Since the 2009 Socialist Party National Conference our general analysis of the Australian and world situation has been borne out. Capitalism is in crisis on a number of fronts. US imperialism is bogged down in the twin quagmires of Afghanistan and Iraq while extreme poverty engulfs many parts of Asia, Africa and Latin America.
The reality of climate change is becoming starker by the day as big business continues to wreck the planet in their quest for profits. The BP oil disaster in the Gulf of Mexico is just one of many examples. But capitalism’s greatest incapacity is shown by the state of the world economy. The economy is ultimately the most important factor shaping all other issues in society.
Since the financial crash of 2008 the world economy has experienced a very limited “recovery” which remains extremely tenuous and fragile. The massive stimulus packages that were applied internationally had some effect in preventing the complete collapse of the world economy. However, the stimulus packages have been limited and have not resolved the underlying crisis which exists.
The “recovery” has not resulted in a substantial growth in the “real economy” and the danger of a “double dip” recession remains. Recent figures refer to an increase in “growth” but they do not represent a real growth in capacity and do not take production back to the levels recorded in the past, prior to the onset of the crisis.
China and Germany have been able to boost their exports recently but the decisive question facing world capitalism is the lack of demand and the absence of new markets. The reality is that we have not seen a recovery in the real sense. Mass unemployment remains in many countries and across the world the ruling classes are seeking to further drive down living standards, wages and conditions.
Ideological blow to the system
The onset of the crisis three years ago represented a huge ideological blow against capitalism. The ruling classes were compelled to respond with emergency state measures whereby they intervened in the “free market” in order to prop it up and save it. Australia was no different with the Rudd/Gillard Labor government pumping billions of dollars into the economy in the form of stimulus packages. The OECD estimates that Australia’s stimulus packages accounted for up to 5.4 per cent of GDP over the three years 2008-10.
These interventions were designed to be short term in character. They were immediate attempts to stave off imminent collapse. In countries where nationalisations occurred, they were followed by rapid proposals for privatisation combined with brutal counter-reforms and attacks on living standards. While these measures did help to cushion the downturn, the massive transfer of public funds to the private sector has now provoked a debt crisis. This sovereign debt crisis is now most pronounced in Europe.
The dilemma arising from this is ‘who will pay the debt?’ If the working class pays through increased taxes, it cuts the market. If the capitalists pay through increased taxes or other measures, it would threaten a strike of capital, the withdrawal of investment, the closure of factories and a big rise in unemployment. If there is a resort to the printing press not backed up by the production of goods and services, it will ultimately result in inflation.
The ruling classes are split as to the way forward. The Obama administration wants to continue with stimulus packages albeit on a more moderate level, while the European powers have shifted from stimulus to cuts and monetarism. It is clear that both options are fraught with dangers.
The president of the European Union for example has called the Obama administration’s economic policies of deficit spending and bank bailouts “a road to hell.” In turn Obama supporter, capitalist George Soros, has described the new EU policy as “a road to disaster”. Neither inflation-inducing capitalist stimulus packages nor deflationary cuts are a viable strategy to get out of this crisis.
For now, most capitalist governments have shifted from a policy of stimulus to one of austerity meaning that the working class is being asked to pay. The problem is that the more severe the austerity measures the more it eats into the ability of workers to be able to buy goods and increase demand.
This is one reason why any recovery will be slow, drawn out and weak. At the same time high levels of unemployment will accompany the low growth rates. A further concern for the ruling class is that any attack on living conditions is also bound to provoke a political and social response from the working class.
These weaknesses mean the crisis will be of a complex and protracted character. However, despite this, massive social explosions have already taken place in some countries and will develop further. The movements that have taken place so far in places like Europe are only an anticipation of what is yet to come across the globe.
How did Australia escape the worst?
In Australia the economic crisis did not hit as hard as it did in the US or Europe. While Australia did not enter a technical recession it has been a recession in real terms for ordinary people. While unemployment seems low at 5.1% underemployment is up, prices are up and interest rates are up. Regardless of the official growth figures most people are finding it harder to make ends meet compared to just a few years ago.
