Tony Abbott has vowed to lift the poor of India and China from their poverty by selling them coal. But what about poor people in Australia?
Various ministers tell us that education, health and welfare are no longer affordable. Others tell us that we have been too greedy and that the “wage explosion” and “toxic taxes” are the root of our problems. Joe Hockey assures that “a rising tide will lift all boats” while the girlinator tells us we must “live within our means” to fix “Labor’s debt and deficit disaster”.
All of this is crap of course as can easily be shown by reference to the facts.
As a percentage of GDP, Australian government spending on health is the tenth lowest of the 33 countries in the OECD database and the lowest among wealthy countries.
The 8.3% of GDP spent by the US government, for instance, is higher than the 6.4% spent by the Commonwealth and state governments in Australia.
Nor is it true that total health expenditure – government plus private spending – are unsustainable. Australia spends about 9.5% of GDP on health services; the United States spends 17.7%.
As discussed on The Conversation, the real reason for co-payments appears to be ideological – a dislike of communal sharing even when it is to alleviate the financial burden of those already disadvantaged by illness.
Australia spends 19.5% of our GDP on social welfare, whereas some European countries like France and Belgium spend upwards of 30% of their GDP on the welfare system.
Australia ranks 25th of 30 countries in the Organisation for Economic Co-operation and Development with data available in terms of expenditure for unemployment.
The largest slice of our welfare payments goes towards the age pension. According to OECD Pensions at a Glance 2013, Australia’s public spending on the age pension is much lower than pension spending in Europe.
Australia spends 3.5% of GDP on the age pension, while Italy spends 15%, France spends 14% and the United Kingdom spends 6%.
A recent OECD report stated that Australia spends slightly less on education as a percentage of GDP (5.8 per cent) than the OECD average of 6.1 per cent. Although it also found that Australia’s total spend has increased relative to GDP over recent years, up from 5.2 per cent in 2000.
And as for a wage explosion, official figures show wage growth remaining at a historic low in the September quarter. The Bureau of Statistics data shows the annual pace of wage growth remained at 2.6 per cent for the second straight quarter, as expected.
The index peaked over 4 per cent shortly before the financial crisis and has been on a downhill trajectory ever since, now running at its lowest level since the records started in 1997.
Abbott and Hockey also emphasise the need to increase productivity. What they fail to mention is that, between 2003-04 and 2012-13, capital productivity shrank 23 per cent while labour productivity increased 14 per cent. It would appear that the workers are doing the lifting while the owners of capital are very much leaning on them.
Meanwhile, the Australian Council of Social Service released a new report revealing that poverty is growing in Australia with an estimated 2.5 million people or 13.9% of all people living below the internationally accepted poverty line with 603,000 or 17.7% of all children living in poverty in Australia. Over a third (36.8%) of children in sole parent families are living in poverty.
“Most of the poverty we found is concentrated among the groups of people facing the most disadvantage and barriers to fully participating in our community. Those most likely to be in poverty are people who are unemployed (61.2%) and those in a household that relies on social security as its main source of income (40.1%), particularly on the Newstart Allowance (55.1%) or Youth Allowance (50.6%).
This finding brings into focus the sheer inadequacy of these allowance payments which fall well below the poverty line. The poverty line for a single adult is $400 per week yet the maximum rate of payment for a single person on Newstart – when Rent Assistance and other supplementary payments is added – is only $303 per week. This is $97 per week below the 50% of median income poverty line.”
Since 1996, payments for the single unemployed have fallen from 23.5% of the average wage for males to 19.5%. Furthermore, the level of Newstart for a single person has fallen from around 54% to 45% of the after-tax minimum wage. Newstart has fallen from 46% of median family income in 1996 to 36% in 2009-10 – or, from a little way below a standard relative income poverty line, to a long way below.
Before the last election, the Greens had the Parliamentary Budget Office cost an increase of $50 a week to the Newstart payment. It would cost about $1.8 billion a year. Not only would this help lift about 1 million people from poverty, it would provide stimulus to the economy as every cent would be recycled, spent on survival. It would lead to better health and education outcomes and facilitate more people finding employment. It’s much easier to look for a job if you have an address and enough to eat and a little left over to buy an outfit and get public transport there should you get an interview.
Give low-income earners more money, demand increases, creating more jobs and more profit – an upward spiral instead of the depths to which Hockey would like to send us (aside from a few polaris missiles like Gina and Twiggy).
$1.8 billion is how much we gave up by repealing the changes to the FBT requiring people to justify the business usage of their cars by keeping a logbook for three months once every five years. Abbott and Hockey would much rather protect tax avoiders than help the poor. Instead, they want the poor to carry the burden of finding the money to pay for their war games whilst delivering a surplus.
Let’s not forget, in April Tony Abbott decided to spend $12.4 billion ordering 58 more Joint Strike Fighters in addition to the 14 already on order. The first Joint Strike Fighters will arrive in Australia in 2018 and enter service in 2020.
As part of the announcement, more than $1.6 billion will be spent on new facilities at air bases in Williamtown in New South Wales and Tindal in the Northern Territory.
But a specialist in US defence strategy has questioned whether Australia’s purchase is good value for money.
If Australia wants to be able to have aircraft that can go up against what China might deploy – in way of not only its own fighters but advanced air defences in years and decades [to come] – then I think you want something… like the F-35.
[But] if you think more about your military needs being the Afghanistan-style operations, the troubled waters of the South China Sea, counter-piracy, peace operations, keeping some degree of regional calm with some turbulence in the ASEAN region but not necessarily China, then frankly it’s a debatable proposition whether the F-35 is the best bang for your buck.
“If you think that that kind of high-end threat is not realistically where you’re headed with your military requirements, then it’s more of a debatable proposition.
In August, defence minister David Johnstone announced:
HUNDREDS of millions of dollars will be spent bolstering the RAAF’s fleet – and the prime minister is in line for a new long-range jet, promising uninterrupted global travel.
The government plan – scheduled to be delivered as part of next year’s Defence White Paper – includes the purchase of up to four new aircraft: an additional two Airbus tanker-transport planes and one or two Boeing C-17 heavy lift aircraft.
One of the Airbus KC-30A multi-role tanker transports would be converted to a VIP configuration and would service the prime minister’s international travel needs.
It would carry the PM’s entourage and the travelling media pack, who are currently forced on to commercial planes as the government’s existing Boeing 737 BBJs are too small.
Since handing down its budget in May, the Government has given national security agencies an extra $630 million over four years.
The Government has also estimated that the military deployment to the Middle East will cost about $500 million per year.
Then we have submarines and unmanned drones and patrol boats and more – a seemingly endless display of military hardware – but we ask our defence personnel to take a pay cut.
I await Joe Hockey’s MYEFO with a sense of anticipation and trepidation. Will the poor be asked to shoulder more of the burden or will Joe admit where the big bucks are to be found and have the guts to go after them?
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