Submission to The Select Committee into the Abbott Government’s Budget Cuts August, 2014 1 Introduction The Queensland Nurses’ Union (QNU) thanks the Senate Select Committee for the opportunity to comment on the Abbott Government’s Budget Cuts. Nurses1 are the largest occupational group in Queensland Health and one of the largest across the Queensland government. The QNU is the principal health union in Queensland covering all categories of workers that make up the nursing workforce including registered nurses (RN), registered midwives, enrolled nurses (EN) and assistants in nursing (AIN) who are employed in the public, private and not-for-profit health sectors including aged care. Our more than 50,000 members work across a variety of settings from single person operations to large health and non-health institutions, and in a full range of classifications from entry level trainees to senior management. The vast majority of nurses in Queensland are members of the QNU. At the outset, we call on the Australian Senate to continue to reject entirely: the proposed Medicare Co-payment and health funding arrangements; the proposed changes to funding and fee-setting arrangements in higher education; all other outstanding budget initiatives that give rise to entrenched inequality in this country. Following the release of the reports of the commission of audit whose findings influenced many of the budget propositions, the QNU and our peak body the ANMF engaged John Moran an historian and researcher to provide a detailed response. This submission draws on his work to comment on some of the areas where we believe the 2014-5 federal budget will produce detrimental effects to Australian workers and society in general. National Commission of Audit as an Ideological Platform for the 2014-5 budget In October, 2013, the federal Treasurer, Joe Hockey, and the Minister for Finance, Senator Mathias Cormann (2013), announced a National Commission of Audit to “review and report on the performance, functions and roles of the Commonwealth government”. The National Commission of Audit (the audit commission) released two reports (2014a, 2014b) 1 Throughout this submission the terms ‘nurse’ and ‘nursing’ are taken to include ‘midwife’ and ‘midwifery’ and refer to all levels of nursing and midwifery including RNs, Midwives, ENs and AINs. 2 recommending significant cuts to spending on healthcare, education, unemployment benefits and pensions, aged care, child care, family payments and the new National Disability Insurance Scheme (NDIS). Under its terms of reference, the Abbott government gave the audit commission clear instructions to recommend ways to achieve its ideological objectives of reducing the role and functions of government and to reach a surplus target of one per cent of GDP within the next ten years. Given the partisan membership of the audit commission2 and the nature of its terms of reference, there was no possibility the reports would represent an independent assessment of the national finances. Quiggin (2013) describes the solemn announcement by incoming Coalition Treasurers of the creation of an independent commission of audit to examine all areas of government spending as a ‘theatrical ritual’. Indeed this ritual is inevitably the convenient precursor to harsh budget measures that break election promises. Less than two weeks after releasing the audit commission’s reports, the Abbott Government brought down its 2014-5 budget. The budget has been the instrument for implementation of a number of the audit commission’s recommendations or variants of them. This federal budget marks the beginning of a wide-ranging agenda to change Australia through economic policy based on neo-liberal principles of small government and large private interests. An outdated ideology that finds its origins in the 1980s moves to dismantle the mixed economy and reduce the role of government informs the audit commission’s reports and thus underpins the 2014 federal budget. The experiences of the last 30 years have discredited many of those ideas, especially experiences such as the: • recent Global Financial Crisis (GFC) caused by virtually uncontrolled private financial institutions overseas; • failures of various privatization ventures including those involving public hospitals; and • significant cost increases for essential, basic services now supposedly subject to “market” forces. The QNU rejects the basic assumptions on the role of government put forward by the audit commission and the attempt to refashion the Australian economy and society through the 2 The Abbott Government appointed Tony Shepherd to chair its audit commission. At the time Mr Shepherd was president of the Business Council of Australia (BCA), a position he had held since late 2011. He was also chairman of listed company, Transfield Services, between 2005 and October 2013. The other Commissioners also had connections with the BCA or the Liberal party. 3 budget. The QNU believes government has a vital and effective role to play in the delivery of quality, cost effective services, including healthcare and education. The Prime Minister himself has described it as a ‘values’ budget and of course the Treasurer has advised Australians this is the end of ‘the age of entitlement’. The federal budget fails to address fair ways to increase the nation’s revenue (see for example the high income earners tax that is only for a limited time). Instead of penalising the young, the old, the poor and the sick, the budget could have reasonably considered a range of tax options, including a financial transactions tax on speculative trading and the closing of various business and investment tax loopholes, as effective ways of moderately increasing the tax take from those more than capable of affording it. We note with interest that the Treasurer could, however, manage to find $53.3 million over two years to fund the Royal Commission into trade unions. By concentrating largely on expenditure, the Treasurer and most of his colleagues have attempted to convince Australians that the previous government’s spending was out of control. In fact, its spending level was below that of the Howard Government from 2000 to 2004 and equal to the Howard-Costello levels from 2004 to 2006 (Australian Government 2013). The QNU therefore rejects the premise that this federal budget needs to rein in spending on programs that assist those in need while ensuring mining and big business does not contribute more revenue. The obvious inequity of the Abbot government’s budget is one of the reasons it has met with such widespread resistance. Like many other Australians, we are not convinced by these actions of a federal government that seems to think talking down the economy in order to build up the economy is a clever strategy. The so-called ‘bottom line’ is that this budget provides significant benefits to those in the community who can afford it the most while taking from those who can afford it the least. The audit commission was a useful marketing tool in softening up the Australian public with its rhetoric about an unstable economy that was vastly in debt in order to make its eventual budget cuts appear less damaging. The reality is that the losers far outnumber the winners. The Treasurer’s dogged attempts to gain support from the Senate cross-benchers to pass the more contentious budget measures has been met with a level of animosity that mirrors the electorate. The following snapshot gives an indication of the imbalance in the federal budget and its clear ideological preference for reduced government spending on major areas of public benefit such as health and education. 4 Budget winners Politicians took a ‘pay freeze’ for 12 months. Public school chaplains received a $245 million boost. High income earners keep tax breaks from negative gearing and superannuation contributions. While those on incomes greater than $180,000 must now pay a 2% debt levy for the next three years, the funding cuts in other areas have no such time limit. Infrastructure receives $11.6 billion in funding for new projects. Mine-owners no longer have to pay the Minerals Resource Rent Tax. Medical research will receive the interest earned from a $20 billion ‘future fund’ that is financed through the Medicare co-payment. Budget Losers All Australians born after 1958 will have to work until they are 70 before being eligible to receive a pension. Sick people will pay more for medicines and a $7 co-payment per visit to the GP. On the upside, if they are so poor they have a concession card and so sick they have to visit more than 10 times, they do not have to pay for more than 10 visits. Young unemployed will have to wait 6 months before they are eligible for the dole, and can only receive a maximum of 6 months benefit for every 12 months they are out of work. Public health will lose $50 billion in new funding over eight years. Public schools will lose the funding they would have gained under the Gonski plan – around $30 billion. Public service will lose 16,500 employees. University students will have to pay higher fees in a ‘deregulated market’. Disability pension holders will face eligibility checks under tighter qualification criteria. ABC and SBS lose 1% of their annual funding. The environment has had $1.3 billion slashed from renewables investment, the $2.55 billion commitment to the government’s ‘direct action policy’ will now be spread over 10 years instead of 4 years, and while $525 million has been given to the ‘Green Army’, $438 million has been slashed from Landcare. Underlying the quick-fix budget overhaul is an ideology that shifts the onus of ‘repair’ from older, established and relatively wealthy Australians to those who are younger, disenfranchised and less well off. Recent polling (Hetherington, 2014) suggests that Australians are starting to question the alarmist rhetoric of the Abbott Government.