Fight Abbott's welfare cuts: a direct attack on the poor

Saturday, August 9, 2014
Treasury analysis reveals the spending cuts cost an average of $842 a year for lower-income households.

The social welfare cuts proposed in the federal government's May budget are a direct attack on working people and the poor. If implemented, they would represent a huge shift in income from the poor to the rich. This harsh reality is backed up by partial figures released by Treasury to Fairfax Media under Freedom of Information.

The Sydney Morning Herald reported on August 4: "The Treasury analysis reveals the spending cuts cost an average of $842 a year for lower-income households, while the average high-income family lost just $71. Middle-income families were down $477. Partly offsetting the skewing of spending cuts towards low earners was the temporary deficit repair levy for those earning above $180,000 a year.

"The Treasury modelling says the average high-income family would pay an extra $446 a year in tax; middle-income families an extra $15; and low-income families only $2 a year more.

"The combined effect is that an average low-income family loses $844 a year in disposable income (earnings after tax and government payments) due to the budget. Middle-income earners forgo $492; while a high-income family is down by $517.

"The Treasury analysis is simplistic. It does not account for changes such as the proposed $7 Medicare co-payment and is for one year only — 2016-17 — of the budget estimates. As such, it understates the disproportionately negative impact of the budget measures on poor families compared to wealthy ones.

"For example, in 2017-18 the deficit repair levy will be abolished and high earners will be much better off. Also in 2017-18, the full effects of the cuts to family benefits will be felt.”

This plan with push many more into poverty. And there are many real alternatives.

Ending the large tax breaks for mining and fossil fuel corporations would free up billions of dollars, as well as drastically reversing the steady decline in the rate of company tax.

Federal and state government plans for wholesale privatisation of public assets, which generate substantial profits for the public purse, will lead to a further fall in government income in the medium term. These sales should be stopped at all costs.

Treasurer Joe Hockey's so-called "budget emergency" has been shown to be a sham. Australia has one of the lowest debt to GDP ratios in the OECD.

Instead, the federal budget, described by Hockey as "tough but fair," is the complete opposite of "fair." It is an open declaration of class war by the rich against the poor, the ruling class against the workers and their families.

Inequality of wealth and income have already risen massively in Australia over recent decades. From having one of the more equal wealth disparities in the Western capitalist world in the 20th century, Australia now has one of the more unequal.

This budget is intended to further shift wealth from the poor to the rich. And Hockey is on record as thinking the budget was "not tough enough".

Sean Brocklehurst, Socialist Alliance candidate for the seat of Pascoe Vale in the Victorian state elections in November, condemned the federal budget as "an all-out attack on our social welfare system, fought for over a century by working people and the community”.

He told Green Left Weekly: "All the existing gains of the welfare system, including unemployment benefits, aged and disability pensions, and single parents' payments, were won as a result of long struggles by the people against big-business rule.

"The attacks in the budget on youth access to the dole, expanding Work for the Dole and income management, as well as cuts affecting family payments and pensions, affect every section of society — except the ruling 1%," he said.

"And the proposed $7 GP co-payment will hit the whole community, but most of all those most vulnerable sections.

"The federal government and the Victorian government are working hand in glove to attack the welfare and rights of the community. Federal government threats to cut $80 billion from funding for hospitals and schools nationally will savagely affect communities in this state and elsewhere.

"The Socialist Alliance pledges to campaign strongly against the welfare cuts and other measures such as privatisation and outsourcing in the upcoming state election," Brocklehurst said.

Sarah Hathway, a tertiary student and the Socialist Alliance candidate for Geelong in the Victorian elections, slammed the federal budget moves to deregulate higher education fees, and to increase interest rates on HECs [the Higher Education Contribution Scheme], as well as other moves to effectively increase privatisation of the university and technical education system.

"These proposed changes to higher education will hit the poor by far the hardest. For example, students from wealthy families will pay far less if fees are paid up front, than those who have to pay their fees through tax after graduation.

"This is just another example that this budget is a declaration of class war on the poor. These changes to education will impact TAFE and the school system massively over time.

"The Socialist Alliance, and especially Resistance-Young Socialist Alliance, will seek to highlight these issues in the upcoming election campaign. Meanwhile we will be going all out to build student protests against these attacks — in particular the National Day of Action against education cuts on August 20.”

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From GLW issue 1020