While prices are soaring and millions of people are struggling to make ends meet, the ALP is boasting about a $22 billion budget surplus that it refuses to use to help alleviate the cost-of-living crisis.
The federal government raked in more from tax revenue than it spent over the 2022-23 financial year. It is the first time that a surplus has been recorded in Australia in fifteen years. Treasurer Jim Chalmers initially forecast a surplus of $4.3 billion when the federal budget was delivered in May; the additional cash largely comes from higher than expected tax revenues from workers and from higher commodity export prices.
In a September press release, Chalmers congratulated the Albanese government’s “responsible economic management and spending restraint”. Labor politicians are lauding themselves as responsible managers of Australian capitalism, rubbing it in the faces of the conservatives, who say that they are the best friends of business.
“If the Albanese government had continued on the same path as the former government”, Chalmers continued, “we would be nowhere near a surplus”. See! We’re even better at balancing a budget than the Liberal Party!
But let’s dig a little deeper into the phrase “spending restraint”. In the context of a once-in-a-generation cost-of-living-crisis, what this means is more pain for workers and their families who are doing it tough. We have skyrocketing rents; mortgage repayments that have doubled; rising supermarket, energy and petrol prices; and a social welfare system that is failing to provide adequate support to those who need it. Foodbank Australia is currently providing food relief to about 1 million people each month.
In July, Prime Minister Anthony Albanese told reporters: “Australian families will look at the federal budget and say it is good that we have a government that is putting in place responsible budget management in order to put that downward pressure on inflation”.
This might be true of the families in the top 3 percent of income earners, who will receive almost half of the benefits of the Stage 3 tax cuts, worth hundreds of billions of dollars, which were reaffirmed in the May budget.
The government also reduced spending on health (from $115.5 billion in 2021-22 to $104.0 billion in 2023-24), reduced funding to government schools in real terms and announced that $74 billion will be slashed from the National Disability Insurance Scheme’s funding over the next decade.
But hey, it’s all in the name of “responsible budget management”.
Instead of being spent on paying off various international lenders, what could $22 billion have done for workers?
According to Anglicare Australia, it would cost the government roughly $20 billion per year to raise the rate of all welfare payments to $88 a day. This would lift almost 2.3 million people—including 840,000 children—out of poverty. There would still be enough left over to provide everyone in the country with free public transport at a price of $2.2 billion, according to the Parliamentary Budget Office.
Or to tackle the crisis from another direction, $22 billion could be spent on building 73,000 new public homes, which would start to put a dent in the decade-long public housing waiting list.
But instead, we are told to rejoice in the wonders of fiscal responsibility.
If the government aimed even higher, it could tackle poverty and the housing crisis at the same time. The Construction, Forestry, Maritime, Mining and Energy Union recently commissioned Oxford Economics Australia to analyse how a super-profits tax could resolve the housing crisis. It found that taxing “excess” profits of companies with an annual turnover of more than $100 million (just 0.3 percent of companies in Australia) at 40 percent would generate an additional $28 billion in annual government revenue. Labor has, unsurprisingly, ruled this out.
Instead, it is sticking to the doctrine of economic rationalism first introduced by the Hawke and Keating governments in the 1980s and carried on by Liberal Prime Minister John Howard and Treasurer Peter Costello. This called for reduced social services, lower taxes on businesses and the rich, deregulation and privatisation of public assets—in other words, more money for big business and less for everyone else. This is what the obsession with budget surpluses is all about.
No doubt many people hoped that the election of a Labor government would turn the tide of Australian politics back in favour of working people. They have been sorely disappointed.
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