- by Anna Pha
- The Guardian
- Issue #2002
The budget announced by Treasurer Josh Frydenberg is a pre-election, last ditch, vote-buying exercise from the Morrison government. Voters struggling with rising prices and falling wages will not swallow the bait.
News Corp’s gutter press Daily Telegraph, ran with a front-page headline declaring the budget “a working class plan”. In this class war economic statement, the plan is to slash a whopping budget deficit and government debt at the expense of workers and social security recipients as the government moves towards a trillion dollars of funding in war preparations.
The contradictions abound.
There is a cost-of-living crisis. Fresh food, groceries, housing, and petrol prices are soaring. Real wages have declined and are set to fall even further this year. The government has no plan to address people’s needs and the cause of the crisis.
Pensioners, the unemployed and other social security recipients are offered an insulting one-off $250 payment. A single, aged pensioner struggling on $987.60 a fortnight will only see their poverty-level payments entrenched. Ditto the unemployed on $642.70 a fortnight ($45.90 a day). Social security recipients need and deserve an ongoing living income, not a tokenistic one-off payment. They should receive an income equivalent to the minimum wage of $772.60 a week. But the government has no plan to lift these incomes above the poverty line.
Nor does it plan to provide the necessary assistance for the thousands of flood victims. The Pandemic Leave Disaster Payment ends in June, hitting the lowest paid workers with no access to sick leave.
There is no plan to address the cost-of-living crisis.
WAR PREPARATIONS
One of the largest budget items is military spending (aka “defence estimates”) of a whopping $42.846 billion in 2022-23, rising to $49.113 billion in 2025-26. (Budget Paper 4) This includes $5.5 billion on French submarines that were cancelled.
In 2016-17 the government announced that it would spend $1 trillion on “defence” over the next twenty years – that is up to 2036-37. There is a long list of weapons and delivery systems on order, including the more than $100 billion on nuclear-powered submarines. Australia is gearing up to fight a war – the US’s war with China.
In March, Defence Minister Peter Dutton launched a new Space Command. “(Space) will undoubtedly become a domain which takes on greater military significance in the 21st century,” Dutton told a recent air and space conference.
Dutton continued: “The 2022-23 Budget continues this government’s strong investment in Defence and the Australian Signals Directorate (ASD). This includes a $9.9 billion investment over the next decade in new national cyber and intelligence capabilities.”
The list of weapons includes a range of missiles, maritime mines, drones, tanks, and guided weapons systems. Dutton’s department has a blank cheque – it is the only government agency quarantined from budget cuts and caps on spending.
TAX CON
The much touted $420 one-off addition to the Low and Middle Income Tax Offset (LMITO) of $1080 is a con job. Workers whose incomes are below the tax threshold do not receive the payment. What Frydenberg carefully avoided mentioning in his speech, but which can be found buried in the budget papers, is that the LMITO will end in 2023-24. This means its recipients will pay an extra $1080 in tax.
The total cost of the two cost-of-living payments and petrol tax excise cut is forecast at $8.6 billion. But almost all this payment is recouped when the LMITO comes to an end saving the government around $8 billion per annum. What’s more, the LMITO savings are ongoing, not one-off.
Frydenberg also failed to mention that the stage three tax cuts for the rich remain in the pipeline. People paid more than $200,000 per annum are set to rake in a tax cut of more than $9000 at a cost of $185 billion over four years. Those on less than $45,000 such as aged care workers, disability carers, or on the minimum wage, receive no tax cut. But they lose their $1080 as noted above.
HOUSING CRISIS
The high and rising cost of housing is one of the drivers of poverty. The amount allocated in the budget is a drop in the ocean.
“Australia is grappling with a housing affordability crisis, social housing waiting lists of more than 200,000 people and a rate of JobSeeker and other income support payments that leave many in poverty and unable to pay their rent,” said Mission Australia CEO Sharon Callister. “We need urgent action from the Federal Government to provide long-term housing solutions that will address our social and affordable home shortfall.”
Developers are set to reap a big windfall from the additional funding for the HomeBuilder grant for those who can afford to build a new home or make substantial renovations to an existing one. The scheme, along with record low interest rates, has already played a major role in driving the cost of housing to record heights. Public housing is yet again neglected.
The government is cutting the supplementary payment that was introduced to fund the historic equal remuneration order (ERO) in 2012. It covers the mostly female workforce in the social, community and disability services sector. Homelessness services take a $39 million hit which will result in the loss of hundreds of jobs and have a serious impact on services at a time when they are most needed.
There is no national plan to end homelessness or house those left in limbo following the floods.
WOMEN
There have been token announcements about funding for women’s services in the past and more in this budget. The government’s record on delivering them is poor.
For example, women escaping domestic violence report they are struggling to access the $5,000 government payment designed to help victims leave an abusive relationship. There are delays and poor communications with service providers. It is much the same as attempting to obtain services from the grossly understaffed Centrelink.
The budget contains nothing to address the low pay of the mostly female workforce in aged care or the extensive understaffing that is driving workers out of the sector and resulting in poor quality care.
