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Budget 2014: Is this the Australia we really want to be?

Date

Hugh Mackay

"It’s a budget that not only turns its back on the problem of inequality; it exacerbates it."

"It’s a budget that not only turns its back on the problem of inequality; it exacerbates it." Photo: Alex Ellinghausen

How you responded to last Tuesday night’s budget speech would depend on your point of view, your preoccupations and your prejudices – political and otherwise.

Trust is more than a personal, private matter: it starts at the top. 

If you were a clinical psychologist, you might have been disturbed by signs of the Prime Minister’s short attention span. Chatting to his colleagues, giggling, looking distractedly about, he seemed unable to concentrate even for 30 minutes while his Treasurer made the speech of his life.

If you were a spin doctor, you’d have been deeply impressed by the whole thing. Knowing that governments generally benefit from an air of crisis, you’d have applauded the creation of ‘‘budget emergency’’ as a slogan (derided by economists at large, but what would they know about winning?) You’d have loved the many euphemisms for tax, especially ‘‘budget repair levy’’ – quite possibly the basis for a whole new chapter in the spin doctor’s manual, that one.

If you were an economist, you might have found much to admire in the budget. You knew there never had been a budget emergency; you knew Australia was a world leader in keeping its national debt under control; you knew the temporary tax on high-income earners was a reckless short-term substitute for serious tax reform. But you might have felt that a tough budget was called for since, sooner or later, the deficit problem would have to be tackled.

If you were a moral philosopher, your jaw would have dropped at the new depths of hypocrisy and the extent of promise-breaking implied by the budget. Even in a climate of unprecedented cynicism about political integrity, you might have assumed that this Prime Minister, having relentlessly attacked Labor for three years over its broken promise on the carbon tax, and having repeatedly declared that no election promises would be broken, would have shown some restraint.

You would therefore have been amazed to see him sitting there grinning while his Treasurer trashed promise after promise. No new taxes? Trashed, by the levy, by the ‘‘Tony Tax’’ on GP visits and prescriptions, and by the increase in fuel excise. No cuts to the ABC? Trashed. No fiddling with the age pension? Trashed. Even if you saw value in any or all of these measures, and the many other budget surprises, you would have marvelled at the moral insensitivity involved in introducing them after all that had gone before.

If you were an advocate of public education, you would have been surprised to hear no reference to it in the speech, but perplexed to discover the truth later in the evening when the commentators got to work on the fine print. You might then have wondered whether ‘‘we are on a unity ticket with Labor’’ on school funding reform was not a promise, but simply an expedient lie.

If you worked in the welfare sector, especially among young people, you might have wept with a combination of frustration and despair.

But what if you were merely a concerned citizen, looking to the budget for clues about where this new government might be taking us; what kind of vision it has for Australia; what kind of society it wants us to become?

As background, you would have been aware that the OECD’s annual report card on Australia, while lauding our prosperity and economic robustness, has for some years been warning of growing income inequality and a rise in poverty. According to the OECD, income inequality among working-age Australians has been rising since 2000 and is above the OECD average.

In Australia, the top 20 per cent of households control 62 per cent of the wealth, while the bottom 20 per cent have less than 1 per cent.  As in any society, economic inequality has certain inexorable social consequences for such things as rates of imprisonment, social exclusion, class envy and social anxiety. Yet, year after year, federal budgets have consistently chosen to favour the already-wealthy through such measures as tax cuts, the inherently regressive GST, and generous superannuation benefits inaccessible to the poorer members of the community.

So perhaps you might have expected a ‘‘tough’’ budget to begin the process of redressing that socio-economic imbalance, since every budget is an exercise in social engineering. You might have wondered, for example, whether this budget would signal a revival of Australia’s once-famous egalitarian ideal by offering more support to the marginalised, more opportunities for people to lift themselves out of poverty, a blueprint for the creation of more full-time jobs, and some new ways to encourage the rich to accept more responsibility for the poor.

Anyone who dreams of a better world knows that a civil society runs on trust. We need to be able to assume that our fellow citizens appreciate the value of mutual respect and those qualities of kindness, compassion, care and concern that distinguish the much-vaunted ‘‘civil societies’’ from the rest.

But trust is more than a personal, private matter: it starts at the top. We need to feel confidence in the integrity of our institutions, whether political, legal, religious, commercial or cultural. We need to be able to trust our leaders, above all. In spite of our cynicism, and regardless of how often we might have been disappointed, we (and our children) still look hopefully to them as examples of probity, charity, loyalty, integrity and decency.

That’s why we are so badly let down when institutions and their leaders err – through anything from corruption or child abuse to the breaking of promises. And we are similarly let down by any sign of heartlessness in high places; any sign of harshness in the treatment of our most vulnerable citizens.

By such criteria, this is a profoundly disappointing budget. It’s not the economics; it’s not the politics; it’s the clear sign that this government has young people, the sick, the poor, the unemployed, the elderly and the marginalised in its sights.

It’s a budget that not only turns its back on the problem of inequality; it exacerbates it.

Hugh Mackay is an author and social researcher.

