The Guardian • Issue #2031

Class war budget

  • by Anna Pha
  • The Guardian
  • Issue #2031

The tent city in Sydney saw homeless people come together as a community and stand up to the government. Photo: Anna Pha

The budget, delivered on 25th October, is set in the context of a looming global recession, ongoing wars, rocketing prices, extreme weather events, famine, and western war hawks blowing the trumpets of war in the Asia Pacific in which Australia will play a major role.

Inflation will far out-pace wages further reducing purchasing power and put additional pressure on the cost of surviving for millions of families. Many more Australians will join the ranks of the more than three million already living in poverty.

The rate of unemployment is expected to rise, and the unemployed are still expected to survive on the cruel and punitive $48 a day – well below the Henderson poverty line. Electricity prices are set to rise by fifty-six per cent and gas by forty-four per cent by the end of next year. Inflated food prices will remain high. Rising interest rates continue to take a toll on household budgets and will see more people driven into homelessness and poverty.

Unlike the previous Abbott/Turnbull/Morrison government, Treasurer Jim Chalmers talked down the economic situation. “Australians know there are hard days to come, and hard decisions to accompany them,” Chalmers said in an ominous warning of cuts to come. Reviews of Medicare and the NDIS are under way.

After Labor’s first budget, hard days are coming for the working class.


There are, however, some big winners: the Australia-US war machine and the resources sector.

Australian government spending on the military is both astronomically costly and fails to serve the Australian peoples’ needs and security, yet the government could find an increase of eight per cent in funding. (See page three) The government kept afloat the estimated $180 billion (before cost blows-outs) for nuclear submarines.

The government also expects to save $3.6 billion over four years by replacing external contractors with employees; and cutting advertising, travel, and legal expenses across the public service and give a boost to staffing to handle the backlog of visa applications.

The pre-election promises of higher wages and lower electricity and gas bills are looking extremely questionable. Under considerable pressure from the public and businesses, Chalmers has indicated that measures are being examined to guarantee supply and contain prices.


Corporate profits continue to soar, but workers are denied a share. Previous tax cuts have propped up consumer spending compensating to a small degree for falling or stagnant wages, thus letting employers off the hook from paying a living wage.

The stage three tax cuts for the rich are due to come into effect in 2024 at a cost of more than a quarter of a trillion dollars ($254 billion) over ten years. They remain on the agenda. Men on incomes over $150,000 are the major recipients. This is a political choice, an indicator of government priorities. The budget is a class question, and this budget favours the capitalist class at the expense of the working class.

Labor’s promise to deliver the stage three tax cuts is a promise that should be broken.

There is nothing just or fair about them. Adding salt to the wounds of those on low incomes, Labor is discontinuing the low- and middle-income tax rebate which was introduced in stage one. This would, for example increase the tax paid by someone on $48,000 per annum by 3.1 per cent. (The Australia Institute)

Recent Australia Institute analysis estimates windfall profits for the Australian oil and gas sector of $26-$40 billion in 2021-22. The Department of Industry, Science and Resources estimates that the sector’s revenue from Liquified Natural Gas and oil exports will increase from $84 billion in 2021-222 to $105 billion in 2022-23. “Despite the massive increase in profits the Australian public is set to receive a paltry share from the sale of natural resources that ultimately belong to them.” (The Australia Institute)


The government is honouring its election promise for cheaper prescriptions which will be of assistance to many families and people with chronic health conditions. Scripts will fall by $12.50 from $42.50 to $30.

There will be fifty urgent medical centres to ease pressure on public hospitals. The government is not increasing its share of funding for public hospitals to fifty per cent, leaving the states and territories to carry fifty-five per cent.

Funding for aged care will be increased. Legislation was passed on 27th October requiring aged care centres to have a registered nurse on duty 24/7 and to provide a minimum amount of care time with residents. The government failed to include dental care under Medicare, a reform that is long overdue.

There is additional funding for community services, but this falls far short of needs.

The NDIS will receive funding for 380 additional staff. “The NDIS didn’t get anywhere near the amount of attention it deserved in this budget, but the May budget next year is the party we really want an invite to,” disability rights campaigner Elly Desmarchelier said.


There is some assistance for families with an increase in early childhood education and care (ECEC) subsidies and extension of paid parental leave to twenty-six weeks as promised prior to the elections. These measures have the aim of increasing the participation of women in the workforce and begin to be introduced in 2024.

The government is setting aside funds for increased wages for workers in the care sector. It will be up to the Fair Work Commission to determine them. There is no guarantee the government will fund the full cost.

These measures are a start but much more is required to achieve wage equity and make ECEC affordable for families.

$1.7 billion is allocated over six years to tackle violence against women and children. But experts are calling for a minimum of $1 billion per annum.


There is funding for an extra 20,000 university places but no measures to guarantee secure jobs in a sector where contract employment is all-too prevalent. These additional places are for areas where there is a shortage of skilled workers such as teaching, nursing, engineering, and IT. Around 35,000 jobs were lost in the university sector during COVID, but the budget fails to offer enough funding to restore them.

“While almost half a billion dollars for extra university places is a welcome start, this commitment needs to form the building blocks of wider reform,” National Tertiary Education Union (NTEU) National President Dr Alison Barnes said.

A $1 billion agreement with states and territories to provide 180,000 fee-free TAFE places in 2023 and 480,000 fee free places over four years is welcome, but all TAFE places should be free.


Considerable attention is given to housing and the Housing Accord with state and territory governments. These measures include building 25,000 social housing properties a year and a guarantee of housing for women and children fleeing family violence.

A new Housing Australia Future Fund will build 30,000 new social and affordable houses over the next five years, mostly by the private sector. The Help to Buy scheme will assist homebuyers to purchase a new or existing home with an equity contribution (part ownership) from the government.

The Australian Council of Social Service (ACOSS) notes that rents have risen by over ten per cent during the past year and affordable housing stock is contracting with nearly 30,000 affordable homes to be withdrawn from the market over the next four years

“We remain deeply concerned for people who have the least and are in chronic financial distress – people who are unemployed, single parents, people with disabilities, students, and people on temporary visas. There isn’t enough in this budget to help them right now,” ACOSS CEO Cassandra Goldie said.

“People on the lowest incomes are facing multiple and unrelenting crises right now – extreme weather events, rising rents, food, and fuel costs, and the prospect of more losing their jobs means that government must deliver on lifting incomes and social and affordable housing.”

The scale of investment in affordable housing falls far short of needs and is compounded by the government’s failure to increase Commonwealth Rent Assistance.


The $11 billion subsidies for fossil fuels remains intact and the budget measures on renewables fall short of what is required for Australia to play its important role in reducing climate emissions.

$20 billion is allocated to Rewiring the Nation program to enhance the capacity of the national grid and integrate renewable sources of electricity.

Funding for 400 community batteries and community solar banks are welcome steps in the right direction.

But these measures fall far short of what is required and gas and coal exports are left untouched.

The government’s main increase in infrastructure spending is on private development of road and rail projects.

As National President of St Vincent de Paul Society said, “Can we give funds to those who are already very comfortable while a growing number of people in our community will struggle to afford the essentials of life?”

“Australians … cannot live on the promise of help in the future when times are better.”

Next week: The CPA’s alternative for a peace and people’s budget putting people and the planet first.
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