- The Guardian
- Issue #2053
Photo: maisa_nyc – flickr.com (CC BY-NC-SA 2.0).
The main focus of recent federal budgets was on economic recovery for the corporate sector, focusing on wiping out the budget deficit created by the government’s stimulus packages and returning the budget to a surplus.
There is an alternative – a budget where private profits are not the priority – a people’s budget which puts the interests of the people and the planet first.
The most important priority in a people’s budget is the security of working people, their families, the unemployed, pensioners, and people with disability. Security is not achieved by spending billions on weapons, military might, slashing corporate taxes, or privatising everything that can turn a profit. It is ensuring that people enjoy basic human rights – permanent well-paid jobs, housing, food, health services, education, basic utilities, public transport, and live in a safe, healthy, and sustainable environment.
People’s needs must replace private profit as the main motive and driving force of the economy and society.
When the Hawke/Keating Labor government embarked on its neo-liberal agenda in the mid-1980s, company taxation was 46 cents in the dollar, there was no GST, and government enterprises made a significant contribution to budget income. Universities and TAFEs were free and publicly owned and run. Private schools received less federal funding than state schools. Privatisation was a dirty word, and the introduction of Medicare provided universal access to quality health care through bulk billing.
Hawke/Keating also set about a gradual, long-term, neo-liberal transformation in the role of government, revenue raising and service provision, which continued under the Howard Coalition government and was advanced by the Rudd/Gillard Labor government. What was known as the welfare state was being wound back and replaced by so-called “self-provision” and “market forces.” Education and health were being privatised and turned into commodities to be bought and sold in competitive marketplaces. Trade union rights were severely curtailed.
WHAT NEEDS TO BE DONE
The Communist Party of Australia (CPA) is calling for a halt to all privatisation and deregulation, and for the government to step in to take control of the financial sector, including re-regulation of interest rates, currency and capital flows.
The development of the economy should be planned; this includes infrastructure, use of non-renewable resources, development of renewable energy sources, and other measures to counter climate change.
Pressing infrastructure needs which are being contracted out to the private sector or totally neglected. The government should as a priority expand the rail freight system, and public transport, and improve urban and rural water supply systems and as well as developing alternative sustainable energy.
The state has a responsibility for the provision of universally accessible quality public services, including social welfare, health care and education.
The federal government now gives private schools twice the funding that it gives state schools, yet state schools have twice as many students. This funding should be wound back and the income transferred to the public system. A good education should be a right, not a privilege, and every child should have access to free, secular education in a state school.
Education should be free from pre-school right through to TAFE and university, fully funded and provided by the public sector. Childcare should be provided by government and community organisations and made affordable and accessible through government subsidies and the provision of more centres where they are needed. There is a conflict of interest between providing quality childcare and childcare, for profit which has a negative impact on children and staff.
The present process of privatisation and focus on hospitals as the centre of health care needs to be turned around. The public health system is in need of restructuring so that emphasis is given to primary and preventative health care.
Dental and mental health should be an integral part of Medicare. The private health insurance rebate and other public subsidies of the private hospital system should be phased out and redirected to the public health system and aged care. Wages and working conditions of nurses and other staff in public hospitals, nursing homes and community care should be raised, recognising their level of professional skills and thus attracting more to return to and enter this important area of work.
The NDIS should be nationalised and fully funded, bringing an end to the rorting and the punitive nature of the scheme, replaced by one that puts participants first on the basis of needs.
The government is missing out on tens of billions of dollars in profits because of its privatisation of the Commonwealth Bank, Telstra, and other services and agencies. The CPA is calling for an expansion of the public sector which has the means to offer permanent employment, a long history of providing apprenticeships and is far less costly and more efficient because of the elimination of layers of profit. The development of infrastructure projects by the public sector means more jobs for the same investment and better quality outcomes.
In particular it is calling for the establishment of a state-owned insurance company and a People’s Bank, based on strong and democratic social charters. Competition from state institutions would force the private sector to slash fees and offer fairer interest rates and better insurance products. A national superannuation fund could provide billion of additional dollars for public infrastructure spending. Private and industry funds should also be obliged to deposit a certain percentage of their funds in government bonds and public infrastructure. This would be of benefit to society and provide sound, stable investments for workers’ savings.
The government has had no trouble finding billions of dollars for corporate tax cuts or increases in the military budget. There is no shortage of money to carry out far-reaching reforms. It is a question of ideological and political priorities how income is raised and distributed. At present the focus is on safeguarding and boosting private profits, not on people’s needs and the public sector. Budget deficits and government debt are not crimes as the neo-liberals would have us believe. The key issue is that the debt is manageable and the money borrowed is put to sound use.
The most important source of government income is through income taxes. Over the past 35 years there has been a flattening of marginal rates with the biggest tax cuts given to those on the highest incomes. This has made the system more regressive. The CPA advocates a progressive tax system based on ability to pay with an increase in marginal rates for those on high incomes.
The GST is an extremely regressive tax, with the wealthiest and the poorest paying the same rate in the dollar – 10 per cent – on goods and services. It should be abolished.
Corporate taxes should be raised. Negative gearing and dividend imputation should be phased out and serious steps taken to close the many tax loopholes and corporate welfare that see large corporations paying an effective tax rate of less than 20 cents in the dollar or less. The introduction of a higher rate of tax or special tax on super profits should be applied to businesses over a certain size in all industries.
Indigenous Australians, the original owners of this wealth before it became wealth, should have the final say over the granting of mining licenses and are entitled to a significant share of the wealth from them.
There are other potential sources of income – as already mentioned the abolition of the private health insurance rebate and abolition of state aid to private schools could be used to solve problems in the public health and education systems. Cutting the billions of dollars in subsidies for fossil fuel corporations would provide additional income.
CUT MILITARY SPENDING
The CPA calls for a total revamp of military spending away from its present offensive nature as an arm of the US military to that of genuine defence. It also calls for an immediate reduction of 10 per cent in funding and cancellation of the nuclear-powered submarines and other AUKUS spending. Refocusing on peace and security could result in savings of billions per annum. This money could be put back into the economy, instead of on US weaponry and wars; would create demand for goods and services; and create many thousands more jobs than the building of a few submarines. They would be permanent jobs.
A People’s Budget based on the above proposals would provide the basis for economic recovery for the people and improve overall living standards. Of course, it cannot bring a halt to the boom-crisis-recession-recovery phases of the capitalist production cycle. This cycle is a systemic feature of capitalism, and has only ever been and can only ever be eliminated by socialism.