A crisis in trust

Politics is broken, is the shorter message of Mark’s post at The new social democrat. Mark, writing before Hockey’s budget speech predicted that the budget would be “horrible”.

He was right. There may have been a feeling that the bad news had been leaked early. In fact the true horror is being revealed in the detail coming out after the speech.The speech sounded like severe belt tightening with a raft of cuts (summary here). In the interview after the speech Sarah Ferguson nailed Hockey on at least two major points. The first is that ordinary folk will carry a bigger burden than the rich, not just proportionately, but in actual dollars. On one count $1400 for the rich and $3000 to $5000 for lower to middle income families.

In fact middle Australia, the poor, the young and the marginalised will be hammered in Hockey’s vision of an age of opportunity, rather than entitlement.

Take the young unemployed:

The Abbott government’s first budget revealed job seekers applying for Newstart or Youth Allowance, who have not been previously employed, will face a six-month waiting period of no income support before they are eligible for payments by undertaking 25 hours a week in the Work for the Dole program.

Once they have spent six months on the program, they will lose income support for another six months unless they undertake training or study.

People under 25 will not be eligible for the dole and instead will have to apply for Youth Allowance which is about $100 less a fortnight. Newstart and Youth Allowance will also be frozen for the next three years.

The hourly rate on Work for the Dole will be $10.20 for Newstart and $8.29 for Youth Allowance.

In the six months applicants for Newstart and Youth Allowance do not receive income support, they will be required to undertake government-funded job seeking programs.

For those thrown out of work Newstart will be limited. With some exceptions:

Newstart applicants will receive one month of income support for every year they worked before applying for the dole and exceptions to the six months…

I don’t think we can talk in terms of a general safety net any longer. We have instead active harassment in the name of stimulating greater personal responsibility. We are leaving a system where all are looked after in favour of a system where only the deserving are supportis severely conditional and incomplete.

Family payments will save a whopping $7 billion, but hardest hit will be:

Sole parents, single parents and parents of disabled children will be hardest hit under changes to family tax benefits, designed to save money and get primary carers back to work.

More harassment.

The second point coming out of the Ferguson/Hockey interview was that the Abbott government is intent on forcing the states to increase the GST by cutting the funding for schools and hospitals by $80 billion over the next 10 years. Hockey’s response was “States runs schools and states run the hospitals” and “All the GST goes to the states so it is up to them.”

That’s clear enough, but not what voters expected or were told to expect.

Mark quotes EMC research:

this week’s Essential Report suggests voters are expecting to take the fall for a budget emergency that is really just a false alarm.

Without believing the central premise of the budget, voters are left with a sick feeling they’ll pay for a budget that doesn’t fix the economy but rather punishes ordinary people in favour of the wealthy.

Mark says (read the whole post!):

The most important thing about this Budget is that it symbolises the brokenness of Australian politics. It’s a tipping point, a crisis moment for the political class.

Everything they [the Government] think they learnt in politics school is wrong, and the focus groups must be feeding this back. We can see this reflected through the inconsistent and panicked messaging from the government.

Confected austerity economics will not work in a crisis of trust. Nor will “let’s all pull together” work in an age of upper middle class entitlement, generously fostered by John Howard’s electoral/fiscal calculus.

I still have some faith in Chris Bowen, who seems to me principled, articulate and genuine. I’d rather he gave the budget reply speech, but there is some hope for Shorten. He sounds less like a politician than many and that may eventually play in his favour.

Abbott has calibrated his message to mask his detailed promises about no cuts “full stop”. For example, he promised no cuts the the ABC and SBS, Instead $43.5 million is being taken out of their budget over the forward estimates. That’s 1% of general funding, plus cancellation of the Australia Network contract one year in, halving its budget. The ABC used the Australia Network funding to enhance its threadbare foreign coverage for the network generally.

Abbott is a silver tongued politician, master of slogans, but is sounding more and more like a salesman, inherently untrustworthy.

You don’t build a stronger Australia by shredding safety nets and increasing inequality.

Update: I thought I’d add here from this post the ABC FactCheck verdict showing how Hockey has added $68 billion to the deficit and essentially confected a budget ‘crisis’, as shown in this table:


See also Hockey’s morality play.

Also see Mark on Hockey’s social dystopia and John Quiggin on the mess of contradictions, meanness, trickiness and tribalism that is the Abbott-Hockey Government’s first budget.

27 thoughts on “A crisis in trust”

  1. This could very well, among the young at least, be a recipe for despair, desperation and the intolerable choice of engaging in a life of crime or starving. Somebody should tell that evil man Abbott and his cackling cohorts, and those sleek rich economists and businessmen admiring his beautiful set of numbers what they’re dealing with here is real people.

