Australia: A ‘unity ticket’ of cuts

Liberal government and Labor opposition join forces to pass A$6.3 billion austerity measures

In mid-September the Liberal government and the Labor opposition joined forces to pass legislation that will allow for A$6.3 billion worth of spending cuts over the next four years. This was met with widespread enthusiasm by the big business elite, who have long been demanding that the working class shoulder the burden as the economy slows down.

The legislation dubbed the ‘Omnibus Bill’ contained cuts that will severely impact on ordinary people including parents, the unemployed, students and the elderly. The government had originally proposed $6.1 billion in cuts, but after some horse trading Labor proposed a package that was even more detrimental.

The most significant cut will see tax benefits slashed for some 390,000 families with a combined income of a mere $80,000 or more. In addition, the baby bonus was scrapped, job seeker bonuses were ditched and cuts were made to aged care allowances. In all 20 regressive measures were pushed through.

One group of people that will be acutely impacted will be students. Cuts were made to HECS-HELP subsidies and the threshold at which student loans have to be paid back was lowered to $51,956 a year. To top things off, some scholarships were abolished and tens of millions of dollars were cut from education funding.

While Labor had previously obstructed many of these measures, they went into the last election campaign speaking out of both sides of their mouths. When talking to working class voters they claimed to be friends of the underdog and pledged to rail against big business greed. When they spoke to big business, however, they said the exact opposite, posing as “responsible” economic mangers.

They told the rich that if they were elected they could be trusted to carry out policies in their interests. Turnbull took advantage of this contradiction after he won the election and drafted the Omnibus Bill as a way of forcing the Labor Party to keep their promises to the rich.

Labor have attempted to put a spin on their treacherous role by saying that the bill would ultimately lead to better results for those on low incomes. They portray the dilemma as a choice between making either the very poor, or the slightly better off pay.

Families on $80,000 a year are not the ones who should be forced to suffer. While it is true that there is a budget deficit and that national debt is growing, the way to deal with that is to force big business to part with a bigger share of their profits. This ‘unity ticket’ of cuts proves that both the major parties agree that profits are sacrosanct and that working people are to be treated with contempt.

Pro-working class approach needed

In fact, the most striking feature of Australian politics at the moment is that there is no major political force that genuinely represents the interests of working class people. The budget could easily be balanced if a pro-working class approach was adopted.

For example, the Australian Tax Office has stated that 30% of large private companies pay no corporate tax at all! The Panama Papers revealed that trillions of dollars are being held in offshore tax havens. Clearly an immense amount of wealth exists. The problem is that it is being horded by the rich and not distributed back to the workers who created it in the first place.

It is an outrage that while this situation exists the major parties are colluding to slash modest benefits to some of society’s most vulnerable people. Billions of dollars could be raised if taxes on profits were increased and all forms of corporate welfare were scrapped. Hundreds of billions more could be freed up if the major sectors of the economy were brought into democratic public ownership and the profit motive was removed.

We cannot allow the major parties to continue to run roughshod over the living conditions of ordinary people. Resolving the issue of working class political representation is urgent if we are to bring any sense to the debate about the budget and the economy. Flowing from this we need an organisation that will fight for a socialist society that puts people’s needs before corporate greed.


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October 2016