The federal Treasurer Joe Hockey has foreshadowed further major cuts to public sector jobs and services in the Mid Year Economic and Fiscal Outlook (MYEFO) released on December 15. The MYEFO is an update on the draconian federal budget brought down by the treasurer in May this year.
The centre of the statement is a forecast of a massive $44 billion collapse in Commonwealth receipts over the next four years, leading to a delay in the Abbott government's much-trumpeted return to surplus to an unspecified date, and resulting in combined federal deficits totalling more than $100 billion in that period.
Shadow treasurer Chris Bowen immediately criticised the statement, declaring that the surplus had been "put off to the never-never". He blamed the May budget itself for having smashed "consumer confidence".
Hockey cited huge falls in international resource commodity prices, especially the near halving of the iron ore price, and slow wages growth, for the fall in federal government revenue. These factors alone have reduced Commonwealth income by around $70 billion over the past 15 months.
The government claims it has saved more than $3 billion as a result of policy decisions in the MYEFO, including slashing 175 government agencies and making further cuts to the foreign aid budget.
The Community and Public Sector Union (CPSU) says the way is now open for even harsher job cuts in the federal public service. The CPSU confirms that the 16,500 public sector jobs slated to be reduced in the May budget will be gone by the end of 2014, well ahead of forecast. Added to the job cuts were contestability contests that will require departments to find out if certain functions should be outsourced.
CPSU national secretary Nadine Flood said, "Contestability contests are nothing more than cover for massive outsourcing and privatisation programs that will see jobs and services sold off. The only contest will be which big business picks up the contract," she added, according to the December 15 Canberra Times.
World Vision head Tim Costello described the government's slashing of overseas aid as "immoral".
"The MYEFO merely underlines the growing political and economic crisis facing the Abbott government," Susan Price, Socialist Alliance candidate for the seat of Summer Hill in the March 2015 NSW state elections, said on December 16.
"The May budget was essentially a pre-emptive strike by the Coalition government against working people and the poor, in the expectation of a looming international downturn affecting the Australian economy.
"Now their neoliberal austerity policies, on behalf of big business, are in danger of throwing the so-called 'Lucky Country' into serious recession.
"Meanwhile, the Senate is holding up cuts to Medicare, tertiary education, social welfare and other areas totalling almost $34 billion.
"It is the public's rejection of the inherent 'unfairness' of Abbott and Hockey's budget that has led to these brutal measures being stalled in the Senate at this stage.
"However, it is precisely because of the massive public hostility to the government's original budget that Hockey has been slightly more restrained in making further severe cuts in MYEFO right now.
"However, the government's decision to cancel its commitment to introduce a 'targeted anti-tax avoidance provision,' aimed at multi-national corporations which dodge Australian tax by sending profits offshore, is the most blatant hypocrisy by Hockey, who railed against tax avoidance by big companies at the G20," Price said.
"The Abbott government has been clearly exposed as a direct instrument of class war against the workers and the poor, on behalf of big business.
"In light of all this, unions, community groups and the public will need to be extremely vigilant in the new year when Abbott and Co return to try to push through their program of cuts, possibly using new tricks and some compromises to hoodwink the crossbenchers in the Senate.
"We will need to organise and unite our forces in 2015 to build a mass movement of opposition to the cuts which can effectively defeat their drive for austerity and privatisation. This will involve fighting the policies of both federal and state governments.
"In NSW, we need to follow the example of Victoria where a mass campaign against the East-West Link has forced the incoming Labor government to tear up the contracts.
"We need to do the same in relation to the WestConnex tollway in Sydney. This also means fighting the Baird government's plans to sell off the NSW power industry.
"Socialist Alliance commits to enter the new year fighting alongside the people's movement against the Abbott-Hockey horror budget, and against all the attacks on our living standards, rights, public services and the environment," she concluded.
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