  2. Over at the Guardian on their daily politics blog several commenters are calling for a budget blocking and a forced Double Dissolution because Abbott is destroying the fabric of our society.. (It might be a lot, I didn’t scroll that far down.)
    I think its a great idea, but I doubt very much if Labor, the Greens or PUP would have the political courage.
    Says a lot about loss of trust, though.

  3. The moves against the unemployed are a sick joke. Since march 2008 the average hours worked per Australian resident have declined from 73 to 68 hours per month and are trending further down. Punishing people to cover up for a serious lack of work is about as moral as punishing refugees for having the hide to flee persecution.
    A government that is serious about unemployment should be looking at doing things that will increase the purchasing power of those who desperately need more money, relax the reserve banks inflation guidelines etc.

  4. Another budget and my hopes again dashed that welfare be given in vouchers rather than cash.
    It’s for needs, not wants, right ?

  5. When it comes to the youth, jumpy, there’s no welfare in either cash nor vouchers for some of them from the Abbott Government.

  6. Been having the same young bloke ring me up for a job every week for about 5 weeks.
    His last boss went bust leaving him 18 months into his time, but no licence is the problem. He,s been surviving on the odd little cashy around his area.
    For my crew and I the work has been patchy till a couple of good tender wins last week

    I pick him up tomorrow for a start.
    That’s how it’s done, no Abbott required.

  7. See also Mark on Hockey’s social dystopia and John Quiggin on the mess of contradictions, meanness, trickiness and tribalism that is the Abbott-Hockey Government’s first budget.

    All day I listened to budget stuff on the radio, including the senate this afternoon. Amongst it all there is carnage everywhere. Across the board the cut to programs was 4.5%.

    Penny Wong nailed it when she said only Abbott’s solemn promises were honoured.

    I decided I agreed with Stephen Koukoulas that the $20 billion medical research fund was a silly idea. Whatever could have been the motivation?! Quiggin points out that it roughly equates our defunding of foreign aid. Also why pick out medical research when $110 million has been ripped out of the CSIRO with 400 staff to go, $80 million comes out of the CRC program and other research institutions have also been hit?

  8. I watched the Shorten, Milne and a bit of the Madigan (DLP) reply tonight.
    Madigan was getting stuck right into the government about lost support for families. One line a liked went something like “this government sees children as an indulgence for those who can afford it, not the future of Australia. (OK I merged two themes in this one since my memory of the detail is a bit wonky – but the message was clear “the DLP is not your friend Tony.”
    Christine was her usual logical self in her attack on the false crisis, the abandoning of climate action and many other flaws in the budget. Plenty of facts and figures, plenty of logical argument. BTW, her line on the debt levy was that it was a weak, temporary
    And Shorten? What we got was a brilliant, telling attack from one of our best communicators. An attack from a real Labor man who actually cares about those at the bottom of the pile, a man who fought for and delivered the disability scheme. It should have been a real moral booster for those of us desperately want to see the end of Tony’s tea party.

  9. Yes, he done good. He done real good! Bill Shorten!

    Dared Abbott to go to an election. You could smell the fear on the other side.

    Shorten has a damn fine speech writer, and he came across as passionate and authentic.

    BTW Palmer says he started out life on the dole and was grateful for the support.

  10. Great to see Shorten has a spine and that supply will be blocked.

    Jumpy @ 4, you really didn’t put any thought into that did you? How many different vouchers will have to be supplied for the myriad of expenses incurred by even a poverty ridden household? Did you not also think that vouchers are a form of currency? Obviously not.
    Same for your comment @6. If all the jobs available were filled overnight there would still be 350,000 on newstart, 500,000 needing more work, 400,000 wanting work but who have given up looking and possibly another 100,000 on DSP available for part time work.
    Among those figures are youth unemployment rates of 18% nationally and 33% in disadvantaged areas, and 200,000 people in their 50’s and 60’s on unemployment benefits.
    Your comment reflects that you’ve allowed yourself to be conned into believing the nonsense that there are plenty of jobs if only these “lazy bludgers would just get of their Rses and find them” or the other bit of nonsense trotted out that “they should go and get some training”.

  11. SG: Vouchers can be useful in cases where children and spouses are suffering because money is being spent on booze etc. However, I would agree that vouchers are not appropriate in most cases because it flags that people are on welfare and can limit where people can go to seek bargains.
    Brian: Shorten performs very well on things like Q&A where speech writers are no help. The speech was one that fitted the way Shorten communicates. Thats what gave it the feel of authenticity. I also watched Shorten on Q&A after Gillard had kicked the single mothers in the guts. Clearly a man who didn’t agree with what had been done. More authenticity. Far more comfortable using his skills to create the disability scheme.

