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Howard's first year: broken promises and job uncertainty

As Australians look back on the first year of the Coalition Government, the key features will be a string of broken promises and a decline in job security.

In just twelve months, John Howard and his team of largely incompetent Ministers have managed to dissipate much of the goodwill which saw them elected to Government. Unfortunately for them, they are now being judged on their collective actions, not on their hollow pre-election words.

It was John Howard who said in the second of the Great Debates on national television on February 25, 1996: "Every single dollar of the promises that I made to the Australian people are going to be kept."

It was John Howard who told John Laws on February 19, 1996: "No promises to individuals will be broken."

It was John Howard who undertook to keep all of his promises regardless of the size of the Budget deficit.

And what did we get after the election? All of a sudden, John Howard discovered the term "core promises" - the promises you keep when you're not keeping the others!

The Prime Minister's principal strategy to deal with the political ill-will caused by his broken promises and other failings has been to apologise.

He apologised for the collapse of his standards of Ministerial accountability. But despite the apology, there was no action to repair the damage to the integrity of his Government. The guidelines on Ministerial responsibility he trumpeted before the election are rendered unenforceable, and no longer apply.

He apologised to the people of Canberra for targeting public service numbers in breach of election undertakings, as if apologies will give people back their jobs or their job security.

He apologised for misleading the public about when he first learned of the Federal Police investigation into Senator Bob Woods - as if a Prime Minister could forget being briefed about a police investigation into one of his frontbenchers.

For John Howard, Government means always having to say you're sorry. But sorry isn't good enough.

John Howard's dead hand on the national tiller has led to low growth, and to widespread job uncertainty.

His cuts to public spending didn't simply break solemn election commitments, they also had a flattening effect on the economy. The economy which he admitted was "better than good in parts" when he took office, was effectively put on ice through a heavy-handed misdirected Budget last August.

His first Budget contained an extraordinary list of cynically broken election cornmitments, including:


The Coalition will maintain existing levels of Commonwealth funding to the ABC - Promise broken before the Budget (now a $209m cut over four years).


The Coalition will maintain the existing level of Commonwealth funding for the arts and provide an additional $60m over 3 years - Australia Council funding cut by $16m over 4 years. Other arts funding cuts across the board.

Child Care

The Coalition will maintain the non-means tested Child Care Cash Rebate -The Budget reduced the level of the Child Care Cash Rebate for families with incomes above the Family Tax Initiative threshold from 30% to 20% (of actual child care costs less a minimum fee, up to a maximum amount).

The Coalition will maintain the system of Childcare Assistance - The Budget capped access to Child Care Assistance at 50 hours per week per child. It froze Childcare Assistance and Child Care Cash Rebate fees ceilings for 2 years (at $115 a week for one child in care, $230 a week for two or more), while allowing the minimum fee to continue to increase. It abolished additional income allowed for extra dependent children when assessing eligibility for Childcare Assistance.

The Coalition has no plans whatever to change the operational subsidy to the community- based long day care sector -The Budget abolished operational subsidies for community- based long day care (which will increase fees by at least $14 per child per week).


To maintain the current level of real expenditure on AUSTUDY -The Budget reduced AUSTUDY expenditure by $527m over 4 years. This reduction will now be a lesser amount, following Senator Vanstone's humiliating backdown on the means test.

The Coalition will increase funding for students with disabilities by $16.5m over three years - No funds provided.

The Coalition will continue the National Professional Development Program to be funded in part from a re-allocation of resources within DEETYA - No funding provided in the Budget.

The Coalition consistently has opposed changes to HECS rules after a student has begun study - Promise breached through changes to the HECS arrangements involving earlier and faster HECS repayments for existing students and HECS liable graduates.


The Coalition's funding commitments in Saving our Natural Heritage are additional to Labor's budgeted funding for the environment - Budget cut $30m from Environment Program in 1996-97.

Foreign Aid

The only cuts we are making are cuts to "business subsidies" (in the aid program) - The Budget contained further cuts in the aid program of $299m over four years, in addition to the abolition of DIFF.


Medicare will be retained in its entirety - The Government has reduced rebates for certain "overpriced" services, which is a salami slice into Medicare, as is the increase in the maximum patient payment and the changes to pathology and radiology.

The Coalition will maintain the real value of pensions and other social security benefits- John Howard increased the Pharmaceutical Benefits Scheme co-payment for all Health Card holders without compensation, and abolished the dental benefits enjoyed by Health Card holders which were provided by the Commonwealth Dental Health Program.

