18 May 2015

Abbott keeps his cuts amid budget smoke and mirrors

Tony Abbott is desperately praying that this year’s budget will save his skin. But the budget cuts from last year remain in place, and even his new spending on childcare relies on taking money allocated elsewhere for families and new mothers.

Abbott has maintained his fearmongering about terrorism and national security, boosting military spending. Interest rates are at an all-time low, but except for the NBN, there is no government spending on badly needed infrastructure like public transport and renewable energy that might create jobs.

The government has a major credibility problem after its first year in office. Everyone now knows their real plans. Once they get themselves out of trouble, the Liberals will dust off the stalled measures from their first budget and go back to savagely hacking away at health, education and pensions.

Some of the worst of last year’s attacks have been quietly ditched for now. The plan to deny under 30s any Centrelink payment for their first six months of unemployment has been scaled down to a one month wait for under 25s. The cut to the rate of pension increases, designed to cut the payments over time, has been dumped.

But others are still there, including the $80 billion in cuts over ten years to schools and health funding for the states. Chris Pyne’s university fee deregulation plans are still on the table, despite standing almost no chance of passing the Senate.

The government has done next to nothing to put money back into health and education after last year’s cuts. Cuts to Aboriginal services and welfare programs have not been reversed.

Instead of helping workers and the poor, the Liberals have instead delivered tax cuts to small business. But there is no money for climate change, a continuation of cuts to foreign aid and a raft of cuts to little known programs in health that total almost $1 billion over five years.

Childcare con
The centre-piece of the new budget is extra funding for childcare. But behind the smoke and mirrors, there are few benefits for parents.

Working parents whose combined income is up to $170,000 will all receive more funding. But this will not kick in for another two years, until 2017. Because private operators will still be able to profiteer and there are no controls on prices, they could easily respond by pushing up fees to cancel out any benefit to parents form the increased subsidies. And the government’s plan will do little to increase childcare places in areas where parents can’t find their kids a spot.

Worse, the government is giving with one hand and taking with the other. There will be cuts to childcare payments for 80,000 “out-of-work” mothers. Rather than improve benefits, the childcare spending is designed to push mothers back into the workforce. New mothers will also lose access to the existing paid parental leave payment, introduced under Labor, if their employer funded parental leave is already more generous. Almost 50 per cent of new mothers will lose money as a result. This has been branded “an outrageous attack on mothers because that was the plan of the scheme”, by Professor Marion Baird, part of the expert panel that has just completed an initial assessment of the measures.

The new childcare funding also relies on cuts to Family Tax benefits from last year’s budget, which the Senate has refused to pass. This would cut off payments to families once their children turn six.

Alongside cuts elsewhere, the Liberals still found more money to boost defence and the surveillance agencies.

They will get another $1.2 billion, on top of the increases already announced in the last year. This funding boost is a political exercise to allow Abbott to keep up his terrorism scare.

The bulk of it will go to the military adventures in Iraq and Afghanistan, now involving 900 Australia troops at a cost of $750 million this year alone. Total defence spending is up to a disgraceful $32.1 billion for this year, of which $6.1 billion will go on new weapons.

The other extra security spending means more money to harass the Muslim community and step up surveillance. The budget papers admit that beefed up security at airports has meant that, “In the eight months from August 2014 to April 2015…new Counter-Terrorism Units have assisted in offloading 267 passengers of security concern”. Predictably, the number of people arrested as a result doesn’t rate a mention, with only three reported in the media so far this year.

The government has been at pains to convince people this budget, unlike its last one, is fair. But for all the talk of tough times, big business and the rich have again been let off the hook. Treasurer Joe Hockey’s crackdown on 30 big multinationals for tax evasion is all for show. He can’t even put a figure on how much money it will raise, not even an estimate. This budget might save Abbott from own backbench for a few more months. But it’s their savage attacks on students, pensioners and universities that that define this government.

If that outrage was mobilised in strikes and demonstrations, nothing could save Abbott.