Beer, cigarettes and cruises – the government’s attack strategy

May 15, 2014

It didn’t take long for the implications of the Coalition government’s first Budget to sink in. Within moments of Treasurer Joe Hockey resuming his seat, representatives of every sector from community welfare to big business filed out to front the media. What they had to say came as no surprise to anyone – business liked the Budget. Almost no one else did.

Arguably, it’s the flagged changes to Medicare that caused the most outrage – the $7 ‘co-payment’ for GP, pathology and some Emergency Department visits, and the $5 increase to medicines. Deservedly so, too. The government would have us believe it’s about spreading the ‘heavy lifting’ in order to resolve the ‘Budget emergency’ and move us quickly back to surplus. The logic is inconsistent, though. If the GP charge is all about helping out the fiscal bottom line, why earmark $5 out of every $7 to go into a medical research fund? For that matter, why not just continue to fund the CSIRO?

The numbers are one thing. Consider this, though – the government is effectively asking every single Australian to make a decision about their own health, no matter how unqualified they are. Does your kid have abdominal pains that cause him to scream? Flip a coin – heads it’s wind, tails it’s appendicitis. How about this – it’s flu season. Pay for the FluVax now, or take the risk that you won’t need to see the doctor later for an antibiotic prescription?

Ludicrous? Yes. Dangerous? Absolutely.

Oh, but no one would be so silly, would they? Mr Hockey certainly doesn’t think so. He’s got it all worked out. You see, it’s about whether we’re selfish or sensible. Why, that $7 isn’t so much to ask. It’s the equivalent of giving up a couple of beers or a third of a pack of cigarettes. Really, who wouldn’t make that sacrifice for their own health, or that of their family?

See what he’s doing there? It’s a rather nasty piece of character assassination. In so many words, Hockey laid down a series of assumptions – that people on low incomes are not concerned for their health, that they’d rather spend their money on beer and cigarettes than on their families, and that they need to take a good hard look at themselves. He didn’t quite come out and call them ‘bogans’, but the inference was practically screaming to be made. And we all know that bogans are lazy, selfish dole bludgers, right?

On Tuesday night, Hockey gushed about how wonderful it would be for people to know that their contribution to the Medical Research Future Fund might one day save their children’s lives. Today, he’s playing hardball, running back to the tried-and-true formula of ‘blame the victim’. He wants to be able to argue that if people suffer as a result of Medicare changes, it’ll be their own fault.

Then there’s what on the agenda for the aged pension – including the family home in the assets test, indexation against inflation, and a rise in the qualifying age to 70. Seniors groups are up in arms. Every one of these changes is potentially destructive. The family home has historically been exempt from the assets test, and for good reason. It’s often not until near retirement that a housing loan is paid off, and in the current housing market, the value of any given house is likely to be considerably inflated from its original asking price. A house bought for under $100,000 thirty years ago could now – conservatively speaking – be worth more than $500,000. If that value is included in a person’s assets, it would render them ineligible for the pension. Their only option would be to sell that home, downsize, and invest the remainder. Even for those of us who are younger, that’s a hugely stressful undertaking, with no guarantee of a good outcome.

Raising the retirement age also places a burden on older people. The idea is predicated on the fact that we live longer. What it doesn’t take into account, though, is that we are not living better. Medical science has become very, very good at saving lives, but it’s still playing catch-up on how to improve the quality of life for people over 60. It shows in the strain on our aged care system, where there is a dearth of available medium-care facilities – and what there is often exists in an uncomfortable middle ground between low-care ‘retirement villages’ and high-care beds.

Again, though, the government’s got an answer to objections. According to Deputy PM Warren Truss, senior just want to have their cake and eat it, too. The argument goes like this: people retire, they cash in their superannuation, go on cruises and spending sprees, and when the money’s gone, cry poor and hold out their hands for welfare. They’re just sponges. They should ‘learn to live within their means’.

Well, of course. Heaven forbid that people who have worked all their lives and put as much money into their superannuation as they can afford be allowed to actually enjoy their retirement. And let’s not mention how they often use substantial amounts of superannuation to pay off debt.

What Mr. Truss deliberately didn’t say is that money put into superannuation is taxed going in and coming out, not to mention income tax over the years. People have already contributed three times over to their own retirements. There’s also the fact that many simply don’t have enough superannuation to see them through, whether as a result of being in low-paying jobs, or simply because Australia didn’t even have a compulsory superannuation scheme before 1992.

It’s niggling little details like this that the government wants kept out of public discussion. Every pensioner and every low-income earner with children who get their faces on The Project, A Current Affair or any of the morning shows, everyone who wants to know why they are being targeted for such draconian measures, is another slip in the polls. (Despite what any government MP says, they do watch those figures.)

This tactic – blaming those who will be worst affected – is nothing short of bluster and bullying. It’s Hockey and Truss working as a tag team to kick people when they’re down. And it’s a huge mistake. Had the government stuck to its original strategy of attempting to accentuate the potential for positive outcomes, it would still have been an unpopular Budget, but that’s all – and unpopular things go away in politics.

That opportunity’s been lost, however. The Budget is irrevocably cast as not merely strict, but outright vindictive. The government has a huge problem on its hands, now. Opposition parties have flagged their intention to block key legislation (notably, Medicare changes), and the Coalition may well find itself facing Hobson’s choice – to ride it out, and risk paralysing the government, or pull the trigger on a Double Dissolution, and risk losing government altogether.

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Budget 2014 – heaviest lifting from the weakest Australians

May 13, 2014

Treasurer Joe Hockey has just handed down his first Budget, and it’s a shocker. Here are the highlights – or rather, the low-lights.