The key factors which meant that Australia was able to escape the worst of the crisis were the size of the economic stimulus packages and the strength of the mining sector which exports raw materials to China. Also Australian banks only had limited exposure to the toxic debts that were associated with the US sub-prime crisis.
When Labor came to power in 2007 the budget was in surplus by around $19 billion. Now after the stimulus packages the surplus has been wiped out. The budget deficit was last projected to be $40.4 billion for the current financial year. Both the major parties are committed to paying off this debt and bringing the budget back into surplus by 2013. In order to do this they will be forced to make cuts to state spending.
The Australian property market
In July 2010 ‘The Economist’ magazine estimated that Australian house prices were over valued by 61.1%, making them the most over valued in the world. This estimate is just the latest indicator in a long line pointing to a massive bubble in the Australian property market. In the nine years between 1999 and 2008 inflation was approximately 36%, while property prices rose between 180% and 300% in the capital cities.
The bubble in the Australian housing market has been fuelled by a number of factors. Tax treatment known as ‘negative gearing’, unique to Australia, coupled with changes to capital gains tax at the beginning of the decade encouraged an influx of speculative money into the property market. The first home buyers grant introduced in 2000 and withdrawn in 2010 has also helped push up prices.
Coupled with this is the fact that not enough houses have been built to keep up with the demand of a growing population. This is because six major land development companies hold the majority of land released for houses by the state governments. These companies ‘drip feed’ the market in order to keep prices and profits high.
State governments are heavily reliant on a property sales tax called stamp duty to fund large sections of their budgets. In recent years stamp duty has accounted for as much as 24% of the entire income of state governments. Any drop, let alone a sharp drop, in property prices would correspondingly see a drop in state government revenue. This would result in cuts to services as well as cuts to public sector jobs.
When the Reserve Bank slashed interest rates in 2008 as a response to the credit crunch, this further inflated house prices as more speculative money flowed into the property market. It is only this year that interest rates have begun to rise and this has slowed the growth in prices. It’s not possible to give an exact prediction of when, or how, the bubble in property will burst but it is clear that these trends are not sustainable. When a crash does occur it will have a huge effect on the entire Australian economy.
A crash in the property market would have a corresponding effect on Australian banks because they would become incapable of recovering many of their home loans. This would be added to in the event of increased unemployment and therefore increased mortgage defaults.
Recently international doubts about the Australian property market and the banking sector’s vulnerability have led to US hedge funds selling off stocks they hold in Australian banks. Australian banks are also still highly exposed to derivatives, the same financial instruments that helped cause the 2008 credit crisis. The big four banks hold $13.1 trillion in off-the-books derivatives compared with only $2.6 trillion in on-the-books assets.
This makes Australian banks unsound on two fronts and prone to the problems we have seen in the financial sector elsewhere in the world. It is only luck coupled with the China factor that has prevented a banking crisis in Australia so far.
The “bright spot” of China
Both the government and many bourgeois economists claim that China will be able to continue to provide Australia with an economic life line. China is now Australia’s largest export partner and the export of raw materials to China has perhaps been the single most important factor in propping up the Australian economy.
Mining contributes about 5.6% to Australia’s GDP. There are very few other developed countries where mining plays such a significant role in the economy. The recent budget papers, and the forecasts for paying off government debt, are all based on commodity export prices remaining at record highs and the idea that China can continue to drag the Australian economy along.
Unfortunately China is now facing a slowdown due to overheating and the withdrawal of stimulus measures. China’s main export markets of the US and EU are mired in recession and this will hamper further growth. China’s domestic economy is also riddled with contradictions.
First there is the problem of very low wages being paid to Chinese workers. Low wages cuts across the ability for the internal market to be able to buy the goods that are produced. Last year the average per-capita income of the 65% of the population who live in the countryside was less than $850 per year. With such low wages it is impossible for the internal market to make up for the drop in demand created by the downturn in China’s export markets.
