An Attack On Pensioners, Families, Students, Workers, The Disabled And Small Business

An attack on pensioners, families, students, workers, the disabled and small business 4

• Tom Ellison: The waiting is over, and we now know two things:

First, the Abbott Government’s vision for Australia’s future is now crystal clear.

Second, there is, and was, no Budget emergency.

Joe Hockey’s first Budget is less a vision for Australia than a blueprint for a nation of automatons. A place where people earn less for working longer hours, pay more for basic services and remain in the workforce until they drop. An invitation for employers to exploit staff, as they know any perceived welfare safety net is now full of holes.

It’s an attack on pensioners, families, students, workers, the disabled and small business.

And none of it is necessary.

The softening-up process began weeks ago, with constant reminders that we needed to somehow ‘fix’ Labor’s debt, which as reported elsewhere, is modest compared to many developed nations. We’ve also been told without urgent action, future deficits would spiral out of control.

So here’s a graph showing Government spending as a proportion of GDP. It’s lifted straight from the Budget papers, so I haven’t tampered with it:

The first rise coincides with increased Government stimulus in response to the GFC. The second reflects Joe Hockey’s decision to give $8 billion to the Reserve Bank. There’s no sign of out-of-control spending, and even in a post-GFC world, the Rudd/Gillard machine didn’t really spend much more than Howard’s government.

(Some people may have seen this graph before, is it’s been circulated on social media by a couple of politicians, but using a logarithmic rather than linear scale. Quite dishonest).

To the extent Treasury are happy to provide forecasts, the future in economic terms looks quite bright. Inflation is tipped to remain under control, GDP growth (although constrained by a slump in capital expenditure) is in line with long-term trends, and private investment is bubbling along nicely. Or was.

But it seems we were promised a Budget surplus, which seems like some sort of economic Holy Grail for modern conservatives. So in eleven years, we can expect a return to a ‘strong surplus of 1.4% of GDP.’

Anyone with a basic grasp of economics will understand forecasting is problematic. Even consensus on a 12-month outlook runs at less than 70%, and dips away sharply after that. Yet we’re expected to swallow a lethal (for Tasmania I suspect) dose of economic poison now, in order to help the Abbott Government stick to one of the few election promises yet to be thrown out.

The losers in this Budget have been well covered elsewhere, so I won’t go over that ground, except to ask one question: If we all have to share the pain equally, why haven’t the following been targeted?

1. Capital gains tax exemption on the family home.

2. Negative gearing.

3. Superannuation contributions tax.

4. Accelerated depreciation.

5. Concessional tax arrangements for companies with overseas operations.

6. Assets test exemption for the family home for wealthy retirees.

7. Marginal tax rates.

8. Business rollover concessions.

9. Income splitting arrangements.

10.Capital gains tax concessions.

A cynic might suggest, in the absence of any mention of reforms in those areas (which cumulatively cost the taxpayer over $40 billion each year) the pain isn’t been shared equally.

So what’s in it for Tasmania?

Well according to some of the PR documents stuck to the cover of the Budget papers, “Investment in national infrastructure adds immediately to economic activity and can also lift the long-term potential output of the economy, particularly by allowing businesses to expand to exploit the better transport, communications or energy solutions available.”

So we get a new set of traffic lights on the Brooker, along with less than 10% of what was originally promised to fix some potholes on the Midland Highway.

Finally, my initial estimates suggest around 200,000 Tasmanians face significant cuts in income over the next three years, including those on the Age Pension. More on that soon.

Tom Ellison
Analyst
Wills Financial Group

• Andrew Wilkie, Independent Member for Denison MR: A statement regarding the Federal Budget

The Federal Budget is a miserable piece of work. To suggest we have a budget emergency is plain wrong, and to use that so-called emergency as justification for targeting disadvantaged members of the community is diabolically cruel.

I do not support the hurtful changes to government pensions and payments, in particular the Disability Support Pension, Age Pension, Parenting Payment, Newstart and Family Tax Benefits. Diminishing the indexation and other changes will be a real blow for many families.

In my electorate of Denison in 2013 there were 5,334 people on the Disability Support Pension; 11,223 on the Age Pension; 1,816 on Parenting Payment; 3,867 on Newstart; and 12,973 on Family Tax Benefits. All of these people will be adversely affected by the Budget.

Also I do not support the introduction of a co-payment for medical treatment, not only because it will disproportionately impact people on low incomes and the sick, but also because the reform will be a significant dismantling of Australia’s universal free public health care system.

In Denison in 2011 the GP bulk-billing rate was 72.5 per cent and all of these people will be adversely affected by increased fees when visiting their doctor and when filling their prescriptions. Even those receiving a concession on their medication will have to fund two or more additional prescriptions themselves each year.

