Tony Abbott is coming under increasing pressure with regard his proposed tax measures as well as his overall agenda of austerity. The Sydney Morning Herald observed the following proposals under consideration by Abbott for the 2014-15 Federal Budget. (Some comprised very probable items for the May Budget - following the "Commission of Audit'; others might be considered 'longer term aspirations' for the sake of an Ideological commitment to 'small government'. Some may even be rejected as 'too hard-line' to be 'electorally viable')
- Abbott's 'debt levy' impacting on those on incomes over $80,000 (this might now been altered so as to apply only to people on incomes over $150,000 – and the downside of this now is that more vulnerable Australians will probably pay a greater price)
- Attacks on universal health-care, with extra upfront payments for those visiting a GP, or a Hospital emergency department
- Cuts in the Aged and Disability Pensions, and also to Newstart – a more austere formula for pensioners; but also cuts in eligibility; (Also there is talk of 'slowing' NDIS implementation - a cut by another name)
- Phasing in 70 as the age of retirement, with the family home included in an assets test – even where such assets are way below average property values….
- Big increases in university fees – but also reductions in repayment thresholds – so poorer graduates are put under extreme financial strain even where there is not a proportionate financial benefit stemming from their education
- Massive cuts in the minimum wage; moving towards a permanent stratum of 'working poor'; a divided Australia similar to the United States - where middle class lifestyles rest partly on intensifying exploitation or the poor and vulnerable
- Forcing the young unemployed (25 and under) from the austere 'Newstart' and onto the even more austere "Youth Allowance". (approx $207/week for those living away from home) (Even more severe changes appear to have been dropped: changes which would have forced young unemployed to move house to find work – even where 'live at home' was the only way of 'making ends meet' for the barest necessities) ('The Age', May 4th, p 13)
- Road tolls (effectively flat 'user pays' mechanism) – In my opinion probably leading to further extensive privatisation of transport infrastructure (rail, road etc)
- Privatisation of what few federal assets remain: "Snowy-Hydro, the Australian Submarine Corporation, Defence Housing, Australian Rail Track Corporation, Australia Post, Medibank, the Royal Mint and the National Broadband Network." (Where infrastructure and central government functions are concerned these will likely be leased back to the Australian people – but at enormous financial cost – revealing the privatisation agenda as essentially Ideological – with the public fleeced in the final analysis)
- Industry Assistance cut in areas like the auto industry. (We already know existing policies, here, may 'flow on' with a cost of around 50,000 Jobs)
(Read more: http://www.smh.com.au/federal-politics/political-news/pensioners-health-family-payments-face-cuts-under-abbott-governments-commission-of-audit-report-20140501-zr2j3.html#ixzz30iDeWA00 )
Importantly: Howard era tax cuts went well into the tens of billions. 'The Australian' observed how in the dying days of the Howard/Costello government $34 billion in tax cuts were promised – and then matched by Rudd Labor. Even the usually-biased 'Australian' noted the impact this had upon the Federal deficit.
'The Australian' also noted more recently how the final 2013-14 Labor Federal Budget "would [have been] in surplus by at least $25 billion, with an estimated $40 billion in extra revenue, if income tax cuts introduced between 2005-2008 had not been put into place."
(Wayne Swan would have made his budget surplus by a country mile were it not for his own insistence on 'small government')
The consequence of these unsustainable tax cuts was a Labor Government that largely 'trod water' when it came to overall progressive reform of welfare and of the social wage. Restructuring of income tax, improvements in pensions, and subsidies for disadvantaged workers (eg: in aged care) – were important exceptions. And Rudd Labor deserves credit for its response to the Global Financial Crisis; with its timely investment in infrastructure. Yet there were also attacks – such as cuts to Sole Parent pensions. And implementation of Gonski and the NDIS were committed to 'into the future' at a time when Labor seemed bound to lose office in any case. Labor did 'put Abbott on the spot' – pressuring him to commit to these popular polices. But now it appears Abbott never had any intention of keeping his promises.
Peter Martin in 'The Age' explains that 'Net Debt' is now set to peak at 16 per cent of GDP or about $280 billion. The consequence of this is that 2.2 per cent of GDP must be devoted to servicing that debt : or about $9 billion a year. (The Age, May 4th, pp 29-29)
To clarify, according to the Federal Parliamentary Library:
"net debt is the sum of all liabilities (gross debt) of an organisation, less their respective financial assets (cash and other liquid assets)."
To get this in perspective Australian Gross Domestic Product is now worth over US $1.5 TRILLION;and by comparison Japanese 'general government debt' is over 200% of GDP; and US 'general government debt' at over 100% GDP.
There are a number of factors worth considering amidst the panic and deception surrounding the issue of government debt:
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