Working Life

Hockey takes the axe to the social wage


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By Mark Phillips

Editor of Working Life

Tuesday, 13 May 2014

DECLARING that Australia must become a nation of “lifters, not leaners”, Joe Hockey has tonight handed down harsh new measures for young job seekers, cuts to pensions, new fees for visiting the doctor, and a temporary tax rise for high-income earners in his debut Budget as Federal Treasurer.

The Abbott Government’s first Budget has lived up to the advance publicity as one of the toughest in living memory, with savage across-the-board cuts in pursuit of long-term savings.

Taking its cue from the Commission of Audit, the Budget begins dismantling the key planks of the social wage with the introduction of a $7 fee for visits to a GP, or out-of-hospital pathology and imaging services, alongside higher co-payments for prescribed medicines, to claw back $4.7 billion over four years. Of this, $5 will go towards a new $20 billion medical research fund and $2 to the doctor or provider.

The age of retirement will be lifted to 70 by 2053, while pensions will be cut over time through new indexation measures which would see the age and disability support pension $200 a fortnight less in today’s money by 2030.

Young job seekers under 30 will be denied any income support for the first six months and forced onto work-for-the-dole to be eligible for Newstart or the youth allowance after six months. And if they do not find a job within that time, the merry-go-round begins again.

Landmark reforms to public hospital and schools funding (the Gonski reforms) to the states will be scrapped.

And in a surprise measure that will take thousands of dollars out of the retirement savings of workers, the increase to the Superannuation Guarantee will be frozen at 9.5% until 2018. It had been due to rise to 12% by 2019.

Motorists will face higher prices at petrol pumps with the reintroduction of twice-yearly indexation of the fuel excise, while 16,500 jobs will be axed from the Australian Public Service.

READ MORE: How the Budget will affect you and your family.

In his Budget speech tonight, Mr Hockey defended the spending cuts as essential to ensure the long-term strength of the government finances.

“We know that for some in the community, this Budget will not be easy,” he said.

“The age of entitlement is over. It has to be replaced, not with an age of austerity, but with an age of opportunity.”

The government says this year’s Budget will set it on the path to a surplus of more than 1% of GDP by 2024-25.

It is forecasting a deficit $49.9 billion this year, falling to $29.8 billion next year and $2.8 billion in 2017-18.

Government revenue will rise by 4.5% to $391.3 billion next year, while expenditure is expected to fall by 0.2% to $414.8 billlion.

Economic forecasts are for GDP growth of 3% in 2014-15 and an optimistic 4.75% in 2015-16, while unemployment will grow to 6.25% next year from 6% this year.

set 1 b

Other features of tonight’s Budget include:

•   A wage subsidy of up to $10,000 over two years to encourage employers to give jobs to long-term unemployed workers over 50.
•  Capping the maximum redundancy payment under the Fair Entitlements Guarantee at 16 weeks, with long-serving workers forced to stand in the line of creditors to seek their full entitlement.
•  A ‘temporary budget repair levy’ of 2% for people earning over $180,000 a year to raise $3.1 billion over three years.
•  The removal of a cap on university fees, along with increased interest payments on student loans.
•  The slashing of more than $800 million in industry programs, including in the automotive assistance and for renewable energy projects.
•  The removal of a financial incentive for apprentices, to be based with a loan scheme similar to that for university students.
•  Twice yearly fuel excise indexation will be reintroduced, in line with inflation. The fuel excise has been frozen at 38.1 cents a litre since 2001.
•  The axing of 16,500 public service jobs, and a higher efficiency dividend of 2.5% a year.
•  The allocation of $53.3 million to the royal commission into trade unions.

Mr Hockey immediately began the hard sell tonight in the face of criticism about broken promises and that the Budget has come down too heavily on those who can least afford it.

ACTU President Ged Kearney said the Budget signalled the end of the fair go.

“This is a savage attack on the standard of living that Australians have worked hard for,” Ms Kearney said.

“The Liberal Government vision is of a harsher, less equal Australia.”

Read more about tonight’s Federal Budget in our special Budget 2014 section.

Working Life is a forum to share ideas and opinions about work and life, both light-hearted and serious. The opinions presented on Working Life are those of the author, and do not necessarily represent policies or views of the ACTU.


Creative Commons License
We believe in the free flow of information, and content on Working Life is available to be republished online or in print under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.


  1. Matthew Hardy
    Tuesday, 13 May, 2014 at 9:56 pm · Reply

    The gross portrayel of the working class as a bunch of needy bludgers is a digusting, arrogant attempt at social blackmail. Yes we do want things… the things we need. Affordable healthcare, education and a sensible approach to infrastructure spending so we can have a healthy, intelligent and prosperous future.

  2. Kim McGovern
    Tuesday, 13 May, 2014 at 10:30 pm · Reply

    This is not a good budget they need to lead by example love on the minimum wage, live as we do, and see what you come up with then :-(

  3. tom thomas
    Wednesday, 14 May, 2014 at 10:24 am · Reply

    Stuff you Hockey and your shit government, its ok for you to hand out ruthless budget cuts to the average australian while you and your mates are sitting on a huge weekly wage and will still be able to live your usual lifestyle. you have doomed your Party to be spat out of government at the next election, I also dont see any pain for you and all your political mates.
    Its easy to sacrifice the average living standards of the aussie battler while you still have all your perks.

  4. Cassandra
    Wednesday, 14 May, 2014 at 3:23 pm · Reply

    This budget is only the first salvo in the now openly declared class warfare started by the Abbott Government.

    As Hockey lit up his cigar and then danced a jig before delivering his budget “of the rich, by the rich for the rich ” he then, after delivering his full frontal attack on Australian workers and their families went on to boast in subsequent interviews that this was only the first stage in the governments reshaping of our economy.

    This reshaping is all about entrenching the rule of wealth and privileged and attacking ruthlessly any organisation or group of people who are perceived to be a threat to their goal of absolute power to have the freedom to do whatever they wish in the pursuit of more wealth for themselves and their backers.

    As Australians are slowly learning we have been conned into democratically electing a Federal dictatorship of the right and, backed by a complicit media they will not give up without a very dirty fight.

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