Morrison’s budget rewards the affluent, punishes the poor

Scott Morrison’s latest Budget is nothing but a bunch of giveaways for the Coalition’s voting base of older, well-heeled, middle class Australians, and miserly scraps for the working class and poor.

Far from being a budget for “low and middle income earners”, as the treasurer claims, the beneficiaries of the $140 billion seven-year package of tax cuts are overwhelmingly the well-off.

It’s a weekly hamburger or milkshake for the big majority of the workforce, a slap-up meal at a five star restaurant for the affluent.

The package smashes the progressive nature of the tax system by introducing a flat tax rate of 32.5 percent for everyone on incomes between $41,000 and $200,000 by 2024-25. This only adds to the other perks used by the well-off: capital gains tax concessions and negative gearing, which have helped make housing unaffordable for younger and income poor people, along with superannuation tax concessions and private health insurance rebates, which transfer billions of dollars to those already doing well.

Some commentators have remarked that political and economic developments will mean much of Morrison’s tax plan never comes to pass. But even if that is the case, the plan indicates where the Coalition wants to take Australia. It’s not dreaming on the treasurer’s part: the government wants the entire package, including the commitments for the third tranche of tax cuts in 2024-25, to be voted on before 1 July. If the Coalition wins the next federal election, it will be well on its way to putting these regressive changes into effect.

And there’s more. Morrison is tabling legislation for a 23.9 percent cap on the share of tax in GDP. Like Trump’s tax reforms in the United States, these caps are simply a warning of austerity to come if the government remains committed to returning to a budget surplus. 

The government is funding its tax cuts from a revenue windfall resulting from high commodity prices and a lift in employment over the past 12 months. It’s projecting $35 billion more in the kitty over the next four years than the estimate of December’s Mid-Year Economic Financial Outlook. Half of that extra money is going into paying down government debt, half to the tax cuts. 

With $35 billion at its disposal, there are better things Morrison could be doing than splashing out on the well-off. The government could boost TAFE, which has been ransacked by the Coalition and is close to collapse. It could boost university funding. But it’s doing the opposite: nothing for TAFE and a $2.3 billion cut to the universities. 

The government could lift the criminally low Newstart and Youth Allowance, staff Centrelink better and scrap the robodebt operation used to harass welfare recipients for what are often fake debts. 

But the government continues to make their lives hell. 

Those on Newstart and Youth Allowance get nothing. Staffing at the Department of Human Services will be cut by another 1,280, on top of the thousands who have lost their jobs since the Abbott government was elected in 2013. Robodebt calls will be ramped up as the government tries to recoup $300 million from alleged welfare cheats. (It’s worth noting that welfare fraud is a drop in the bucket compared to allowances that people are entitled to but never claim.) 

Migrants lacking paid work will be robbed of $200 million worth of entitlements if Morrison gets his way, extending the waiting period from three to four years. The government also wants to introduce compulsory deductions from the welfare payments of people with fine defaults or warrants against them.

If it’s more pain and humiliation for those already in poverty, there’s money galore for the Coalition’s favoured causes. An extra $500 million on military spending, pushing the military budget to more than $36 billion in 2018-19. Plenty of money for the Joint Strike Fighter project, plenty for submarines and surface ships. But, for the victims of war and political repression, cruel cuts: $141 million has been sliced from foreign aid. 

The big infrastructure companies stand to benefit from tens of billions of dollars allocated over the next decade on road and rail transport programs. More than $9 billion has been earmarked for equity investment in a Melbourne to Brisbane rail line, which makes little commercial sense and is nothing more than pork-barrelling for rural Coalition electorates and business users of interstate freight and haulage.

“Border security” has been a big winner from Morrison’s budget. On top of the ballooning military budget, $300 million is going into airport security. No guesses who will be the target of the enlarged corps of armed police and security agents roaming the airport terminals. 

And the government’s persecution of asylum seekers is not only an affront to humanity but costly to boot: more than $1.4 billion has been allocated to running offshore and onshore detention programs in the coming year.

The government is also using the budget to pursue other elements of its right wing ideological project. 

Renewable energy subsidies are being reduced, while the government refuses to increase its emissions reduction targets, which are well below those needed to arrest climate change. 

The Bible-bashing treasurer is pushing another $247 million over four years into the school chaplaincy program. 

The Coalition’s racist base will cheer the $50 million allocated for the 250th anniversary celebration of Captain Cook’s voyage to Australia. 

Meanwhile, the ABC, a bête noire of the Coalition's right wing, is losing $84 million and the SBS another $15 million, part of a long term project of gutting public broadcasting to leave the way clear for the private media conglomerates.

Even positives in the budget, for example, the 14,000 extra places in home care for seniors, are just a drop in the bucket: the waiting list is currently 104,000. Much more is needed to ensure elderly people are not tipped into for-profit nursing homes which, recent exposes have demonstrated, are motivated by nothing more than an extra buck.

All these handouts to the well-off come on top of the government’s planned tax cuts for big business, the bill for which keeps growing – now standing at $80 billion over the next ten years.

Media coverage has played up the idea that Australia is currently enjoying an economic boom, with corporate profits surging and business indicators lifting. 

But if it’s sunshine for the bosses, the budget casts a shadow over workers, forecasting that unemployment will drop from its current 5.6 percent, but only to 5.2 percent while wages growth will rise from 2.25 percent to only 2.7 percent. Workers will be lucky not to go backwards on those numbers.