Is this a real Labor Budget?

Assaults upon the rights of pensioners, the introduction of regressive user-pays principles for everything from roads to schools, the gradual abandonment of progressive distributive mechanisms, are considered 'objectively sound policy.' But any attempt to achieve a modicum of distributive justice, involving a greater proportionate burden upon the upper middle class, is branded by the Conservatives as a 'war on middle Australia.'

Labor needs to press home the argument that someone must pay for health, education, infrastructure and the social security safety net. If those on relatively high incomes do not pay their share then who will pay instead? Also, while the very rich should pay their fair share, the tax system needs a broad enough base to fund the social necessities provided by government.

Class interest is an unavoidable factor of political and economic life. The Conservatives attempt to obscure the issue with false appeals to the principle of 'classlessness,' where distributive justice is labelled 'class war' but assaults upon the most vulnerable are unquestioned. At other times fears about refugees and resentment against marginal groups are beaten up as a 'wedge.' Finally, there is an appeal to 'competence' on 'economic management,' usually constructed as adherence to the dominant neo-liberal ideology.

Many a radical in the 19^th and early 20^th Century imagined an in-built working-class majority would make the transition to socialism inevitable in the context of universal suffrage. Since then, however, the class homogenisation imagined by Karl Marx, was replaced by many layers of differentiation within the working class. The idea of a (predominantly white collar) middle class self-identity has long since impeded working class solidarity. Essentially, though, the Conservatives are still afraid of a Labor Party which appeals consistently, unashamedly and unambiguously to the class interests of the majority; a move which could reconsolidate Labor's 'natural base.'

Conclusions

This Budget – including its welfare and training provisions - is about pushing the economy to full capacity, by anticipating a reinvigorated mining boom . There is the accompanying goal of containing inflation and hence interest rates and cost of living pressures. Greater participation should also 'increase the size of the pie' from which a larger and proportionate investment in infrastructure and social services could spring.

Labor governments of times past would attempt to contain inflation by working with the trade unions. But with the lack of such arrangements, so-called 'tough love' measures on welfare aim to increase labour market participation by 'any and all' means necessary. Apparently this includes labour conscription, pressures upon the disabled and vulnerable single mothers and continued relegation of the unemployed to dire poverty. By expanding a 'reserve army' at the bottom end of the labour market, Swan supposes he can contain the inflation genie.

It is conceded that labour market participation can ameliorate social isolation, though this can be pursued without the punitive elements contained in this Budget. As suggested, there are better ways of promoting growth and containing inflation than these (i.e.: via agreements with organised labour which nonetheless do not erode real wages and also through tax measures targeting consumption at the upper end to reduce inflationary pressures in the most equitable manner possible).

Despite this it is notable that Gillard Labor, has broken with a long tradition amongst both Labor and Liberal governments, by failing to deliver income tax cuts 'as a matter of course'. The political pressure to return to surplus by 2012-13 and pressures to maintain some modicum of social justice, have ensured that.

Yet, a higher and progressively structured flood levy could have stemmed pressures to enact austerity. Further, delivering on an unnecessary and costly cut in Company Tax, simply put the government under more pressure. However, a National Disability Insurance Scheme could have seen Labor 'on the front foot,' pursuing a big ticket reform agenda re-establishing Labor's 'can-do' credentials. An 'NDIS' especially could have been crucial in expanding by billions real funding for disability services and income support to meet the true level of human need.

Instead the government is 'dying the death of a thousand cuts,' depicted as indecisive and victim to a deceptive fear campaign on the Carbon Tax.

The question that arises, therefore, is: Where to now for the government?