Contributed by Joe Montero
The budget delivered by Treasurer Josh Frydenberg last night (11 May 2021) was even worse than many had expected. It is a massive con, pretending to be to be built on generous handouts to Australians and friendly towards women. This budget is neither, and thoroughly in line with the government’s obsession with neoliberalism.
Treasurer Josh Frydenberg
First the small positive parts.
The outlay of $1.5 billion for the growth of manufacturing is a small step in answering its decline. There is $107 million for the Supply Chain Resilience Initiative. This relates to extending the links between firms and their suppliers and markets. But what has been offered in this budget is not enough to make a big difference, and there is no mechanism to ensure that it is targeted properly guarantee either growth and jobs.
Childcare gets a pledge of $1.7 billion, and a modest amount is given for the training of women. single parents will be given 10 percent of the deposit to buy a home, although the fact that few will be able to put the rest together is being overlooked. There is a small tax offset of up to $1,080 for singles and $2.160 for couples on lower and middle incomes for the net financial year.
Small and medium businesses hard hit by COVID, will have their tax dropped form 30 percent to 25 percent and the small business loan scheme will be extended. agricultural biosecurity gets $375 million. Small beer and wine makers get out of paying the first $3,500 worth of excise tax on their product.
The COVID vaccination rollout gets $1.5 billion. Preschools get $2 billion.
There is just enough here to enable the spin doctors to sow the illusion that this is a generous budget full of giveaways. But when closely examined, the above giveaways go nowhere near meeting existing needs. They are tokens. Nothing more.
The bad side is that the budget overall is framed as a giveaway to big business.
This fits in with the arguments that by making it more attractive to big business, it will invest and create jobs. This is the essence of the Morrison government’s job creation plans, when job creation is the single most important need that this budget was supposed to meet.
There is no real job creation program.
Providing more generous asset write offs. boosting the capacity of CEO’s and executives to own shares in the company and encouraging workers to buy their own shares is not job creation. Nor is a 30 percent tax discount to bring in developers of computer games from overseas or handing most of the $1.2 billion earmarked for the tourism industry to the airlines.
The bulk of the pretend job creation plan is the boost to JobMaker Plan. This and the rest of the associated measures amounts to a $74 billion handout to the corporate world, which is unlikely to transform into many jobs. This is because the corporate incentive is to channel the handout towards the bottom line and dividend payouts. We saw this happen with JobKeeper last year.
Australians depending on Centrelink payments get no increase. Lifting these payments would have provided an important stimulus to the economy, as well as making life better for those dependent on them. This is far more likely to translate into new jobs than all the above.
Conversely, corporate welfare is a strong feature of this government and this budget. Most of the handouts are earmarked to go to the private sector, in line with the government’s ideological insistence on private sector led growth. It denies that the economy is a long-term bad shape, made worse by the COVID pandemic, and that the big business led private sector has shown itself incapable of solving the problem.
This means that a much greater direct engagement of the public sector in the economy is necessary. This would go against the mantra of minimal government involvement and will not be entertained.
The third major failure concerns the need for a sustainable economy. Instead of moving away from a carbon creation economy, the Bowen and Galilee basins have been unlocked to extract gas reserves. A commitment to zero carbon emissions has been replaced, with “our goal is to get there as soon as we possibly can”. Overall, protection of the environment gets nothing, despite the well being of all of us depending on it, and the climate emergency continues to be ignored.
It is hard to imagine anything that will do more harm to our economy and society.
Even more than before, Australia needs to begin the shift to an economy that is about people. To achieve this, the number one priority is that the needs of all are met. This requires a strong public sector, to which all sections of society contribute according to their capacity and the rewards, in the forms of income and participation, are shared fairly.
Australia must shift towards a sustainable future to take on the climate crisis. This is also necessary to guarantee a modern economy, incorporating the latest technology and skills, and economic health
The question is, how are is Australia to bring this about?