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Tag Archives: Coalition spending

A ‘budget emergency’: it’s all about choices

The excuse for the draconian cuts made by Abbott and Hockey is that there is a budget emergency and a debt crisis. I in no way concur with this appraisal of our economy or our future outlook but, that aside, as those of us who are not independently wealthy know, if you have limited funds then prioritising expenditure is most important. The following article is to give you some perspective on how our money could be better spent.

In a display of largesse, Tony Abbott chose to gift $16 million to the profitable Cadburys factory, $10 million to his beloved Manly Sea Eagles, and $5 million to Rupert Murdoch’s Brisbane Broncos. This money could have paid for:

  • The Climate Change Authority which was allocated $6.2 million in the 2012-13 financial year
  • The National Preventative Health Agency which will be abolished, saving $6.4 million over five years.
  • The Alcohol and Other Drugs Council of Australia which has an annual budget of $1.6 million from the federal Health Department.
  • The Advisory Panel on Positive Ageing which is to be scrapped – at a saving of just over $1 million a year.
  • The Refugee Council of Australia (RCOA) despite allocating $140,000 just two weeks ago in its 2014-15 Budget.
  • The Government will achieve savings of $6.4 million over four years by ending the Get Reading! Programme
  • The Government will achieve savings of $4.4 million in 2014-15 by ceasing funding for Building Australia’s Future Workforce – Connection Interviews and Job Seeker Workshops
  • The Government will achieve savings of $3.9 million over two years from 1 July 2014 by ceasing funding for the Experience+ Career Advice initiative

Joe Hockey’s $8.8 billion gift to the Reserve Bank of Australia could have funded:

  • Pharmaceutical Benefits Scheme (PBS) co-payments and safety net thresholds which will increase by $5 (from $37.70 to $42.70) and for concessional patients by 80 cents (to $6.90) in 2015. PBS safety net thresholds will the increase by 10 per cent annually. The saving is $1.3 billion.
  • The threshold on Higher Education Loan Program (HELP) will drop by 10%, to $50,638 in 2016, at a repayment rate of 2%, saving $3.2 billion over 4 years.
  • Family Tax Benefit Part B (FTB-B), which will be cut for families when their youngest child turns six. Currently about 60 per cent of families with children under the age of 16 receive the payment, and the changes will save the Government $1.9 billion over five years.
  • All Family Tax Benefit payments will be frozen and remain at current rates for two years, saving the Government $2.6 billion over four years.

Kevin Andrews $245 million school chaplaincy program and $20 million in marriage counselling vouchers could have been spent on:

  • Indigenous legal aid which will have $13.4 million stripped from its budget over the next three years
  • Community Legal Centres – additional $30 million set to be stripped from community legal centres, legal aid commissions, and family violence prevention services.
  • The Commonwealth Human Rights Education Programme saving $1.8 million over four years.
  • the HECS HELP benefit, which was intended to provide an incentive for graduates of particular courses to take up related occupations or work in specified locations will end from 2015-16. This measure will achieve savings of $87.1 million over three years.
  • Australian Research Council funding will be cut by 3.25%, saving $74.9 million over three years.
  • Funding to the Australia Institute for Teaching and School Leadership will be reduced, saving $19.9 million over five years.
  • The Better Schools Centre for Quality Teaching and Learning will end, saving $21 million over 5 years.
  • $14.7 million from Child Care Early Learning Projects
  • Live Animal Exports – Business Assistance Supply Chain and Official Development Assistance (Improved Animal Welfare Programme) saving of $2.3 million

Tony Abbott’s Paid Parental Leave Scheme, costing $22.2 billion could pay for:

  • The GP co-payment, to apply from July next year, will raise $3.5bn over four years.
  • The changes to Newstart which will save the Government $1.2 billion over the four-year forward estimates period.
  • Australian foreign aid spending is being cut by $7.6 billion over the next five years
  • $1.8 billion over four years by tearing up the 2011 health reform agreement and 2007 public hospital funding arrangements, which saw any increased expenditure split 50/50 between state and federal governments. Instead it will move to a CPI and population growth model for any additional funds.
  • The government also outlined intentions to index pensions and equivalent payments by the Consumer Price Index, estimated to save $449 million over five years.
  • Apprentices will lose grants offered under the $914 million program Tools for your Trade
  • The Seniors Supplement will be abolished from July 1 this year, for a saving of $1.1 billion.
  • The Dependent Spouse Tax Offset, which until now was available to people with dependent spouses of age 60 or older, will be discontinued, a decision which will save the Government $320 million.
  • The Mature Age Worker Tax Offset will also be abolished, saving $750 million
  • The Government has also abolished the Pensioner Education Supplement, for a saving of $281 million,
  • They will not proceed with the planned pilot of Supporting Senior Australians: Housing Help For Seniors, a $173 million program that was to encourage older Australians to downsize to smaller dwellings.
  • The Government will save $1.7 billion over six years – by almost halving its expenditure on the Commonwealth Home Support Program.
  • The Government will save $89.6 million over four years by reducing the Medicare Benefits Schedule rebate for all optometry services from 85 per cent to 80 per cent commencing from 1 January 2015. This measure will also remove the charging cap that currently applies to optometrists accessing the Medicare Benefits Schedule, enabling them, in the future, to set their own fees in a similar manner to other health providers.
  • The government has estimated it will save $12.7m by ordering medical specialists to review veterans who are receiving military compensation payments for economic loss because of an inability, or reduced ability, to work because of injury or illness.
  • The government has deferred the establishment of 13 Partners in Recovery organisations which help people with severe mental illness by coordinating clinical, housing, education, employment, income and disability services to save $53.8m.
  • The Government will achieve savings of $10.0 million over five years from the Office of Water Science research programme, with the programme terminating on 30 June 2016 and a further $20.9 million over four years by closing the National Water Commission in December 2014.
  • $390 million saved by deferring the National Partnership Agreement for adult public dental services until July 2015.
  • $367.9 million saved by axing the National Partnership Agreement on Preventive Health
  • $2.9 million by axing the National Tobacco Campaign. Dept of Health to develop online and social media campaign.
  • The National Congress of Australia’s First Peoples disbanding will save $15 million over the next three years
  • Funding for Indigenous languages has been cut by almost 10-million dollars over four years.
  • The Government will achieve savings of $196.8 million over nine years by terminating the Australia Network contract with the Australian Broadcasting Corporation.
  • The Government will achieve savings of $201.0 million over three years from 2015-16 by ceasing reward funding to States and Territories under the National Partnership Agreement on Improving Public Hospital Services.
  • $115.4 million is saved by abolishing GP Education and Training Limited, shifting its functions into Health, and ceasing the Pre-vocational GP Placements Scheme.
  • The Government will achieve savings of $38.4 million over five years by ceasing the Displaced Persons Programme from 2013-14.
  • The Government will achieve net savings of $120.0 million over six years from 2015 by ceasing the Ethanol Production Grants Programme on 30 June 2015.
  • The Government will achieve savings of $134.3 million over five years by abolishing the First Home Saver Accounts scheme
  • $229 million saved over 4 years by axing the Dental Flexible Grants Programme.
  • A cut of $173.7 million over 3 years to the Research Training Scheme from 2016
  • Tightened eligibility criteria for the child care providers to access the community support program will save $157.1 million over 3 years.
  • $29.8 million saved over four years by cancelling the Improving Educational Outcomes program
  • $31.1 million saved by reducing funding for Tertiary Education Quality and Standards Agency
  • $9.9 million saved by axing funding for the nursing and allied health scholarships in Tasmania.
  • $2.3 million cut in contribution to the World Health Organisation

This list of cuts is by no means exhaustive, just a comparison of how the Coalition chooses to spend our money. If we look at the hundreds of billions they intend to spend on defence in the coming years, we could have free health, needs-based funding for education, real NBN, an increase in research spending, a decrease in university fees, and an increase in Newstart, pensions, and foreign aid as well as taking action on climate change. It might cost us a few planes and submarines and Tony might have to cut back on a few of the war games he has been planning. How would you prefer the money be spent?