Another problem facing China is the contradictions in the property market. At the moment it is estimated that there are almost 64.5 million empty apartments in China, yet prices are so high that 85% of the population cannot afford to buy a home.
The provincial Chinese governments are highly exposed to this bubble because they are heavily reliant on selling land for funding. At the same time much of China’s construction industry relies on provincial government projects. When the Chinese property bubble bursts construction will inevitably slow. This will impact heavily on the Australian mining industry which provides raw materials for these projects.
While resisting Western calls to revalue the Yuan, China has tightened money and credit growth and implemented measures to deter speculative buying in real estate. The central bank has also raised the proportion of deposits that banks must hold in reserve, rather than lend out, three times this year.
Despite these moves by the central authorities provincial governments are doing their best to resist them. In many cases they simply don’t implement central government policies. This is particularly the case in relation to policies designed to slow the growth of the property bubble.
The Chinese banking sector, which includes two of the world’s largest banks, is also exposed to the property bubble. On the one hand Chinese banks have funded the property bubble by giving loans to property speculators. On the other hand the provincial governments, who make their money via land sales, are highly indebted to these banks. Any crisis in the Chinese banking sector would have massive ramifications for the world economy and would certainly have implications in Australia.
As part of the Chinese stimulus measures the regime ordered the state banks to increase credit offerings by more than 16 trillion renimbi. Most of this has been frittered away on risky stock market speculation. Since April a sum equal to 20% of GDP has been ‘invested’ in new forms of stock market derivatives. In effect these derivatives are a gamble on what level the stock market will be at in 12 months time. This type of speculation only increases the risks and contradictions stored up in the Chinese banking system.
China along with the other “bright spots” which exist for capitalism such as Brazil and India, could still be hit late by the crisis and plunged into recession. Inside China, any economic contraction is bound to provoke a social explosion. Already we are seeing an increase in industrial militancy with some manufacturing companies like Honda and Foxconn being forced to concede pay rises. More strikes are on the horizon.
Each of these developments has dire implications for Australian capitalism. While China has helped keep Australia out of trouble for now, China is facing a series of crises and it is unlikely that it will be able to drag the Australian economy back to high levels of growth in the short term. Despite the hopes of the Australian government, and their friends in the bourgeois media, China will not be able to show a way out of the capitalist crisis.
A weak and unstable government
The Federal election held on August 21 delivered a hung parliament – the first in 70 years. Neither the Labor Party led by Julia Gillard nor the Coalition led by Tony Abbott won the 76 seats required to form a government. The result was both a reflection of the lack of enthusiasm people have towards the two major parties and a reflection of the uncertain future that faces Australian capitalism.
After 17 days of haggling the Labor Party managed to cobble together a minority government which includes Adam Bandt from the Greens, Tasmanian Independent Andrew Wilkie and country Independents Rob Oakeshott and Tony Windsor.
This government will be weak and unstable from the outset. It holds its majority by the slimmest of margins and the entire process has discredited Labor in the eyes of many. Gillard is seen as a Prime Minister who first came to power via a coup and only maintained her leadership through a series of deals with the Greens and Independents. Labor has lost a lot of authority and this can be seen in the election results.
Big swings were recorded against Labor particularly in the states of Queensland and New South Wales. Overall Labor’s primary vote fell more than 5% to 38% while the Coalition increased their vote slightly (1.9%) recording almost 44% of the first preference vote. The Greens polled the highest ever vote for a minor party with 11.5%. After preferences Labor leads slightly on a two party preferred basis.
In New South Wales (NSW) and Queensland (QLD) voters punished Labor partly because of deeply unpopular Labor State Governments. In both states these governments have embarked on privatisation programs. In NSW the government is seen as particularly corrupt. In Queensland voters were also clearly angered by what they saw as the undemocratic ousting of former Queensland based Prime Minister Kevin Rudd.
Added to these regional factors was a mood of general disappointment with Federal Labor. Since 2007 the Labor government back flipped on a number of key election promises. They have refused to act on climate change, kept the vast majority of John Howard’s anti-worker laws and continued to scapegoat refugees.
