Prime Minister Tony Abbott's harsh regime of cutbacks and user-pays charges has been rejected by the Australian people in poll after poll. But this has not stopped the pro-business media from trying to wear people down and pressure Labor and the Greens to accept some of the government's demands.
Typical of this drumbeat was the widely reported Deloitte Access Economics report, which likened the growing budget deficit to a novel by horror writer Stephen King. In an effort to massage a consensus for cutbacks it demands, "For our budget to be sustainable, our politics has to be sustainable".
In other words these commentators want Labor and Liberal to stop "playing politics" and agree to a bipartisan program of austerity. The government has even spent taxpayers’ money on its so-called Intergenerational Report to pile on the pressure.
It's true the government is facing declining revenues as a result of a slowdown in the Chinese commodity boom. But this boom barely masked the real budget revenue horror story that has been grinding on for more than three decades now -- the bipartisan policies of tax cuts for the rich, privatisation and corporate subsidies.
Federal Labor has resisted the worst of the Abbott government's proposals, rather than commit electoral suicide, but it has only slowed the course, not changed the direction. In 1988 the corporate tax rate was 49%; today it is down to only 30%.
Remember the fear and hysteria about Kevin Rudd's mining super profits tax? That proposed a 40% tax on mining superprofits, well behind the 78-90% that Norway levies on the oil and gas industry. Instead, we continue to give the mining companies $4.5 billion a year in subsidies.
We have the fifth lowest tax rate in the OECD. According to the Australia Institute last year the cumulative cost of tax cuts introduced since 2005 was $170 billion.
The inevitable outcome of this has been to concentrate wealth at the top. Since the 1980s the richest 1% of the population have doubled their share of national income, and now have more wealth than 60% of the population. The top 10% have the same amount of wealth as the bottom 80%.
All this generosity to the super rich has to be paid for in the budget too; and it has been via cuts to social spending, more user-pays charges and the introduction of the regressive and unfair GST.
The Abbott government’s single-minded emphasis on reducing spending increases the burden on those with lower incomes who depend on government spending the most. By 2017-18 the bottom 20% of single parent households will lose 11% of their disposable income.
There certainly is a dangerous minority that threatens the well-being of ordinary Australians, but it is not asylum seekers or Muslims.
This government of sociopaths and leaners now want us to further subsidise their lives of privilege by increasing the GST. Instead we need to abolish it. The current budget deficit could be more than covered by making the mega rich pay their way.
The best place to start would be by restoring the company tax rate to 49%. The Australia Institute has canvassed a range of other measures in the paper It's the revenue stupid.
It suggests four steps that would between them raise $19.5 billion a year. These are:
1. Restricting superannuation tax concessions for the very wealthy;
2. Restrictions on negative gearing
3. Scrapping the capital gains discount
4. Introducing a “Buffet” rule (a minimum average tax on high income earners).
Billionaires and their hangers-on in parliament and the pro-corporate media dismiss such policies as the "politics of envy". The truth is they are the starting point for a discussion about creating an Australia founded on human dignity, equality and a fossil fuel-free future.
[Sam Wainwright is co-convener of Socialist Alliance in WA.]
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