Budget delivers ‘Christmases all at once’ to Coalition’s big business mates

Morrison and Frydenberg have delivered a budget for the rich

Innes Willox, chief executive of the national employer association Australian Industry Group, could barely contain his glee when he appeared on ABC TV’s Budget 2020 special report on October 6. “For many businesses, not all, this is like all their Christmases have come at once,” he said.

In more private and plush settings, corporate chiefs were probably popping bottles of the best champagne and breaking out the cigars because this budget was a massive corporate handout, paid for with a record $213.7 billion deficit.

Treasurer Josh Frydenberg delivered his budget speech in undertaker’s tones to sell the Coalition government’s line that the best way to start a recovery from the “most severe global economic crisis since the Great Depression” was to hand lots of money to the rich so they can create jobs.

The budget dispensed a new round of tax cuts (which will overwhelmingly benefit the richest 20% and further increase inequality, after delivering a once-off $1080 cut for middle and low income earners).

It created a new $4 billion employer subsidy, called the JobMaker Hiring Credit (targeting young workers), a temporary measure to businesses with turnovers of up to $5 billion to write off the entire cost of new investments in one year, and other tax concession to make it easlier to write off losses.

Arms industries, targeted as a favoured export growth sector, will be one of the corporate beneficiaries from a $1.3 billion “Modern Manufacturing” plan.

Meanwhile, the million workers officially estimated to have lost their jobs since the pandemic began will soon be forced to struggle on unemployment benefits that go back to below the poverty line, after the temporary lift to JobSeeker. Even more will be dumped on the unemployment heap when the JobKeeper wage subsidy scheme (which the Treasurer said is currently “supporting around 3.5 million Australian jobs”) ends in March.

Women, who were disproportionately represented in the tsunami of job losses after the pandemic hit in March, get no special assistance. This is despite ample research showing that the high cost of childcare was an even bigger obstacle for women workers to return to work, especially after many households took a big income hit from the pandemic.

While young workers have been hit hard by the pandemic, the new JobMaker scheme is designed to encourage employers to take on young people for low-pay, part-time and casual work.

This $200-a-week wage subsidy for workers 19–29 years old (the subsidy is only $100/week for 30–35 year olds) only lasts a year. Meanwhile, young people opting to do tertiary studies are going to be hit with substantial fee rises in some fields of study.

Aged pensioners, who missed out on any rise this year, will get two once-off payments of $250 between now and next March. The budget promises an extra 23,000 home-care packages to allow aged people to live at home, but there are 59,000 people already assessed as needing care but still waiting for places, and even more waiting for an assessment.

Trade unions are rightly concerned that the budget seeks to further erode workers’ wages and conditions. The budget papers assume zero wage growth over the next few years.

While the treasurer said it was “all about jobs”, the budget’s economic assessment forecasts the official unemployment rate to remain well above pre-pandemic levels for years after peaking at 8%. The official unemployment rate hides the real jobless level, calculated by Roy Morgan research to currently be at 13.8%. When the JobKeeper subsidy ends, this will shoot up even higher.

“Leave no one behind” has been well and truly left behind in this budget.

There is a big lie at the heart of Frydenberg’s budget speech. The rich don’t need more public largesse; if they wanted to create more jobs they already have more than enough money to do this.

Big business has already rorted the JobKeeper wages subsidy scheme. While it has helped many struggling small businesses keep employees on the books, many big companies that were still making profits claimed billions on the scheme and paid out hefty dividends to their shareholders.

The latest round of tax cuts already mostly go to the rich, but the next foreshadowed round of tax cuts will benefit the rich even more, and bring Australia’s income tax system close to a regressive flat tax.

Internationally, a new study has revealed that the combined wealth of world’s 2189 billionaires has increased by 27.5% between April and July, reaching a record high of US$10.2 trillion.

Capitalists don’t create new jobs unless they think there is profit in it for them. When the global economy goes into a sustained depression, history tells us that the rich are just as likely to hoard their wealth or speculate in the world of fictional capital.

Giving the capitalists more money just makes them richer.

But our biggest criticism of this record deficit budget is that it squanders billions that should have been spent on addressing the climate emergency and urgent social needs.

Further, it is a budget that sets in train future cuts to social services and boosts Australia’s climate rogue status as one of the biggest fossil fuel exporters.

The $213.7 billion deficit could have been much better spent on public works to begin the urgently needed transition to 100% renewable energy — which we should and could do in less than 10 years — building ecologically sustainable public housing to address the housing crisis, build up the capacity of the public health system and liberate education from the profit-makers.

This would create more real jobs than the budget promises and these jobs would do good things for society.

The $34.4 billion budgeted for 2020–21 military spending and the $10 billion or more in subsidies to the mining and fossil fuel industries would be better spent on sustainable jobs. Building a green and just future can be funded if the super rich and the big corporations were not allowed to dodge taxes.

While Labor opposition leader Anthony Albanese has indicated that he will argue for a $500 million boost in spending on public housing, his party has also supported the government’s $53 million “gas-led recovery” plan and tax cuts for the rich.

The Greens have called for the JobKeeper scheme to be maintained after March and for the tax cuts abandoned.

“This is a budget for the millionaires, not the million unemployed,” Greens leader Adam Bandt said. “Budgets are about choices and this budget chooses to prolong the recession, fuel the climate crisis and leave young people behind. Instead of a green recovery, this budget is all brown and trickle-down. It spends big, but spends badly.

“Tax cuts mean nothing if you don’t have a job. They don’t stimulate the economy, but they’re two thirds of the government’s entire stimulus plan. We’re going into debt to pay for tax cuts for the super-wealthy.”

The Greens are developing a green new deal to set out an alternative course to the budget’s give-it-to-big-business approach. This could offer a way forward, but only if their green new deal becomes a real mass movement that includes all activists and trade unionists who want a radical change in political course.

[Peter Boyle is a member of the Socialist Alliance national executive.]