At the same time most people have underlying concerns about the state of the economy. Despite what the major parties say, the economic situation is still very fragile. With the federal budget in deficit both Labor and the Coalition have maintained the need for austerity measures to “bring the budget back to surplus by 2013”. Many people correctly saw this as an attempt to make workers pay for the downturn, hence the “neither of the above” attitude expressed on election day.
Voter disillusionment was also shown in the high number of ‘informal’ and ‘donkey’ votes. Voting is compulsory in Australia so rather than staying home many people go to the polling booths and deliver a blank or ruined ballot paper. In this election more than 600,000 people voted informal – more than 5.3%. In working class electorates the result was even higher.
Swing to the Greens
The Greens were the only party to substantially increase their vote in the election. Almost 1.2 million people voted Green – an increase of 3.7% compared to 2007. In the upper house the party has increased their number of Senators from five to nine, thereby giving them the balance of power from mid 2011.
Most of the primary votes lost by Labor went to the Greens. Thousands of young people, sections of the middle class and even a layer of workers voted for the Greens on the basis that they presented a program that was to the left of the major parties.
They called for urgent action on climate change, a more humane refugee policy and an end to the ban on same-sex marriage. Even on industrial relations their policy was far superior to Labor’s and this helped them secure support from a few trade unions including the Victorian Electrical Trades Union.
While the Socialist Party has significant differences with the Greens, we view their election results in a positive light. It shows that important layers of the population are looking for a more progressive alternative to the major parties. The question that remains, however, is will the Greens be able to deliver?
Unfortunately the Greens do not have an economic or political alternative to the major parties. They support the capitalist system albeit with a friendlier face. Their failure to articulate an alternative to the profit-driven system means that when they get into positions of power they cave into the pressures of big business. This has been seen in Germany, Ireland, Tasmania and on several local councils across Australia.
The agreement the Greens signed with the Federal ALP won only the most minor of concessions. Since the Federal election, the Victorian Greens have declared that they would be willing to prop up either an ALP or Liberal government in that State, no doubt a big surprise to their mainly left-leaning voters.
While the Greens will have the balance of power in the Senate from mid 2011, they will be hampered by the fact that the two big parties share general agreement on most significant policy issues.
Against the backdrop of low growth and high debt the Greens will be under massive pressure to assist the government in bringing the budget back to surplus. In other words, rather than campaigning against attacks on living standards, they will be forced into a position where the best they can do is put a Green face on the many cuts that are in the pipeline. It will only be a matter of time before the Greens disappoint the hundreds of thousands of people who voted for them.
Big business anguish
Big business has expressed its disappointment with the election outcome through the pages of the capitalist press. They had hoped for a ‘stable government’ that could restore investor confidence by moving quickly towards implementing the austerity measures required to bring the budget back into surplus.
Given the fact that the two major parties, the Greens and the Independents all agree on the need to be “responsible managers of the economy” it will still be possible for cuts to be delivered. The problem for big business is that the process is now much more complicated and if we do see another downturn in the economy the ability for the government to act decisively has been diminished. It is not ruled out that an early election could be called in an attempt to break any deadlocks that arise.
From the point of view of big business profits a minority government is an unstable outcome for the Australian ruling class. However, this does not mean that ordinary people should be complacent. With the US in recession, the sovereign debt crisis in Europe and China facing an uncertain future, it is still probable that the world economy will experience a double-dip recession. If this is avoided the best capitalism can hope for is a drawn out period of anaemic growth.
While Australia was not hit with the full effects of the crisis in 2008, it is unlikely that will be the case a second time around. With the budget in deficit, and a potentially unpredictable parliament, it will be much more difficult for further stimulus measures to be introduced. Capitalist parties and Independents of all stripes will be forced to offload the economic problems onto working people.
If nothing else the 2010 Federal election has highlighted the similarities between the two major parties. During the campaign they both engaged in a race to the right – each trying to prove to big business that they would be the best defenders of the profit driven system. There is a desperate need for a party that stands for the interests of ordinary people.