None of the Coalition's health policy initiatives will entail cuts in funding for public hospitals - The Government cut funding to public hospitals through a combination of cuts to Financial Assistance Grants to the States and cuts to Hospital Funding Grants totalling around $800m over 4 years.

The Coalition will maintain the Medicare levy at 1.5 per cent of taxable personal income - Medicare levy has been increased for some taxpayers (see Taxation below).

Labour Market Programs

The Coalition will maintain expenditure on labour market programmes in real terms - These programs were slashed by $1.8 billion over four years.

Older Australians

The Coalition will maintain all current Commonwealth concessions for Older Australians - The Commonwealth Dental Health Program was scrapped on 31 December 1996. This program provided basic and emergency dental care benefits to Health Card and Commonwealth Seniors Card holders. Older Australians have also been betrayed by the introduction of upfront fees for nursing home patients.

Primary Industries

The Coalition's environment funding commitments in "Saving Our Natural Heritage" are additional to Labor's budgeted funding for the sustainable agriculture elements of the Primary Industry portfolio such as the National Landcare Program - There was no provision in the Budget for Labor's "Our Land" package, including $177m for Landcare and $100m for the Murray Darling Basin Initiative.

Public Service

The savings in running costs works out at about 2,500 public servants - The Budget projected that public service numbers will decline by 10,500 over 1996-97. Independent estimates suggest the loss of up to 30,000 public service jobs by 1998.

Research Development

The Coalition praised RD syndication before the election - RD syndication abolished before the Budget.

The Coalition will maintain support for RD through the 150% tax concession - Tax concession rate reduced in Budget to 125%.

Regional Development

The Coalition will maintain regional development funding of $150m over four years- Abolished.

Road Funding

The Coalition will continue Federal road funding expenditure commitments at current levels - National highway system funding cut by $621m over four years.


To introduce a savings incentive through a tax concession on interest earned - Not introduced in this Budget.

Social Security

To introduce a Pension Bonus Plan (saving $290m over three years) - Not introduced.

The Coalition will maintain the lump sum advance system - Budget tightened lump sum advance scheme for pensions and allowances from January 1997, saving $83.5 million in 1996-97 and 1997-98.

The Coalition will maintain the current employment and education entry payments - The Budget abolished employment entry payment, and education entry payment for non- pensioners from March 1997, saving $66.5 million over 4 years.

The earnings credit scheme will be retained by a Coalition government - The Government abolished the earnings credit scheme completely from March 1997, saving $259 million over 4 years.

The Coalition will not force people who are eligible for the disability support pension onto unemployment or other benefits - A package of cuts aimed at people with disabilities was announced, with projected savings of $119.5 million over 4 years.

A Coalition government is committed to maintaining the real value of rent assistance - The Budget cut rent assistance for single people sharing accommodation by 33% from July 1997, saving $113.5 million over 3 years.

The Coalition does not intend to increase the penalties for minor breaches of the requirements of receiving payments - Penalties increased from January 1997, saving $368.4 million over 4 years.

The Coalition does not support the introduction of a work for the dole scheme - The Government has announced flimsy, unfunded details of a pilot scheme which does not even pretend to offer victims of unemployment any proper training or hope for real jobs in the future.

States and Territories

The Coalition will provide a fixed share of Commonwealth revenue to the States and Territories in a way which is "revenue neutral " and which would guarantee current services- Promise broken at June Premiers Conference 1996 when Financial Assistance Grants cut by $1.5 billion over three years, and Specific Purpose Payments by 3 per cent annually.


There will be no new taxes and no increases in existing taxes under a Coalition Government- Budget contained (1) Medicare levy surcharge of 1% for higher income earners without private health insurance; (2) superannuation contributions surcharge (up to 15%) for higher income earners; and (3) increased tax on out-of-pocket medical expenses.


Maintain funding for the Australian Tourist Commission - Cut ATC funding by $18.5m over the next four years.


The Coalition will maintain the International Trade Enhancement Scheme (ITES) - Abolished in Budget, saving $117m over four years.

The Coalition will not "fiddle" (Fischer's words) with amendments to the Export Market Development Scheme until 1999 at the earliest - The Government introduced tighter eligibility criteria and the application of a $150m cap for EMDGS cutting the program by $426m over four years.

The Coalition will maintain the Innovative Agricultural Marketing Program - Abolished saving $6m over four years.

The Coalition will maintain the Asia Pacific Fellowships- Abolished.


To maintain the level of Commonwealth funding to universities in terms of operating grants- Cut by $623m over four years. Additionally, universities are suffering reductions in other funding which will mean that the total amount to be cut from universities will come to over $2 billion over four years.