The Guardian May 17, 2000


Federal Budget 2000-2001:
Fails to deliver on community needs

by Anna Pha

One of the most noteworthy features of the Coalition Government's budget 
for the year 2000-2001 is what it fails to do and say. The burning issues 
of job creation, industry development, Medicare, public education and 
infrastructure, the needs of Indigenous people and the environment are not 
addressed. Instead, there are more cuts and a phoney debate about budget 
surpluses to divert attention from the Government's failure to deliver on 
these pressing community needs. Because of the widespread opposition, the 
introduction of the GST on July 1, is also being deliberately downplayed. 


"Our unemployed get no full-time jobs but a crackdown", said Chris White, 
Secretary of the United Trades and Labor Council of South Australia.

Another 2250 jobs are on the line in Medicare and government departments.

"There is nothing to assist our manufacturing sector, no hint at reversing 
car tariff cuts, nothing to invest in research and development and our 
Manufacturing Centre", said Mr White.

Jobs are left to the global economy to deliver.

The transfer of funding from the public to private education system 
continues  forget the "clever Australia".

The annual $2.2 billion subsidy to private health funds remains intact, 
diverting badly needed funds from the public health system.

The amount allocated to rural health is totally inadequate.

The Government's attitude towards reconciliation and Indigenous Australians 
is evident in its complete failure to meet the desperate needs for housing, 
employment, education and health.

"Where is there a considered response to the serious social and emotional 
wellbeing problems being encountered by so many of our people as a result 
of past policies of separation of Aboriginal children from their families", 
asks ATSIC Social Justice Portfolio Commissioner Brian Butler.

"This Government seems blind to our pleas that our culture is being ripped 
apart by the legacy many of our people have been left with  high levels 
of substance abuse, youth suicide and mental health problems."

The Government also demonstrates its contempt for environmental protection 
with $62 million in cuts to essential programs tackling salinity, Landcare, 
water resources and other vital programs.

Our public broadcasters, the ABC and SBS, are yet again expected to do more 
without additional funding.

The ongoing cuts to the public service and social spending, announced in 
previous budgets, continue without mention.

The few new measures, less than $1 billion in spending next year, are in 
the main political, their focus on the disaffected rural electorate.

The $1.8 billion rural package is over four years, and $501 million of that 
is for the previously promised fuel rebate which is a part of the GST deal 
with the Australian Democrats to prevent rural petrol prices rising.

Smoke and mirrors

The new corporate sector style accounting methods introduced in last year's 
budget, in the name of "improving budget transparency and accountability", 
make comparisons with previous years nearly impossible.

Budget papers used to contain tables giving details of the last financial 
year's spending and income (and compare them with previous estimates), and 
make estimates for the budget year and several years to come.

There were detailed historical tables showing trends in spending and 
income, as well as proposed changes in spending for the year of the budget.

The Budget papers for the last two years do NOT give details of last year's 
performance. They only give estimates for the year 1999-2000 which is not 
yet over, and forecasts for the next four years.

Cuts previously announced are not mentioned, although they are presumably 
included in the calculations. Gone are the simple comparisons of income and 
expenditure.

The Budget surplus has taken on the mantra of a company profit, except 
there are numerous methods for estimating it: cash surplus (the old way of 
comparing income and expenditure); the "underlying" cash balance (includes 
income from sale of some assets); net operating result (private sector 
method, counts all profits from asset sales); Government Finance Statistics 
standards (meets international requirements to compare the performance of 
different countries); fiscal balance (measures difference between saving 
and investment, or something like that!).

You are not meant to understand it. Just take the Government's word that it 
is good for you and vote for Costello as next Prime Minister.

It is another exercise in double-talk. They talk about "transparency" when 
in fact, it's an exercise in obscuring the truth.

The GST has become an unmentionable, the Treasurer only occasionally 
managing an oblique reference to "indirect tax arrangements". However, it 
will hit every man, woman and child in the community like a sledgehammer on 
July 1.

Amazingly, or perhaps not surprisingly, there are no estimates of GST 
revenue  only a net sum of $24 billion to be paid to the States after 
deducting the Commonwealth's costs (no estimate of these is given).

Reduced income

Total taxation income is set to fall by 8.7 percent in the next financial 
year.

The Government boasts that the corporate world will pay around $7-8 billion 
less taxation and costs to exporters will be reduced by over $3.5 billion. 
This is on top of the 50 percent reduction in capital gains tax brought in 
last year.

The biggest beneficiaries of the estimated $12 billion in personal income 
tax cuts will be the rich.

But, as the ACTU points out, for a worker on a weekly income of $480, the 
$12.25 per week tax cut promised, will not compensate for inflation 
(predicted at 6%), tax bracket creep and interest rate rises.

The GST package involves a transfer of wealth out of the pockets of 
pensioners, the unemployed, students and workers into the bank accounts of 
the rich and big business.

Reduced income

The long-term effects of the tax changes are covered up by the impact of 
one-off sales of public assets which continue apace. These are estimated to 
bring in more than $58 billion over the next four years.

Government revenue during the 1990s, according to estimates by the 
Australian Council for Social Services, averaged $15 billion less than in 
the 1980s.

That is one of the reasons why there are long waiting lists for public 
hospitals, why teachers struggle to defend their wages and conditions and 
to save public education, and students are fighting fees and privatisation.

The full effect of tax reductions (for the rich and corporate sector) and 
the loss of dividends from privatised government enterprises will become 
very evident when the government runs out of things to sell and the public 
cupboard is completely bare.

The public health and education systems and social security spending will 
be the biggest casualties.

"By the end of 2000-2001 the Government will have slashed net debt by 
around $50 billion since 1996-97", says the budget statement.

The banks and other financial institutions that make the runs on the 
Australian dollar and push so hard for budget surpluses, are in effect 
calling in their loans to the public sector so that they have the cash to 
lend to others or use themselves to buy up public enterprises and assets.

State assets are being sold off to the private sector and the State itself 
is being privatised. This process will in a short space of time render the 
State bankrupt. When that point is reached Government's will default on 
their payment of superannuation and further slash pensions and monies for 
health, housing, education and infrastructure.

Needless to say, the Treasurer and the Budget papers have nothing to say 
about this agenda.

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