This year we’ve faced a global pandemic and an economic crisis – not to mention the spiralling climate emergency and the many pre-existing fault lines in our society. Now, we’ve got this year’s budget. In this abridged version of his budget in reply speech, Nick McKim explains why it’s nothing more than a neoliberal trainwreck.
By Nick McKim
This budget has been delivered in truly exceptional circumstances. We are in the middle of a global pandemic that has hit us hard and exposed many pre-existing fault lines in our economy and in our society: insecure work, poverty, privatisation, social isolation and underfunded public services.
These times, and this budget, may well be defined by a global pandemic, but even before any of us had heard of COVID-19 we had massive challenges facing us, and those challenges remain today. The earth’s climate is breaking down around us. We are living through a mass extinction event. Nature is being destroyed at record pace. The ecological systems that our economy and our society rely on are in crisis.
In economic terms, we are also in exceptional circumstances. Interest rates are at the lowest rate in the history of the Federation. Globally, interest rates are at the lowest level in recorded human history. Borrowing money has never been cheaper. Australian households are now carrying more debt than they ever have, and Australia’s level of household debt is second in the world only to Switzerland.
Despite this, homeownership rates are going through the floor. In Australia, they’re back to where they were in the 1950s. This is not because people don’t want to earn money. Workforce participation is at the highest rate it’s ever been. More people than ever are putting their hands up for a job. But wages growth is at the lowest rate since the Australian Bureau of Statistics started keeping records on it in the 1950s.
So we’ve got wages growth at record lows but we’ve got the proportion of national income going to company profits at record highs. The end result of all this is that wealth inequality is entrenched, it’s significant and it’s rising. Record low interest rates, record high household debt, falling homeownership, record workforce participation, record low wages growth, record high company profits, rising wealth inequality-this is what we faced before we entered a global pandemic, and this is what 40-odd years of naked neoliberalism has delivered. More and more people are getting less and less, despite making a greater and greater effort. Meanwhile, the big corporations and the super wealthy who own and run them sit back and pocket ever bigger profits and amass ever greater wealth.
Neoliberalism rewards wealth more than it rewards effort. It is a system that’s created gouging monopolies and fostered privatisation and deregulation. This is a system where if you’re not amongst the chosen few you must, to paraphrase Lewis Carroll, run as fast as you can just to stay in place, and to go anywhere you must run twice as fast as that. This is a system where the game is rigged.
Undoubtedly COVID-19 is the trigger for the recession that we’re in. But this recession and the pathway to recovery will be made monstrously more difficult for the vast majority of Australians because of the four-decades-long neoliberal assault on the spirit of our country through privatised public utilities, outsourced public services, a mad obsession with budget surpluses, a deregulated industrial relations system, a deregulated financial sector, trade deals that diminish the sovereignty of our country, manufacturing forced offshore, a property market rigged in favour of the speculators, and massive tax breaks for miners and polluters who are pillaging our common wealth and cooking the planet.
Thanks to neoliberalism, we entered the pandemic with an underfunded healthcare system; with an underfunded and privatised childcare system; with an underfunded, privatised and barely regulated aged-care system; with an underfunded education and training system; with 40 per cent of our workforce in insecure work; with entrenched high rates of unemployment and underemployment; with a social safety net set below what people need to survive; and with the most overpriced housing in the world.
The pretence of more competition and more choice delivering some kind of market nirvana for people was always a con. Neoliberalism has done to this country what it was always going to do: concentrate wealth and widen the divide between the haves and the have-nots. And all of this has been facilitated by the two major parties that sit in this place today and by an all-powerful financial industry which is a rapacious parasite on our country that has hollowed out the real economy and left behind nothing but a fragile shell. This is why the cheapest money in history is no longer enough. We are truly through the looking glass.
A saving grace?
In the face of all this, we’ve got this year’s budget. So how does it stack up? Is it a turning point? A budget that builds a nation? Is it a budget that offers us the hope we so desperately need that we can live good lives and respect nature and climate? No, of course it’s not – not from this Prime Minister, not from this treasurer, not from this government. This budget is a neoliberal trainwreck that will impoverish poor people, steal hopes and dreams from young people, entrench wealth inequality, entrench unemployment and underemployment, and line the pockets of the big corporates and the super rich.
Don’t believe the government’s budget hype. This budget does nothing to change the structure of the Australian economy or the underlying social, human and natural problems this structure has created. It perpetuates the same old failed, trickle-down, crony capitalist, fake economics rubbish that is simply about big corporations and the super-rich gorging themselves on the hard work of others and rigging the rules to suit themselves. The only difference this time is that it’s neoliberalism on tick. But don’t be fooled by a new-found tolerance for government debt, because this budget seeks to protect and project the same old neoliberal ideas.
The government could have used this budget and increased the debt to invest in a shared future, providing the infrastructure, the income support, the jobs and the public services needed to create a cleaner, fairer and more equitable future. It could have used the debt to create jobs in renewable energy, reforestation and rewilding, helping reduce emissions, restore ecosystems and draw down carbon from our atmosphere. But instead it chose to use the debt to further rig the system so that the big corporates and the super-rich can keep making off like bandits while millions of Australians will endure the kind of hardship and poverty that nobody – and I mean nobody – in a nation as rich as ours should ever have to suffer.
