Why $6 is an insult to workers

The following opinion piece by AWU National Secretary Bill Shorten was published in Melbourne's Herald Sun newspaper on May 13, 2005

The Federal Budget has flunked any test of real tax reform.

John Howard cheekily claims the tax cuts are "for Bill Shorten's (AWU) steelworkers" but in fact the Budget squibs at building and sharing a more secure future for our country and all Australians.

The Budget tax cuts may be good for some people - especially top income earners who get more than 10 times the $6 available to most workers.

But too many people get too little, and what they do get will quickly melt away.

Moreover, the Budget has failed to deal with the major economic problems sabotaging future chances for Australian workers.

Kim Beazley is right to demand an alternative. Real tax reform would mean a fair and consistent system that treats all classes of income equally.

Instead we have an unfair system that rewards the better off for opting out by individuals calling themselves companies or setting up family trusts.

Australia will eventually get a decent tax system where income rates are aligned near the corporate rate, rorts are eliminated and corporations actually pay their fair share.

I predict we can achieve a tax system that rewards incentive, attracts investment and promotes productivity.

But as for the Budget tax cuts, many workers are now realising that their extra $6 is only a temporary claw-back from the continuing tax rip-off of bracket creep.

Research for the AWU based on average annual wages growth of 4 per cent shows that the Budget's tax benefit to average workers (with no children) earning $40,000-$50,000 a year will be totally wiped out before 2008.

Even worse, the Liberals' new industrial relations laws will directly attack the main source of income growth for nearly all working people - their wage rises.

It is a bit rich for the Government to be crowing about a $6 tax cut while threatening average wage rises of around $40 per week for unionised blue-collar workers.

If John Howard was really interested in helping AWU steelworkers, he would abandon his industrial relations laws before the new Senate even meets.

Australia has a foreign debt crisis that requires a new level of savings through superannuation - our only real "future fund".

But the Budget does nothing to increase super contributions from 9 per cent, whether by employers, workers or government co-payments.

There is no plan in the Budget to deal with Australia's disastrous trade performance and balance of payments nightmare. Unless we act soon, the world will eventually pull the plug on us.

Australians are borrowing too much money to buy too many imports. The public foreign debt of 10 years ago has been transferred piece by piece to every private household credit card in the country.

Too much of our prosperity has depended on banks borrowing overseas and lending it to people to build houses.

That's why the Budget should have delivered far more on the basic requirements for export industry growth - research and development, infrastructure investment, higher education and skills training.

Where's the vision for Australia's needs for reliable water supplies, strong regions and a sustainable environment?

Instead, the Budget's so-called Future Fund is providing little except windfall profits to financial institutions for handling someone else's money.

And what about easing the real household expenditure pressures on working families? Health, education and petrol prices are increasing fast enough to swallow a $6 Budget cut before anyone even notices it.

The multiple taxation of petrol through the excise and GST is another example of urgent tax reform that is totally ignored in the Budget.

It is wildly wrong for Mr Howard to claim workers' support for his budget based on some inadequate tax cuts.

If Mr Howard was really interested in helping workers, he would overhaul the tax system, abandon his industrial relations laws and promote savings through superannuation instead of fuelling more expenditure based on foreign debt.