"Australia may sell assets and cut welfare spending to rein in a debt burden that is already the second-smallest among developed nations" reported Bloomberg breathlessly early in May.

Such is the madness of the deeply unpopular conservative Australian government, which will lay down its budget for the coming 12 months next week.

In order to justify its right-wing agenda, the Abbott government ordered a National Commission of Audit. The Commission's report was released a week ago, and was described as a "document that appears to hates Australia".

Amongst its many recommendations was one to axe climate programs at the national science organisation, the CSIRO, and the Bureau of Meteorology. It also recommends halving the budget for the National Landcare Program, abolishing the Clean Energy Finance Corporation and Climate Authority, and merge specialist and independent National Water Commission and Murray Darling Basin Authority into other government departments.

The Australian government already has a terrible reputation with climate change information and science in general. There is no dedicated Minister for Science, and one of the first acts of the Abbott government was to shut down the Climate Commission.

The Commission of Audit report is transparently a tool for the Abbott government to be a stalking horse for their extreme agenda, and to provide cover for their first budget. Abbott and his advisors know that you make all your unpopular decisions and cuts early, so you can buy votes closer to the election.

(Ironically and scandalously, the Commission, after recommending so many cuts to public programs, busted its own budget by over double, according to the West Australian newspaper, costing $2.5 million with just a $1 million budget.)

Behind the many broken election promises embodied in both the Commission of Audit report, and the various policies canvassed by Abbott and his treasurer Joe Hockey, is a desire to reduce the deficit. At its heart, the Abbott government wants to pursue an austerity agenda to wind back the social democratic state.

As Bloomberg noted, Australia has the second-smallest budget deficit in the developed world.

A substantial part of this deficit has been utterly concocted by the government, according to the ABC's fact-checker. The treasurer has added $68 billion to the deficit, and has tried to lay the blame at the feet of the former Labor government.

Amidst the many recommendations from the Commission of Audit and various policy thought-bubbles from the government, almost no suggestion has been given to reducing the vast amounts of subsidies and tax credits given to corporations.

A particularly egregious subsidy is the diesel fuel subsidy, which will cost $2.4 billion next year. This equates to a hand-out by Australian tax-payers of around $182 each year.

The national president of the mining union, the CFMEU, Tony Maher called out this squandering of public funds in an article for ABC's The Drum:



Does it really make sense for taxpayers to be funding a rebate on diesel fuel for the mining industry at a cost of $2 billion a year?



The CFMEU underlined this point in a senate submission to the Select Committee on Fuel and Energy:



The Australian Taxation Office has stated that for the 2006-07 year, the mining industry was easily the heaviest user of the fuel tax credit schemes, claiming $1.47 billion of the $4.9 billion claimed. The next highest claim by an industry was transport and warehousing with $1.28 billion. The latter industry made 171,085 claims for the credits, while the mining industry made just 6,735. This vast difference demonstrates that mining industry claims are made by a relatively small number of very large companies, while the transport claims often come from small businesses. That the mining industry receives such extensive fuel tax credits while claiming to be internationally competitive and unsubsidised has attracted significant criticism from an environmental perspective. The continuing level of significant subsidy weakens the substantial argument that the industry is otherwise able to make that is it one of Australia's great success stories. Industries that rely on subsidies or other forms of protection are not generally able to be portrayed as a success story. Further, the mining industry is not a deserving case. There are no grounds in terms of equity, social justice or industry development to justify a significant subsidy to the mining industry.



The Abbott government could avoid cutting important education, health, and disability support programs, by simply ending the ludicrous diesel fuel subsidy.

However, cutting this subsidy has been ruled out by treasurer Joe Hockey, according to the ABC. The argument used to defend this subsidy is that it is used by farmers, but as the CFMEU notes, the biggest beneficiary is the mining industry.

The Australian mining industry has form, and its power has been demonstrated over the past few years, and as Ben Phillips writes, it is really about an industry locked in a life-or-death struggle to keep profiteering. Nevertheless, it is remarkable (but not surprising given this recent revelation) that Hockey was so quick to rule out scrapping the diesel subsidy.

In February, treasurer Joe Hockey declared that the so-called "age of entitlement" to be over:



"I say to you emphatically, everyone in Australia must do the heavy lifting. The age of entitlement is over, the age of personal responsibility has begun,'' he said.



Of course, he really is referring to everyday people, not corporations.

It's not just environmentalists calling for the end of the diesel subsidy. The International Monetary Fund, not a notable hotbed of socialistic revolutionaries, called in March for the ending of subsidies for fossil fuels. Globally, 2.5 percent of global GDP is spent on fuel subsidies, with wealthy households capturing around 43 percent of the benefits.

As I've written before, the conservative world-view supports fossil fuel subsidies because they see the wealth of companies like mining companies as inherently moral and because subsidies incentivise their hard work. Support for everyday people and disadvantaged people is immoral because in the minds of conservatives, it creates dependency and promotes laziness.

Next week's budget will likely see the Abbott-led Australian government commit an unforgivable act of self-harm upon the Australian people in pursuit of their extreme, ideologically-motivated conservative agenda.

As Greg Jericho says, this budget will just be the first step to achieving a "dopey regurgitation of libertarian masturbatory fantasy".