Commission of Audit hits those who are most vulnerable

May 1, 2014

The government’s Commission of Audit report was finally released today. It’s over 500 pages long, but already it’s proving to be targeted at those who can least afford it.

These are just some of the recommendations:

PENSIONS

Aged pension eligibility to be raised to 70 years old.

Pension eligibility criteria to be tightened.

The family home to be counted as an asset in means testing.

Pension payments to be gradually reduced to 28% of average weekly earnings.

Carer’s Allowance to be means tested.

HEALTH

NDIS rollout to be ‘slowed’.

GP visits to cost $15 in ‘co-payment’.

Those who turn up at an Emergency Department whose situations are deemed ‘less urgent’ to be forced to make a co-payment.

Everyone to pay more for medicines, including those currently listed under the Pharmaceutical Benefits Scheme. This includes medicines that are currently free.

In a rare recommendation not aimed at the poorest and most in need in Australian society, high income earners would be required to take out private health insurance in order to access Medicare. The Commission also recommended a 2% increase in the Medicare Levy surcharge to encourage the shift to private health insurance.

NEWSTART

Payments to young job seekers to be cut after 12 months.

Job-seekers between 22 and 30 be forced to relocate to take a job after 12 months, or lose benefits.

EDUCATION

Gonski reformed to be scrapped.

States to have full control of schools.

Higher education to cost more.

Students to start paying back their FEE-HELP debt earlier.

FAMILIES

The Commission recommended the Paid Parental Leave Scheme salary cap be scaled back to $57,000 per year.

Family Tax Benefit B to be abolished.

A new FTB A ‘supplement’ to be available to sole parents with children under 8 years of age.

INFRASTRUCTURE, INDUSTRY AND PUBLIC SERVICES

More road tolls.

Industry assistance, including to the car industry, to be slashed.

Seven Commonwealth bodies to be scrapped, including the Climate Change Authority and Clean Energy Finance Corporation.

Over 60 other departments to be merged; for example, Border Protection with Customs.

The Snowy-Hydro scheme, the Australian Submarine Corporation, Defence Housing, Australian Rail Track Corporation, Australia Post, Medibank, the Royal Mint and the National Broadband Network to be sold off over time.

The Commission estimates this will mean that 15,000 fewer public servants will be needed, especially in Canberra.

New targets for funding the ABC and SBS, while the Australian Broadcasting Network would be abolished.

The minimum wage case to be abolished, with a new benchmark of 44% of average weekly earnings.

It takes no special knowledge whatsoever to see that this report is a nightmare. It targets the weakest, poorest, least able to adapt to extreme changes in their fiscal circumstances. Now, Treasurer Joe Hockey has been at pains to stress that this is a report, not the Budget, but he’s not ruling anything out, either. Some of these recommendations have already been signalled as ‘under consideration’.

Take an ‘average’ family – one parent works, making about the average weekly age. The other parent stays at home with the kids, who are 14 and 10 respectively. If the Commission’s recommendations are adopted, they’ve just lost Family Tax Benefit B. They’re probably paying higher fees to send their kids to government schools than they were even one year ago. If the kids get sick, they not only have to find the money to see the doctor, but also the money to pay for whatever gets prescribed.

How about someone approaching 65, and thinking about retirement? Their superannuation funds aren’t great, because they’ve never had a high earning job. They won’t be able to even try for the pension for five more years, and even then there’s no guarantee. You see, they own their home, which they’ve paid off over decades. Thanks to gentrification in the area, it’s probably worth a fair bit now – almost certainly enough to exclude them from the pension.

Or someone leaving high school, wanting to go to university? Well, they’d have to pay more for their degrees, but hey, there’s always FEE-HELP, right? Except that debt will be higher, and they’ll have to start paying it back much sooner. They could always go on the job market and try to save money, but if they have trouble getting a job, they might well find themselves forced to move anywhere the government deems fit, or else be back where they started with no means of support.

Even a single, able-bodied, employed person doesn’t get off scott-free. They’ll be mostly okay – as long as they don’t get sick, require regular (or even semi-regular) GP visits and medicines, lose their job, drive to work, sign up for the NBN … you get the picture.

Amazingly, the government would like us to believe that this is all necessary. It’s all the previous administration’s fault, of course. The message is clear and consistent: the Coalition don’t want to do this, but they must. Why? Because, in Hockey’s words, ‘What this report proves is that we have inherited a mess’.

Really, Mr Hockey? Are pensioners out in the streets desperately trying to make their terrible circumstances known, as they are in Greece? Is our inflation rate at almost 60%, as it is in Venezuela? Is our debt as a percentage of GDP at 230%, as it is in Japan?

The short answer is NO. They’re not.

Our inflation rate is 2.9%.

Our debt as a percentage of GDP is 28$.

Yes, we have a deficit. Yes, if a completely unforeseen disaster happened right now, we would need to borrow more money to combat that. But that deficit came about as a result of spending designed to cushion us from the impact of the Global Financial Crisis. It was strategy – and it worked.

The government would have us believe this was ‘wasteful’. They prattle about pink batts and school halls, and just about turn themselves inside out trying to obscure the real effect of the Rudd and Gillard governments’ spending initiatives.

And yet the Coalition decided to increase the deficit by $8 billion ‘just in case’.

And yet the Coalition decided to spend $24 billion on buying Joint Strike Fighters in a highly questionable business deal.

The same people who even now wring their hands and all but confirm that their sights are squarely trained on the most vulnerable of us.

Hockey says the Commission’s recommendations are ‘courageous’.

No, Mr Hockey. What would be courageous would be your government refusing to kick people when they’re already down.

But what are the chances of that?

Guess it’s over to you, Labor, Greens, PUP. Anybody? Anybody?


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