The Guardian May 21, 2003

Federal Budget 2003-2004

by Anna Pha

"No longer will the government provide"

The Budget handed down last week by the Federal Treasurer Peter Costello is 
a highly political and ideological statement mapping out a path for far-
reaching changes to Australian society. It is much more than a budget 
boosting military expenditure or a pre-election budget with tax cuts. The 
Sydney Morning Herald described it as a "new vision for Australia. No 
longer will the government provide." Its "vision" is not a very pretty one 
for working people.

It replaces collective responsibility by individual responsibility, public 
services by private enterprise, and turns essential services into 
commodities to be purchased according to ability to pay on deregulated 

The responsibilities of governments and the public sector are being 
transferred bit by bit to the private sector, for-private profit.

The media presented the budget in terms of dollar changes to health and 
education and promoted the miserable tax cuts. They played down the fact 
that Medicare is being smashed, that fundamental principles are at stake.

Government Ministers attempt to hide the reality by the use of dishonest 
wording. The Medicare changes are portrayed as making Medicare "fairer" but 
the introduction of co-payments does not make Medicare "fairer". It 
undermines the fundamental principles of Medicare. Formerly, bulk billing 
ensured that all patients received free treatment by a GP. Now the majority 
will be forced to make a co-payment to visit their GP.

The changes to Medicare remove the collective responsibility of society for 
the well being of individuals.

The concept of universal access with centralised funding raised according 
to ability to pay is replaced by a two-tiered system with Medicare 
remaining only as a "safety net". The wealthiest will be well able to buy 
the best that health care has to offer.

The Medicare, education and other user-pays "reforms" shift responsibility 
onto the individual.

The Government's scheme has been denounced by most doctor organisations, 
but this will not deter the Government from pushing ahead with the 
imposition of fees and the deregulation of the health system.

Education is also being privatised and turned into a two-tiered system. It 
will also be further deregulated and fees increased. (See Education analysis)

Centralised funding through revenue raised by the government through a 
progressive tax system is being replaced by user-pays, that is, individual 

Changes add up

All the budgetary changes are part of a bigger picture. They represent the 
imposition of economic rationalist policies that were commenced in the mid-
1980s by the Hawke and Keating Labor Governments.

In every budget since its election in 1996, the Howard Government (and 
Labor in the immediate years before that) made small, incremental changes 
to policies and spending.

Bit by bit public assets have been sold off (e.g. government buildings and 
enterprises), work contracted out to the private sector (e.g. security of 
buildings and airports, use of couriers and IT), government departments 
wound back, merged or completely eliminated.

The private sector (including large charities and churches) has taken over 
much of the monitoring, placement and training of unemployed people.

In some areas there have been straight out cuts, e.g. public housing and 
public works. In other areas allocations have been shrunk in real terms by 
not keeping up with increases justified by inflation, e.g. Medicare payment 
to doctors and funding of higher education places.

In many areas, such as health and education, funds have been transferred 
from the public sector to the private sector through such mechanisms as the 
private health insurance tax rebate.

There is a deliberate attempt to blur the boundaries between the private 
and public sectors. There are public patients in private hospitals and 
private patients in public hospitals, and so on.

The 2003-04 Budget contains more of these incremental changes and makes 
fundamental changes in the principles that underpin Medicare, public 
education, and in other areas of Government social and economic 

The Government is gradually withdrawing from its responsibility to provide 
essential services to the community.

Money for war

There is a dramatic increase in spending on the military and "security", 
the details of which are not well publicised.

The tax cuts are presented as some sort of compensation for higher 
education and health care costs but at $4 for most workers and only $1.63 
per week for those on very low incomes. In dollar and cents terms, the tax 
"cuts" are peanuts. But more importantly, public education and Medicare 
involve important principles which should not be traded off for any amount 
of money.

The tax system is also being steadily "reformed" to make those on low 
incomes pay a greater share of taxes. The former relatively progressive tax 
system, where people contributed according to their ability to pay is being 
replaced by a flatter, regressive tax system. The introduction of the GST 
was a major step in this process.

The GST is a flat, regressive tax. People on low incomes pay at the same 
rate in the dollar as the rich and, thereby, contribute a larger proportion 
of their income in taxes.

Medicare, public education, public housing, government responsibility for 
the welfare of the people, and progressive taxation are all anathema to the 

They are in stark contrast to the Government's emphasis on the individual 
and its pro-big business outlook.

The Government gives priority to assisting its big business patrons, church 
schools and other private sector interests.

In education these changes have reached the point now where non-government 
schools receive more funding from the Federal Government ($4.37 billion in 
2003-2004 with no public accountability) than Australia's public 
universities ($4.31 billion with strings attached). Government schools come 
a poor third with $2.26 billion.

While underfunded hospitals need nurses, state schools lack resources and 
teachers, and workers need jobs, there is no shortage of money for waging 
wars on behalf of US imperialism or for ASIO and the other organisations to 
spy on and standover the people of Australia.


But this spending comes at a huge cost, particularly to the security and 
welfare of the majority of Australians.

Successive budgets have seen cuts to social spending  $5 million here, 
$50 million there. Once the cuts have been implemented they remain in the 
years ahead. These cuts add up to billions of dollars over time.

They do not appear on the books as cuts. But they are there and people are 
hurting as a result.

This budget has more cuts but they are called anything but "cuts" or 

For example, there will be "better monitoring of Work Activity Agreements" 
which, in fact, results in a $67.1 million cut in payments to the 

The disabled will be slugged $120 million in 2004-2005 by "recognising and 
improving the work capacity of people with a disability".

When it comes to the Pharmaceutical Benefits Scheme, there will be cuts of 
$266.4 million next year. These are done in the name of "sustaining" the 
PBS! They come on top of even larger cuts last year. "Sustaining" in this 
case means destroying the PBS and giving the giant pharmaceutical 
corporations free rein to charge monopoly prices and make super profits.

Lack of accountability

For some years now the budget papers lack the detail that used to be 
provided. Kenneth Davidson reports in The Age that the Government in 1997 
decided to drop the requirement that the budget be audited. It was 
previously audited by the Auditor General.

The accounts are not now audited. This budget presents estimates for 2002-
03 spending and projections for spending over the next four years. There is 
no public accounting of what actually happens.

Another Government device is to underspend monies allocated in certain 
areas. According to information provided by The Greens, the Government has 
underspent by large amounts on greenhouse reduction, salinity and other 
environmental and heritage areas. This means that programs often announced 
with much publicity and fanfare are simply not carried out.

There are further cuts in the environment while the rights of the 
individual (private farmers and corporations) take precedence over the 
needs of the community and the protection of the environment when it comes 
to such questions as water usage, land clearing and salinity.


The budget serves the Government's political agenda with the tax cuts used 
to justify the claim that the Howard-Costello Government are good financial 
managers and that they can deliver a budget surplus and tax cuts. It is a 
dishonest attempt to divert attention from its real policies.

It is a war budget, but the "surplus" and tax cuts are used to hide this 
and allay fears that we cannot afford the massive military and "security" 

The budget continues the transfer of power and wealth to the transnational 
corporations through further deregulation, privatisation and military 

The Government provides for the transnational corporations not the 
Australian people.

Further budget coverage and A People's Budget by a People's Government in 
the weeks to come.

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