More great articles by Kaye Lee:

Hi ho, Hi ho….where am I spose to go?

My kids are ok, yours can go beg.

War games

Who are the real leaners here?


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Living within our means

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Joe Hockey says we should be living within our means. But what exactly does he mean? (Image from

Last night I watched a giggling Leigh Sales interview Joe Hockey who vacillated between the laughing matesy wink wink buddy of the MSM and the sombre Treasurer telling us we must “live within our means”.

So what exactly does “living within our means” mean?

It can’t mean always spending less than you earn because otherwise most individuals would not be able to buy a house or a car or go on overseas trips. Businesses would not be able to start up and grow. Governments would not be able to provide infrastructure. Developers wouldn’t exist and banks would go broke.

So I guess it means being able to service your debt.

In the last budget, net debt in 2013-14 was estimated at $178.104 billion, around 11.1 per cent of Gross National Product, and net interest payments for the year of $7.835 billion. By comparison, the combined net debt for the world’s seven biggest economies is 92.6 per cent of their combined GDP.

The Gross Domestic Product (GDP) in Australia was worth 1520.60 billion US dollars in 2012. Even allowing for the changes in exchange rate and the deteriorating position since the budget, our interest payments are about 0.5% of our GDP. If you were earning $100,000 a year I don’t think you would find paying less than $10 a week too onerous.

But are we saddling future generations with a debt they will never be able to repay?

Well for starters, the Australian government has NEVER had zero gross debt. We have very occasionally reached zero net debt, but considering the global financial crisis, and the very low interest rates on offer at the moment, going into such comparatively low levels of debt to stimulate the economy and to provide jobs, services and infrastructure seems a wise investment.

For many of us, it is a goal to be mortgage/debt free by the time we retire, though that is unachievable for a lot of people. This is not the case for governments. They will never retire. They will always have an income stream. There will be boom times when they can save and reduce debt, and tough times when they must borrow to spend. Suggesting that we can ever maintain zero debt is just not realistic nor is it necessary.

There are some structural issues in the budget that need addressing to prepare for our changing demographic but the cost-cutting measures so far announced or hinted at by the Coalition do little to address these problems into the future. Their miserly savings of a few million here and there have come at the cost of many very worthwhile ventures.

But the really galling part in this tightening of our belts is what the government is choosing to spend money on.

There have been many stories about politicians rorting their entitlements, hiring private jets, and generally wasting a lot of taxpayers money. Their travelling and office expenses are huge. We are providing Tony Abbott with several places of residence and also apparently forking out for new bigger jets and a fleet of security cars, costing us hundreds of millions.

We are having yet another enquiry into the Home Insulation Scheme. Whilst it was a tragedy that 4 young men lost their lives, there have already been eight investigations which have detailed how and why it happened with recommendations on how to avoid similar problems in the future. Royal Commissions aren’t cheap and it looks like we will also have one looking into unions even though there is already the framework to investigate corruption and prosecute individuals by Fairwork Australia.

Whilst cutting $13.4 million from Indigenous legal services, they provided $2.2 million legal aid for farmers to fight native title claims.

The Federal Government withdrew support for a $16 million grant to South Sydney Rabbitohs for a high performance centre whilst retaining a $10 million funding promise for Brookvale Oval – located in the heart of Prime Minister Tony Abbott’s Warringah electorate.

I shudder to think what Operation Sovereign Borders is costing us. With two frigates at $207,000 a day each and seven Armidale Class Patrol boats at $40,000 a day each, along with numerous Customs vessels patrolling the seas between Christmas Island and Indonesia, the bill must be huge. It has also left us without the promised patrol of Japanese whaling. Combine that with the $3 billion we spent last year locking asylum seekers up in offshore detention centres, and the extra $1.2 billion allocated by the Coalition in MYEFO, this is a very costly exercise in inhumanity.

