Opinion

Households around the nation face genuine hardship, with terrible consequences. By Clem Bastow.

Clem Bastow
The real budget emergencies

The most important thing that happened when Prime Minister Tony Abbott appeared on Jon Faine’s program last week wasn’t that he winked when a caller revealed she had turned to sex work to make ends meet.

Instead, it was the fact that the caller, “Gloria”, asked Abbott: “What do you suggest I cut out, Mr Abbott? Food, electricity, firewood, Christmas [and] birthday presents to my grandchildren? Or should we all just die and get out of your way?”

Abbott brushed her off by mentioning cutting the carbon tax, ignoring the cold truth of her question: it’s not at all hyperbole to suggest that people will die as a result of this budget, should it come to pass.

In the aftermath of “#Budget2014”, there are a number of elements it is apparent would have a devastating effect, generationally. The introduction of a $7 “co-payment” to see a GP, and the proposed six-month waiting period before young people can claim Newstart benefits, appear to be the most immediately hurtful.

But in the Coalition’s “earn or learn” vision for the future of the country, those who choose to “learn” may well find themselves locked out of higher education. Under Abbott and Christopher Pyne’s planned privatisation of universities, students’ contribution per Commonwealth-supported place will be higher than the government’s. Universities’ fees are likely to increase by about 33 per cent, in order to compensate for the predicted average 20 per cent cut in funding. And, most alarmingly, interest rates charged on HECS/HELP debts will rise dramatically, indexed to the 10-year government bond rate rather than the consumer price index.

According to the National Tertiary Education Union, this will leave students enrolling in 2013 and beyond with debts, once study and living costs are taken into account, between $65,000 and $250,000. The time needed to repay student debts could be closer to four decades, as opposed to the current 10 years or so. It will be a considerable deterrent to higher education. It’s highly likely such a model of American-style education-induced penury won’t appeal to Australians who’d prefer to “earn”. Unfortunately, for unemployed young people – at least those between the ages of 25, the proposed new Newstart eligibility age, and 30 – the future is equally bleak.

So far, nobody in the Coalition has managed to explain precisely – beyond Joe Hockey’s “I would expect to be in a job” – what young people are supposed to do for the six months before they can claim benefits. Indeed, for a treasurer, Hockey seems surprisingly bad at basic maths.

Let’s imagine that Joe is a 26-year-old University of Melbourne graduate. He lives in Brunswick East, where the median weekly rent is $358, with one other housemate. Joe suddenly finds himself unemployed when the business he works at goes into receivership. He has some modest savings that quickly dwindle when spent on rent, bills, transport and food. His parents have long since moved into a smaller unit and can’t accommodate him.

Let’s say he moves to Croydon, in the outer east, where a friend has a spare room; at $95 a week, it’s cheaper than his current house. But without the Health Care Card that Newstart provides, he won’t be able to purchase a concession Myki pass. So, in order to travel between zone 2 and 1 while seeking employment, he’ll have to pay $60 a week for transport. There are still months to go before Newstart is available to him, and barely any savings left. In a word, Joe is screwed. He’d better hope he doesn’t fall ill.

The imagined job seeker isn’t necessarily a young person straight out of uni. Joe could be 29 – hence, still a “young person” – and married, with two young children and a mortgage. What if Joe is Joanne, a 27-year-old woman with a disability who has a university degree and is desperate to work but can’t find a workplace that is accessible in her wheelchair?

What’s especially galling about these hypothetical scenarios is that they come laced with the knowledge that at about 28 per cent of the average wage, the Newstart “allowance” is a pittance.

A paper co-authored by Dr Alan Morris of Sydney’s University of Technology and Dr Shaun Wilson of Macquarie University, “Struggling on the Newstart Unemployment Benefit in Australia”, found that one in four people in Sydney’s inner west who had been on Newstart for more than a year had approached people on the street for help. “Instead of spending their energy looking for a job these people are worried all the time by the very basics of survival,” Dr Morris told The Sydney Morning Herald.

Again, Hockey seems to have a very loose grasp of basic household budgeting. As so many people have told him, if you can’t afford to pay the power bill, let alone internet access or a newspaper to search for job ads, or transport to get to the job-seek agency, it is very hard to look for work.

“I think these changes are going to unleash terrible suffering,” Morris said of the proposed cuts to Newstart. “We are going to have more people begging in the streets.”

For older people such as “Gloria” who suffer from chronic illness, and even those who don’t, the cumulative effect of having to spend $7 here and there, plus expected increases to the cost of medication obtained through the Pharmaceutical Benefits Scheme, will mean the spectre of death, whether from starvation, cold or lack of medical treatment, will loom large.

As he launched his budget, Abbott told his Coalition colleagues, “This is a watershed moment, when a bold new government does what has to be done to set the nation on a better course.”

It appears that “what has to be done” is to fire the starter pistol that begins a race to the bottom.

This is a budget that carries with it, for hundreds of thousands of Australians, the very real likelihood of fatal consequences, as illnesses become acute and money has to be spent on either doctor’s visits or food and electricity. For others, despair, desperation and homelessness will descend. For those affected by neither extreme, yet unable to afford university fees, a grim, underqualified purgatory beckons.

Full speed ahead on that better course for the nation.

This article was first published in the print edition of The Saturday Paper on May 31, 2014 as "The real budget emergencies". Subscribe here.

Clem Bastow
is a Melbourne-based writer and critic.