The Business Council has a plan – make working people pay
Posted by John, February 18th, 2010 - under Rudd Government, Rudd Labor, Social services.
The Business Council of Australia has a plan – a plan to make the poor and working people of Australia pay for the crises of capitalism.
In its Budget submission the BCA argues the Government must reduce the budget deficit.
This fear of deficits is a conservative furphy. Our Government debt is one of the lowest in the developed world as a percentage of GDP and contrary to Barnaby Joyce’s calamitous caterwauling, we are not going to default on it.
And the Government will argue, perhaps with a modicum of truth, that its $52 bn stimulus package helped Australia avoid recession (for the time being anyway).
The Business Council wants the Government to stop approving any more stimulus spending. Yet there is little evidence that big business has systematically taken the place of Government in generating growth and jobs.
The BCA also wants the Government to tighten eligibility and/or means test some of the top spending programs. They won’t actually nominate which ones, but ABC radio’s Stephen Long helpfully gave us a list. In an interview with Peter Crone from the BCA Long said:
Leave aside payments to the states and the top 10 in that list of programs includes in descending order: the aged pension, family tax benefits, Medicare, disability pensions, unemployment benefits and pharmaceutical benefits.
Tightening eligibility and means testing is code for cutting these programs. If the BCA has its way less people will be getting the pension, Medicare, subsidised medicines and unemployment and disability payments.
The left should argue for the universality of benefits and a tax system which taxes the rich. To support means testing is to support attacks on ordinary workers and the less well off.
The BCA doesn’t mention cutting defence spending, which under Rudd Labor is set to increase 3 percent in real terms per annum for the next 7 years.
Something else the BCA doesn’t mention is tax expenditures. These are disguised grants through the tax system. Treasury estimates that about $100 bn in revenue is foregone through this disguised grants system. Much of this hidden expenditure goes to business.
Disguised expenditures for business good, pensions bad, BCA?
Labor is already doing some of what the BCA suggests with its attacks on family benefits and pension eligibility, not to mention increasing the pension age to 67.
The BCA wants to go further. While it says it doesn’t support raising the pension age to 73 ‘at this stage’, it thinks that is the sort of initiative governments will need to take to address the ageing population over the next 40 years.
The logic of capitalism is impeccable. The benefits of living longer are really costs. The bosses’ club want to make us work longer for living longer.
But isn’t the point of all these great new medical advances and technology meant to be so we can have better and longer lives to enjoy ourselves, not waste it working for bosses like the BCA?
Well actually no – the whole point of all these advances and new productive ways of doing things is not to reduce the working week or retirement age – it’s to make profit for the BCA and their mates. That actually means increasing the working day and age of retirement to counteract low profit rates.
Labor is not going to adopt the BCA recommendations holus bolus.
But because the ALP shares a conservative capitalist economic worldview with the BCA, it will take actions similar to those big capital suggests at a stage it judges convenient in both the political and economic cycles.
Lindsay Tanner is sharpening his razor.
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Comments
Comment from Leon Bertrand
Time February 19, 2010 at 11:50 am
“The left should argue for the universality of benefits and a tax system which taxes the rich. To support means testing is to support attacks on ordinary workers and the less well off.”
I would have thought that the left would support means testing, because they help the poor and ensure that rich people don’t get the same assistance.
In arguing for universal benefits, it would appear that you are at one with the Howard Government.
Comment from Marco
Time February 19, 2010 at 7:20 pm
At the moment, I don’t dare to state what could be the end result of this move by the BCA.
At one hand, the Rudd government is starting to feel that voter support is falling. This might make them reluctant to move openly to satisfy their corporate masters.
On the other hand, Rudd has boasted of being a “fiscal conservative” and we know what that means.
And Abbott and co are not beyond trying to depict themselves as champions of the oppressed: remember the short-lived “Abbott’s battlers”? They could resurrect it.
As the RBA will not be changing their policy of raising interest rates, the combination of higher interest rates, fiscal cuts and worsening global economic outlook could have severe recessive consequences by middle to end of the year.
These people should be grateful that stupidity, incompetence and greed are not crimes punishable by death.
Comment from Tristan Ewins
Time February 21, 2010 at 12:16 pm
Leon and other readers; The problem with targeting payments ever more tightly it that some people on middle and upper incomes come to resent this. The Conservatives in particular are adept at playing on peoples fears and resentments – to divide us against each other… Ultimately, this means the poor and vulnerable are marginalised – and mean-spirited sentiments amongst voters helps lead to austerity… Of course many in the business community prefer this – as austerity for the vulnerable frees up resources for corporate welfare. And by undermining the ‘safety net’, ordinary people will be more desperate to get any job – even with unfair wages and conditions… And the added vulnerability of pensions will add to this desperation… Ultimately, the result is downward pressure on wages and conditions – compounded by downward pressure of welfare and social services….
Comment from Leon Bertrand
Time February 22, 2010 at 1:17 pm
“The problem with targeting payments ever more tightly it that some people on middle and upper incomes come to resent this. The Conservatives in particular are adept at playing on peoples fears and resentments – to divide us against each other…”
The problem with your account is that the Howard Government was for universal benefits. It’s the Rudd Government which has made tentative moves to means-test.
Comment from John
Time February 23, 2010 at 8:12 am
Leon, it’s a good question you raise. I’ll respond when I get time and am not distracted by other matters, perhaps through an article on the universality of benefits coupled with a re-introduction of a progressive tax system.
Comment from Dave Bath
Time February 18, 2010 at 10:32 pm
I wonder if the BCA would argue that consumers should do the same, never be in debt using the same logic. If so, we can get rid of the financial system and simply have a safe deposit scheme.