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Joe’s Budget – Building a less fair Australia?

TONY Abbott promised that if elected he wouldn’t make cuts to health or education, wouldn’t cut the ABC, wouldn’t increase taxes or introduce new taxes. Last night’s budget broke all those promises while also announcing 16,500 more public sector workers will lose their jobs.

Funding to the states for health and education services will be cut by a massive $80 billion over the next 10 years, leaving state governments with little choice other than to cut back services. New taxes will be levied on Australians who need health care – $7 more when you see a doctor and $5 more for a prescription, x-ray or blood test – but this money won’t be used to fund health services, it’ll go into a medical research fund while families struggle to fund the health needs of their children. Medicare locals established by the previous government to coordinate primary and secondary health services will be scrapped. Just another explicit promise broken. Gonski education funding increases will effectively disappear in 2017, exactly when the big increases were supposed to kick in.

Base funding for the ABC and SBS has been cut by 1% and the Australia Network – our voice into the region – has been scrapped. Australia’s foreign aid budget has been cut by a further $7.9 billion over the next 4 years, reducing our ability to help countries in crisis.

Families have borne the brunt of the budget cuts. In addition to the new health taxes family support payments have been reduced, young people will need financial support for longer as they won’t be entitled to job start allowance and an increase in petrol excise means it’ll cost more to fill up the car. The retirement age will be increased to 70 and the indexation of aged pensions will be aligned to CPI – effectively cutting pensions by $100 over the next 10 years.

It’s not all bad news – some groups did all right. Company tax has been reduced by 1.5% and while some corporate welfare programs have been cancelled they have been replaced with new programs. Defence spending will increase by $800 million next year to $29.2 billion and will increase further over the next 4 years until it reaches a target of 2% of GDP. Yes, we have a target for defence spending but no target for education spending.

The reaction to the budget has been quick and mostly scathing:

“TasCOSS is very disappointed in this divisive federal budget – it entrenches the divide between those with decent incomes, housing and healthcare and those without.” – Tony Reidy, Chief Executive TasCOSS

“This budget is an attack on the most vulnerable people.” – Bryan Green, Tasmanian Opposition Leader

“A miserable piece of work. Diabolically cruel and bitterly short-sighted.” – Andrew Wilkie, MHR Denision

“The 2014–15 federal budget is a solid start to putting the fiscal strategy back on track, but there is much more work to do to support growth and deliver a sustainable budget position for the long term.” – Business Council of Australia Chief Executive Jennifer Westacott

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