Magazine of Socialist Action in Australia

Budget measures: ‘Intergenerational’ or ‘interclass’ theft?

Reading Time: 5 minutes

Editorial comment from the March 2015 edition of The Socialist

Last month saw an escalation of the political crisis in Australia with Liberal Prime Minister Tony Abbott facing a motion in his own party room to declare all leadership positions open for contest. Despite no other MP putting their name forward as a contender, an amazing 40% of Liberal Party MPs voted in favour. Abbott himself described the events as a “near death moment”.

The mainstream press has attempted to explain the internal Liberal Party discord as a result of a series of mistaken “captains calls”, and the inability of the government to sell its message. While there is no doubt that Abbott has made many blunders in his 17 months in office the real source of the crisis is the unfolding economic situation.

The boom in the mining sector is fading fast and this is impacting on the federal budget. In an attempt to maintain conditions for big business, like low company tax rates and various forms of corporate welfare, the government delivered a budget last year that sought to make ordinary people pay the price for falling revenues.

Alongside cuts to welfare and social services the government raised the retirement age. They also made attempts to deregulate university fees and introduce a co-payment fee for seeing a doctor. People saw this for what it was – an attempt to make them pay for an economic crisis that was not of their making. As a result the Liberals fortunes slumped.

Liberal state governments in Victoria and Queensland were summarily thrown out of office. Polls showing that the federal Liberals could lose as many as 40 seats at the next election drove a revolt of Tony Abbott’s back bench. While Abbott escaped the threat of a challenge to his leadership by the skin of his teeth he is now clearly on notice.

In an attempt to quell voters’ opposition to his harsh budget measures he has signalled that this year’s budget will be somewhat milder. While bound to include further measures aimed at making ordinary people shoulder the burden, it will probably be rebranded and framed as something that is good for families and children.

His dilemma is that this approach will probably not satisfy anyone. Against the backdrop of rising unemployment and living costs the bulk of people are unlikely to be fooled. People are finding it much harder to make ends meet and cynical phraseology will not help people pay the bills.

At the same time big business are already questioning whether Abbott is capable of delivering what is necessary for them. With the budget position so precarious even mild gestures aimed at keeping voters happy can put big business benefits at risk. They demand an urgent return to surplus not only in order to maintain their benefits but in order to increase them. As capitalism is a global system they seek to compete with low tax and low wage rates the world over.

The political volatility that we have seen in recent months has actually been brewing under the surface for some time. The discord in the Labor Party as far back as 2010 was some of the first expressions of this new unstable era for Australian capitalism.

Voters have been using elections as a way of punishing incumbent governments that carry out cuts and privatisations. Strategists of big business are perplexed by this. Some have complained that ‘democracy is not working.’ What they really mean by this is that even the supposedly stable two-party system they set up to serve their needs is now failing them.

Some speak of the need to set up a new political party that speaks ‘left’ but carries out a traditional right wing agenda. Others are pushing for the two major parties to come together, to put aside their minor differences and to have a bipartisan approach to economic and budget matters – a type of ‘national unity’ that aims to restabilise the profit driven system for the top 1%.

Many point towards the need for a more technocratic approach to budget issues in a similar way to we have seen in Europe where people can vote for whoever they like but economic decisions are made separate to government by unelected institutions. The introduction of a raft of anti-democratic laws are already paving the way for a period ahead where governments will attempt to remove people’s rights in order to carry out a pro-big business agenda.

This is the direction those who seek to profit at our expense want to head in. How far they can go will depend on the ability of people to put up a fight – not just against cuts and austerity measures but also in defence of our democratic rights.

In the immediate term it is unlikely that the Liberals will stabilise and unite around Abbott. It is most likely that leadership hopeful Malcolm Turnbull is biding his time waiting for Abbott to falter before he pounces and attempts to secure the top job.

It is not ruled out that if Turnbull does manage to secure the Liberal leadership he would seek to call an early election in an attempt to solidify his position. Learning from the errors of Julia Gillard he would want to be seen as having legitimacy. He would want to wipe the slate clean and approach the electorate as the new, friendlier face of the Liberals.

While he may hold slightly more progressive views on some social issues he has the same hardnose approach to economic questions as Abbott. In other words he would facilitate the same process whereby ordinary people would be forced to pay for a crisis that they did not create.

From the point of view of ordinary people, neither changing the leader of the Liberal Party, nor putting Labor back in power would satisfy their needs. Labor just like the Liberals is a party of big business. For decades, each has taken turns representing the profit making agenda. As a result we have seen the gap between rich and poor widen substantially.

In an attempt to give ideological cover to the type of pro-business budget measures that have been supported by both the major parties, Abbott has said that to not take action would be a form of “intergenerational theft”. In an emotive way he claims that people need to make sacrifices now so as to not burden the children of the future.

What he is effectively saying is that while the top 1% prospers the rest of you have to fight over the crumbs for generations to come. To describe the situation more accurately would be to call it “interclass theft” – a process whereby the wealth created by the bulk of ordinary people is being hived off by the rich elite. Both the major parties are complicit in this scam.

There is a desperate need to shift the entire political debate away from the needs of the top 1% and towards the needs of the majority. We need to build a new political movement based on the interests of working class people, students, the unemployed and the poor.

Such a movement needs to be focused on reversing the trend towards wealth inequality and replacing the profit driven capitalist system with a system that prioritises people’s needs. The famous Irish workers leader James Connolly dubbed this type of system ‘socialism: the great anti-theft movement’.


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