I am especially alarmed by the attack in the Budget on people with a disability, and in particular the tightening of eligibility and assessments for the Disability Support Pension. Over recent weeks a number of people with a disability have approached me about the prospect of such changes. All were alarmed and some beside themselves with fear and panic. For any government to put people in such a position is appalling, and all the more so because it will have exacerbated the mental illness of some vulnerable people.

Australia can afford to give people a world-class education but the moves to deregulate university fees, increase HECS debts and alter the HECS repayment arrangements are entirely at odds with that noble aim. Students will now pay more fees and have no certainty that the fees for their desired course will be the same in the future. That alone will deny many potential students the opportunity to gain and benefit from tertiary qualifications.

In Denison in 2011 there were 30,232 people attending education in one form or another, including 6,700 at university or other tertiary institution. Many of these, and those that will or would follow them, will be adversely affected by this Budget.

Australia’s wealth and good fortune should not be hoarded and the cut to foreign aid in the Budget is bitterly disappointing and short-sighted. Obviously we have a moral obligation to assist the world’s poor. But doing so is clearly in our own national interest because development assistance creates stability and opens up markets. The slashing of over $7.6bn for Official Development Assistance over five years is a false economy.

Yes, we do need to deal with the structural revenue/expenditure weaknesses in the nation’s finances, and the move to tax the wealthy more and tighten the means testing of government pensions and payments are sensible moves.

But such reforms are clearly weakened by the Government’s determination to implement a Paid Parental Leave Scheme that would pay up to $50,000 per eligible person. This is extravagant, unaffordable and set to disproportionately benefit relatively well paid recipients.

There are also a range of other measures, not addressed in the Budget, that would help to put the Budget on a better footing, for example a super profits tax on any company making a super profit like the banks.

Tasmania will not be spared any of the downsides of the Budget, and Denison in particular will be hard hit by the cut to CSIRO nationally of $111.4m and other Public Service job cuts. And while the Antarctic Gateway Partnership will receive $24m, this is not new money and the money will be sourced from the already underfunded Australian Research Council.

The Tasmanian environment will not fare better with $4m being stripped from Tasmanian Forest Reserve Tourism and the Government’s pledge not to support any further reserves in the State. It is positive that Hobart Airport is getting a $38m runway extension, but it is important to protect the environment which is one of the reasons tourists fly to our great state.

However I am pleased that Bass Strait vehicle and freight subsidies have escaped the axe for now. Moreover $400m has been earmarked for the Midland Highway upgrade and $500m for other projects including the Brooker Highway at Elwick. The final $50m (of the $340m Commonwealth grant) for the rebuild of the Royal Hobart Hospital appears to be safe given the Government’s commitment to progress existing Health and Hospitals Fund projects.

But budgets are about more than money, and this Budget is very much also about the Government’s credibility, or otherwise. For instance the ABC and SBS have had their base funding cut by $43.5m even though the Coalition made an iron-clad promise before the election not to do so.

Australia is a rich and fortunate country and one that can easily afford to look after those in need of assistance. There is simply no good reason for the sick, disabled, aged and unemployed to not be able to access high quality care and an income to live a decent life.

Budgets are a chance for governments to show the community what they think is important. This Government has sent a clear signal to the Australian people that it is more interested in a surplus than their future.

• Dr Buck Emberg, in Comments: Rejection Voter: Voice of the Future? The re-currently asked question “who are you going to vote for?” has never been more difficult to answer. Today, the most common answer I hear is something like, “I don’t really know. I do not want to vote for any of them! I reject the whole damn lot!” A growing dissatisfaction with ALL politicians is not merely an Australian phenomenon. Relatives in North America say; “we are fed up with our politicians.”

• Will Hodgman: Focus on Jobs and Economy There’s no doubt it’s a tough budget, but the Tasmanian specific initiatives announced tonight will help create jobs and build the economy. These initiatives were developed cooperatively during last year’s election campaign between the State and Federal Liberals and they’re now being delivered. These initiatives include: – $38 million for the extension of the Hobart Airport runway. – $400 million for the Midland Highway upgrade

• Guardian Australia: Joe Hockey delivers deep pain for little gain

• ABC: Budget 2014

• Cassy O’Connor: The most savage Budget cuts in living memory …

• Jan Davis: Budget the curate’s egg

• Nick McKim: Federal Gonski funds gone

• Richard Colbeck: Committed to strong and sustainable forestry industry, fisheries

• ABC Friends urges Senate to block Budget

• Peter Whish-Wilson: Liberals sneak through $28.9 million cut to Bass Strait Equalisation Schemes

• Terry Polglase: Hodgman must stand against cuts to Tassie schools

• Tony Reidy: Tasmania will feel major pain from moves on welfare, pensions and health

• ATA: Budget blows will not stop community push for renewable energy

• FamilyVoice: Punishing stay-home mums undermines our future workforce