Labor’s budget hits workers with cuts and new costs

Working class and poor people expecting relief from Labor’s budget did not get any. Disappointment rippled through households as it became clear that they were the targets of a raft of “savings measures”, meaning cuts.

Treasurer Wayne Swan and Julia Gillard insist these “tough” cuts are necessary to fund the Gonski education reforms and DisabilityCare Australia (the re-badged National Disability Insurance Scheme, or NDIS). But they are seriously out of touch if they think robbing Peter to pay Paul is going to be a vote winner.

Cuts for us

We already knew Labor were to shamelessly pit schools against universities by paying for Gonski with $2.3 billion ripped out of universities, rather than stomach getting the money from the miners and the corporations.

While they have tweaked laws around tax evasion, to raise $1.1 billion a year, the bulk of the pain will be felt by those already struggling while those raking in the profits have been left off the hook (see opposite page).

The government will scrap the Baby Bonus, which amounts to a $1.1 billion cut to welfare. And this comes on top of last year’s changes that have thrown 80,000 single parents onto Newstart, cutting their payments by approximately $115 a fortnight and forcing them to look for work. Despite hostility from Labor’s own backbench at these brutal cuts and a hope that they might revise this decision, they have stubbornly and cruelly stuck to it.

Widespread institutional support for increasing Newstart, too, was ignored. Instead Newstart recipients who work can keep an extra $19 a week of their income; a measly total of $988 a year. This will mean nothing for the four our of five people on Newstart who can’t find work. They will need to continue to survive on $35 a day.

The government did however find money to punish—investing an extra $64.9 million in investigating welfare fraud. Yet more money will be thrown at income management programs—another $26.3 million for Noel Pearson’s Cape York initiatives, and $16.4 million for the expansion of income management.

As well as dropping new tax concessions for families, parents dealing with excessive child care costs get no relief. The government will freeze the child care rebate at $7500. The latter was already a stop gap measure for their failure to invest in providing any public child care at all.

Carbon tax compensation through raising the tax-free threshold has been quickly forgotten, justified by the falling EU carbon price. Those of us dealing with massive electricity price rises (80 per cent in NSW in the last four years, for example) will just have to cope.

Costs for us

On top of this pain, DisabilityCare Australia will be funded by increasing the Medicare levy by 0.5 per cent. Rather than institute a progressive system where the rich pay a higher proportion, Labor’s plan means everybody that pays the levy will be charged the same proportion of their income.

Even Abbott is prepared to raise corporate tax to fund his maternity leave scheme—but Labor won’t do it for the disabled! This needed investment in disability funding does not need to come from people already struggling.

As well as no relief from the rising cost of living, there is next to no new spending to fix the endemic problems in the health system. In fact $644 million will come out of primary hospital care. And the costs incurred to access to the Medicare Safety Net, which reimburses out-of-pocket health expenses, will be raised to $2000, leaving people out of pocket unless they spend over that amount.

The budget also puts a freeze on rebates for General Practitioners, meaning some doctors will decide to stop bulk billing and charge their customers more to cover increasing costs.

Big picture

The promise of tackling climate change has been abandoned, with just under $1 billion cut from the already tiny spending on renewable energy.

Disgracefully, cutbacks in foreign aid of $1 billion have been justified by increased spending on refugee detention and deterrence measures. The money will go to punishing asylum seekers, but the government is creating an image of asylum seekers taking from the deserving.

Yet the government has decided to increase defence spending overall. In fact $3 billion will go into buying 12 new Boeing Superhornet Growler Fighters to add to the 24 we already have.

It is these nasty cuts that will live on after the Labor government is turfed out at the next election.

By Amy Thomas


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