2012 Federal Budget: better late than never

The Conservatives need to decide whether to pursue a mix of economic conservatism and political liberalism; or whether to adopt a ruthless neo-liberalism which cares little for the poor and disadvantged; and for the political and civil liberties of citizens. It is important to observe, also, that 'economic conservatism' need not imply economic liberalism, but rather could accept Keynesian assumptions (in past accepted by Liberal governments) on the mixed economy and counter-cyclical demand management. Though Joe Hockey seemed to be quite clear recently on QandA that he cared little for the traditional Australian spirit of egalitarianism.

But for Labor stronger action is necessary to place class faultlines in clearer relief. The principle of class struggle is seen by many – even on the Left - as being discredited. But when we speak of class interests and class struggle this need not imply terroristic Stalinism; or to begrudge citizens their human and civil rights. Rather the purpose of democracy is at least in part to set free oppositions of interest and provide a framework for their peaceful resolution. Or where this does not work, to contain conflict to forms of civil disobedience which do not descend into an escalating cycle of violence.

And if he desires an agreed class peace, how does Abbott suppose this is possible on the basis of ruthless neo-liberalism – as opposed to the kind of Centrist Catholic Social Welfarism; or a 'Social Market' such as exisited under the Christian Democrats in post-war Germany? (though the author is politically Left, these are perspectives he hoped Abbott may have been more open to)

Further, if redistributive policies are nothing but a 'bribe' (as according to Abbott) what are we to make of the 'upper middle class welfare' of the Howard years: and of Abbott's own paid parental leave which offers leave with full pay to workers on as much as $150,000/year? (See: http://www.news.com.au/money/cost-of-living/paid-parental-leave-scheme-stays-abbott/story-fnagkbpv-1226286894077 )

Conclusion

Having to achieve more with less can drive efficiency – so there is some benefit in a government operating under tight fiscal circumstances. Indeed, a comrade in the Socialist Left of the ALP recently commented to me that rather than spending billions more in areas like Aged Care that we could achieve more 'electoral kudos' (my term) with well targeted and innovative initiatives.

But asssuming that policy outcomes matter more than narrow electoralism, often there is no getting around the need for an injection of greater resources. Much of this year's Federal Budget was just reprioritisation – with little new money. Again: In accepting this framework Labor will repeatedly find itself in the position of 'having to rob Peter to pay Paul'. In public education, aged care, mental health, welfare, public housing, disability support and services, and crucial transport and other infrastructure: 'trying to do more with less' can only take you so far. For instance: the Gonski recommendations for Education simply cannot be implemented without billions in new funding; nor can a sustained introduction of Medicare Dental.

By comparison – moving initially from 100% to 75% Dividend Imputation, further cutting superannuation concessions for the wealthy top 5% of income earners, reforming the Mining Tax, and applying an 'Abbott-esque' levy on business via Company Tax – along with other reforms – could have grown social expdeniture by 1.5% of GDP – or approximately $22 billion in new and improved initiatives.

And yet with $5 billion of largely redistributive, Cost-of-Living oriented policies - this is arguably a traditional Labor Budget. It puts many of Labor's core low to middle income constituencies first in way we haven't seen so much in quite some time.

Now, though, Labor needs to turn the to source of the Cost-of-Living crisis. This must include implementation of the Gonski recommendations – so low and middle income families can feel secure sending their children to State and poorer Independent schools – at peace in the knowledge they will not be disadvantaged, and that there is no need to 'go beyond their means' in providing a private school education. And reversing the trend to privatisation, and constructing public housing and infrastructure for emerging new suburbs also need to find themeselves to Labor's 'policy radar' with policies that attack Cost-of-Living pressures at their very root.