ON MARCH 4, the Australian Council of Trade Unions (ACTU) announced its support for a new proposal to transfer this year’s planned $31 billion tax cuts directly into superannuation funds. The decision by the ACTU to back the proposal is a turning point for a body that has historically, and quite rightly, opposed tax cuts in general, in favour of social spending on services like health and education. The “reasoning” behind the proposal is that it will help to curb rising inflation by delivering neither the planned tax cuts, nor increased government spending. Despite increases in the cost of living, the message is clear: the new government has to prove that it can match Howard’s legacy of “fiscal responsibility”-a Liberal Party catch-cry that over eleven years further accentuated the gap between rich and poor.

Kevin Rudd is already promising to make super payments tax-free for people over 60. According to Rice Warner Actuaries, this will cost the tax-base $100 billion in today’s dollars over the next 15 years, significantly reducing the available funds for services.

Labor is turning its back on the Your Rights At Work campaign that brought it to power, by focusing on “fighting inflation” rather than fighting wage cuts. Under this plan the bulk of the $31 billion won’t go to low-income earners. Superannuation was introduced in the 1990s to undermine the state’s responsibility for funding welfare-while putting the funds into services would benefit the poor most, this latest superannuation plan will make a minor difference to the super balance of workers, while boosting the already over-sized funds of the wealthy.

By Rachel Cramp

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