By now most of you are probably fed up with the social media white noise about the Federal Budget. I’m betting you came here to get some light relief and perhaps a serve of tasty crumpet. Sorry blog fans. I feel very strongly about some of the issues raised last Tuesday and am compelled to spill my opinions here on this page. Its not as if anybody cares what a pampered Eastern Beaches housewife thinks – but here goes.
Here’s my ten cents worth (plus a 0.02 cent deficit levy).
To start with, there is no budget emergency – yet. The nations finances are in reasonable shape. According to the IMF (if you give a toss what they say) “gross debt is expected to peak at around 32% of GDP in 2015 and is among the lowest in advanced nations”. By way of comparison the US debt currently stands at 104.52%, the UK at 90.60% and Japan at a whopping 237% – those my friends are budget emergencies.* When I was in stockbroking companies with our level of debt would have been labelled “conservative” and urged to borrow more. (Those pre-GFC days were some crazy times).
Having said that Australia’s debt has grown rapidly since the GFC and its prudent to nip it in the bud now before it gets any worse. In that regard I have sympathy and respect for what the Liberal Party is trying to achieve. Unfortunately its the way they are going about it that has me in a lather of concern. The already gaping chasm between rich and poor in this country is about to widen in my view. I’m about as socialist as Barrack Obama’s ass (what a fine slender butt it is) but I do believe we should aim to have minimum standards and a levelish playing field. The current Budget tilts the playing field in further in favor of the better off.
The measures I am most peeved about are:
1) Cuts to the unemployment benefit for the under 30s.
For those without family support this could be catastrophic. Giving jobless young people no lifeline will force some onto the street and even into crime. Sweat shop conditions will spring up as unscrupulous employers take advantage of the desperate. At the same time inexperienced young people are at a competitive disadvantage to older workers who will be subsidized to the tune of $10K for employers to take them on.
The whole thing reeks of extremist ideology gone mad rather than a tangible benefit to the bottom line. If the Liberals wish to discourage “welfare bludging” a work for the dole scheme would be preferable to cutting these people off altogether.
2) Medicare co-payment of $7
My family is able to pay this and I am willing to do so if it funds quality healthcare in this country. Yet it will discourage welfare recipients (and in the case of under 30s non welfare recipients) from getting medical attention. Unhappily being sick and impoverished tend to go hand in hand so this measure is a double whammy to the disadvantaged. I’m not against to the user pays principle per se but strongly believed that certain groups like aged and disability pensioners should be exempt.
3) Deregulation of University Fees
This is the thing I am most pissed about. Interest rates on the the HELP scheme are about to leap and Universities will soon be free to charge whatever the heck they like for their courses. This is likely to increase the cost of a degree substantial and erect yet another barrier to the less well off getting a tertiary qualification. We could end up with an American scenario whereby the children of the wealthy pay to go to “Ivy League” institutions and the rest are relegated to sub-standard Community Colleges. Not only is it inequitable, its short sighted. We’re going to need highly skilled people to compete internationally in the future but we’re constraining our ability to produce them.
Here are some alternative scenarios I see as better to the current goings on. None of them are ideal but I’d prefer them to kicking the poor in the guts.
1) Raise the GST to 12.5% – 15%. You know its going to happen anyway. Compensate with an equivalent increases in welfare payments and tax cuts at the lower end. Plough the resulting income bonanza back into health and education.
2) Reduce the defence budget and wind down our overseas military engagements – this should be a no brainer.
3) Slash funding to elite private schools. Its not class warfare. Its simply reallocating limited resources to areas of real need. While we’re at it – School Chaplains can sod right off.
4) Crack down on family trusts.
5) Company tax to remain at 30% – rather than cut to 28.5%*. Say farewell to the parental leave levy and
6) Keep the paid parental leave scheme the way it is. It is reasonable that all carers receive the same amount regardless of their previous salary. In fact I’d go a step further and means test it against the partners income. Why should the wives of Macquarie Bankers receive tax payer funded handouts?
7) Negative gearing – Sayonara.
8) Look at taxing super annuation returns.
9) Limit the NBN roll out to business districts, schools and hospitals.
10) A carbon trading scheme – remember that old chesnut?
Thanks for reading to my ignorant and simplistic arguments. I welcome your dissent.
*If GST is increased then it is reasonable to reduce company tax.