305 comments

  • Do we really have much of a choice in the matter? Australia is in debt up to its eyeballs and if drastic measures aren't taken with this type of budget then we will have a much much worse crisis to worry about. Unfortunately, Tony is the one who has to take the fall for it. No matter the party that's in, someone has to take the fall of this tough budget. And today its Tony Abbot.

    The key problem I see with this budget is not that people will be losing out in the immediate, but that certain expenses which are being eradicated don't have a mention of ever being re-established for the people in the future.

    Now that's more worrying than the budget itself!

    Commenter
    Griffo
    Date and time
    May 19, 2014, 5:51AM
    • Thank you, Hugh Mackay.
      Invoking the recent linguistic largess and laxity associated with the word misogyny, let us explore possible contextual conceptualizations of the budget debate - through particularly partisan prisms:
      “Outright lies” – versus – “Simply making adjustments to the original commitments” (and, “Fundamentally keeping faith with the electorate”);
      “You lied” - versus – “I had the courage to change my mind” (the ‘Keynes defence’ which may also be used by scoundrels, “When my information changes, I alter my conclusions. What do you do, sir?”);
      “Ruthless and heartless” – versus – “Courageous and visionary”;
      “Stupid” – versus – “Wise”;
      “Indefensible” – versus – “Defensible”;
      “It’s all your fault” – versus – “It’s all your fault”.

      Commenter
      Howe Synnott
      Location
      Sydney
      Date and time
      May 19, 2014, 6:03AM
    • What about Family Trusts, capital gains tax gifts- I mean discounts, and hiding income through never-to-be paid back loans, negative gearing?
      I didn't see any of those being addressed.
      That would cause real pain... The Liberal party might lose donations !

      Commenter
      TonyLiar
      Date and time
      May 19, 2014, 6:09AM
    • The Abbott Govt is on the path to dismantling Australia's properly-functioning welfare state; it is making it cost-prohibitive to be young, old, a student, infirm, disabled, a member of a family, or even a driver in suburbia,

      Clearly the most disenfranchised and powerless, the most vulnerable and complacent, are being made to pay, and told their pain is 'shared' because those over 180k will pay a disproportionately lower, temporary 'tax'.

      There are neo-liberal ideological extremists on the verge of changing this country forever.

      They are encouraging an enmity that has grown out of Australia's worsening inequality in the economic and political arenas.

      Time to wake up.

      Commenter
      Abbott. Over.
      Date and time
      May 19, 2014, 6:23AM
    • Hugh quite interesting you look at it from a narrow nationalist piont of view. Why not ask " Is this the world we want" as I an sure the majority of the people in the world think it is unfair that developed countries have export sweat shops to 3rd world countries to ensure their population has a better lifestyle without having to see the slums. Now that these countries are starting to educate themselves and globally are attraching better jobs for themselves people like yourself start complaining about how unfair it is for the average Australian.
      Well Hugh our lifestyles have been supported by slavery conditions in developing conturies for too long. ( if your ipone could talk it would tell you of the worker how could not take a pee for 12 hours, but that did not stop you buying one. Imagine how expense it would be if made by Australia workers. You probably could not afford it)
      So yes Australia and the other developed worlds will now have to face up to it's FAIR share of poverty. We could take the approach that the latte left suggest and tax the rich more but that would only leave to the high end jobs leaving Australia as well.
      Welcome Hugh to the real world were everyone has the same oppurtunities. Now that is the world we want. No longer can you answer your iphone without realising you supported exported slavery. How does the truth feel?

      Commenter
      abc
      Date and time
      May 19, 2014, 6:25AM
    • Lowest debt if any developed nation in the world, but as it is a good idea to get from the red to the black, why on earth are the wealthy not asked to pay a fair and permanent share by way of increased permanent tax rates and removal of ridiculous super concessions and the rest.

      Commenter
      Tin
      Date and time
      May 19, 2014, 6:28AM
    • Like all programs NDIS has a ramp up phase. After it's been in for 20 years it will pay for it's self and have lower numbers of people on the disability pension (due to people recieving the care they need early on and moving to the workforce)

      Gonski again will pay for it's self by raising everyones education standards. The reason why universities didn't complain to much about their cut in growth of funding is because they will save on university preparedness courses and remedial services.

      Commenter
      Jess
      Location
      here
      Date and time
      May 19, 2014, 2:41PM
    • Griffo 5.51 am: There is no budget emergency and there never has been! Our finances are the envy of the world. I don't know why voters are so surprised either. Abbott has form. Now they know how the refugees feel. To Abbott, this is just another 'operational' necessity. Only this time it is taking place on land.

      Commenter
      EBAB
      Location
      St Lucia
      Date and time
      May 19, 2014, 6:28AM
    • Australia is not in debt up to its eyeballs. I don't need to go any further.

      Commenter
      DanB
      Date and time
      May 19, 2014, 6:29AM
    • Agree completely. Love how the media portray the protesters yesterday as people let down by voting Abbott, when if fact they were just former arts students who stack the university student union boards unhappy they will have to find a real job.Didn't know the socialist alliance voted Liberal.

      Commenter
      Piped Piper
      Date and time
      May 19, 2014, 6:29AM

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