With Federal Treasurer Joe Hockey tipped to announce the harshest economic plan in a decade, people are worried. The “end of the age of entitlement” and “budget emergency” have been the preferred phrases to describe the reason for a radical surgery of the Australian economy – with precious little anaesthetic on hand to relieve the pain.
“Debt per head has actually been much higher in the past… so it’s not really something we should be worried about.” Andrew Korlos
The preamble that came from the Commission of Audit put on the table a menu of unpalatable items; paying additional fees to see a GP, raising the pension age, and lifting the bar for welfare benefits. It’s not a recipe that appeals to any Australian. But traditional migrant communities may have more reason than most to challenge the assumptions that underlie what will be announced on Tuesday – particularly the Greek community with its rapidly ageing population and culturally specific needs.
To get a sense of the unease, felt not by those at the sharpest end of the economic scale, but by entrepreneural, employed, achievers – people non-aligned directly to any political party, I spent an hour in Oakleigh and met two of its residents: Toula Kourelis is the owner of a small hospitality business on Eaton Street, and Andrew Korlos – a young corporate lawyer.
Andrew (25), who majored in ‘econometrics’ (the application of mathematics and computer science to economic data) when studying for his economics degree, questions the government’s description of an economy in crisis.
“Looking at the numbers, government spending is actually not that high,” says Andrew.
“What’s happening is that tax revenues have taken a big hit over the past four years, and unemployment has been creeping up. When you have low revenue your budget gets into a worse position.”
“Debt per head has actually been much higher in the past. In the early 1990s it was much higher, so it’s not really something we should be worried about.”
One of the biggest concerns for the former Oakleigh Grammar student is the deficit levy – the temporary tax increase on those earning more than $150,000, which is already locked into the budget plan.
“From an economic policy perspective, it’s bad policy, because it’s pro-cyclical – which in non-economist speech, means that when you have a deficit,” says Korlos, “the last thing you want to do is pull back on spending and consumption”.
Andrew – who offers his time as a volunteer at the Australian Greek Welfare Society – says that the assumptions of the Commission of Audit – “a who’s who of the Business Council of Australia”, are fundamentally flawed, and with so much reportedly hanging on their pronouncements, he warns the budget’s likely to not only be painful, but counterproductive.
“Based on the the announcement of the deficit levy, I think that’ll make everybody worse off,” he says, adding that suggested changes to Medicare and welfare reforms such as increasing the pension age and changing the indexing of pensions – are “entirely regressive”.
Toula Kourelis, mother of three young children and owner of 5Five Bakehouse Kitchen in the Eaton Street mall, agrees.
Asked to share her main concerns, Ms Kourelis says the government’s reported plans for changing Medicare – including the Commission of Audit’s recommendation for all patients to make extra Medicare payments of $15 – are the most disturbing.
“I’m one of the fortunate ones who could probably afford to take my children to the doctor still, if appointments became more expensive, but there’s a lot of families out there who don’t have that ability,” says Toula.
“Getting more revenue through healthcare is wrong,” she adds.
Toula believes the budget could also spell problems for her business if the government’s sums affect consumer sentiment.
Having launched her upmarket Oakleigh cafe only recently, any downturn would hit her and other local businesses hard.
Despite Tony Abbott’s rhetoric that the budget will divide the pain equally, Toula believes low-income earners will suffer the most.
“If people are short-changed, it’s going to affect businesses like mine because we’re in a predominantly working class area.
“People might still have cash in their pockets, but they’ll be scared to spend it,” she says, adding that increasing the pension age is particularly unjust.
“When someone has been working from a young age, and looking forward to retiring at the age of 65, and then being asked to work an extra five years, it’s going to take a toll on their bodies.
“They’ll be going to doctors, paying the extra charges, so it’s all connected.”
The Abbott government’s austerity measures are aimed at the greater good, but the question is, who will be left behind on this hard road to fix the nation’s economic future?