Labor's proposed budget cuts ought to be slammed
The Labor Party announced a series of “savings” measures on June 10, including $1 billion worth of Abbott/Turnbull cuts that had previously been blocked in the Senate.
It has tried to make the attacks appear palatable by claiming they are directed at higher income families. However the truth is they reaffirm that a future Labor government's direction will be more about cutting government spending than raising revenue from the big end of town.
Further, they will have bigger impacts on ordinary workers than appears evident at first glance.
The highest profile cut is the proposed abolition of the Family Tax Benefit (FTB) Part A supplement to families earning over $100,000 per year. They claim this will save the government $500 million over the four years of forward estimates and over $2 billion in ten years.
The Supplement to FTB Part A is for an annual bonus of up to $726 which may not seem much to someone on $100,000. However it is important to remember that this is family income that is being measured. That is a couple who each earn $50,000 — hardly extravagant wages — would be affected by this policy.
Of greater concern is that this cut will not be indexed so over time it will affect increasing numbers of workers.
Labor is also planning to save $2.3 billion by continuing the Coalition's freezing of payment thresholds for private health insurance rebates. The community as a whole would be better off if all the money currently spent on subsidising private health insurance were redirected straight into the public health system.
However, after significant government campaigns to pressure people into taking out private health insurance, to cut the rebate paid is another slug on ordinary workers.
There are also a number of Abbott/Turnbull cuts — that Labor said “will never pass the parliament” — that Labor is now planning to implement. One of these is the change to the higher education indexation program. This will mean that graduates will have to start paying back student debt sooner: another slug on ordinary workers.
And there is no talk from Labor about reversing the cuts in former Prime Minister Tony Abbott's 2014 horror budget — which Labor and Greens voted for in large measure when they passed the supply bills. These included cuts to the ABC and SBS, the CSIRO and Aboriginal services.
Instead of slugging ordinary working families for hundreds of millions of dollars, Socialist Alliance says tax the super-rich. Returning to the 49% corporate tax rate of the 1980s and taking steps to close the loopholes that allow the multi-millionaires and billionaires to hide their taxable wealth in tax havens would net far more for the budget. These measures would be of significant benefit to the majority, creating jobs and fighting climate change.
The Socialist Alliance is for measures that will help more people. By taxing the corporations adequately, we could raise Centrelink payments to allow a decent standard of living, expand public housing to solve the housing crisis and fund free and accessible childcare. This is what pro-people policies look like.
In this election campaign, Labor has tacked to the left by promising some modest measures such as reform of negative gearing and criticising treasurer Scott Morrison's cuts to corporate tax, for instance.
However, the detail of the ALP's planned “savings” shows the party in its true colours. The policy direction they will implement in government is not so different from the Liberals.
It took mass protests — such as the March in March movement — to stall significant parts of Abbott's budget in 2014. Whichever capitalist party wins the July 2 election, we need to be prepared to protest again to defend our rights.
[Kamala Emanuel Socialist Alliance WA Senate candidate in the upcoming federal election.]