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The forgotten poor – until we need a few bucks

image 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?

18 comments

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  1. Loz

    Thank you for this article. I wish the whole of Australia could read this and realise what we have is a incompetent and lying government.

  2. Florence nee Fedup

    I do not believe many Labor supporters could fault the 40 minute speech just given to the Sydney Institute ABC 24. Yes, ETS is on agenda. Very strong and comprehensive.

  3. June M Bullivant OAM

    When the Pope writes and asks him to look after the poor we have a big problem.

  4. galacticpresident

    Imprecise to say we spend almost 20% of GDP on welfare, as less than 25% of the budget of the department of human services is actual welfare payments (the sum total of Austudy, Abstudy, Youth Allowance, JobSearch / NewStart, Singles, Families, Disabilities, Seniors & Veterans combined is at most < $70B, yet the department budget is $280B) … So basically about 75-80% of that budget is the administrative overhead of turning welfare into a political football, plus payments to 3rd party "service providers" (who do little or nothing of use whatsoever for anyone actually in need in many cases, with a handful of exceptions) … arguably you could double everyone's welfare payments, declare unemployment over, and just instruct anyone not working to either study, seek therapy for illness/injury/disability, raise their families, or care for whomever they're caring for … and you'd still be able to split the other $140B between health & education, thus simultaneously making both world class again over time … but instead we waste tons & tons & tons of resources managing something that doesn't need it, because it wasn't a problem in the first place

  5. Billy muddle maudlin

    It is so sad that ratios to GDP were not mentioned by Gillard when the rabbott was economic/debt crisising all over the place. It is sadder when little billy cannot even make a rejoinder to the Belgian whose home has a debt ratio 5 times larger than Aust.
    The saddest may be that the electorate cannot understand the truth but can understand and believe the lie.

  6. Truth Seeker

    Thanks Kaye, 🙂 Should be compulsory reading!

    Cheers 🙂

  7. Anomander

    Let’s not forget the billions being spent paying private security companies to lock-up people in inhumane detention facilities for years at a time.

    We’ve also sold-off (or are planning to sell) almost every income producing asset we ever owned, so those profits can flow into the hands of a wealthy few rather than feeding back into government revenue.

  8. Kaye Lee

    The funding shift from expenses to capital expenditure aims ‘to improve Defence capability’. This means spending more on equipment while implementing efficiencies such as reducing public service staff numbers in the Department of Defence. (and cutting pay and entitlements to diggers)

    Three major projects—Growler electronic attack aircraft, Romeo maritime helicopters and naval anti-aircraft long-range missiles—will receive immediate funds this financial year totalling $500 million.

    The Defence Materiel Organisation’s (DMO’s) total net resourcing for 2014–15 will be approximately $12.8 billion.

    The total Approved Major Capital Investment Programme (AMCIP) budget for 2014–15 is around $5.4 billion and the Defence Capability Plan (DCP) budget for the same period is $671.5 million, with the DCP budget expected to significantly increase by 65.6 per cent each year over the forward estimates, reaching just over $3 billion in 2017–18. The capacity of Defence’s capability development as a whole is forecast to incur substantial incremental increases in expenses across the forward estimates.

    Defence’s top 30 approved projects attract an overall total budget expenditure of around $47.2 billion. Some of the key programs include the:
    •build program for three Air Warfare Destroyers (AWD) which has an approved budget of $7.8 billion. However, almost $5.2 billion has already been spent. The program has run over budget and is currently being assessed by an independent review team.
    •Future Submarine acquisition program which currently has an approved budget of $235 million. Of particular note, the Defence Portfolio Additional Estimates Statements 2013–14 (PAES) stated that the Government had ‘suspended work on Military off the shelf design options’ and would focus on Option 3 (evolved Collins) and Option 4 (new design) submarines. This approach was also confirmed in this Budget.
    •acquisition of 72 Joint Strike Fighter (JSF) aircraft, of which 14 had been approved by the Rudd Government in 2009 and a further 58 approved by the Abbott Government in April 2014. The Budget notes the major risks to the JSF program include ‘the establishment of an electronic warfare reprogramming capability and the stand-up of sustainment systems and facilities required to support Australian operations’.

    The Government’s March 2014 announcement to acquire an unknown number of Triton Unmanned Aircraft System (UAS) from the United States has not been included in this Budget. The UAS has yet to successfully complete development with the US Navy

    http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/BudgetReview201415/DefMateriel

  9. Scott

    Rising unemployment puts downward pressure on wages as there is more competition to fill s diminishing number of vacancies. It’s a Tory’s dream to have a higher proportion of the population who are unemployed and desperate to get a job, hence while there are more people who are unemployed, this government makes it as difficult as possible to live on unemployment benefits in order to make sure that people try to get those non-existent jobs. The whole deal is designed to maximise profits.

  10. CMMC

    Katy Perry seems to be in accord with the Abbott plan for private education largesse.

    She has given $10 000 to Toorak Loretto girls school.

  11. Florence nee Fedup

    One wonders at what makes Abbott tick. We have World Bank and IMF stating the biggest concerns facing us now, is the growing gap between rich and poor, Yes, environment and gender inequity.

