Australian Labor leader postures as opponent of budget austerity

By Mike Head
16 May 2014

In last night’s budget-in-reply speech, Australian Labor Party leader Bill Shorten gave a carefully calibrated and completely cynical performance. Above all, it was designed to divert the deep popular hostility to the budget back under the wing of the parliamentary establishment, and prevent an understanding of the real roots of the far-reaching assault on the living standards and basic rights of working people.

Acutely conscious of the widespread outrage triggered by the Abbott government’s budget, Shorten declared that Labor would oppose, and perhaps try to block, some of the most vicious measures. A key cabinet minister in the last Labor government, he claimed to be speaking “on behalf of millions of Australians who feel shocked and angry” and “ambushed” by the Abbott government’s “blueprint for a radically different, less fair Australia.”

At the same time, Shorten made a pitch to the corporate and financial elites that Labor would help deliver the sweeping cuts to social spending and welfare entitlements that it demands—just as the previous Labor government, backed by the trade unions, did from 2007 to 2013.

In several passages in his speech, Shorten pledged to business that Labor remained committed to “change and reconfigure the Budget’s trajectory,” in order to reduce government spending and make the budget “sustainable,” but “in a fair and reasonable way.” He claimed that “Australians are up for hard decisions. But pay them respect, sit down, talk to them, and listen.”

In effect, Shorten offered the continuing services of the Labor and union bureaucracy as the most reliable means of implementing the “hard decisions” required by the financial elite. He even accused Treasurer Joe Hockey of being a “soft cutter” of federal spending.

Making his appeal to the sense of alarm felt by millions of people, Shorten stated: “This is just the beginning, turning Australia into a place most of us won’t recognise—colder, meaner, narrower. This is a budget that would seek to demolish the pillars of Australian society—universal Medicare, education for all, a fair pension, full employment.”

Shorten’s posturing is completely fraudulent. The previous Greens-backed Labor government suffered a devastating defeat last September precisely because of the widespread opposition to its austerity measures. It directly paved the way for all the Abbott government’s plans to dismantle what is left of the post-World War II welfare state.

Under Prime Minister Julia Gillard, Labor cut sole parents off benefits, kept Newstart unemployment benefits at below-poverty levels, imposed harsh new “activity tests” on the disabled, as well as the unemployed, and raised the pension age from 65 to 67. It also established the free market “education revolution” framework for the de-regulation and raising of tertiary education fees, and mechanisms for driving down spending on health, education and the disabled. In Labor’s final year in office, 2012–13, it cut government spending in real terms for the first time in the post-war period.

The Abbott government is now escalating this offensive, as the full impact of the global economic breakdown of 2008 is brought home to Australia via the collapse of the mining boom and the sharp slowdown in China.

Shorten portrayed the budget as driven by an “ideological” obsession on the part of Hockey and Prime Minister Tony Abbott. “These are purely ideological changes that go to the very core of the prime minister’s character,” he insisted, saying they were “the kind of thing you would expect from American Tea Party Republicans.”

The truth is that in Australia and internationally, the financial markets increasingly dominate every aspect of economic life, ruthlessly dictating the removal of all previous social concessions and other impediments to the accumulation of corporate profit and private fortunes. If Labor were still in office, it would be imposing similar measures, as its record demonstrates.

Citing figures from the National Centre for Social and Economic Modelling (NATSEM), Shorten gave some indication of the budget’s impact on average families. NATSEM estimates that a couple with a single income of $65,000 and two children in school will have more than $1,700 cut from their annual family budget, as a result of higher health and petrol costs and the loss of tax concessions. By 2016, this cut will triple to over $6,000 a year—more than 10 percent of their after-tax income.

However, interviewed on the Australian Broadcasting Corporation’s “7.30” program after his speech, Shorten revealed that while Labor would oppose these measures, it would seek to deliver cuts of the same scale. “Families need this money and you can’t just pull a rug out from underneath them without consultation and discussion,” he said.

While vowing to vote against these imposts, Shorten also refused to guarantee that a Labor government would reverse them once introduced.

Shorten personifies the Labor and trade union apparatus that has subordinated the working class to the requirements of the corporate and financial elite for decades, under Labor and Liberal-National governments alike. Before entering federal parliament, he served as national secretary of the Australian Workers Union. The unions were the chief enforcers of pro-market restructuring under the Hawke and Keating governments from 1983 to 1996. They played the same role in suppressing opposition in the working class to the continuing attacks on living standards by Howard Coalition government.

Following Labor’s return to office, Shorten was central to the June 2010 backroom removal of Kevin Rudd as prime minister to make way for Julia Gillard. The coup not only paved the way for the shift to austerity by the Labor government, but also led directly to its alignment behind the Obama administration’s “pivot” to Asia to militarily encircle China. Shorten was later identified in leaked US diplomatic cables published by WikiLeaks as one of the US embassy’s trusted confidants in the Labor and union movement.

In his budget reply speech, Shorten was silent on one of the most important features of the budget—the lifting of military spending toward 2 percent of gross domestic product. This is a bipartisan goal, in line with the commitment to the US “pivot.” On both inter-connected fronts—war and austerity—the interests of Australian financial elites are completely bound up with Wall Street and US domination in Asia and internationally.

The return of a Labor government would only intensify this program of militarism and social counter-revolution.

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