There are no plans to provide women the sort of budget they need with the provision of adequate services and pay equity in areas such as aged care and early childhood education and care.
Workers are looking down the barrel of further real wage reductions. Consumer prices are expected to rise by 4.25 per cent and wages by 2.75 per cent this year – a wage reduction in real terms of 1.5 per cent. That is an optimistic scenario. Most economic commentators believe the CPI will rise by more than 5.0 per cent.
PUBLIC SECTOR
“Exhausted nurses, midwives and aged care workers, beyond the point of burn out, simply cannot continue without the resources they desperately need to do their job and keep the community safe and well,” the Australian Nursing and Midwifery Federation said. These and the many other workers in the provision of essential services will get nothing.
More cuts are scheduled for Services Australia with the loss of 9.4 per cent of the workforce – 2,700 jobs. This follows on from the Coalition’s previous cuts to public service agencies of 8000 jobs which has resulted in backlogs of work and long wait times for the public.
The destruction of the public service continues with subsequent loss of expertise along with contracting out in the government’s for-profit free market models in the private sector. There are no plans for a public servant wage rise, let alone compensation for past wage freezes and caps.
The NDIS continues to be starved of funds.
There are some additions to the Pharmaceutical Benefits Scheme (PBS) but no mention of the products that have been removed. On one of the few positive notes in the budget, the PBS safety net thresholds are reduced enabling several million people to qualify for free or the discounted rate earlier. For general patients the threshold is reduced from $1,542.10 to $1,457.10 and for concession card holders from $326.40 to $244.80.
The government fails on Medicare – doctors’ rebates are not increased and funding for wages and resources in public hospitals is not increased. The $6.6 billion taxpayer-funded subsidy for private health insurance remains in place, more ongoing corporate welfare.
There are no plans to strengthen and extend public health.
EDUCATION
“The government’s free market approach to early childhood education has failed,” states Helen Gibbons, Early Childhood Education and Care director, United Workers’ Union.
“In just the past week it’s been revealed that there is huge inequality of access to early education depending on where you live, as private providers over-saturate lucrative metropolitan areas and abandon regional families. We’ve seen children are going hungry because of cost-cutting to their food budgets, while private for-profit providers pocket millions in parents’ fees and federal funding.
“An early education system driven by profit will never deliver the quality that children and parents deserve,” Gibbons said. “Children cannot be fed for $0.65 a day.”
The government has no plan to address the shortage of public, affordable early childhood education and care.
Consistent with the Coalition’s neo-liberal agenda, public education comes last:
- Public school funding cut by $559 million over next three years
- Private school funding increased by $2.6 billion over four years
- No funding allocated for capital works in public schools
- No increase in funding for preschools.
Frydenberg announced more money for apprentices and their employers but continues to support the private vocational and education system while undermining tertiary and further education (TAFE).
Public universities were locked out of JobKeeper resulting in the loss of more than 17,300 jobs.
“Higher education is a smart, triple-dividend investment: it employs more than a quarter of a million workers, it educates the next generation of workers and it drives the research and innovation to power our economy,” said Alison Barnes, National Tertiary Education Union National President.
There is no plan to improve the quality of public education or abolish fees.
CLIMATE
The government’s claimed path to net zero emissions as late as 2050 is fuelled by greenhouse gas emitting natural gas, carbon capture storage, and hydrogen which is yet to be proven viable despite the billions of dollars already poured into it. The budget gives coal, oil and gas corporations more than $37 billion.
“Darwin is positioned to become one of the world’s leading low-cost clean energy hubs, with access to excellent onshore and offshore natural gas and greenhouse gas storage resources, including the Beetaloo and Petrel basins and the Barossa and Bayu-Undan fields,” Minister for Emissions Reduction Angus Taylor claimed. Really?! Clean energy hub?!
Spending on climate change and energy is set to fall from $2 billion to $1.3 billion in the coming four years – a reduction of thirty-five per cent! This is at a time when urgent and drastic action is needed to address climate change.
The Australian Renewable Energy Agency, Clean Energy Finance Corporation, and the Great Barrier Reef are among the programs being cut. The Reef has just taken another hit with its fourth mass bleaching event in six years.
There was a token $148.6m for community solar and wind microgrids in areas too remote to have access to the power grid.
There is no plan to increase greenhouse gas emission targets by 2030 or abandon fossil fuels. It is left to industry and the households to do the heavy lifting.
The $6.316 billion for two new dams in regional Queensland and one in NSW are a trade-off with the National Party for agreeing to zero net emissions by 2050.
While allocating a little over $6.1 billion for rail infrastructure, billions more are provided for roads.
NEOLIBERAL
The Coalition’s “election budget” is designed to give the impression of providing handouts across the board. But they are crumbs from the table of big business, funded by other cuts that were not mentioned in the Treasurer’s speech. The Budget Papers tell a very different story: big handouts to the private sector and further erosion of the public sector.
Reducing the budget deficit and government debt is high on the government’s agenda. You can be sure they have a plan on how to do that on the backs of workers and the most vulnerable.
If, and most likely, Labor is elected then it will be under pressure to slash the budget deficit and accumulated debt.
