This is the third part of a series arguing against the Abbott government’s first budget. Part 1 summarizes the overall unfairness and debunks the justification offered for this agenda. Part 2 examines how the budget affects climate, environment, fossil fuel subsidies, business, and science. This part examines how it affects the federation, education, and health.
Starving the states
At the time of the last budget, I chastised the then-Gillard government for promising policies that would ramp up years in the future, arguing their delivery could not be guaranteed. This budget shows I was right: many of Abbott’s cuts are to planned growth in spending.
Federal funding to the states has been slashed by $80 billion over the next decade (about $50 billion in health and $30 billion in education). In doing so, the federal government is breaking agreements with the states to ramp up funding on hospitals, dental health, and preventive health; and cancelling the Gonski schools funding for the years when it was scheduled to ramp up. Instead future funding levels will be linked to inflation, a measure of household costs which has nothing to do with running a hospital or school. Because teachers’ and doctors’ wages rise about 1% faster than inflation, this effectively means hospitals and schools will shrink by 1% per year. Continue reading