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Taxing savers and investors the key to delivering in the May budget

By Tristan Ewins - posted Monday, 11 March 2013


'Doing the math' this would translate into an additional $6.5 billion a year on average.

Nonetheless it is quite possible that Labor has 'done a deal' with the miners. If so it is a fundamental matter of democracy that this be made known to the public. The alternative is the kind of 'Iron Law of Oligarchy' referred to by political scientist, Robert Michels – whereby political and economic elites determine agreements 'behind the scenes' – cutting ordinary citizens out of the equation. (the anathema of democracy) Yet at the same time trust is an extremely valuable thing in politics – and even if Labor has made the wrong call on any deal, it would be understandable were they to remain true to that commitment.

The Greens are thinking of 'holding Labor over a barrel' over the MRRT. And ideally the tax does need to revert to its original form as intended by the Henry Tax Review. But if this is politically impossible the Greens must co-operate with a Labor Government that makes big progressive social initiatives possible through thorough-going reform of superannuation concessions and dividend imputation.

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To put all this in perspective the Australian economy today is valued at approximately $1.4 Trillion. The Gonski package – crucial for the very viability of our state school system into the future – and to the opportunities of hundreds of thousands of students - will cost about $6.5 billion a year to implement. And the NDIS – crucial to some of our most vulnerable Australians and their families – was projected as going to cost at least $15 billion a year when 'fully operational' in 2018. (but phased in gradually)

But what else can Labor do to 'break through' ahead of September; with the May Budget perhaps being its last opportunity to bed down such major initiatives?

For a long time this author has argued for reform of Aged Care. It is an issue that effects many of us. Even the younger among us will have family who may need care in the relatively near future.

The unnecessary acuteness of suffering experienced by many aged Australians is a matter of national shame.

For those needing low-intensity care there must be high quality, affordable options available. The 2012-13 Aged Care Reforms proclaimed the end of 'Living Longer. Living Better.' This must include those with low care needs as well as those needing high level care.

As for residents in high intensity care - they need privacy; they need their own rooms if they so desire. They also need heating and air-conditioning, dental care, facilitated interaction, quality food, and 'changes of scenery' - perhaps including access to gardens. In the future some of those who remain alert and in need of mental stimulation could do with access to information technology. There are also problems with staff to patient ratios, including a need for more registered nurses.

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More generally there is a need for more robust career paths for aged care workers; with better training being complemented with better wages and conditions. This will also improve the quality of care experienced by aged residents. Very recently the government offered a package of well over $1 billion directed towards exactly these ends. This is very welcome. But the welfare of residents demands billions in new money – not only money redirected from within the existing budget.

For those older Australians wanting to stay at home – and well enough to do so – there is a also need for regular interaction to ward away the loneliness from which so many suffer. And Families and Carers also need additional support in order to make home care viable. Staying at home is only an option for many with significant support, and the Combined Pensioners and Superannuants Association has long argued support services here are under-funded.

A minimum additional annual $5 billion devoted to Aged Care would be a start (though certainly not the 'final word') in working towards these ends; while also beginning a phase-out of user pays mechanisms that hit average and working class families. Working class and middle income Australians should not be forced to sell their family homes (using the equity in the home - even incrementally,) with an effective regressive 'flat tax' in order to secure care for their loved ones. All the more so while there are massive tax breaks for quite wealthy Australians that go into the tens of billions

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About the Author

Tristan Ewins has a PhD and is a freelance writer, qualified teacher and social commentator based in Melbourne, Australia. He is also a long-time member of the Socialist Left of the Australian Labor Party (ALP). He blogs at Left Focus, ALP Socialist Left Forum and the Movement for a Democratic Mixed Economy.
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