Turnbull's 2017 Budget: a wolf in sheep's clothing!

Written by: on

Max O.

The recent 2017 Federal Budget catch-cries of "good debt vs bad debt" and "security, opportunity, fairness" pitifully fail to cloud the class antagonisms that afflicts Australia. From the disastrous 2014 Budget of "lifters and leaners", Turnbull's Coalition government has taken the 'Labor Lite' route to swoon support for this year's Federal Budget.

However the working class, who are becoming more and more impoverished, can clearly see a con when Treasurer Morrison offers hollow inducements such as: increasing the Medicare levy to fund the  National Disability Insurance Scheme (NDIS); supposed increase of $18 billion for needs based funding of Australian schools; introduction of the First Home Super Saver Scheme that will enable first home buyers to direct some income into super accounts, at a lower tax rate than normal and allegedly 'assist' them to the purchase a house.

The philosophy of the rich is one of making the working class pay!

The reality is that these measures either cost Australian workers without touching the rich or corporations, or do pathetically little to improve the livelihoods of ordinary people. Tax payers will pay a 0.5% increase in their Medicare levy to finance the NDIS whilst the rich can now rejoice that the 2% deficit levy will be removed.

The increase of $18 billion for needs-based funding for Australian schools is in actual fact a $22 billion decrease from the original Gonski $30 billion funding recommendation for schools. Similarly, the First Home Super Saver Scheme will do little to make homes affordable to the working class, despite the Government claims that it will help first home buyers to save a deposit 30 per cent faster.

What would help first home buyers is ceasing Negative Gearing and Capital Gains discounts to investors who cash in on it and consequently dominate the housing market and push up prices, causing the housing speculation bubble to eventually crash.

Another pea and thimble trick is the 0.06 percent levy on the bank liabilities creating a $1.5 billion tax impost for the Big Four Banks. However, this will be compensated when the corporate tax cuts are introduced, a measure that will eventually give away $50 billion from the Government coffers when the company tax rate is reduced to 25%.

Much fan-fare has been placed on the Turnbull Government’s Budget commitment to boost and improve infrastructure. Here is where the Coalition posits the analogy of "good debt vs bad debt", counter-posing that spending on infrastructure is better than recurrent spending on social welfare, education and health.

Billions of dollars will presumably be spent on a mixture of energy, rail and road infrastructure projects throughout the nation. $5 billion will be spent on constructing Sydney's postponed second international airport.  It is doubtful whether all of these infrastructure commitments will be undertaken due to the current economic slump.

The 2017–2018 budget  is now the tenth that has vowed to achieve a surplus within a four-year budget cycle. With a large deficit of $29.4 billion and public debt out of control credit agencies and big business are not happy and are threatening to downgrade Australia’s current AAA rating. Australian businesses will then have to borrow at higher interest rates which will further weaken economic activity.

Capitalism's growth paradigm: the fool's paradise

The illusion of a 'return to surplus budget' is premised on the unlikely forecast of economic growth, both globally and in Australia. Turnbull's Budget envisages the expansion of the Chinese, Japanese and US economies over the next few years, thereby keeping up Australian export prices and government tax revenues from both company and personal income taxes, and attracting further inflows of foreign investment. Out of all this fantasizing about economic growth, Australian GDP apparently will climb from 1.75 percent in 2017 to 3 percent in 2020.

In continuing its commitments to keep Australia tied up to US-led wars of aggression, the Turnbull Government will maintain its escalating financial allocation to the military, intelligence and police. Their budget boosted military expenditure by 6.1 percent this financial year and will keep increasing it up till 2021.

Around $150 billion will go to the military over the next couple of years to pay for F-35 jet fighters, new surface warships, the start-up construction of 10 new submarines and the funding of Australia's continuing involvement in military operations in Afghanistan, Iraq and Syria. In the next ten years, approximately $494 billion will be spent on the military by the Australian Government to further its inter-operability with the US war-machine and contribute towards American dominance of the world.

The economic reality for the Turnbull Government is that capitalism in Australia will be trapped in a low growth and a low profitability future. Because of the difficult task of imposing control over the working class and cutting public spending and wages there will be continuing political and economic turbulence for this and any future 'Shorten/Labor Government'.

Print Version - new window Email article

-----