Workers and young people need to be prepared for the attacks that are on the agenda. This government’s main priority will be bringing the budget back to surplus. This will inevitably involve cuts in the areas of health, education and welfare. Mass struggles will be required to stop these attacks.
While the make up of the government is an important consideration, we need to remember that most important decisions in society are not made in parliament but in big business board rooms. Real power lies at the point of production and real change is achieved through the mass mobilisation of ordinary people.
Working class political representation
One of the most striking features of the Australian situation is the complete lack of political representation for working people. While the big business elite have two major parties that are willing to implement austerity, workers, the unemployed and young people have no mass party of their own.
The move by the Electrical Trades Union (ETU) in Victoria to disaffiliate from the Labor Party is welcome. But more than just breaking ties with Labor, trade unions like the ETU should join with progressive community organisations and the existing left groups to form a new mass workers party. This would not only give ordinary people an option at election time but it could be used to advance workers and community struggles in campaigns on the ground.
At the moment support for a new workers party is not widespread. This is mainly because of the cowardly role of the majority of trade union leaders and their slavish support for Labor. This will change at a certain stage however as the Greens expose themselves in power and workers, through a combination of their own experience in struggle and the continuation of the crisis, conclude that they have no alternative but to build their own political voice. Socialists have a crucial role to play in promoting the idea of a new workers party.
As has been seen in Germany, France and Greece, the development of a new party will not be an easy or straightforward process. We have to recognise that the workers movement is in a weak situation from both a political and organisational point of view. Since the collapse of Stalinism in 1989-91 most of the communist parties of the world have either disintegrated or changed their character. At the same time the parties coming from a social democratic tradition have moved decisively to the right.
To this must also be added the crucial question of the currently limited level of political consciousness of the working class which was inherited from this period. The failure of the official workers leaders to offer a real socialist alternative has also hindered the development of the political consciousness of workers and young people.
The collapse and/or shift to the right of the old workers parties has also been reflected in the trade unions, student unions, and in many community groups. The lack of an ideological counterweight to the traditional capitalist parties has meant that working class consciousness has been thrown back with all of the resulting organisational problems. This is something that will take both time and experience to overcome.
It is natural that workers lack enthusiasm for politics when all the parties look and act in a similar fashion. At the same time workers will be turned away from the unions when they act in partnership with these parties.
With this being the case socialists really have a dual task of both fighting for and rehabilitating the basic ideas of socialism and, at the same time, building new parties of the working class while maintaining the ideas of revolutionary Marxism. It will still require a series of struggles before a powerful left force is built with a substantial active participation by workers. The same can be said in regards to the rebuilding of the trade unions along militant and democratic lines.
Working class women face oppression under capitalism not only as workers but also on the basis of their sex. The gender pay gap in Australia as of May 2010 stood at 17.3%. This gap has consistently hovered around 16 – 18% for over a decade.
In addition to paid work, women still perform the majority of unpaid domestic work including cooking and cleaning as well as caring for children, the elderly and the sick. In Australia women get less leisure time than men due to the unpaid work they have to perform in the home.
One of the reasons for the pay gap between men and women is the high concentration of women employed in low paid ‘caring’ jobs. Often these jobs are also highly casualised. Because of privatisation and the lack of government funding for services like child care and aged care, only those employers who pay the lowest rates of pay end up getting contracts.
Even when women do break into higher paid industries they face lower wages than their male counterparts. For example there is a 24% pay gap in full time adult ordinary time earnings between men and women in the mining industry.
Working women do not have a real choice as to when or whether to have children because of economic factors that mean great weaknesses in social provision, childcare and access to abortion. The recently announced improvements to paid maternity leave are welcome but long overdue. Compared to other advanced capitalist countries the scheme still falls well short of the mark and will do nothing to address the problems of discrimination faced by women in the workplace.
For us as a party, it is important that we continue to take up issues like childcare, abortion rights, casualisation and low pay as well as issues like family violence which affect women disproportionately.