This is a bloody great budget for coal companies and gas companies. It is a magnificent budget for the banks. It is a bonanza for the arms manufacturers. This is a budget by the government’s mates, it is a budget for the government’s mates and, boy, does this budget deliver for the government’s mates and for the government’s political donors.
Leaving us behind
If you are a young person, if you’re renting, if you’re a woman, if you’re a First Nations person, if you’re unemployed, if you’re underemployed, if you’re struggling to pay the bills, if you’re worried about the climate crisis or if you’re worried about the biodiversity crisis, this is not a budget that offers you the hope that you so desperately need.
This budget continues to ignore women, people working in the arts and entertainment sectors, and universities. There is no new money in this budget for environmental conservation and effectively nothing to help protect our threatened native species and natural ecosystems in the middle of the sixth great mass extinction event in our planet’s history. There is no serious action to close the gap, a shameful betrayal of promises made just four months ago. Meanwhile, the surveillance state will continue to grow, our rights and liberties will be further eroded and more power will be concentrated into the dangerous hands of the Department of Home Affairs.
This budget also turns Australia’s back on the world’s displaced people. It cuts Australia’s humanitarian intake and refugee intake by 20,000 places over the next four years, and gouges almost $1 billion of support for refugees and people seeking asylum. What is happening to this country?
Support for the rich
The centrepiece of this budget is the bringing forward of the stage 2 tax cuts, supported by the Australian Labor Party. That will see millionaires get $2,500 a year extra in their pockets while the working poor get $250. The unemployed can line up for their regular kick in the teeth; they will get nothing, because a tax cut is worth nothing to you if you haven’t got a job.
Don’t be fooled by the spin. The additional offset for low- and middle-income earners is a one-off; it’ll be gone in a year’s time. There’s a temporary boost for the millions and a permanent boost for the millionaires.
And stage 3, which will arrive in four years time – unless it’s brought forward in the meantime – is even worse. By that point, the top 10 per cent will be getting 50 per cent of the additional benefit. Stage 3 was voted for by both major parties in this place when it was legislated. Under both stage 2 and stage 3 of these tax cuts – tax cuts that overwhelmingly benefit high-income earners – men get twice the benefit women get. These tax cuts will further entrench gender inequality and further disrespect the massive contribution women have made and continue to make to our country.
Borrowing money to give the wealthiest Australians a tax cut is, obviously, patently unfair. But it’s also really bad economics. There is nothing Keynesian about using the public purse to enrich the already very wealthy. There is nothing smart about tax cuts that leave behind young people, unemployed people and women. These tax cuts will not create jobs. These tax cuts will not trickle down. They won’t do what the major parties say they are going to do. The money will not make its way out into the economy. These tax cuts will not work.
We know that trickle-down economics is one of the world’s great political cons: the people at the bottom are dying of thirst waiting for a few drops to reach them. If low- and middle-income earners weren’t spending before COVID hit and weren’t spending before we got into a recession then high-income earners certainly won’t be spending in the middle of a recession. What will happen is that high-income earners will accumulate yet more wealth by buying more shares or paying off the mortgage on their investment property.
The way forward
The Australian Greens reject this government’s choices and its priorities. We reject neoliberalism in whatever form it comes. The Australian Greens want to build an economy that respects people, respects nature, respects our ecosystems and respects our climate. If we can remake our society to protect us from a virus, we can remake it to look after everyone, to look after climate and to look after nature.
The Greens’ plan responds to the magnitude of the challenges we face and the three intersecting crises: the pandemic, rising wealth inequality, and the climate and biodiversity emergency. This is a choice that our parliament can make.
Our plan is built around a government backed jobs and income guarantee that would ensure that everyone has the income they need to live with dignity. It will also get us back to full employment as quickly as possible. No-one should get left behind, and the Greens’ plan ensures that no-one will be. This is a choice that our parliament can make.
Our plan is built around massive government investment in health, in education, in public and active transport, and in the whole range of public services that people need and want, delivered at a high quality. It’s built around massive investment in manufacturing and renewable energy – far beyond that which is included in the government’s budget. These will be the building blocks of a fairer and cleaner economy. We can’t afford not to do this. This is a choice that our parliament can make.
Our plan is built around our Create Australia strategy – a jobs-rich plan for the creative industries in our country, underpinned by a commitment to get artists into our schools and libraries and a decent kickstart to get more Australian content onto our screens and live performances back to our stages. This is a choice that our parliament can make.
And for young people – who, as with all recessions, are copping the brunt of it – our plan is built around a next-gen guarantee: free education, a living income and a guaranteed decent job, if you want it. Our nation’s future depends on trusting in and believing in the next generation. This is a choice that our parliament can make.
With the money that this budget commits to tax cuts we can have a green recovery that creates hundreds of thousands of good, decent and well-paid jobs, ensures everyone has an income they can live on and creates a clean, strong and stable economy. We can set everyone up to live a good and dignified life while we respect nature and our planet’s climate. A plan to do this is not just possible; it’s necessary. This is a choice that our parliament can make.
I’ll sign off with a recent quote from Sir David Attenborough: “Nature will flourish when those that have a great deal perhaps have a little less.” Thanks, David. The Greens couldn’t agree more.
Nick McKim is the Greens’ spokesperson for economic justice.