Saving a few million dollars by disbanding all climate change advisory bodies and sacking scientists at the CSIRO will not make a dent in the $2.55 billion over the next four years, followed by $1.2 billion a year until 2020, budgeted to pay to polluters, and the $811 million we are spending on a Green Army.

It is also widely agreed that Direct Action as planned, with an unrealistic $8/tonne abatement price, will go nowhere near meeting our emission reduction and renewable energy targets. Under an emission trading scheme we would have the flexibility to source abatement overseas if the price is right so we would meet the target through national and/or international reductions. Direct Action has no such plan if targets aren’t met and it also has no plan for beyond 2020.

In the 7:30 report, Joe Hockey, when asked about assistance for struggling company SPC Ardmona, replied that the

“parent company of SPC Ardmona, Coca-Cola Amatil, which is an Australian company, in the first six months of this year had a profit of over $215 million …. I think you can understand why we are being very cautious, very careful about handing out taxpayers’ money to companies that are profitable.”

During the election campaign, Abbott flew to Tasmania and blithely handed a gift of $16 million to the Cadbury chocolate factory. Cadbury is owned by a multinational firm that had reported a 64 per cent rise in its profit to $74.9 million last year. It’s probably just a coincidence that they are major sponsors of Tony’s pollie pedal ride.

Speaking of pollie pedal sponsors, they include three pharmaceutical companies – alphapharm, Roche and Pfizer – as well as the world’s largest biotechnology company AMGEN. Bob Gosford wrote a very informative article in the Northern Myth about AMGEN. Tony’s close association with pharmaceutical firms and his haste to sign free trade agreements doesn’t auger well for our Pharmaceutical Benefits Scheme which will no doubt be immediately targeted for lawsuits for restricting profitability.

Joe Hockey also said last night, when asked about a possible $6 co-payment for bulk-billing doctors,

“Well, no, we’re not ruling things in or out. We are dealing with all of the suggestions that have been put forward on a methodical basis. I want to emphasise – I want to emphasise: this not a choice for government. It has to be done. We need to live within our means. We can’t keep hitting taxpayers, we can’t keep hitting families, we can’t keep hitting employers, employees with new taxes to pay for the largesse that Labor left. We can’t do that. We’ve got to live within our means.”

But apparently they can hit us all to fund their rolled gold Paid Parental Leave Scheme which is estimated to cost $5.5 billion a year and is hugely skewed to favour the wealthy.

Mr Hockey has also cost us several billion by abolishing certain taxes:

  • $1.8 billion fringe benefits tax crackdown on cars
  • $313 million in tax on super pension earnings above $100,000 for 16,000 wealthy people
  • $266 million by removing the $2000 cap on tax deductions for work-related self-education expenses.
  • Another three taxes, including one aimed at stopping multinationals shifting profits overseas, will be watered down, at a cost of $700 million.

Through direct subsidies and tax concessions, the mining industry receives over $4.5 billion a year from the government. The average rate of corporate tax is about 21 per cent, the mining industry only pays 14 per cent.

This year the government will provide $7 billion for the private health insurance industry. $5.6 billion will be in a direct subsidy to the industry. There will be another $1.4 billion in income tax foregone by the Commonwealth Government.

Excluding deposits, Australian taxpayers are handing over benefits worth $2.1bn to $7.2bn a year — up to $763 a taxpayer — to the big four banks, which is conservative because the Financial Claims Scheme insures deposits up to only $250,000.

Mind you, the banks don’t even pay for the explicit insurance, which the Reserve Bank governor said recently was probably worth “a few basis points” of insured deposits, or somewhere around $250 million a year.

There are many more examples showing the priorities this government has for its spending. MYEFO projects that we will not reach a surplus until 2023-24. From everything I can see, it is only the poor who are being asked to tighten their belts so the rich can grow richer in the misguided hope that this increased wealth will somehow trickle down. It seems to me that if you instead increased the wealth of our poorest people then that would create a tsunami of demand that would indeed “lift the tide” for all.

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