Indigenous people are the most downtrodden section of Australian society. For years bourgeois politicians and commentators have talked of ‘closing the gap’, however, report after report shows that under capitalism no progress is being made. Life expectancy for Indigenous people is still over ten years less than that of non-Indigenous people and unemployment rates are still over three times higher.
More than a quarter of Indigenous people live in overcrowded housing while they are only half as likely as non-Indigenous people to have completed a year 12 education. More than half of Indigenous men across Australia have been locked up in prison at some time in their life.
In the important areas of health and education Indigenous people also face drastically lower standards than the rest of society. A recent report went so far as to recommend a UN Red Cross aid program to address malnutrition in Indigenous families. This is a complete indictment of capitalism in one of the wealthiest nations in the world.
The discrimination faced by Indigenous people can be graphically seen in the racist Northern Territory Intervention. This legislation, which facilitates the take over of Aboriginal land, includes provisions for welfare quarantining and the deployment of extra police. The blatant racism of the Intervention was even admitted by its perpetrators with the suspension of the Racial Discrimination Act (RDA).
The fact that the RDA has now been reinstated should not be seen as a progressive move as the policy of welfare quarantining has just been extended to all people across the Northern Territory. As we warned at the time, Indigenous people would be some of the first to face welfare cuts with other oppressed layers of the class being next in line.
It has now been 3 years since the Intervention was first implemented and its effects on Indigenous communities have been devastating. A recent government assessment report noted that:
“health, child health care referrals are down… child malnutrition is up… On education, total enrolments and school attendance rates are marginally down”
“On law and order, alcohol, drug and substance abuse incidents are all up (p.32–33); domestic violence related incidents are up (p.33); and breaches of domestic violence orders are up (p.33) despite a far greater police presence… all categories are up except for sexual assault reports that are slightly down.”
One of the main motivations behind the legislation was big business access to economically rich land. The Intervention assists mining, agribusiness and tourist corporations access Aboriginal land. Since the start of the Intervention there has been a massive increase in mining exploration. Exploration licences have mushroomed from less than 200 in 2007 to around 400 today. Alongside the land grab, the cuts to welfare and the shutting down of small isolated communities has helped push people into ‘hub towns’ and created a pool of cheap labour for these companies.
Australian capitalism continues to fan the fires of racism through policies such as the NT intervention. The ruling class will continue to use any tool at its disposal to divide and rule working people. As long as capitalism remains Indigenous people will be treated as a third world minority within an advanced western society. Their oppression contributes to the driving down of conditions for all workers.
Our approach must be to argue for unity between Indigenous and non-Indigenous workers around a joint programme of democratic demands such as land rights and for decent health, education, housing and job opportunities for all. The issues facing Indigenous people in Australia are at root class issues. Therefore we must continue to campaign inside and outside the trade unions against the NT Intervention and for Aboriginal rights.
Lesbian, Gay, Bisexual, Transgender and Intersex (LGBTI) people also face discrimination in every aspect of their lives. Recent studies have shown that up to one in five young LGBTI people have experienced homophobic bullying and up to 16 per cent have been assaulted because of their sexuality. Young people who are bullied or assaulted often feel isolated and become depressed. They have lower levels of self-esteem which often leads to poor education results and high drop out rates.
Of those who are victims of assault, 60% have consequently considered harming themselves. Rates of self-harm and suicide are up to eight times higher than for heterosexual teens. Suicide is actually the leading cause of death among young LGBTI people.
In Australia today LGBTI people are denied the right to marry. In their third term in office the Howard government introduced the Marriage Amendment Bill 2004 which saw marriage in Australia defined as “the union of a man and a woman to the exclusion of all others.” Labor gave no opposition to the bill and same-sex marriage was officially banned both in practice and recognition.
Rather than promoting equality, capitalism benefits from creating divisions. Throughout the history of capitalism workers of different races, religions and sexualities have been turned against each other by bosses and the state. For us the task is to link the struggles of LGBTI people to wider issues and ultimately to the need for socialism.
The same sex marriage campaign is popular with young people who want to fight for equality and against discrimination. As a party we should continue to support such campaigns while putting forward the ideas of workers unity and socialism.
