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Issue #1497      13 April 2011

Plugging the budget gap – vulnerable to pay

The federal budget is due to be handed down on May 10 and the public is being softened up for a shocker. The government is still hell-bent on getting its finances back into surplus by 2012-13. There will be no arguments from the equally dry Coalition on that score but that is not the problem. With the bill for the Queensland floods and storms still mounting and military commitments draining the coffers, where will the savings be made? Whose interests are going to be sacrificed to plug the yawning gap? There is bi-partisan unity on the question – it will be public services, particularly those for the most disadvantaged. Those Australians will pay with reduced services and increased victimisation.

For a while it sounded like big savings were going to be found in the gigantic military budget, now running at over $80 million a day! However, Joint Strike Fighters and Air Warfare Destroyers are still on the order books. Australian forces are bogged down in Afghanistan alongside their US and NATO allies. That costs $1.7 billion a year. The military presence in East Timor, the Solomon Islands and the security role in Iraq brings that up to about $2 billion a year. But it looks as though this spending is safe.

Last week a number of major announcements about health were overshadowed by the news that smokers will soon have to buy cigarettes in even more gruesome packaging. Health Minister Nicola Roxon refused to douse speculation that she is looking to cut $400 million from the budget for medical research. It is clear, despite the talk of hospital funding reform, that spending on health is going to be slashed.

Part of the ALP’s promise to the Greens in exchange for supporting a Gillard government was that there would be a nationwide, comprehensive dental subsidy scheme. That promise has been broken. It will not be in the May budget. Roxon is pressing ahead with measures to slow the introduction of new drugs to the Pharmaceutical Benefits Scheme. Australians will have to continue digging deep for dental care and deeper for medicines.

For weeks Prime Minister Gillard and Tony Abbott have been vying in the media to see who can sound the more Calvinist about the value of work in the life of the individual. This is the prelude to new measures to get people off benefits. At times like these we can expect some candour about the actual scale of joblessness in the country – not the cooked unemployment figures that feature in the media. Gillard said recently that there are up to two million working age Australians who “stand outside the full-time labour force, above and beyond those registered as unemployed.”

About 800,000 of these are part-time workers who need more hours but can’t get them. Another 800,000 are said to be “discouraged workers”. The suggestion is that even after wave after wave of bureaucratic punishments including Howard’s “mutual obligation”, there are large numbers of Australians simply choosing not to work. According to the PM, there are “many thousands of individuals on the disability support pension who may have some capacity to work.” Abbott is leading the charge with suggestions as to how these masses of allegedly workshy Australians could be whipped back into the labour market. He is proposing:

  • Mandatory work for the dole for recipients under the age of 50
  • Universal benefit quarantining for “necessities”
  • Suspending the dole for the under 30s in areas where there are unskilled, unfilled jobs
  • A new disability benefit for those with “readily treatable” injuries like bad backs.

The suggestions are dripping with prejudice. The assumption is that if a young person lives in an area with an unfilled, unskilled job the only reason he or she doesn’t have one of those positions is because they have refused to apply. He pictures large numbers of people staying at home on a niggardly disability pension long after their minor back injury has healed.

The government has dismissed some of the ideas, like universal benefit quarantining, because they would be too expensive to administer. Abbott’s ambit-claiming policies give Gillard the chance to move in and punish the most impoverished sections of the community while sounding “reasonable”.

A mining super-profits tax with teeth is not being considered. A modest rise in corporate taxation is not on the agenda, either. Like their state government counterparts, the federal government is angling to slash public services and hound those with disabilities and the victims of economic downturn.

After years of claiming that resource exports and good economic management spared us the full impact of the global economic crisis, Gillard is sounding very much like the US President, the British PM or the heads of the various belt tightening European countries. Sooner rather than later, the workers of Australia will have to respond in the same manner their overseas counterparts are at this moment – with struggle.  

Next article – Cluster bombs bill needs amendments

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