Communist Party of Australia

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Issue #1621      December 4, 2013

Build the political alternative

Bit by bit the slash and burn policies being pursued by the Abbott government are becoming more apparent. The public service, Medicare, social welfare, public education, trade union rights, wages and working conditions are in the firing line. We are being told “the age of entitlement is over”, that we cannot afford to keep paying age pensions, that wages are too high, that workers must provide for themselves in times of unemployment, sickness and retirement. That the government must bow out of anything the private sector can do, sell off its assets and give the mining corporations and developers a free hand.

We are expected to believe governments can no longer afford the services and benefits that they have provided for decades, despite massive increases in productivity, the lower costs of production of many goods and the record amounts of wealth (and profits) being created by workers. It doesn’t add up. Nor do the reasons for government cuts.

Take the Productivity Commission’s recommendation that workers retire at 70. We are told there is a “problem” – people are living longer! We have an ageing population who will be on the age pension for more years. So, the proposed solution to this “problem” is to extend the retirement age. It used to be 55 or 60 for women and 60 or 65 for men. Then it was increased to 65 for men and women and now it is in the process of being raised to 67.

No one is pretending that most workers will find jobs at that age; it’s hard enough now for 50-year-olds to hang onto their jobs or find new ones when sacked.

The real agenda is not retirement at 70, but extending the pension eligibility age so that would-be retirees are put onto unemployment benefits instead of the age pension. Politically that is far easier than reducing the age pension.

The unemployment rate (Newstart Allowance) is a disgraceful $250.50 per week. (For those over 60 who have been unemployed continuously for nine months or more it is $271.05.) Compare this with an age pension including current supplements of $413.55 (base pension of $375.85). That’s an overnight saving of up to $163 per week. It also delays eligibility for a Seniors Health Card.


At the same time eligibility for the age pension will be tightened. At present, the family home is exempt from assets testing. Abbott, in line with the conservative philosophy of “self-provision”, is looking at including it when assets testing for the age pension and aged care services.

The idea is to draw on the assets held in the family home, a form of mortgage where the bank provides income for you to top up your inadequate superannuation income, pay for aged care, including nursing home charges. Further down the track, when access to Medicare and public hospitals become means and assets tested, then it could be used to cover health expenses too.

That would let the government completely off the hook, no age pension; you live off the assets in your home and when you die, the bank moves in and gets its money plus interest back and your children miss out. In other words the bank milks you during your working life as you pay off the home loan and interest and then, on your or possibly your partner’s death, the bank takes it all back!

“Self-provision” in a nutshell.

“Self-provision” is not only a gift to the banks but to the insurance companies who will provide the various products covering periods of sickness, unemployment or other income support during times of need, instead of the government. It provides the “savings” to fund company tax cuts. They are already making a killing out of the superannuation funds.

The Communist Party of Australia (CPA) strongly opposes people’s homes being mortgaged over their heads in their old age. The government has a responsibility to fund aged care services and the age pension out of central revenue.

The destruction of Medicare is also on the agenda. This includes means and assets testing, limiting it to basic services and forcing people into private health insurance cover for medical services.

The CPA supports the strengthening of Medicare so that bulkbilling is universal, doctors under Medicare are salaried and have the time to address the needs of their patients, including preventative care as well as other services.

The issue is ideology not lack of money or a budget deficit. The government could find $15 to $20 billion overnight by cutting military spending, ending the fossil fuel rebate to mining companies and abolishing the private health insurance rebate which subsidises private hospitals. And there’s a lot more corporate welfare out there to be cut, including tax rorts.

The government is serving the interests of the big business, of the big banks and financial institutions. There is no cash shortage when it comes to future corporate tax cuts. When Labor Treasurer Paul Keating started the process, corporations were paying 46 cents in the dollar on declared profits. Treasurer Joe Hockey plans to cut the company tax rate from its present 30 cents to 28.5 cents in the dollar in 2015, and further in the following years.

The CPA believes the government should be increasing the taxation of company profits and the rich.

Workers told, provide more with less

At the same time as pushing for “self-provision” the government is backing big business demands for “higher productivity”. This is spin for lower wages, loss of penalty rates, increasing the hours of unpaid overtime, and cutting conditions and workers’ entitlements.

The government is having us on, pushing for lower wages at the same time as expecting people to save more and provide for themselves through insurance.

It doesn’t add up. People cannot self-provide when their incomes are halved or they lack job and income security. It doesn’t add up because it is not supposed to. It’s all rhetoric, political spin designed to fool people and sell unpopular policies.

One of the main aims of the Australian Building and Construction Commission legislation and new industrial relations laws to come, is to weaken trade unions and organised resistance to lower wages and loss of conditions. Newman’s IR laws in Queensland are an indication of what Abbott has in mind. They are based on Howard’s WorkChoices, but go much further in denying workers their rights. (See Guardian #1620, 27-11-2013, “Corporate state agenda – your rights threatened”.)

Childcare workers, on $19 an hour, have just been told the government is going to axe their promised wage rise. Other community workers expecting future instalments in the equal pay entitlements will have to fight if they are going to get more federal funding to cover the increases. Promises by previous governments mean nothing.

The CPA believes, in line with international law, that trade union rights are basic human rights, that unions should have the right to organise, to collectively bargain and take industrial action without threat of heavy penalties or being sued for millions of dollars. The Party strongly opposes individual employment contracts and non-union enterprise agreements.

There is another way

The real crisis facing the people of Australia is the government’s withdrawal from its social responsibilities and bowing down to big business demands to slash taxes and cut public services.

The CPA strongly opposes the privatisation of government services, businesses and departments. Only the public sector can provide services on the basis of need, without the conflict of interests and cost-cuttings that occur when the prime motive becomes private profit. Public is cheaper and better.

The government should be focussed on expanding and improving public services, not sacking staff, closing departments and privatisation. Governments have a responsibility to ensure the well-being of the people.

The CPA believes that all workers who pay their taxes during their working life are entitled to an age pension which enables them to live in dignity and enjoy retirement.

The CPA has the policies for a different kind of society based on social justice, democratic rights and peace. They are affordable and realistic.

We invite you to join us, to work with us and help build a strong and vibrant Party. We know there are many other organisations and individuals who have similar aims and policies. We must join forces and build the broadest possible movement – a coalition of left and progressive forces.

Next article – Editorial – The wildfire spread of self-regulation

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