Forget the end of neo-liberalism and a new era of social democracy that Kevin Rudd talked about in his Monthly essay. The fiscal conservative Rudd has returned (if he ever went away). Behind the mining super profit tax is a very different picture.
Labor are hoping that the resources boom will last long enough to get them out of trouble. They are hoping no-one scrutinises the prediction that the Budget will be back in surplus by 2012-13. But if the Greek debt crisis deepens or China’s growth stalls, or mineral prices do not rise as much as forecast—and these are all possibilities—all bets are off.
Swan and Rudd have slugged smokers for $1.2 billion, but substantially the Budget rests on the resources super profit tax and the hope that the economy will boom. This is extremely unlikely. Treasury predicts that Europe will return to growth in 2010, the IMF only thinks this is a possibility in 2011.
Swan is predicting household consumption will rise by 3.5 per cent in 2010-11 and 4 per cent in 2011-12. But job ads are falling and there is no sign household spending is rising, now that the economic stimulus package is gone. What this means is that if Australia’s economy does stall, serious spending cuts to reduce the Budget deficit have been put off until after the election.
By capping any increase in government spending to just 2 per cent, Labor has ensured that there is little money for health and education. Although there were new announcements of health funding a $40 million program to boost the number of nurses has been cut. And a program to provide mental health treatments worth $57 million has been scrapped.
Swan and Rudd are also putting the boot into disability pensioners—and hoping to cut spending by $383 million. People will be unable to receive the pension until they prove they have tried to find a job.
Behind the tax on super profits, Labor has actually cut the corporate tax rate from 30 to 29 per cent in 2013 and to 28 per cent in 2014. Billions are being handed back to the bosses (see p5).
The Budget throws another $1 billion at what is now called “border protection”. Christmas Island, Curtin, Port Augusta and Villawood are to be up-graded and refurbished. There will be eight more patrol boats and $33 million more paid to Indonesia to enhance activities against people smuggling.
National spy agencies like ASIO are getting $4.3 billion and greatly expanding their powers to tap phones and use satellite surveillance on activities like people smuggling.
The government has revealed how little it is interested in action to halt climate change. There is only a pittance more—$652.5 million to fund renewable energy—and over four years!
There will be public service jobs growth but the government is spending $6.3 billion on full-time defence personnel and hopes to tempt another 6000 recruits into the defence forces.
The money to boost jobs, health and education is there. The Commonwealth Bank has just announced its profit increased 13 per cent to $2.91 billion for the last six months of 2009. But Rudd baulked at the idea there could be a tax on banks’ super profits. Working people are still paying for the recovery. Since the crash, the fall in average hours worked is still the equivalent of 100,000 jobs.
Rudd is ruling for the rich. He might be talking about taxing the mining companies but when mine workers went on strike to improve their conditions, they were threatened with fines under Rudd’s FairWork Australia laws.