  12. Then there was Truss complaing about older Australians who

    are relying on the age pension because they are blowing their super on cruises and luxury items,

    Obviously, they should have been like him and have a very generous pension with no asset/income test that will start as soon as he chooses to leave parliament.
    It is one of the problems with means tested welfare. Means testing punishes those who have saved unless they have concentrated their assets in the family home.
    In the case of pensions, the budget would have been better off if all super tax concessions had been cancelled and everyone over 65 paid the old age pension. We could even have a more generous pension if the pension was taxed or the pension was set up as a loan that could be repaid from the estate when the pensioner (and partner?) have died. Many of our friends on part pensions don’t work because of the paperwork hassles this creates and the small gain after the effect on the pension is factored in.

  13. SG @ 10
    A little bit of thought actually, a simple debit card only redeemable for certain products. Not difficult at all.
    As for the other, you seem to think the official ” jobs available ” data is both correct ( Cambodias official unemployment rate is zero and Venezuela less than here )and employer generated, I disagree.
    I gave you an example of someone that, even if untaxed, sustained himself till opportunity knocked to pursue his chosen field.
    Your comment reflects that you’ve allowed yourself to be conned into believing the nonsense that your destiny is someone else’s to dictate.
    Please don’t categorise the unemployed as victims.

  14. But jumpy, you’ve only had to think about how to type out a brain fart. You haven’t even an outline of how it would work, let alone the detail of which products, where, how. And of course there is the tiny matter of choice and human rights. I could go on but that’s enough for you today.
    Eva Cox has delved into the figures and a link to her research on unemployment is below. It’s out of date and she provided an update recently in which the situation for jobseekers has worsened but it’s over at The Conversation if you care to search through their wacky system.
    Your example was for 1 only person and 1 only job. The reality is that there are close to 2 million Australians wanting work or more work and only around 1/4 million jobs. Why would the government produce a jobs available figure vastly lower than it really is? They’ve already fudged the figures on the actual unemployment rate to cover up how bad the situation is. Comparing Australia’s government statistics to Cambodia and Venezuela is an act of desperation.
    Neo-liberal governments deliberately keep a large pool of unemployed to keep wages down. Government could fix most unemployment overnight. Reduce the working week and increase penalty rates for overtime, regulate salaried employment. Raise taxes on the rich to pay for a decent social policy, increase assistance to local producers including tariffs as industry is the provider of the large numbers of jobs needed to bring the poor out of poverty.
    The point you and so many others miss, including progressives sadly, is that no matter how much you kick the shit out of the unemployed there are nowhere near enough jobs for them all. In fact, there are only enough jobs for a fraction of them and as you will see if you bother to read Eva Cox, most of those jobs are for university educated people.
    Now, it probably bothers the hell out of you that there are so many people in Australia of lower intelligence than you but the fact is that probably about half are not capable of gaining a degree, and a quarter would struggle through most TAFE courses.
    Due to decades of poor social policy many people are simply unemployable due to multi-generational disadvantages like unemployment, addictions, mental health, long term poverty, crime etc. Without decent social policy we may as well pay these people a decent benefit to stop them from committing crime and keep them consuming. Similarly, pay those who really do want jobs which are not available a decent benefit in line with the service they are providing to the government in keeping wages down.
    Lastly, to you personally, try to realise how lucky you are to have one of the scarce jobs, to see it as a privilege and not something to bash less fortunate people with.

  15. SG: You didn’t mention job redesign. Many of the productivity changes in the 90’s involved merging low skilled jobs with higher skilled jobs. What this meant was that the jobs that used to be able to be done by people without much education or ability were blended with others requiring more talent than they had. In my patch it meant that operator jobs (junior high school) became operator tradesman jobs (Senior high school plus trade.) Or a bloke with a crook back who could operate and reclaimer now has to be able to do “general duties – which need a healthy back.
    Productivity should be measured in terms of output per available hour, not hours worked.

  16. Brian, fwiw, i took no offence at SGs comment.
    He quite reasonably can’t know the people that he gives excuse to for not working is me and the men I work with every day.

    As for,

    Government could fix most unemployment overnight. Reduce the working week and increase penalty rates for overtime, regulate salaried employment. Raise taxes on the rich to pay for a decent social policy, increase assistance to local producers including tariffs as industry is the provider of the large numbers of jobs needed to bring the poor out of poverty.

    A recipe to crush all employers except Government.
    We all know what that is called and it doesn’t work

  17. JohnD, the company I was toolmaking for tried to train 4 of their best diesetters for toolmaking during the shortage of the early nineties. Only one became an adequate toolmaker. The others were way out of their depth and it wasn’t just the maths which is only trigonometry usually. They just didn’t get it, weren’t up to the complexities and the precision. They had to be constantly supervised.

    jumpy “He quite reasonably can’t know the people that he gives excuse to for not working is me and the men I work with every day.” I have no idea what that means sorry. It sounds as though you are not even the tiniest bit enlightened but I hope I’m wrong.
    I found Eva Cox’s update on the registered job vacancies.

