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BUDGET RAZOR GANG

  • by Anna Pha
  • The Guardian
  • Issue #1991

Despite everything that the Morrison government says about not pursuing “budget repair”, that is exactly what it is doing. Punitively, secretively, and dishonestly, Treasurer Josh Frydenberg and his razor gang are already on the move. Corporate welfare will continue to rise: social spending will take the big hit.

The government is targeting the most vulnerable groups in the name of “budget repair”: The unemployed, the homeless, sole parents (mostly women), people with mental illness, age pensioners and many more are all facing or have already experienced callous cuts.

One of the most vicious cuts of all was the slashing of JobSeeker to a miserly, starvation income of $629.50 a fortnight or just under $45 a day. It is one of the lowest unemployment benefits of any OECD country and an absolute disgrace for a rich country like Australia.

At the same time, Frydenberg is promising tax cuts, further tax concessions for business, and Defence Minister Peter Dutton is embarking on a spending spree on nuclear submarines, missiles and expansion of US military bases in Australia. In other words, the Coalition plan to reduce potential income from taxation, spend billions more on the military, at the same time as slashing the budget deficit and government debt!

The budget deficit was $134 billion at the end of the 2021 financial year and the 2021-22 budget forecast an accumulated gross debt of $963 billion by 30th June 2022.

Something has to give, and it won’t be Morrison’s big business mates or the war machine.

NDIS TARGETED

The National Disability Insurance Scheme (NDIS) is lined up to take one of the biggest hits.

The federal government has been and still is determined to cut spending on the NDIS. It came up with the idea of “independent assessments” of the disabled to determine their eligibility and level of support. Strong opposition saw it forced to retreat on “independent assessments” as the public and advocacy groups saw through this smokescreen for cost-cutting.

But this has not halted plans for savage cuts to and underfunding of the scheme. Minister for the NDIS Linda Reynolds, a former brigadier in the army reserve and former Defence Minister, has no qualms in boosting military spending while taking aim at people with disabilities.

She has called for states and territories to increase their contributions to the scheme because its costs are rising and are higher than previous estimates. She has also come out with the most extraordinary claim that the NDIS was never intended to function as a “welfare scheme for life”: The NDIS is not welfare: It is an individualised scheme based on the needs and choices of participants.

The main objective of the NDIS is to provide people with disability and their families with the necessary supports so that they can manage everyday activities and, as far as possible, live an ordinary life. The aim is to enhance the independence and social and economic participation of people with disability, to provide them the choice and control to use their NDIS funding on the supports.

SABOTAGED

Instead of services being delivered by the not-for-profit sector, administration of the NDIS and provision of services leave a lot to be desired, with layers of contracting out to private providers who pocket profits. Participants are being commodified for private profit.

People with permanent disabilities are still expected to review their plans every twenty to thirty-six months in instances where their circumstances are likely to stay the same. There are numerous reports of plans being cut in recent reviews while needs remain unaltered or even greater.

The government is undermining the scheme by reducing support and increasingly knocking applicants back. Reynolds has now indicated that the government plans to give the CEO of the NDIS the power to change a recipient’s plan without their permission.

Those in the frontline providing the services are under huge pressure with big workloads.

The NDIS, apart from the enhancement of lives it brings, has the potential to be of huge benefit to the economy. The NDIS has the potential to enable hundreds of thousands of people with disabilities to make a positive contribution to society and the economy as well as living a full life.

SOUND ECONOMICS

The progressive think tank Per Capita estimates that the NDIS employs more than 270,00 people in a range of occupations and contributes to the employment of tens of thousands more workers indirectly. “The economic impact of the scheme is likely very large, even compared to other types of government spending,” Per Capita states.

Per Capita gives a conservative estimate of the multiplier effect of the NDIS to be in the range of 2.25 which it says would mean that the economic contribution in 2020-21 was around $52.4 billion.

The NDIS is underfunded and Per Capita estimates that every $1 billion that it is under-funded results in significant negative outcomes across the economy. This includes a decline in total economic activity of $2.25 billion.

“The consequences of underinvesting in the NDIS would be disproportionately born by women, carers and people living with a disability.”

Fully funding the NDIS would increase employment that in turn would increase government revenue from income tax.

ALTERNATIVES TO THE RAZOR

Lifting the incomes of social security recipients would generate further spending and economic growth. People on very low and low incomes spend every additional cent in the economy. This results in increased demand and more jobs. The additional employment results in a larger income tax take. But most importantly, it would enable social security recipients to live their lives in dignity, to enjoy the basics of human existence, and participate in society. Surely in such a rich country as Australia, that is the least we can do.

The slashing of corporate welfare, in particular fossil fuel subsidies, and increasing corporate taxes would go a long way to reducing budget deficits and government debt.

Australia is spending more than $1 trillion on war preparations in the next twenty years to fight US imperialism’s wars. The AUKUS pact between Australia, the US and the UK includes the purchase of nuclear-powered submarines, missile systems, and the expansion of US bases on Australian territory.

Instead of participating in US imperialism’s wars, heightening tensions in the Asia-Pacific region, and contributing to a dangerous arms race, Australia should be cutting military spending and closing all foreign military facilities.

Instead of building nuclear-powered subs, the shipyards in South Australia could be building an Australian merchant fleet. This would facilitate the security of Australia’s imports and exports.

PLANNING

Job creation is one of the best methods of reducing the budget deficit. The more people in paid employment, the larger the revenue from income tax. There is great scope to create hundreds of thousands of jobs in the transition to a sustainable and peaceful future. These jobs could be created by redirecting the $47 billion-a-year subsidy given to the fossil fuel industry towards funding for publicly owned green industries and the retraining of workers for well-paid “green” jobs.

Australia is well placed to develop renewable energy, sustainable water industries, biomaterials, green buildings and waste recycling amongst other projects.

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