Magazine of Socialist Action in Australia

Australia not immune from the world economic crisis

Reading Time: 2 minutes

With the European debt crisis entering a “dangerous new phase” ANZ chief economist Warren Hogan says: “The risk is rising further that these stresses spread outside of European countries, including Australia. Indeed, the two key transmission mechanisms to Australia from this European crisis – China and funding pressures – are now worsening”

As the global financial crisis worsens, its negative effects on the Australian economy are becoming clearer. Despite government statements to the contrary, Australia is not insulated from the crisis by the mining boom.

The mining boom continues, but its exact nature and its effects on other industries are misconstrued by the government. Constant references to the ‘strength’ of the Australian dollar are misleading.

Retail, manufacturing, education and tourism are all feeling the negative effects of the strong dollar: online shopping, cheaper overseas labour markets and the flight of tourists and international students are having big impacts on these sectors. Alarmed capitalists in these sectors are begging the government to take an interest in their profits as well as the mining bosses’.

The government has clearly demonstrated it is willing to blame workers for the crisis – Martin Ferguson recently blamed Australians who travel overseas for the crisis in tourism and mine workers’ high wages for the lack of better profit distribution!

Job losses continue unabated across the industries that have lost out in the two-speed economy. The mining boom profits, supposedly trickling down to other sectors, have not saved the more than 120,000 full-time jobs lost in the second half of this year alone.

Despite the complaints from capitalists in the suffering industries, it is workers who are truly losing out. When BlueScope Steel fired 1000 workers last month, the company was compensated for its ‘loss’ to the tune of $100 million. In retail, 80,000 full-time workers have lost their jobs since the financial crisis began, and still the retail bosses appeal to the government to lower the minimum wages and conditions.

The mining boom employs only 200,000 people, or 1.7% of the national workforce. Since the financial crisis began many more than 200,000 workers have lost their jobs, and the number of the jobless grows daily.

This is all happening despite the presence of the ‘mining boom’. What might Australia look like after China’s predicted economic slowdown? The situation is set to dramatically worsen.

Despair at the capitalists’ short-sightedness is not enough. Workers should not pay for a crisis that they did not create. Workers, and their unions, need to take serious action to protect jobs, wages and conditions.

Protectionism is no solution. In reality protectionist measures like tariffs etc only protect the boss’s profits while pushing prices up for the entire working class. Rather than treating unions like funeral funds, we need to campaign to transform the unions into fighting organisations.

At the moment there is a serious crisis of leadership in the unions, and this will not change without a push from below. The excuse that industrial legislation is too restrictive to allow for action is not good enough – especially when the union leaders are bankrolling the ALP – the party that created this anti –worker legislation in the first place.

Workers need to fight against every job loss and every attack on working conditions. Unions need to campaign for an economic and a political alternative to the crisis ridden capitalist system. Only by going on the offensive against the destructive drive for profit can we truly fix this worsening crisis.

By Socialist Party reporters


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