The Guardian May 24, 2000


GST wage campaign under way

A campaign is under way by unions for wage rises to counter the 
increased cost of living caused by the introduction of the GST on July 1. 
The Government tried to throw cold water on the campaign, Treasurer Peter 
Costello bringing out the inflation bogie man immediately following the 
federal Budget.

He was way too late; there was no way workers were ever going to swallow 
the Government's propaganda that an income tax reduction would compensate 
for the GST price rises.

In fact, at least 80,000 people with incomes below the taxable threshold  
those at the bottom rung of the economic ladder who will be belted hardest 
by the GST  won't get the tax cut anyway.

The wage campaign, coordinated by the ACTU will: monitor the price effects 
of the GST during the coming months; seek to have clauses included in 
collective agreements that will allow for wage reviews to compensate for 
the GST; ensure adequate compensation for low-paid workers through the next 
Living Wage Case and; apply for higher award allowances to compensate for 
price rises.

"If employees were to go out and seek wage increases in addition to tax 
cuts, that would run the risk of feeding a second round of price rises back 
into the system", said Costello.

This old and tired line, that workers' wages are the cause of inflation, is 
made all the more ludicrous when Costello simultaneously admits that his 
GST will cause price hikes on consumer goods. It also masks the fundamental 
inequity of taxing people when they purchase goods.

Another con trick is the budget announcement of a one-off payment of $120 
to people on low incomes, amounting to 2.22 percent for someone earning 
$5,400 per year, less than the Government's own conservative GST price-hike 
estimate of 2.75 percent. Being a one-off payment they won't get even get 
that miserly amount next year.

"Mr Costello has been exposed as a fraud over his arguments that tax cuts 
would compensate for this unfair tax", said ACTU President Sharan Burrow 
launching the union campaign.

She said the tax cuts had become a sick joke, many people already having 
had them cancelled out by the recent interests rate rises.

"The ACTU has always said that the GST was nothing but a burden on working 
families", said Ms Burrow. "Mr Costello confirmed that in the budget when 
the Government's price rise predictions rose to 6.75 percent in the 
September quarter."

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