By Pip Hinman
The $7 billion of cuts in last year's federal budget were obviously going to have a worse impact on the poor. A study commissioned by the Australian Council for Social Service (ACOSS) and the Australian Council of Trade Unions (ACTU) has come up with figures proving just that.
The study, conducted by the Melbourne Institute of Applied Economic and Social Research and the National Institute of Economic and Industry Research, examined the impact the budget cuts would have on households, either by changing their purchasing power or by changing the value of a service they receive. It found that when the impact on gross incomes, taxation and access to subsidised community services such as labour market programs and child-care services are taken into account:
- unemployed households stand to lose approximately $38 per week;
- households whose main income is a disability or wife pension stand to lose $21.50 per week;
- households whose main income is Austudy stand to lose $15 per week; and
- sole parent families stand to lose $10.70 per week.
Households with disposable incomes of less than $200 per week (which would include many single pensioners and unemployed people) lost, on average, 2.2% or $5.40 of their spending power. By contrast, those on incomes of more than $1200 per week lost only 0.85% or $15.10 of theirs.
ACOSS president Robert Fitzgerald said that the poorest households stand to lose more than twice as much as the richest households, even after the family tax initiative is taken into account. The Howard government, he said, should "not only reconsider some of the last budget measures which impact so harshly on those who can least afford it, but it must also be much more careful in constructing its next budget package so that the same adverse outcomes are not repeated".
Dick Nichols, economic spokesperson for the Democratic Socialists, commented that it was "wishful thinking" to hope that the next Howard budget would be any less regressive. "Only with trade union and community groups mobilised against the cuts will the Howard government be forced to back track."
Nichols believes that the ACTU's living wage campaign, currently before the Australian Industrial Relations Commission, is "a step in the right direction" but "too little, too late", especially given the federal government's neo-liberal austerity drive.
Nichols points out that top executives now earn around $35,000 a week — the same amount that an average worker brings home in a year. "Yet the ACTU's claim for staged increases in award rates of pay for workers who haven't received increases through enterprise bargaining will barely offset the reduction in income arising from last year's budget cuts", he said.
"Using the IRC to argue that workers' wages need to catch up with the cost of living should be only one part of an all-in fight back", Nichols said. "If the ACTU continues to refuse to help channel workers' anger at the cuts into campaigns to defend the public sector, it will make it easier for Howard to push through another harsh budget in May."