Scott Morrison’s Commonwealth budget aims to be politically balanced but, like the Hockey budgets, neglects struggle street. The budget still labours under the neoliberal belief in minimal taxes, small government and maximum freedom for private enterprise.

Morrison’s mantra is that cutting taxes on businesses and the wealthy will increase investment, growth and jobs. The trouble is, this is not the case, in part because the meagre income of much of the population reduces demand. It appears also that tax cuts for the wealthy make little difference to the growth rate.

In addition, the unfairness of the economic system builds up popular resentment against elites groups who often make the rules to benefit themselves. This explains much of the disenchantment with politics that we see in Australia. We haven’t reached the situation of the United States, where anger and resentment is very evident in the widespread support for Donald Trump and Bernie Sanders. Consider also the rise of populist movements in parts of Europe with very high unemployment. Youth unemployment in Greece is at 48 per cent. How long can nations manage such social distress without turning to extremes?

Trickle-down economics & inequality

The trickle-down assumptions of supply-side economics have been proven bogus, but they supply a rationale for rich individuals and corporations to justify the inequitable division of wealth.

Joseph Stiglitz and many other economists have highlighted how inequality has grown to astonishing levels in the United States and elsewhere. Mike Secombe in The Saturday Paper pointed out that in Australia, the top 20 per cent have 70 times more wealth than the bottom 20 percent. While 10 per cent of households own 40 per cent of the wealth, the bottom 40 per cent of households own just 5 per cent. Secombe quoted an OECD study that ‘growing inequality is harmful for long-term economic growth.’

This is certainly the view of Pope Francis and other religious leaders. The Pope’s recent social encyclical, Laudato Si’, identified inequality and climate change as two of the greatest challenges to human wellbeing today. Francis highlights greater equity as a key to sustainable growth and prosperity.

Scott Morrison declared an end to class warfare, yet it would seem that the very rich have been waging class warfare for years, largely unhindered.

Major budget problems

The 2016-17 budget makes superannuation somewhat fairer for low-income people, but three-quarters of the benefit goes to the top 10 per cent of taxpayers. In addition, few of the steep cuts to services and programs made by the Abbott government have been restored. Indeed, there are more cuts to health and aged care in particular, and some Medicare benefits.

Despite strong support from business groups to lift unemployment benefits, the government curiously refused to increase them. For people going on to Newstart, the benefit will actually drop because they will not receive the small carbon tax compensation benefit. Unemployment benefits remain under $530 a fortnight for a single adult without children, not enough to pay for board at a backpacker’s and for food, medication, clothing and a phone card. Many walk the streets by day, and at times sleep rough. Increasing numbers of people are relying on charitable agencies for emergency support, and you may have seen more people begging in the streets of major cities.

The budget does little for the homeless or those in housing stress. And what of the 600,000 children living in poverty? Instead the budget cuts 810 jobs from the Department of Human Services, and a further 344 from the Department of Social Services. There was little new for Indigenous programs either. The budget did not restore earlier cuts, and there were further cuts to Indigenous legal services and higher education participation programs.

The extraordinary cost of housing is raising great concern in the community, as it is pricing many young couples out of the housing market, or saddling them with crippling debts. The housing bubble is also socially damaging, a source of considerable stress and delaying family formation. The budget completely resiled from any attempt to tackle the problems arising from negative gearing, as well as from capital gains taxes.

Perhaps most surprising, the budget ignored the looming crises from global warming. At a time when Australia could be a world leader in sustainable energy, and developing ways to adjust to climate change with new technologies and know-how in farming, fishing, housing, health care etc., the Coalition seems diffident, despite the Prime Minister’s own personal views. The cuts to funding for our world-famous CSIRO, and for research on climate change, are emblematic of the blinkered thinking of the Coalition government.

As for the budget’s centrepiece, the ‘enterprise tax plan’ to cut company tax from 30 per cent to 25 per cent over ten years, Stephen Long called it a ‘con’, and Tim Colebatch considered it ‘breathtaking’ and ‘courageous’, in Sir Humphrey’s famous phrase. Will the tax cuts produce growth and jobs? Not for years, according to Stephen Long. Small companies will likely retain profits in the business rather than risk new investment. The lower tax rate will encourage investors from overseas, but that will take years to eventuate. ‘The gains for jobs and wages are so small they are trivial’, comments Long. Malcolm Turnbull eventually confirmed that the program could eventually cost nearly $50 billion.

One of the few bright spots in the budget is an effort to tighten multinationals’ tax avoidance and capital flight. Voters are naturally outraged at such systemic tax avoidance and governments themselves are suffering from this massive haemorrhage of capital into tax havens. All the political parties broadly support curtailing this tax avoidance.

Yet because the Coalition had reduced its funding, the Australian Tax Office cut its workforce from 22,000 to about 18,500. In a major about-face, Treasurer Morrison announced that the ATO would now gain an extra 1000 staff, with 390 of them joining a taskforce of 1300 to ensure tax compliance by multinationals. Better late than never.

In short, what we urgently need in Australia is stronger support for those on struggle street, and policies to restore a fairer distribution of wealth and opportunity.

Bruce Duncan is a Redemptorist priest lecturing in social ethics at Yarra Theological Union in Melbourne. He is one of the founders of the advocacy organisation Social Policy Connections.

In his July trip to Ecuador, Bolivia and Paraguay, some of the poorest countries in Latin America, Pope Francis has voiced the anguish and concerns of millions of people struggling to rise out of severe poverty and marginalisation, yet are “exploited like slaves”.

