Labor is set to bring down cutbacks, job losses and attacks on the unemployed in its federal budget on May 10. “We’ll be doing things in this budget that won’t be popular,” Treasurer Wayne Swan has promised.
The government is blaming falls in tax revenue from the summer of natural disasters, plus tax write-offs by the mining companies from investment in new mines.
But their obsession with the neo-liberal diet of budget surpluses is the real reason they are insisting on cuts. Labor competed with Tony Abbott during the election campaign over who would cut debt the fastest.
Their economic conservatism is another effort to appease big business and the multi-millionaire CEOs. As their recent response to refugee protests at Villawood and Christmas Island detention centres shows, they remain committed to a race to the right with the Liberals. This is the same formula that shattered their support at last year’s election.
Ever since then, the government has droned on endlessly about its commitment to return to surplus by 2012-13.
But an Essential poll in April found 69 per cent of people would rather it delayed these plans, in the face of the one-off costs from the floods and wild weather. Economists and even the Australian Industry Group’s Heather Ridout have given the government the same advice. But Wayne Swan insists the government is “determined to… meet that commitment.”
Thousands of jobs face the axe in the public sector. The government will demand a 1.5 per cent cut each year in the public service, in what it calls an “efficiency dividend”, up from the current 1.25 per cent.
It promised during the election campaign not to increase the dividend. But Finance Minister Penny Wong said it isn’t breaking its promise because the increase would be “temporary”.
After 24 years with an “efficiency dividend” in place any genuine cost cutting in the public service happened long ago. The existing demand for 1.25 per cuts each year is already destroying jobs. Centrelink has just announced 530 job losses, and 300 more jobs are set to go at the Department of Education, Employment and Workplace Relations, after 600 jobs got the axe last year. And the public sector union expects further cuts when the budget is announced.
Julia Gillard has signalled a major attack on welfare, proclaiming, “there are people who can work who do not.” She demanded, “every Australian… pull his or her own weight.”
So after all Howard’s efforts to punish the unemployed and force people off the dole, Labor still thinks not enough has been done?
The government has already flagged tougher rules for older unemployed workers. People over 55 and on the dole will be forced into the same requirements to look for work as younger workers. This will scrap exemptions allowing them to do part-time or volunteer work, introduced because employers are often unwilling to hire them.
In a speech to the Sydney Institute Gillard lined up her targets: “people who have been unemployed for more than two years… families where no adult has been working for at least one year. And… the youth unemployment rate”.
Welfare rights organisations have pointed out that if Gillard really wanted to help the unemployed find work, this would cost the government more money in education, training and incentive measures. But punishing the unemployed through cuts is all that is on the table.
And the government’s motive for this? As Gillard explained, “our economy needs more workers”. Big business is desperate for labour thanks to the mining boom, and unemployed workers that they can hire on the cheap fit the bill nicely.
Labor’s neo-liberal straightjacket means that, instead of plans to fix up our public hospitals and schools, or money for public transport and renewable energy, it resorts to funding cuts.
But there is plenty of money available to properly fund services and infrastructure. The government is wasting almost half the revenue from its revised mining tax on tax cuts for big business, according to research prepared for The Greens. It will spend $2.4 billion in the first year alone on cutting corporate tax.
But there is no reason to accept budget cuts lying down. The Greens have a responsibility to their supporters to oppose attacks on welfare and public spending and to pile pressure on Labor to change course. Rightly, The Greens have signalled they will oppose the corporate tax cut. But in the last few budgets, their obsession with winning small concessions has won the day over standing up for the more substantial change we desperately need. The response of Bob Brown to the recent saga over BDS was not encouraging (see page 13). They will need to be prepared to take a gutsier stand to stem Labor’s slide rightwards.
The fightback from scientists, who rallied all over Australia against plant to cut medical research funding, shows what can be done. They have succeeded in pushing Gillard back. Let’s follow their good example.