Stuart Munckton
The 2005-06 federal budget, unveiled by Treasurer Peter Costello on May 10, included "across-the-board" tax cuts. However, while high-income earners received an average tax cut of $41.58 a week, most workers will receive only a $6-a-week tax cut.
Furthermore, the budget signalled new attacks on the living conditions of some of the poorest and most vulnerable sections of the population. At the same time as the government announced a budget surplus of nearly $9 billion, some 190,000 sole parents, people with disabilities and mature-aged jobless people will be pushed off welfare.
Those who are disabled but deemed capable of working part-time, as well as parents, both single and partnered, whose children have reached school age, will be forced from their current payments onto the low-paying standard jobseekers' Newstart payment. They will also be subjected to the same harassment as other jobseekers, such as being forced into work-for-the-dole programs after six months.
At the same time as laying into the weakest and most vulnerable, unashamedly labelled "shirkers" and "bludgers" by Costello and his cheer squad in the Murdoch press, the budget was a bonanza for the wealthy corporate elite. It included business tax concessions worth $1.8 billion, as well as creating a $16 billion Future Fund under which budget surpluses and the $30 billion the government expects to raise from the full privatisation of Telstra will be channelled into the stock market.
Ostensibly created to meet unfunded superannuation liabilities for federal public servants, the Future Fund actually amounts to a massive slush fund for corporate investment.
The corporate rich — the main beneficiaries of the budget's tax cuts and handouts to big business — are the real bludgers.
The budget goes out of its way to benefit the highest income earners. The tax cuts offered will give those who earn $125,000 a year or more tax cuts of $87 a week over the next two years, while the 75% of taxpayers who earn less than $58,000 a year will get only $6 a week. This is a slap in the face for the majority of workers, given that polls show most want increased spending on social services rather than tax cuts. Instead, the budget gives 7 million workers less than the cost of one return peak-hour train ticket from Sydney's outer suburbs into the city — a trek thousands of workers make daily.
While health care and public education miss out in the budget again, the Coalition has shown it is willing to spend public money when it sees the need. At the same time as the budget
slashes funding to Medicare, breaking a key Coalition election promise, military spending has reached a record high of $17.5 billion, including $402.5 million for the current deployment of 450 troops in southern Iraq.
This is a budget for the bludgers and shirkers who make up the tiny minority of mega-rich.
However, the Coalition is wary of upsetting public opinion by going too far too fast. For instance, if the budget had included the proposal to lower the top-bracket tax rate from 47% to just 30%, someone earning $3 million a year would have received a tax cut of $500,000.
The federal Labor Party has attempted to tap into the popular feeling about the injustice of the largest tax cuts going to the richest with a lot of noise about opposing this budget. ALP leader Kim Beazley's speech on the budget to parliament on May 12 was filled with left-populist rhetoric against the "greed" of the Coalition.
However, the actual substance of the ALP's alternative polices are meagre, to say the least, and amount, at best, to a modified version of the same pro-rich policy agenda. Under Beazley's tax plan, those earning a six-figure salary would get a $40 a week tax cut, while those earning less than 70,000 would get only an extra $12 a week in their pay packets. That is two kebabs a week from Labor instead of one from the Coalition.
The real audience for Beazley's speech however was those sections of the corporate rich dissatisfied that the Coalition was not going far enough. Reflecting this section of the capitalist ruling class's views, the May 11 Australian Financial Review editorial compared Costello's latest budget unfavourably with those of the "free market" Hawke and Keating Labor governments of the 1980s and early '90s.
In a pitch to the same sections of big business, Beazley declared in his budget-in-reply speech that "Australia needs a government that is up to the reform challenge, that can lift the hood on the economy, get stuck in and fix things up — just as the reformist Hawke and Keating governments did in the 1980s and 1990s".
From Green Left Weekly, May 25, 2005.
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