Magazine of Socialist Action in Australia

Australia’s ‘record’ run without recession

A bonanza for the rich, crumbs for the working class
Reading Time: 3 minutes

Last month the establishment celebrated that the Australian economy had scraped into its 26th year without experiencing a technical recession. The Treasurer Scott Morrison proudly announced this “world record” describing it as a “tremendous national achievement”. The government’s big business backers also lauded the news, but for ordinary people the record meant very little.

That’s because the long boom that Australia has experienced was very much one-sided. While company profits have risen almost 40% in the past year alone, wages rose by a mere 1.5%. The wages share of national income is now at the lowest level seen since the 1960s!

In a clear indication that living standards are falling, wage growth has been tracking below inflation levels for the past six months. Similar results are expected for the second half of the year and for 2018. Households are increasingly having to dig into their savings to pay for essentials like utility bills and rent – both of which are rising at rates above inflation and putting millions under stress.

Making matters worse unemployment and underemployment are on the rise and poverty is also growing. In fact an estimated 2.9 million people now live below the poverty line. This is also a “record”, but one that the government prefers to keep hidden. With millions of people struggling to make ends meet you can understand why most scoffed at this supposed “national achievement”.

Big business on the other hand have much to cheer about. The banks have raked in billions, as too have the mining companies. The mining sector actually saw their profits increase 100% over the past year! Of the billions made, only a pittance was paid in tax, the vast bulk having been syphoned off by big private shareholders.

While the super-rich made hay, the rest of us were only able to get ahead in any way by working long hours and racking up huge debts. Now with Australia’s good luck coming to an end we are being told that it’s time for belt tightening. According to the government, we now need to pay more taxes, welfare should be cut, and we should pay more for education, healthcare and transport, so that company taxes can be reduced even further!

They tell us that if we let the rich get even richer it will “trickle down” to the rest of us. But the experience of the past 26 years has been the exact opposite. While it was a bonanza for the rich, it was mere crumbs for the rest of us, while huge swathes of working class people have gone backwards.

The recent minimum wage rise of $22 a week was an insult and will leave millions in the ranks of the working poor. When announcing the decision even Justice Ross acknowledged that the increase “will not lift all award-reliant employees out of poverty, particularly those households with dependent children and a single-wage earner”.

Making matters worse, cuts to Sunday penalty rates for many low paid workers in the retail, fast food and hospitality sectors start this month. This will see billions more transferred from workers wages to profits. The whole set up is a sick joke, but it doesn’t have to be this way.

The trade union leaders talk as if these processes are taking place over their heads, but it’s no coincidence that profits have ballooned at the same time as industrial action has dwindled. Employers never hand over anything without a fight.

But instead of organising a real fight the trade union leaders tell us that we should just vote for Labor at the next election, even though Labor’s policies are a pale imitation of the Liberals.

Bill Shorten is a million miles away from Jeremy Corbyn in Britain who advocated real wealth distribution policies like nationalisations, repealing anti-union laws, scrapping university fees and rent controls. Rather than blindly supporting Labor the trade union leaders should demand that, as a minimum condition of support, Shorten pledge to replicate Corbyn’s manifesto.

If Labor refuses to genuinely adopt policies designed to reverse the trend towards wealth inequality then the trade union movement should ditch them and set up a new party that will. A real working class party alongside fighting trade unions would make up the type of movement we need to build a society that works for the many and not just the few.


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