Scott Morrison and Malcolm Turnbull have delivered a budget for the billionaires. They claim that opposition to their tax cuts for the rich is “class warfare”. But the truth is that they are the ones waging naked war against the ordinary people of Australia.
People earning less than $80,000 — the large majority — get absolutely nothing from this budget. The top 10% of taxpayers get three quarters of the benefits while the top 1% get almost half (47%) of the tax cuts.
The budget continues the war on social services by cutting billions from schools and hospital funding and refusing to reverse the cuts to Medicare.
It also features a drive to push young unemployed people into slave wages of $4 an hour.
Another centrepiece is the extravagant cuts to company tax rates. They have a 10-year plan to reduce the company tax rate from 30% to 25%. This is highway robbery — directly stealing tens of billions of dollars of public money and putting it into the hands of the corporate rich.
Small businesses get the benefits first, but they have changed the definition of “small” businesses from those turning over $2 million to $10 million a year. A company turning over $27,000 a day would count as a “small business”. This is clearly a very different league to your local hairdresser, baker or florist.
Turnbull did not want to reveal the $48 billion cost of these tax cuts to big corporations. The reason is obvious. Six hunderd of Australia's biggest corporations already pay no tax whatsoever.
In theory, the budget includes measures to tackle corporate tax avoidance. However, former assistant tax commissioner and socialist John Passant describes these measures as having all the impact of “thrashing with a feather”.
The diverted profits tax is only projected to raise $100 – $200 million annually — compared to a $48 billion corporate tax cut!
Passant also points out that the 1300 new tax office staff represents less than one-third of the staff cut last year. “If extra ATO staff means an increase in revenue, doesn't that mean sacking 4400 staff cut revenue collections from the big end of town?”
To their credit, Labor has challenged the Morrison/Turnbull corporate tax cuts. They have also promised to maintain the deficit repair levy on taxpayers with an income over $180,000, which was quietly dropped in Morrison's budget.
However, Labor's budget response falls short of the challenge needed against the billionaire class. They may wax lyrical about the fact that 600 corporations pay no tax, but they do not have a plan to seriously address it.
Only 30 years ago, the company tax rate was 49%. Any government that represented the interests of ordinary people would restore it to that rate again.
Labor rightly criticises the Turnbull government for cutting climate funding in the budget. As the most pressing issue for humanity today, this failure on climate removes any pretence that they are qualified to run the country. However, Labor's own climate response is inadequate.
Inevitably, the fightback against this budget for the billionaires is going to be intertwined with the federal election on July 2.
However, trade unions and progressive organisations cannot rely on simply advocating a vote against the Coalition. Only people power in the streets can defeat these cuts.
Labor and the Greens should not repeat the mistake they made in 2014 when they voted in favour of Tony Abbott's extreme budget cuts in the supply bills. As a way of registering their dissent and as a boost to the grassroots campaigns against Turnbull's latest budget cuts, they should vote against this budget as a whole.
The best way to reject this budget in the election is to vote for the strongest opposition to it: the Socialist Alliance, with preferences to the Greens and then Labor before the Liberals.
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