Labor’s budget cuts begin Abbott’s work early

Rather than use their last budget to provide real change, Labor have imposed sweeping cuts that Abbott will be happy to keep when he more than likely comes to power in September.

Despite ditching its plan for an immediate return to budget surplus, Labor remains wedded to the neo-liberal mantra of balancing the budget, arguing that new spending on the Gonski school reforms and DisabilityCare Australia must be offset by cuts to other areas.

But they are robbing Peter to pay Paul—the bulk of their cuts concentrate on family, education and welfare benefits.

Abbott will keep Labor’s cuts, like the $2.3 billion taken from universities, without wearing the political painEven while trying to sell their commitment to Gonski and DisabilityCare, Labor’s priority is to be seen as prudent “economic managers”. Labor are posing as the ones prepared to impose “responsible” cuts in order to fund spending on schools and disability support.

Treasurer Wayne Swan thinks he can make electoral mileage by somehow forcing the Liberals to reveal the scale of the cuts they have planned. Gillard thought she was being smart challenging Abbott to support the increased Medicare levy to fund DisabilityCare—but he simply agreed to support it.

Referencing Liberal Treasurer Joe Hockey’s comments that it is time to attack welfare and end the age of entitlement, Wayne Swan challenged him to come clean, saying people could, “choose between making motherhood statements about ending the age of entitlement, or putting their words into action”.

The Liberals have taken the invitation to keep the cuts and let Labor wear the blame.

Hockey even told the Liberal party room meeting that, “the easiest cuts to make are the ones that Labor makes for us”.

Besides the university cuts already announced, Labor has kept last year’s cuts to single parents payments, while further cutting climate programs, foreign aid and scrapping the baby bonus.

There is absolutely no need for this. The government could get billions more in revenue if it was prepared to seriously tax the profits of the mining companies and banks, and target the rich.

Even The Greens have pointed out that fixing the mining tax would raise $26.2 billion over three years.


Even with its big flagship announcements about Gonski and DisabilityCare, as usual Labor’s big promises don’t measure up to reality. The boost in funding to schools from July will be a tiny $473 million (see page 10).

The DisabilityCare scheme provides a much-needed reform, but again the immediate funds being committed are tiny.

Wayne Swan is desperately claiming that Labor’s budget is one that “puts jobs first” by avoiding savage austerity. But the government will slash another 1262 jobs in departments including Centrelink, the Australian Bureau of Statistics and Quarantine. This comes on top of 5000 positions cut in the last year because of Labor’s 4 per cent “efficiency dividend” imposed in the last budget.

Swan has admitted it will get worse—unemployment will rise in coming months as the economy slows. Resources companies Ausdrill and Iluka Resources have each cut 300 jobs in recent months. Newcrest mining cut 150 jobs in March. Engineering firm, Coffey International, announced 150 sackings in May. Despite record profits, the four big banks have sacked 1600 people over the last six months.

Make the rich pay

The rallies on budget day jointly called by the National Tertiary Education Union and student groups showed the kind of response to the budget that is possible. Demonstrations against the $2.3 billion cut to universities drew good crowds across the country.

We need similar mobilisations to continue the fight against the uni cuts, the cuts to public sector jobs, the cuts to single parents and to push for increasing the dole.

Raising extra funding for services and welfare—like a $50 a week increase to Newstart, reversing the cuts to single parents payments and funding renewable energy, jobs, hospitals and public schools is urgent.
Much of the union bureaucracy, however, is backing Labor’s budget. The Australian Education Union has been totally uncritical of the Gonski funding plan and is now simply focused on calling for Abbott to maintain the funding increase.

But the threat of an Abbott government is no reason to go quiet on Labor’s cuts. They are only opening the door to him. Mobilising against the cuts and demanding the wealthy pay for the much-needed boost to spending is both the best way to keep Abbott out of office and the best way to prepare if he wins.

“Your Rights At Work”-style mobilisations can send a clear signal that there is a fighting union movement willing to take the fight to Gillard and Abbott.

And it can give people a vision of a real alternative to fight for—not simply a choice of Labor’s cuts or Abbott’s cuts. Such a vision is going to be needed to see beyond the gloom of the coming election. It is only through building fighting unions and movements on the streets that we can turn things around and begin the struggle for a different society.


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