As we go to press this month the Coalition continues to hold an election-winning lead over Labor in the polls. In the lead up to the budget in mid May, there is much talk about the state of the nation’s finances and how to plug the budget deficit.
Regardless of who wins the election in September they will inherit a budget black hole in the midst of a worsening economic situation globally. Some economists are predicting that if Australia continues on its current path it could face a decade of budget deficits – with the annual total set to pass $60 billion in 2023.
Most capitalist commentators are urging the major parties to make some ‘tough decisions’. This is code for placing the burden on the bulk of ordinary people who work for a living. Measures such as increasing the GST, increasing income taxes on low and middle income earners and tightening the criteria for welfare payments are among some of the ‘solutions’ put forward by the big business press.
Socialists reject these measures and argue that it is those who profit at the expense of ordinary people – big businesses – that should be forced to pay. All the relevant figures show that they can more than afford it.
For a long time now the trend in Australia, and across most of the developed world, has been that the rich are getting richer while the rest of us are struggling to make ends meet. Wages as a share of national income is currently 52.6% – it’s lowest since September 1964. Profits as a share of national income on the other hand are near record highs.
Company tax rates have consistently trended downwards since the 1980s in Australia. From 46% in 1980 to 30% now this process has led to an increasing gap between rich and poor. Income inequality in Australia is actually amongst the fastest growing in the developed world. The top 10% of income earners make nearly 10 times as much as the bottom 10%.
Mining giants like BHP Billiton booked profits in the order of $15 billion last year while the mining tax brought in a paltry $126 million in its first six months. At the same time the mining moguls share in $13.8 billion in taxpayer funded fossil fuel subsidies. The situation is a total farce.
It is estimated that if the mining tax was increased to 40% of forecast profits in excess of $100 billion could be raised over the next decade. If the big banks and the gambling industry had their super-profits similarly taxed hundreds of billions more could be raised to both plug the budget deficit but also to invest in the areas of health and education.
Far from having to undermine the wages or the purchasing power of ordinary people there are vast amounts of wealth in Australia that are currently untapped.
While socialists support increasing taxes on big business as a basic reform we would go further by calling for the major sectors of the economy to be brought into public ownership. That way the entirety of the wealth produced by these enterprises could be shared out more equally, in a democratic and planned way amongst the population.
As we approach September we shouldn’t let either of the major parties tell us that ‘tough decisions’ or ‘hard cuts’ are required. Those who created the crisis should be forced to pay. We need to defend our living standards and fight to reverse the trend towards wealth inequality.
In order to be able to do this effectively we will have to build a new political vehicle – a party that unlike the Liberals and Labor unashamedly represents the interests of the majority and is prepared to take on big business greed. That will be our task regardless of who wins the next federal election.
Oppose Labor’s $2.8 billion in university cuts!
Attend the national student strike on May 14
Last month federal Tertiary Education Minister Craig Emerson announced a further $2.8 billion in cuts to funding for higher education. This is on top of over $2 billion of cuts to tertiary education funding over the last six months. University staff and students will be directly affected by this latest round of cuts with increased class sizes, staff lay-offs and more expensive degrees.
By Socialist Party reporters
$900 million will be taken out of universities over the next two years through so-called ‘efficiency dividends’. Student Start-up Scholarships will be turned into loans, adding over $6,000 to student debt for a 3 year undergraduate degree. The discount for paying course fees upfront will also be abolished.
The average public investment in tertiary education in advanced countries is 1% of GDP. In Australia only 0.7% of GDP goes towards higher education, with the majority of money coming from private sources like student fees, rather than public spending. This places Australia 25th on the list of 29 advanced countries, with investment 30% lower than the average. The tertiary education sector is in desperate need more public funding, not less.
The latest cuts are part of the ongoing agenda to turn education into a for-profit, user-pays industry run on a business model. The Labor government has tried to justify the tertiary cuts by claiming the savings will pay for the Gonski reforms to school education. These reforms are themselves a step towards the further privatisation of public education, cementing public funding for private schools. Under the Gonski reforms private schools are set to receive a further $2.5 billion in public funding, despite remaining exclusive for students from wealthier backgrounds.
We need to reject the idea that different levels of education need to compete against each other for funding, whilst also rejecting the push towards privatised education. If the biggest profiteers in the country – the mining bosses, the big banks and the casinos – had their super-profits taxed at a higher rate there would be more than enough public money available to fund free, quality public education for all. The mining bosses alone receive around $4 billion per year in taxpayer subsidies – more than the recent government cuts to tertiary education.
A number of ‘stakeholders’ in the education sector – University administrators, staff unions and students unions – have stated that cutting university funding to fund schools ‘doesn’t make sense’. Unfortunately, it makes perfect sense to a government hell-bent on furthering the marketisation of tertiary education. The goal of both major political parties is to facilitate the growth of a profitable, market based tertiary education sector funded on a user-pays basis. The accessibility, diversity and quality of education will inevitability continue to fall by the wayside as business competitiveness is prioritised.
If students and staff are to defeat the plans of both major parties to treat education as a commodity, rather than a right, collective action is required. Joint strike action from the NTEU (National Tertiary Education Union), NUS (National Union of Students) and the AEU (Australian Education Union), inclusive of high school students, would show both Gillard and Abbott that we are serious about our right to quality public education from pre-school to university or TAFE.
While we desperately need to build a movement of students and staff against education cuts, we also need to fight for a political alternative to the pro-business policies of the major political parties. Only a democratically planned socialist economy based on human need – not private profit – would prioritise the provision of free, quality education across the board.
Attend the national student strike activities on budget day – May 14