At the same time Abbott is on the verge of withdrawing government support for the car industry – with a projected $500 million in cuts. Estimates hold that this move could see unemployment rise by 1.5%, costing the economy $21.5bn a year. And while car industry support may also be seen by some as another example of 'corporate welfare' itself, it is a special case – because of the multiplier effect with regards jobs, and the fact that core jobs are relatively high-wage compared with manufacturing elsewhere. The skills and capacities are also of strategic value for the Australian nation.
Meanwhile, the Liberals have signalled their intention to significantly increase Defence expenditure: at a time when they are claiming a 'budget emergency' as a rationale for wide-ranging austerity. And yet previously announced Gillard government subsidies for Aged Care workers will be withdrawn in an attempt to undercut unions: with the probable consequence that the sector will lose more skilled workers; and aged care residents will suffer the consequence.
Abbott has declared that: "the carbon tax will go, but no-one's personal tax will increase and no-one's fortnightly pensionor benefit will reduce.
It is beginning to look unlikely, however, that welfare will remain untouched.
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There is a uncomfortable reality that both the Liberals and Labor were reluctant to talk about during the election campaign. When fully implemented, Disability Care Australia will peak with a price-tag over $22 billion, with roughly half coming from the Federal Government. What is more, an ageing population and a growing population must mean additional expenses when it comes to health, aged care, and infrastructure.
All this is by no means unmanageable or unfundable with an economy valued at over $1.6 Trillion. And certainly a regressive GST is not the only option. Removing superannuation concessions for the wealthiest 5% would bring in about $10 billion alone. But the looming crisis has consequences for an administration trying to 'reduce the size of government' as an Ideological imperative. Those consequences are especially dire in the context of a previously highly-targeted welfare state – under siege from middle class and corporate welfare. It means some already tight welfare provisions stand to be narrowed even further – with the most vulnerable and disadvantaged of all paying the price.
But as this author has argued elsewhere:
Looking back to the 1950s it is interesting to note that the conservatives and 'centrists' of that time were often more 'radical' on the economy than today's avowed social democrats: and even of some avowed members of the Socialist Left.
Specifically, a "social market" model was adopted by the German Christian Democrats in the 1950s". This included providing for a mixed economy, social wage and welfare state. Not a 'traditional socialist economy' by any means. But at least the poor and vulnerable were not sacrificed for the sake of corporate and upper middle class interest, and/or 'Ideological purity'. (Aarons, Routledge, 2009, pp 33-34)
The time has come for Abbott and other self-avowed Christians in the Coalition to search their consciences. The time has come to confront the fact that given the developing social and economic pressures, 'small government' at all costs is neither compassionate, rational nor just.
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