  18. SG

    I have no idea what that means sorry.

    No, my fault, I often stuff up translating my ” thinking to text ”
    Try again,
    I’m in construction. Some of those I work with have all the reason that you stated above ( poor upbringing, little education, addictions, disabilities, current family brake downs, criminal history, ) as an excuse to be on welfare.
    But there not, why ?
    In contrast, the residents in the 5 housing commission homes in my cul-de-sac are so comfortable they can party and go fishing rather than mow the lawn.
    They can work but don’t, why ?

    Maybe I’m tainted by watching the recipients of other peoples labour piss it away.
    Anyway, I’ll leave it there and have nana nap, the Saturday night doof doof doof and screaming matches start a mere 9 hours away.
    Happy times.

  19. jumpy, the ones you work with are very lucky. They won the lottery of finding a job. People being different from one another means some are brutalised and traumatised by harsh experiences. I would rate getting constant rejections to work applications as a harsh experience.
    You said “They can work but don’t ,why?” As I’ve been saying, they can’t find work. Some are just unlucky, some just project insecurity, some don’t want to work like those that are third or fourth generation unemployed. How do those people get a work ethic?
    There will always be large numbers of unemployed due to the way neo-liberal governments have structured society and it will always be the least able who are unemployed. That is an opportunity to show compassion towards them. Politicians from both major parties who take part in demonization of the unemployed deserve a special kind of contempt as they are doing it to cover up the failure of their ideology.

  20. War veterans seem to have escaped some but not all of the nastiness for the time being. There is a crackdown on so-called temporary injuries among young veterans and some airy-fairy excuses made for doing so. Things could have been far worse but I suspect some of the boys and girls fresh back from Shaitanistan might have had a few quiet words in the shell-like ears of political advisors – “a word to the wise is sufficient” ( I shall refrain from adding the second line lest I get charged with inciting something naughty) 🙂

  21. Ben Eltham thinks the budget is about score settling and about redistribution, from the young, the poor, the sick and the voiceless to the rich.

    Ross Gittins thinks the budget is tough but unfair. He thinks most of us will be let off lightly but:

    Only those people right at the bottom of the ladder have been hit hard – unemployed young people, the sick poor and, eventually, aged and disabled pensioners – but who cares about them? We’ve been trained to worry only about ourselves, and to shout and scream over the slightest scratch.

    He points out that the biggest savings cut in as late as 2017, so as not to kill the economy when it’s fragile.

  22. Peter Martin concentrates on the super wealthy, who, he says, pay no tax. Zip. Nothing!

    On his evidence I have to disagree. He mentions franking credits on shares as a tax avoidance measure. Actually what happens is that share owners as part owners of companies pay full company tax on dividends. On the tax return this tax is added on to their income and then the tax paid is taken off the tax owing at the end. It’s all perfectly rational.

    To do otherwise would mean that share owners pay twice. They would pay company tax on income and then be taxed personally on their after-tax income.

  23. Cheer up Gentlefolk, only 54 sleeps and a wakey until Bob Menzies Day, that’s the name of the day I’ve picked for the party room spill against Mr Abbott. Now I’m not so bold as to say that our brand spanking new Prime Minister will be the bright young Mr Pyne or Madam Bishop …. however, I do wish our new ambassador to Equatorial Guinea all the best in his new career.

  24. GB,
    One of the TV stations this morning noted there were already rumblings against Abbott after today’s polls. I can’t remember which one as I was channel-surfing to avoid a very boring, over-long cross promotional interview with Keiren Perkins on the ABC. Spose it was a good way for ABC Breakfast to avoid criticising Tony Abbott.

    They did replay parts of Abbott’s lying interview on The Insiders yesterday several times. How do we know Abbott was lying (apart from Abbott lying being axiomatic?) Because the Premiers revealeed this morning that the cuts to health and education begin in July, not in about three years’ time as Abbott was claiming. What is the matter with the guy? is he so stupid, or so morally bereft, that he doesn’t care all his lies will be exposed, especially now.

  25. Late news: The government and people of Equatorial Guinea have lodged a strong protest and the governor of Kerguelen Island is not answering his phone. This does not bode well for a post-politics career change.

  26. Prime Minister Tony Abbott has ruled out any first-term changes to superannuation beyond that promised at the election.

    Treasurer Joe Hockey on Monday night gave his strongest indication yet the government could change the age at which people accessed their retirement savings.

    “It is on my mind, and it’s on Tony Abbott’s mind,” he told the ABC’s Q&A program.

    He suspected any change would be “in this term”.

    Which one of them is lying?

Comments are closed.