    I have a sneaking suspicion that Hockey and Abbott actually believe their hype.

    When one listens to what leaders are saying, I cannot expect a good outcome for Abbott.

  12. Jennifer Meyer-Smith

    It suits Abbott’s rich business mates that there are growing numbers of poor, desperate people fighting for ever decreasing jobs, so the creeps can keep wages, salaries and job conditions at low standards.

    It also doesn’t bother them when people face such financial hardship that they lose their houses and become homeless because that just means more plunder and opportunities for them.

    This is cynical and largely true of the mindset of Abbott and his LNP Government and their backers.

    If it weren’t true, where are the innovative, effective employment initiatives that grow meaningful employment opportunities for every demographic, including mature age women and people with disabilities?

    As for the Job Services Australia scheme, this is just another government backed rort for Centrelink contractors supposedly in the business of finding jobs for desperate people. The beneficiaries are not the unemployed; they are the JSA contractors. These are people making money out of poor people’s desperate desires for meaningful employment.

    Instead of giving grants to the JSA’s, give the money directly to the unemployed, as financial incentives in the form of substantial micro-finance grants and micro-credit low interest loans that can allow energetic people to start Startups: viable self-employment sole practices and also social enterprise ventures.

    Such initiatives would in turn provide further paid employment to other unemployed people as the enterprises grow and evolve. These micro-finance and micro-credit financial programs must be Over and Above the Newstart safety nets, so that people can live while they are establishing their practices, businesses and ventures.

    But then these ideas are counter to what Abbott and his ugly parasitic LNP buddies want because offering positive solutions to the desperation of mounting unemployment runs contrary to their own vested professional and personal interests.

    We are right to vilify them for their selfish, inhumane treatment of their fellow citizens.

  13. iggy648

    You can get to be a billionaire 5 times over from your companies earnings, and your company never pay any tax. (Hopefully they’ve paid some more recently). But what pings me off extremely is that they keep claiming that royalties are taxes. They are not. Royalties are the price mining companies pay for the raw materials they purchase from the owners of the raw materials (i.e. you and me).
    http://www.abc.net.au/news/2011-11-09/fortescue-mining-company-tax/3655270
    Then they’ll tell us there shouldn’t be a mining tax because they already pay 40% tax!!

  14. Jennifer Meyer-Smith

    Good point iggy648,

    for clarifying that the language is essential, so that ordinary lay people who are also voters, understand that they are being robbed by fortescue mining company and all its mining mates.

    They owe us 40% Royalties because they are using our resources out of our soil.

    Now they owe us Taxes after all the profits on the mining resources they have taken from us.

    This is the language Labor needs to push into Abbott’s and his LNParasites’ faces, so they have to tell the Australian voters why they let the mining companies fail to meet their obligations to us Australian citizens.

    While Labor is about it, it can show some backbone and explain to the Australian people how under a Labor/Greens alliance will see that every dollar derived from the mining companies will go into education, health, welfare, innovative employment incentives with substantially better financial support.

  15. Truth Seeker

    And in keeping with the general theme of this article: “When the Abbott goes bad!” by the self appointed poet laureate of the G20 🙂 Yours truly 😯

    When the Abbott goes bad

    It’s really quite sad

    For the voters to see

    That we’ve all just been had

    As he set out to fight

    With the Russian named Vlad

    And the people have realised

    That the man’s raving mad

    ___________________________

    The rest can be read here 😉

    http://truthseekersmusings.wor

    Cheers 🙂

  16. stephentardrew

    Let’s be clear where Abbott and co’s poisonous treatment of the poor comes from. This is an article that should chill the bones of any progressives simply because the facts are so demonstrably, and obviously, true. The US is a rapacious megalomaniac monster perverting justice throughout the world. And we relentlessly hang onto their shirt tails in the hope that some of the greed will trickle down to us. We desperately need a revolution of some kind. How, when and where remains a mute question nevertheless it is becoming an absolute necessity. We surely don’t want violence and yet violence is being perpetrated upon billions of people on this planet just to support the festering greed of middle and upper class elites and oligarchs.

    http://www.truthdig.com/report/item/for_the_worlds_sake_revolution_in_the_united_states_20141113#14159299750201&action=collapse_widget&id=8681556

  17. stephentardrew

    Sometime the mind calls for quiet refrain summoning the heart and strengthening the will to stay the course and remain true to ones heart.

    Soft of Wind

    Soft wind in leafy trees
    Magical cadence of gentle summer days
    Wresting away the innocence of childhood
    Keeping close innocence past in hope of salvation
    Quiet of heart gentle of mood
    I could not let this magic of mine
    Disappear under the weight of cruel intent
    For in the end only the lover remains
    Steadfast and immovable
    For I will not be turned from the embrace of goodness
    That lightens the heart
    Lifting the self beyond suffering and greed
    For I am in Love and Love is in me
    Not as want or need but as
    Quiet reflection beyond meanness and greed.

  18. marg1

    Great article Kaye Lee.

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