Population and the environment
With many people suffering the impacts of underemployment, a lack of services and increasing costs, arguments in favour of population and migration control seem to make sense to a lot of workers. This is especially the case when no alternative solution is being proposed.
Refugees on their way to Australia have been hounded as “illegals” and “queue jumpers”. What has been implicit in these attacks on asylum seekers is the idea that Australia is an overcrowded land and simply can’t support more people. Anti-refugee hysteria comes hand in hand with the idea that there is only so much to go around. The reality is that Australia is a resource rich country. The problem is not a lack of wealth but the way that wealth is distributed.
Some of those who argue against population growth also often argue that a reduction in immigration would reduce greenhouse gas emissions and environmental destruction. This is a total misconception.
Firstly, a climate change policy based on limiting population growth implies that per capita emissions can never be drastically reduced. Even if Australia’s population stayed at its current level for the next 20 years, unless a substantial plan to shift to renewable energy is implemented, carbon emissions would remain at catastrophic levels. There is a drastic need to reduce Australia’s greenhouse emissions. This will not be achieved by simply turning away refugees or reducing immigration.
Secondly, it is not ordinary people who are responsible for Australia’s carbon footprint. Big business and industry is responsible for the majority of environmental destruction, not ordinary people. The number of migrants will make virtually no impact on the highly polluting energy industry in Australia.
More significant than population size in gobbling up and wasting resources are the methods of production utilised by big business and the state. It is these methods that determine the efficiency and availability of services such as public transport, water and housing.
Regardless of whether Australia’s population stays at 22 million, or increases to 35 million, the impact on the environment will depend on which methods of energy generation and natural resource management are used.
An environmentally sustainable energy and resource sector would be able to provide for more people than the existing destructive and wasteful system. Unfortunately big business and their representatives in government are more interested in burning fossil fuels for profit than investing in renewable technology.
The concern of working people in Australia over the state of wages, unemployment, public services and the environment is totally legitimate. However, placing the blame on migrants does not address the causes of these problems or advance anything to improve the situation. The problem is the capitalist system itself.
The economic crisis, climate change and the food and water crisis are all international, and so too needs to be the fight back. There is an urgent need for the labour movement to develop a clear alternative to the backwards ideas of anti-population theorists.
Left unchallenged, capitalism will continue to cause poverty and environmental damage. What is needed is a democratically planned economy and an international struggle for socialism that will bring the wealth of the world into the hands of workers. Only by dramatically increasing the use of renewable energy, increasing public transport and improving the overall efficiency of production will we be able to move towards a sustainable economy.
Can the low levels of struggle last?
It is a fact that the attitudes of most people are to the left of those of the major parties on most issues. Opposition to the war in Afghanistan is high as is opposition to government policies like cuts and privatisation. Support for same-sex marriage is high despite both of the major parties being opposed.
Despite the contradictions in political consciousness which exist amongst big sections of the working class, and the lack of political representation, we need to recognise the underlying frustration and anger which is already present. This mood was in part reflected at the recent Federal election.
While strike levels are at all time lows, and there are no mass movements taking place at the moment, there is anger and frustration bubbling away under the surface. This is the case mainly because, despite the fact that Australia has escaped the worst of the crisis, most ordinary people have been negatively affected in some way.
There is a difference in consciousness across the continent. In States benefiting from the mining boom, workers were more susceptible to the mining barons’ fear campaign against the mining tax, fearing it would end the good times. In the southern States, the Federal election results showed a lower vote for the Liberals and a certain swing to the ALP and Greens.
Unemployment seems low but the biggest problem facing workers is that of underemployment. When the economic crisis hit employers responded by reducing the hours of thousands of workers. In many case these hours have not been restored and a large section of the population still needs more work than they can get.
At the onset of the crisis workers reluctantly accepted some job losses and cuts to working hours in the hope that things would be back to normal soon. Simultaneously people were given cash hands outs and incentives to build homes as part of the stimulus packages. A significant part of the stimulus packages was spent in retail and construction in the aftermath of the crisis but there are now signs that people’s attitudes to the economy are beginning to change.
