By Denis Bright
In his Address in Reply Speech, Bill Shorten challenged the inherent opportunism in the LNP’s Budget Statement.
Labor still faces an enormous challenge in retaining four heartland seats in Fremantle, Perth, Braddon and Longman in the forthcoming federal by-elections. The SA Seat of Mayo in the Adelaide Hills is currently held by Nick Xenophon’s Party, and has not been held by Labor since its formation in 1984.
Big ticket items in the LNP Budget for new motorways are pushed into the future to offer token tax relief of up to $8.55 per week for workers in the $18,201-$37,000 income range.
The infrastructure promises looked good until the fine print of commencement dates and negotiations of partial funding by the states and territories were finalised. Nothing is offered for Brisbane’s Cross River Underground Rail Link with its capacity to revitalise inner-suburbs with Transport-Oriented Development Projects (ToDs) to ease housing shortages.
The capacity of states and territories to come up with matching funding is highly questionable. The variability in revenue assistance from the Commonwealth to the states and territories is quite appalling. The big losers are Queensland and the Northern Territory, with stationary allocations to the ACT and Tasmania. These allocations include both GST sharing and general revenue assistance (Budget Paper 3):
Variability in Federal Support to the States and Territories
One of the harshest financial cuts has been directed to the ABC Broadcasting Networks which are so important for families in regional areas:
Funding for the ABC has been cut by $84m with the treasurer, Scott Morrison, saying the reduction is justified because “everyone has to live within their means”.
The ABC’s managing director, Michelle Guthrie, told staff she was “very disappointed and concerned” about what amounted to a substantial budget cut and it would impact audiences.
“This decision will make it very difficult for the ABC to meet its charter requirements and audience expectations,” Guthrie told staff.
The cut comes on top of the government’s decision not to continue a further $43m targeted grant to support news gathering and after cuts of the magnitude of $254m since 2014.
Beyond the high-profile infrastructure items with a distant commencement date, the federal government is struggling to cope with social security expenditure associated with the ageing of the Australian population and high levels of regional and youth underemployment. Expenditure on TAFE and training programmes is obviously less important than protection of salaries of households from the LNP’s core support base.
Projections for spending priorities of future federal LNP governments offer no possibilities of real changes (Budget Paper No.1 2018):
Real Growth in Commonwealth Expenditure 2017-2021
Commitment to elitism justifies these warped priorities which will increase the income divide in Australian society.
Elitism in Action
The elitism in the LNP Budget is market by a flat tax rate of 32.5 per cent for 73 per cent of workers by 2024-25. Only 6 per cent of workers earning a taxable income of over $200,000 will have to pay a progressive tax rate of 45 per cent on income above that threshold now and in the immediate future to 2024-25. Legal forms of tax avoidance schemes are available to compress higher incomes into the 32.5 per cent threshold range. Just ask your nearest accountancy office and your expenditure will be a tax deduction.
The broad scope of the 32.5 per cent tax band will help to maintain tax coffers and may contribute to a return to surplus. Income tax and GST receipts as a percentage of revenue were lower twenty years ago as shown in the excellent graphics from The Guardian Online:
As pointed out by Bill Shorten, the federal LNP’s less publicized commitment is a reduction in company taxes for large and middle-sized companies. Most of this initial $80 billion hand-out will go to large companies and banking institutions. The capacity of this sector to avoid paying legitimate Australian taxation is legendary.
Commitment to Fairness
By restricting tax relief for the largest companies and banks, Labor has the capacity to spend responsibly on health, aged care, hospitals and infrastructure. It can ensure that wage theft is always challenged, and legitimate penalty rates restored.
It is a good sign that Brisbane’s Courier Mail decided to tone down its lead story in the morning edition (10 May 2018).
Offering tax relief of up to $928 a year for 10 million Australians in Labor’s Address in Reply had already gained some traction with the editorial staff (CM Online 10 May 2018).
Perhaps this is a sign of a fair assessments of Labor’s battle to retain four current heartland Lower House seats. In Brisbane’s Northern Corridor seat of Longman, the prospects for a swing to Labor must face the challenge of a new populist onslaught to distract constituents from real issues about living standards and quality of life in an electorate which is not famous for elitist pretensions.
Denis Bright (pictured) is a registered teacher and a member of the Media, Entertainment and Arts Alliance (MEAA). Denis has recent postgraduate qualifications in journalism, public policy and international relations. He is interested in advancing pragmatic public policies that are compatible with contemporary globalization.