How is the peak body for people with disabilities to be funded?

According to the Liberal-National Government in Canberra, Australia is in such a bad economic position that we must question the affordability of just about everything and even reduce much needed Government services for Australia's most vulnerable citizens. They may say this is necessary but this Coalition seems never to have questioned whether they could afford the electoral cost of knighting Prince Phillip. Jokes aside, the Abbott Government has, in this mean Grinch-style action, just before the Christmas holidays, cuts $1.5 million in funding from Australia's national peak disability bodies that provide advocacy ahd other support.

In my opinion, and that of many other like-minded astute citizens of this Commonwealth, viewed this cut is nothing but calculated cruelty. What could be the reason behind this reduction of support to people with disabilities? Was such misguided economic policy provoked by their efforts of their advocates to stand up for themselves and fight for a change? It seems that the rationale is this: the best way to silence Government critics is to stop their funding.

If this is so, then it is in total disregard of Australia's commitment to a 'fair go'. The statistics are already horrifying: 45% of people with disabilities already live below the poverty line. Also there is the grim reality of an employment rate 30% below the national average. This is only harnessed by gross inequalities created by poor systems of governance. Why weaken the plight of people with disabilities in order to create savings for an economy that is supposedly in trouble?

Australia's budget deficit and debt

On 13th August 2013 Kevin Rudd made these comments during an interview. This was in the context of the election campaign and related to Australia's international credit rating. Why would a AAA credit rating be given by the major credit agencies if the economy was not strong.

"We have among the lowest of budget deficits and debt to GDP of any other major economies in the developed world… If it's so bad, Mr Abbott, why have we been given by the three ratings agencies a AAA credit rating?"

The Net Debt to Gross Domestic Product (GDP) ratio is a way of counting how much national debt a country has when compared with the total value of the economy, as measured by GDP. It is used as one indicator of the economic sustainability of a country's debt.

The statistics proclaimed in the article show a very favourable national comparable average. In 2012, Australia's net debt to GDP ratio was 11.6% (that is, our net debt was equivalent to 11.6% of our GDP) and it was then expected to increase to 12.7% in 2013. This is very close to the figure (13%) mentioned by the then Prime Minister in his interview.

The Australian net debt to GDP ratio is low by international standards. The average for the Euro Area in 2012 was 71.9%, lower than the figure reported by the Prime Minister (90%), but still more than six times higher than the debt level in Australia.

Out of 26 advanced major economies for which net debt data are available from 2012, Australia had the sixth lowest net debt to GDP ratio (including countries that reported a negative net debt).

Economists' opinion of the Federal Budget 2014

Let's consider what some economists are saying about the underlying rationale of the Coalition Government's obsession with cutting the budget deficit. Consider first

Sinclair Davidson, Professor of Institutional Economics, at RMIT University. Here is what he is reported to have said about the proposed GP co-payment scheme.

Then there is the Medical Research Future Fund. This verges on the incoherent. The government will invest all the money from the GP co-payment, increased medicine payments, and savings from medical expenditure into the fund which will then finance research. In other words, the GP co-payment and increased medicine prices will not be used to reduce debt or deficit. So why have it at all? Clearly there is no urgent need to introduce these higher prices and co-payments; they are driven purely by ideology. The Medical Research Future Fund exists to detract attention from that decision. Why deprive people of actual medical attention in order to finance research when there is no guarantee of any actual benefit?

In other words: Is the federal government just attempting to introduce another social dilemma? A social dilemma is when a collective act is in opposition to private interest. It seems that public policies that can directly affect social inclusiveness are framed to create what seem to be social dilemmas. This plays off the perception that welfare policies are an incentive for a growth in individual selfishness. Public Choice theory has taken this on board and identifies some policies that presuppose the creation of social dilemmas.

This is driven by the belief that an even worse social dilemma can be created to cover up the first. Is that what the cut to advocacy is all about?

Or consider the views of Lawrence Abeln, Dean of the Business School at University of Adelaide

There is no concern for a structural deficit in Australia and therefore no need for such repairs. The Australian national deficit is among the lowest of our G20 peers. There is too much preoccupation with the public debt in this federal budget, and we should focus instead on using debt as an instrument of growth rather than employ measures to reduce spending. Relative to our G20 competitor nations, Australia has one of the strongest economies in the world.

This prompts me to ask a question, and give a logical, coherent and factual response. Can individual self-interest be altruistic? Of course it can, but the chances of it being plainly selfish and greedy are much greater. The effects of such a way of life can be witnessed today by the problematic growth in the economic divide between rich and poor that is encountered everyday by those who keep alert to what is happening around them in general social life.

Our inflation is relatively contained, our unemployment is low relative to Europe and the US and we have among the lowest public debt ratios to gross domestic product (GDP) of any industrialised country in the world. Our public debt is 30% of GDP. It is three times that in France and the UK, two and a half ties in the US and seven times in Japan. So we as a nation have a very strong balancesheet and our public debt is already under control. Because of our favourable balance sheet especially compared to others, we have capacity to borrow and to use some of the funds to invest to promote further growth.

Therefore, what I would like to ask is this: why does the federal Coalition Government undermine much needed social policy? What does it think it will gain from this cut? Is there anything to gain from the loss of advocacy for disabled people?