Magazine of Socialist Action in Australia

Budget: Neither party offers solutions

Reading Time: 3 minutes

Desperation from the government was in the air as the Coalition revealed their 2019-2020 budget. The plan centres on a cheap attempt to buy votes ahead of the election, while the government has cooked the books to promise a surplus if re-elected. But as usual there are no solutions to the big problems faced by ordinary working people.

A housing crisis coupled with an ‘income recession’ is worsening living standards and building up resentment among wide layers of people. It reflects in the government’s poor poll results, which the budget didn’t really improve.

The budget’s new income tax cuts and tiny one-off “energy bill” payments are an admission that life is getting harder for most people. But these would not be enough to produce a real improvement.

Most workers understand that tax cuts are no substitute for the decent wage rises that are needed just to recover the lost ground. Instead they are widely seen as cynical electoral bribes.

Moreover, the Coalition’s plan is to deliver huge tax cuts to the rich by making tax rates “flatter” and less progressive. Such tax cuts would be paid for by continuing to cut social spending and funding for essential services.

Labor have promised roughly the same tax cuts for people earning less than $90,000 per year. But Labor aren’t promising to substantially “change the rules” and give workers more leeway to fight for decent wage rises.

In fact, Labor put in place the current industrial rules. Instead of blindly trusting Labor’s vague “promises” we need a serious industrial campaign that includes strike action. This would put real pressure on employers and whoever wins the election to deliver decent pay rises.

Economic dangers

Both major parties are promising the first surplus since the global financial crisis, for next year. That promise has been made and broken multiple times by both of them for over a decade. They also promise to completely pay off government debt in the next ten years. But there is no guarantee these things will happen.

Rosy predictions for pre-financial crisis levels of wage and economic growth underpin these politician-promises. These figures have been over-estimated for years. It’s highly likely they will be wrong again as the first recession since 1992 threatens.

Potential dangers for the Australian economy include the simmering US-China trade war, Brexit, and a European financial crisis. Not to mention economic blackmail by the Chinese dictatorship or a worsening domestic housing downturn. Any combination of these would turn budget estimates into fantasy.

On a whole range of other burning issues, the government’s budget continues the same old big business agenda. Even their limited and drawn out infrastructure spending is focused on profits for corporate Australia and won’t adequately address any problems quickly.

Nothing is budgeted to avert the climate catastrophe, and public subsidies for private fossil fuel use remain four times higher than spending on the environment. Weekly “Fridays for Future” youth climate strikes, like in parts of Europe, would be a good first response to this.

People living on Newstart payments will continue to struggle on $280 a week with no increase in sight. There is however $129 million to be spent on extending the racist and ineffective cashless welfare card, targeting Aboriginal people especially. Aboriginal people will not get any money to address the ongoing violence, dispossession and oppression they suffer.

There are no serious measures to address the gender pay gap or other issues of systemic sexism. Medibank Private will continue receiving millions of dollars from the public so they can profit from the ‘1800 RESPECT’ call centre. This should never have been privatised.

ASIO and the Australian Federal Police will benefit from a $570 million boost to funding for “intelligence” agencies. Both have a long history of spying on and targeting activists, unionists, socialists and others challenging big business interests.

The next capitalist crisis is brewing and will hit Australia much harder than the 2007-08 crash. Clearly the priority of pro-capitalist politicians is to increase the power and wealth of the ruling class at the expense of working people.

No matter who wins the election, the overarching political and economic policies will remain the same. A huge amount of wealth exists in Australia but the problem is that its controlled by big business. In order to have a budget that deals with the real problems we face we need to fight for public ownership and democratic control of the main parts of the economy.

These are the building blocks of socialism.

By Kirk Leonard


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