Recently retail spending has been sluggish and building and loan approvals have been down. This is just one indication that people are not convinced that the economy can return to boom times soon. Instead of spending up big, many people are looking to use any spare cash to pay off their personal debts.
Personal debt levels are very high amongst working people. To put this in perspective, between 1990 and 2008, household debt soared from 45% of disposable income to 155%. While the debt levels are bad enough, it has been the recent interest rate rises that have hurt people the most. At the moment the official cash rate stands at 4.5% but many economists are predicting that, regardless of Reserve Bank decisions, many banks will begin to put the rates again up in the later part of 2010.
With personal debt at very high levels, and interest rates rising, this will further impact on people’s ability to make ends meet. A double dip recession would not only mean increased unemployment and underemployment but it would mean that even those in work would face increased hardship. This will especially be the case as it will be much harder for the government to implement more stimulus measures given the amount of state debt already on the books.
There are both physical and political limits to the amount of hardship people can endure. It is not necessarily the case that people have to be destitute before they start to fight back. In most cases people engage in struggle when they can begin to see their situation change. People can be more determined if they feel that their modest livelihoods are being threatened. At the same time anger will increase when people begin to realise that they have been lied to about the economic situation and that there is no prospect of the economy returning to boom times soon.
The trade union movement is more intact here than in many other advanced capitalist countries and there will inevitably be a revival in union-led fight back at some stage. However the treacherous role of sections of the union bureaucracy can only led to disaster, as best seen recently in Ireland. Non-unionised sections of workers, without the dead weight of bureaucracy, may move into action faster and in a more militant fashion than many expect. The movement of the mainly Indian taxi drivers in Victoria in 2008 is a case in point.
With that said, the road back to higher levels of class struggle will not be an even or straight one. The rhythm of the struggle and the development of political consciousness will vary tremendously in different sections of the class. This is largely because of the lack of a clearly defined political alternative and the organisational weaknesses of the official labour movement.
For the Socialist Party the political and social consequences and their effects on the class struggle are the decisive issues arising from this crisis. Even if the world economy is able to return to a period of absolute growth, which is inevitable at a certain stage, it is important to stress that this would not be sufficient to resolve the social horrors and deprivations, arising from the crisis or the political consequences which flow from this.
Regardless of another downturn the new government will at some stage be forced to take measures against the working class in order to return the budget to surplus. While we can look to Europe to the see numerous examples of governments trying to force the working class to pay for the crisis, we can also look to Europe to see the working class response of strikes, occupations and mass protests.
Socialism: The only way forward
While the situation in Australia can seem very different to that of Europe we have to recognise that, albeit at a different speed, similar processes are taking place. There is also no fundamental difference between Australian and European workers. Both have a proud tradition of struggle and both will be forced to move into action to resist the coming attacks.
Already in Australia there is much less confidence in the system than there was just a few years ago. Capitalism is incapable of both meeting the needs of the working class and tackling major issues like climate change. The trend in the next few years and decades will be for the even more widespread questioning of the system. A growing layer of workers and young people will draw socialist conclusions.
Working class consciousness will make sudden leaps forward as it catches up with objective reality. We have to prepare our party for these events. One of our most important tasks is to understand the complicated processes that are taking place at both an economic and social level. A deep understanding of developments will help us to better focus our work and better intervene as the objective situation turns in our favour.
The ruling class is facing a series of crises and has no clear way out. On the economic front their only options are either austerity or stimulus. Both of these ‘solutions’ are problem laden. The only way back to ‘growth’ on a capitalist basis will be through the destruction of jobs and living conditions. This will create new crises, contradictions, political conflicts and struggles. Socialism is the only viable option for working people and the poor.
In the short term we need to win and politically educate those who are already open to socialist ideas. Against the backdrop of a system in crisis we can be confident that the ideas of public ownership, democratic control and planning will get a better response as they are the only ones that can offer a viable alternative to poverty, war, environmental destruction and economic crisis.