A hidden agenda, a questionable deal

  The budget’s hidden gender agenda

In our workplaces men and women are treated differently and the situation is getting worse, not better. According to the latest figures, the pay gap between male and female workers has blown out to 20 per cent in Australia, and issues of gender inequality continue to be largely ignored in public policy thinking. The government appears happy to do nothing and let things drift.

But ignoring inequality means policies continue to be enacted which can further entrench the problem. The budget’s hidden gender agenda, a new report from the Australia Institute, finds that – in good times and in bad – women are getting a rougher deal than men from budget and income tax cuts.

The belt-tightening strategies set out in the 2014 Federal Budget impact women more severely than men. As women are more likely to assume care roles than men, they tend to rely more on services provided by government. Cuts to these services have meant that 55 per cent of the budget savings have fallen on women.

This situation is far worse when you consider where the ‘budget emergency’, that the government’s budget is supposed to fix, came from.

In the mid-2000s during the mining boom the Howard government and the first Rudd budget gave away billions in permanent tax cuts. These tax cuts were paid for by the temporary increase in revenues brought on by the mining boom. When the mining boom faded and the budget drifted back to more normal circumstances, the hole left by the income tax cuts was revealed.

So who benefited from these tax cuts? Overwhelmingly it was high income earners, predominately men. The tax cuts cost the budget $169 billion from 2005 to 2012, of which $115 billion (68 per cent) went to men. Women, on the other hand, received $54 billion (32 per cent) of the windfall. 

So the benefit that caused the hole in the budget was paid to men and the repair job is costing women. This represents a double blow to women at a time when the gap between men’s wages and women’s wages is widening.

It’s time that the government started to take the issue of gender equality seriously. When the government fails to do so, it can inadvertently create policies that leave women worse off.

Chairman, the commission and the questionable contract

“If you want independent advice, don’t ask a barber whether you need a haircut” – Warren Buffett.

Recently the Abbott Government has been ruthless in chasing former Labor ministers for any dirt they may uncover and which can be used for political advantage. So when the Abbott Government decides not to chase the former government over allegations of irregularities in an immigration contract, it makes you wonder what might be going on.

At the heart of the story is a 2012 contract between the Department of Immigration and Transfield Services, worth $24.5 million for the management of the Nauru detention centre.

The contract has attracted strong criticism from former New South Wales Auditor-General Tony Harris. Speaking on the ABC’s Lateline program, Mr Harris said that the contract awarded to Transfield did not include a brief outlining the scope of the work and the services expected by the Department of Immigration. The brief is a critical element of a financial agreement, the absence of which enabled Transfield to dictate the terms of the deal, Mr Harris said. 

“If you haven’t written the script, Transfield will write the script. Transfield will tell you what you need; Transfield will tell you how much it’s going to cost you,” he said.

And Transfield have indeed made a fortune from government contracts.  And Transfield have indeed made a fortune from government contracts.  Earlier this year the Abbott Government extended the Transfield contract to cover both Nauru and Manus Island until October 2015 at a total cost of $1.2 billion. So why is this not a scandal?

When all this happened the head of Transfield was Tony Shepherd, former CEO of the Business Council of Australia and current government-appointed Chair of the National Commission of Audit. It is reported there were a series of bad acquisitions, appointments, asset write downs, mismatched debt and covenant currencies made on Mr Shepard’s watch in his time as head of Transfield. 

But Mr Shepard would have to know a thing of two about about business, right? Well, it would be interesting to ask Transfield’s shareholders. Having started as Director of Transfield in 2001, Mr Shepard also went on to become the company’s Chairman in August 2005. At that time Transfield’s share price stood at $5.35.  By the time he stepped down from both positions in 2013, the company’s share price was less than a dollar.

In 2013 Mr Shepard was appointed Chair of the National Commission of Audit. Interestingly, in their report to government earlier this year, the Commission made the interesting suggestion to do away with the Procurement Connected Policies – the 24 documents that set out the guidelines for government procurement. The Commission made a key recommendation that the government “base procurement decisions on value for money at all times by abolishing Procurement Connected Policies.”  

At a time when a deal worth millions can be struck with key documents missing, it should go without saying that slackening the rules for government officials to pursue ‘value for money’ – without proper probity, legal and other guidelines – is surely a recipe for disaster. 

The (actual) facts about higher education

When the government launched its “Higher Education” online advertising campaign, reactions came thick and fast. Within hours a student had put up a spoof website calling out the government’s claims and by the next day GetUp had a spoof video

The senate cross-benchers have not been impressed and Labor has registered a formal complaint that the campaign breaches the government advertising guidelines.

Aside from its general whiff of desperation, the ads repeat a claim Education Minister Christopher Pyne has been making for months now that the government will cover half the cost of university courses. But two months back we checked the facts and found the claim was already clearly false.

We’ve asked the government about their assumptions, because it seems they’ve just assumed fees will only rise to recover cut funding. Yet, even the Minister expects fee deregulation to boost research rankings, and that’s only possible if fees rise even more. Incidentally, this makes a nonsense of the new proposal to have the ACCC be ‘price monitor’ for fees. Given students already over-pay to fund research – what amount of student ‘co-payment’ will the ACCC decide is fee-gouging, exactly?

The ads also reassure us that “HECS is here to stay” and, while it’s true the government is keeping the student loan system, increased student debt could make it unsustainable. As University of Canberra VC Stephen Parker put it: “HECS works through the Government advancing all the fees upfront to the university, so if more students default because debts are higher, the taxpayer could end up having paid out more cash.”

As summed up in the recent UK Higher Education Commission report: “The current funding system represents the worst of both worlds. The Government is funding Higher Education by writing off student debt, as opposed to directly investing in teaching grants.”

Our experience could be even worse. Without the fee caps of the UK system, we could see the sort of fee inflation of the US system, where fees have increased at ferocious rates – even faster than their notoriously expensive health care!

It could be that the government wants the system to become unsustainable, or it could be that the government simply hasn’t given it much thought. Either way, It’s clear from the government’s ads that they would rather not have a serious debate about what the sector really needs. Ironically, for such a debate, the ads and the government’s continued intransigence might be the best thing that’s happened.

TAI in the media

The Guardian: Solar and wind energy backed by huge majority of Australians
Canberra Times: Want to break laws and get away with it? Form a company
The Australian: Murray criticises investor tax breaks
News.com: Murray Inquiry: Negative gearing in firing line – what will it mean for house prices?  
Brisbane Times: Generation Less – the young will inherit … budget deficits

Exciting news – Catalyst and TAI are merging!

Catalyst Australia, an influential research think tank based in Sydney, is joining forces with the Australia Institute. Together, we’ll provide more first-class research and progressive political analysis. 

If you’re in Sydney, why not join us tomorrow afternoon for some Christmas drinks and nibbles to celebrate the new partnership. We would love to see you there! 

WHERE: Trades Hall Atrium, 4 Goulburn St, Sydney
WHEN:   4:30pm, Tuesday 16 December
RSVP via email to: mail@tai.org.au

 

General Enquiries

02 6130 0530

mail@australiainstitute.org.au

Media Enquiries

Jake Wishart Senior Media Adviser

0413 208 134

jake@australiainstitute.org.au

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