2022 Federal Budget

A few paltry handouts can’t hide it: this is another budget for the bosses.

The biggest elephant in the room is wages. This is a government that has presided over the biggest fall in real wages in Australia in a generation. Before the pandemic, wages were flat. Now, they’re in free-fall. In 2021 inflation was 3.5 percent, while wages rose by just 2.3 percent. For a worker on an average income of $68,000, that represents a pay cut of $832.

And the pain is set to continue. According to budget forecasts, wages will grow by just 2.75 percent in 2021-22, while inflation will be 4.25 percent. If those forecasts prove correct, then that’ll be another $1,000 hit for those on an average wage.

Neither the once off $420 tax break that most low and middle income workers will receive at the end of this financial year, nor the $10 or so you might save on fuel due to the six month cut in fuel excise, is near enough to make up for these wage cuts. These temporary measures targeting cost of living pressures are a joke. To put things in perspective: if the government increased the minimum wage by just $1 an hour, it would put $1,976 into the pockets of millions of low-paid workers over the next year.

The government won’t consider any such thing, of course, as it would put a dent in the profits of their core constituency: the corporate bosses and billionaires whose wealth, in the past two years, has soared to new heights of obscenity. The Australian newspaper recently released its annual list of Australia’s richest 250 people. The wealth of this group increased from $470 billion to $520 billion in the past year, a rise of $50 billion.

Despite this there’s no talk—either from the Liberals or the Labor Party—of boosting taxes on the wealthy to fund climate action, increase healthcare, education, and welfare spending, build more public housing, or address any of the many other problems facing ordinary people in Australia today.

Those on welfare are expected to be grateful for the once off $250 payment announced in the budget. But given the steep rises in housing costs, energy, groceries, and other essentials, this will be eaten up in a flash. A government that was serious about improving the lives of those on welfare might consider, as an alternative, dividing-up that $50 billion wealth windfall that fell to the 250 richest Australians in the past year. This would put a quite impressive $9,300 in the pockets of each of the 5.4 million Australians who receive some kind of government benefit today.

And that’s just the start of what you could do if, instead of prioritising the interests of big business and the rich by cutting their taxes and placing more and more restrictions on the ability of workers to fight for better wages and conditions, you instead put the interests of people over profit.

Central to the Victorian Socialists’ vision is taxing the rich at a rate that’s a fair reflection of the fact that all the wealth they amass is the result of the labour of their workers. Hundreds of billions could be raised just by returning tax rates to what they were just a few decades ago. Tens of billions more could be raised by cutting areas like the bloated military budget, or the funding for private schools that the government is planning to increase by $2.6 billion over the forward estimates (compared to a $560 million cut to public school funding over the next three years).

Victorian Socialists also see restoring the rights of workers to collectively organise and fight for better wages and conditions as central. Economists are perplexed at sluggish wage growth in a context where unemployment is falling. But historically significant gains have only been made by workers in periods of high levels of unionisation and, most importantly, strikes. So long as workers in Australia are subject to some of the world’s most draconian industrial relations laws, and neither the Labor Party nor the heads of the trade union movement are prepared to seriously challenge them, we shouldn’t expect much progress.

Behind the ‘smoke and mirrors’ then, this budget is more of the same from the Liberals. They hope a few handouts here and there will make people forget about all their failures and elect them for another term. But the budget changes nothing. It’s another budget for the bosses, which sacrifices the interests of Australian workers and the poor to the obscene wealth and profits of the rich. 

In the upcoming federal election, they deserve to be given the boot. But we should be under no illusions that the Labor Party will offer anything much better. Which is why the Victorian Socialists’ campaign—offering an alternative to the major parties that puts people over profit—is worth getting behind.