Gillard’s cuts hit single mothers and students, but the rich get off

Labor’s decision to rip $2.8 billion out of universities is a further nail in its electoral coffin. It sums up the problem with this government: its failure to tax corporations and the rich has left it targeting cuts at services and welfare that hit workers and the poor.

Shamefully, it slashed parenting payments to single mothers from January 1. Now, in order to fund increased spending on schools, it will rip money out of the already strained university system. No wonder people think Labor stands for nothing.

Gillard's cuts will hit single mothers and students while the rich get off

Universities will face an “efficiency dividend”—an across the board funding cut—of 2 per cent next year, that will see jobs and courses cut.

HECS fees will go up for all new students on Youth Allowance, whose Student Start-Up Scholarships will have to be paid back. This will raise the government $1.2 billion.

And there is more to come. As Anthony Albanese revealed the day after the cuts were announced, “There will be further cuts announced in the Budget [in] May”.

The reason for the cuts is simple. Labor capitulated to the mining companies, producing a mining tax that raises almost no revenue.

It has also caved into the rich over superannuation. There was talk that Labor would take back some of the billions handed to the “fabulously wealthy” in the form of tax concessions on income from superannuation investments.

According to the Australia Institute, “the benefits of tax concessions to superannuation flow overwhelmingly to high income earners with many low income earners receiving literally zero benefit”. The wealthiest 10 per cent of the population alone will receive $4.5 billion through such concessions this year.

But Labor’s super changes will raise just $900 million over four years. Financial Services Council chief and former NSW Liberal leader John Brogden called it “a good package” and withdrew his threat to launch an ad campaign against the changes.

The timid changes to super puts the lie to the ridiculous claim from Simon Crean and others that Labor under Julia Gillard has embarked on “class war”. In reality the government is totally committed to keep down corporate taxes. Treasurer Wayne Swan has boasted that Labor is taking less tax as a share of the economy than the Liberals did under John Howard—as if being a low-taxing government was a badge of honour.

The banks and the mining companies are raking in money. But Labor is so committed to the worship of the market that it won’t touch them.

Warped priorities

So its plan to boost schools funding relies on finding cuts elsewhere. The government wants to put an extra $9.4 billion in federal funding into schools over six years, averaging out at an unimpressive $1.5 billion extra a year. That is far less than the $3.8 billion a year for government schools that the Gonski review recommended. Labor’s Gonski spending priorities are also warped by their insistence on giving even the wealthiest private schools an increase in funding—on top of the money they got from the Howard government.

This is bad enough, but the government also wants to give more power to principals and dismantle the remaining statewide staffing systems. It wants to enshrine the destructive NAPLAN standardised testing regime at the centre of its schools policy.

Labor’s failures look like handing Tony Abbott and the Liberals the election. According to Essential polling in April voters continue to see Labor as the party representing working class people. But less and less people trust Labor to deliver for workers, with the party judged even more “out of touch with ordinary people” than the Liberals. Labor in power has chosen to race the Liberals to the right instead of standing up for any principles.

The failure of Labor’s time in power shows the cost of putting any hope in Labor or parliament. Too often the unions have apologised for a useless Labor government instead of building a fight in the workplaces, the campuses and on the streets to demand real change.

Labor’s cuts to universities show that there is no point waiting to build the fight that’s needed. The staff unions at Sydney Uni have staged three days of strike action so far this semester to fight management’s attempts to increase casualisation and make it easier to sack staff and cut courses. The fighting campaign has seen the NTEU recruit 240 new members this year.

Julia Gillard and Craig Emerson say the Budget cuts are all about “Labor values”—but they are a million miles away from the values of the Labor (and Green) voters who voted Howard out in 2007. That’s why Labor’s polling has crashed below 30 per cent.

When the election comes, we can vote Green. But to wage a real class war, we need united action by unions, students, lecturers, general staff, and single parents to stop Gillard’s Budget cuts.

That’s the kind of action that will be needed to force Labor to deliver, to fight Tony Abbott if he wins office—and to fight the system, they both represent.


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