Business Council commands the agenda of the Coalition Government's "Austerity Commission"

Vanguard December 2013 p. 5

Max O

(Business CEOs meet with Treasurer Joe Hockey to lay down their agenda)

The Coalition Government's recently announced "Commission of Audit" will herald wide ranging changes to public sector operations and government expenditure. It will stipulate the need for massive transfer of public property and services to corporations and call for huge government spending cut backs and sackings of public service workers.

In effect this audit will be the Business Council of Australia's (BCA) 'Austerity Commission' for the nation and the Coalition Government will dutifully carry out its orders! The audit commission is stacked with pro-business warriors: The BCA's president, Tony Shepherd will be its chairman; BCA's chief economist and policy director Peter Crone will head the commission’s secretariat; a former public service official who oversaw the contentious WorkChoices policy, Peter Boxall; former Howard government minister, Amanda Vanstone; past Treasury Secretary, Tony Cole; and one time Western Australian public service head, Robert Fisher.

Capitalism in crisis

The backdrop for this austerity is the continuing Global Financial Crisis which is the result of capitalism’s own doing! This economic crisis, brought on by capitalism's crisis of over production and exacerbated by financial speculators syphoning off billions of dollars from the productive economy to make rapid profits in the stock market and the derivatives casino, caused government budgets around the world to go into debt to either save the predatory financial system or help stimulate economic activity and assist consumption of surplus production. Now this massive government debt must be paid back to the banks, the beasts who created the crisis, and consequently austerity measures are now being put in place.

The ideological preparation for this austerity onslaught has been in train for some time. Joe Hockey, the Coalition's Treasurer, sprouted forth the notion, "end of the age of entitlement" a neo-liberal concept where 'Big Government' is replaced by 'Big Society' and the transference of public services to either the private sector or for people to provide for themselves.

The reverse side of this "end of the age of entitlement" coin is the massive tax cuts for corporations and for those on higher personal marginal rates that the audit commission will no doubt call for. The BCA had earlier flagged its demands through its "Action Plan for Enduring Prosperity" for a company tax cut from 30 to 25 per cent and to increase the GST - to now include education, medical and fresh food - which will hurt people on low incomes.

Austerity is good for business - Utilities up for privatisation

Out of this government indebtedness is the potential for business to do very good business through privatisation of government utilities and assets. For starters the corporate sector will have a bonanza with the forecasted audit commission's recommendations for sale of Medibank Private, Australian Post, Australian Rail Track Corporation, Snowy Hydro and selling the students’ HECS debt (Higher Education Contribution Scheme) as securities to investors.

Obviously for these to be attractive they will be sold for less than their true value, if not a fire sale.

The 'Big Society' mantra is "government should do for people what they cannot do, or cannot do efficiently, for themselves, but no more.....", "that government should be run like a business" and that "government should live within its means". Now social security and public services will be replaced by charities and self-provision.

Abbott's Coalition Government is preparing to hand-ball even more government responsibility to private and church institutions to carry out such tasks as family services and housing. This will be achieved through the model of increasing contestability of services; which means outsourcing services to private charities/institutions and churches that will do it cheaper than the public sector.

This will be justified by the audit commission, that to address “the rising cost of social and other spending” government welfare programs should be eliminated and that the user pay, co-payments approach should be extended across health, education and other services.

For example it is touted that the government will introduce a Medicare “co-payments” for GP doctor visits. The inescapable result of such an action is that working class people will start to forgo necessary healthcare, while the wealthy will continue to receive the best medical treatment.

The term “self-provision” will be the method of replacing unemployment or sickness benefits in times of need, where people will pay insurance to cover such payments. The government will cease to fund these out of central revenue and jettison its social responsibility for society's well-being.

The size of the cutbacks and sell-offs

The listed measures below reveal the size of some of the cutbacks and sell offs that the BCA and Abbott's Coalition Government wish to achieve and will carry out through the imprimatur of the audit commission:

• 20,000 public services jobs to go. The running cost of the federal public service is 15 per cent in a $400 billion budget.

• Medibank Private could bring in about $4.5bn.

• The sale of the Australian Rail Track Corporation could earn the government $5bn.

Below is what the Abbott Coalition Government has already intends to slash from the working class and favours they will pass onto capital and the rich:

• Have abolished the Low Income Superannuation Contribution, which reduces tax on superannuation contributions from workers on less than $37,000 per year. This is an effective tax increase on 3.6 million workers, including 2.1 million women. It means that these workers will be paying more tax on their superannuation than on their take home pay and will have less money in retirement.

• However the government announced that it would scrap the proposed 15 per cent tax on superannuation pension earnings over $100,000. This change will apply to those with more than $2 million in superannuation assets, around 16,000 people. The 1% 'filthy rich' will be very appreciative and save themselves $313m in taxes.

• The Schoolkids Bonus has been scrapped which helped millions of families with the cost of sending children to school.

• The Income Support Bonus has been stopped, which will hurt people on a range of income support programs, including Newstart and Parenting Payments, which are already too low.

• The Mineral Resource Rent Tax for big mining companies will be abolished, not that it collected much revenue. The mining industry sends 80 per cent of its profits offshore.

These measures are to ostensibly reduce government debt, which is currently around $400bn mark or 27.1% of Australia's GDP and eventually create a government surplus.

However the touted cutbacks and sell-offs are not only to assist achieving a surplus budget of 1 per cent of GDP by 2023-24, but to restructure the budget over the long term so that the 'welfare state' will cease to exist, and the state will redirect revenue towards capital.

This 'Austerity Commission' has the objective to snatch back gains that the working class had won in the past and make them wear the burden of capital's economic crisis. Prepare for monumental struggle!