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Friday, 2 May 2014

Commission of Audit: a recipe for a poorer, nastier and more brutish Australia

Commission of Audit: a recipe for a poorer, nastier and more brutish Australia

Commission of Audit: a recipe for a poorer, nastier and more brutish Australia

prescriptions advocated by the Audit are stock-standard 1980s-era
neoliberalism: privatise government assets, abolish government agencies,
charge citizens more

The report of the Commission of Audit, which weighs five kilos.
The report of the Commission of Audit, which weighs five kilos. Photograph: Lukas Koch/AAP

We always knew the Commission of Audit would
produce a small government, low spending, neoliberal report.

Why? Because that’s what the government set
it up to do.

The Commission of Audit was announced as a
supposedly independent body. But the people doing the auditing are mostly
rusted-on, hardline conservatives. Tony Shepherd, a former chairman of
Transfield, is also the former boss of big business lobby group, the Business Council
of Australia. Peter Boxall is a former chief of staff to Peter Costello. Howard
government minister Amanda Vanstone is there too. This is a political body, set
up to do a very political job.

The giveaway is there in black and white,
in the Audit’s terms of reference.
These give it “a broad remit to examine the scope for efficiency and
productivity improvements across all areas of Commonwealth expenditure,
and to
make recommendations to achieve savings sufficient to deliver a surplus
of 1% of GDP prior to 2023-24.” Top of the list: to “ensure
taxpayers are receiving value-for-money from each dollar spent” and
wasteful spending.”

Framing an exercise like this as delivering
value for money and cutting waste ensures that the debate is all about
government spending. There is no acknowledgement that the real cause of the
current deficit is a shortfall in revenues, not a blow-out in expenditures. Nor
is there any mention of the fact that the Commonwealth’s spending is low by
OECD standards
, and in fact is broadly consistent with spending levels in the
later years of the Howard government.

The Audit ignores all this. “We have spent
beyond our means for too long,” it complains, bemoaning the “sixth consecutive
budget deficit.”

It’s as though that minor event known as the global financial
crisis never happened. This is truly the “autistic” economics that a group of
French university students protested about in June 2000.

The prescriptions advocated by the Audit
are stock-standard 1980s-era neoliberalism. Privatise government assets. Cut
red tape. Abolish or amalgamate government agencies. Charge citizens more for
government services, like visits to the doctor. Slash government benefits,
especially for the most vulnerable. Make students pay more for their education.
Reduce foreign aid. Abolish national protections, like a national minimum wage.
Halt Commonwealth support for the homeless.

This is a recipe for a poorer, nastier and
more brutish Australia. If implemented, it would mark the beginning of the end
of the Australian fair go.

By far the most radical proposal is to junk
a century of federal-state relations and return huge swathes of the
Commonwealth’s functions to the states. This is cloud cuckoo stuff. The states
are struggling to fund the services and functions they currently provide. It is
absurd to believe a tiny state like Tasmania can provide the kind of advanced
public services that all citizens demand. Australians should not be
condemned to lower standards of living and poorer public services just because
they live in a small state.

The idea to give the states a 10% income tax tells you all you need to know. Despite a mania for reducing
complexity, the Commission of Audit wants to cut federal tax rates, only to
increase them again with an extra income tax for the states. At the same time
as it complains about duplication, the Audit wants to take single, federal
programs and devolve them to eight separate states and territories. Go

We don’t need to ask ourselves what
Australia would look like if this radical plan were implemented. Just look
across the Pacific. The United States has a small federal government as a share
of GDP, and devolves many public services to its states. It has a vestigial or
non-existent social safety net. It has low taxes and many social services are privatised.
In other words, it is exactly the sort of country the Commission of Audit would
like to see Australia become.

How is the small government, market-is-best
ideology working for the US? America has endemic intergenerational
poverty, massive inequality, crumbling infrastructure and lower life expectancy
that Australia. America’s public finances are much worse than Australia’s, with
huge deficits and a growing public debt. Its economy has grown much more slowly
than Australia’s over the past decade; its middle classes have actually shrunk
since the mid-1970s.

You’d have to be a certain sort of person
to want this future for Australia. You’d have to be driven by ideology, not
evidence. You’d have to have internalised a certain type of economic theory
that tells you that markets are always better, and that governments are always
worse. You’d have no fear of cuts to government benefits or services, because
your large personal fortune ensures you can always pay the best for everything.

Needless to say, no one who worked on this
Audit was a homeless person, a worker on minimum wage, or someone with a
permanent disability. Instead, an unrepresentative and partisan group has used
shoddy arithmetic and junk economics in an attempt to destroy a century of
Australian social welfare.

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