Speaking to a crowd of two million people in Santa Cruz on 9 July, Francis attacked a mentality that “has room only for a select few, while it discards all those who are ‘unproductive’, unsuitable or unworthy, since clearly those people don’t ‘add up’.”

It is a world Francis knows well from his own extensive personal experience in Argentina but also from his role as one of the key figures coordinating the ten-yearly meeting of the bishops of Latin America at Aparecida in Brazil in 2007. Not only did he help Pope Benedict prepare his speeches to that conference, but as then Cardinal Bergoglio, Francis supervised the writing of the 160-page final document, reaffirming the role of the Church in confronting poverty and injustice as an essential part of its mission. This document is a forerunner for Pope Francis’s major statements and policies, including the new encyclical, Laudato Si’: on care for our common home.

A high point of his visit to Bolivia was his hour-long speech to the two thousand delegates to the Second World meeting of Popular Movements in Santa Cruz on 9 July, when he demanded “real change, structural change” to reform “intolerable” conditions for farm-workers, labourers, communities and the earth itself.  He warned that time “seems to be running out” to save the planet from “perhaps irreversible harm” according to the scientific consensus. “Do we not realise that something is wrong in a world where there are so many farm-workers without land, so many families without a home, so many labourers without rights, so many persons whose dignity is not respected?”

He condemned the “unfettered pursuit of money” as “the dung of the devil”. When “capital becomes an idol” and “greed for money presides over the entire socioeconomic system”, they ruin society and put “at risk our common home”.

Francis said he had no “recipe” for a social program or a monopoly on truth, but everyone, governments, popular movements and other social forces had to find a way forward together.

First he insisted on the moral principle that the economy be at the service of peoples, not people at the service of money. “Let us say NO to an economy of exclusion and inequality, where money rules, rather than service. That economy kills. That economy excludes. That economy destroys Mother Earth.”

It was not enough to offer a “decent sustenance”, but people needed rights to land, lodging and labour, he said, along with access to education, health care, technologies, art and cultural activities, sports and recreation. “A just economy must create the conditions for everyone to be able to enjoy a childhood without want, to develop their talents when young, to work with full rights” and enjoy a dignified retirement. He insisted this was not utopian thinking, but was possible and ‘an extremely realistic prospect”.

“Working for a just distribution of the fruits of the earth and human labor is not mere philanthropy. It is a moral obligation. For Christians, the responsibility is even greater: it is a commandment.” He urged the popular movements to strive for “the common good to be achieved in a full and participatory democracy”.

Secondly, he called for peace and justice internationally, and attacked what he called the “new colonialism”. “At times it appears as the anonymous influence of mammon: corporations, loan agencies, certain ‘free trade’ treaties, and the imposition of measures of ‘austerity’ which always tighten the belt of workers and the poor.” He criticised monopolistic media that “impose alienating forms of consumerism” as “ideological colonialism”.

To a roar of approval from the crowd, Francis also said that “many sins were committed against the native peoples of America in the name of God.” He called on Catholics to beg forgiveness for these past crimes, and to commit themselves to supporting the struggles of the indigenous peoples of Latin America.

Thirdly, he lamented that “Our common home is being pillaged, laid waste and harmed with impunity.”  “Cowardice in defending” our common home “is a grave sin.” He said they cannot allow certain global interests “to take over, to dominate states and international organisations, and to continue destroying creation.” “I ask you, in the name of God, to defend Mother Earth.”

Many commentators have been critical of Pope Francis for these views, and the question is how will he manage when he arrives in New York to address the US Congress on 24 September and the United Nations General Assembly. On the flight back from Latin America, Francis said he would study what his critics had been saying to see what he could learn.

He will certainly not resile from his call for global responsibility to address the threat of ‘catastrophic’ global warming, as well as urging a revolution of conscience about our moral obligations to the millions of impoverished and excluded people. He will not reject capitalism in principle, since he knows there are many forms of capitalism, some with strong social and communitarian features.

Nor is the Pope opposed to a type of economic growth needed to lift people out of hunger and poverty, as long as this is done equitably, encourages more modest lifestyles and does not damage the environment for future generations.

But he is strongly opposed to the neoliberal versions of capitalism, the dominance of financial capital, and the belief that free markets of themselves will resolve most problems of distribution and poverty.

No one familiar with Catholic social teaching, going back to Pope Leo XIII’s social encyclical On the Condition of the Working Class (Rerum Novarum) of 1891, should be surprised at this. The Church has long taught that the earth is given by God for everyone; the right to private property is not absolute but conditional on benefiting the common good, by maintaining productivity in goods and services for the benefit of all. Since Leo, the Church has consistently urged that property be distributed as widely as possible, so everyone had a share sufficient to provide for their family and for security against sickness and old age.

The neoliberal ideology, on the other hand, exalts the rights of wealthy individuals over and against the common good, and propagates the extreme inequality that has left millions destitute. Francis is calling for worldwide resistance against this ideology, and for reforms to economic systems and business practice to ensure far more equitable distribution of wealth and opportunity. He will undoubtedly appeal for business leaders and governments to help refashion the global economy so that everyone has a place at the table. He is highlighting the moral imperative to build a more just global economy, an economy with a conscience.

Bruce Duncan is a Redemptorist priest who lectures in social ethics at Yarra Theological Union within Melbourne’s University of Divinity. He is one of the founders of the ecumenical advocacy network, Social Policy Connections.