Magazine of Socialist Action in Australia

Economic downturn: Australia yet to see the full effects

Reading Time: 2 minutes

Capitalism in crisis – Socialist solutions urgently needed!

As the Government’s cash handouts start to flow through, Labor Prime Minister Kevin Rudd is enjoying his highest approval rating yet. A recent Nielson poll shows Rudd’s rating has risen to 74 per cent, statistically making him one of the most popular Prime Ministers in Australian history.

While Rudd’s efforts to tackle the economic crisis seem to be paying off, under the surface there remain massive contradictions.

The $42 billion stimulus plan has been welcomed by those receiving the much needed $900. However, some of those in most need – very low-waged and some unemployed workers – have missed out. Either way, the hand out will not bring comfort to those who face job losses in the coming period. The Government has boasted of the 90,000 jobs they claim will be created with infrastructure funding, yet nearly 39,000 full time jobs were lost in March alone, raising unemployment to a five year high of 5.7 per cent.

Even some conservative economists are suggesting that one million Australians will be out of work by next year, forcing Treasurer Wayne Swan to admit unemployment will rise well above the Treasury forecasts of 7 per cent. In reality, the Government’s stimulus measures have been designed to prop-up the profit driven system of capitalism and not for the benefit of ordinary Australians. Little has been done to protect jobs, yet billions have been handed out to banks and car companies to maintain profits.

Rudd’s other policies have been similarly designed in the interests of big business. Work Choices remains largely intact with the anti-union Fair Work legislation. The maintenance of the much despised Australian Building & Construction Commission (ABCC) also ensures the continued undermining of worker’s rights.

The Carbon Pollution Reduction Scheme fails to seriously address climate change, but ensures the right to pollute for big business. The Northern Territory intervention continues to displace Indigenous communities in the interests of mining companies, and Australian troops remain in Afghanistan despite a majority of the population opposing involvement in the war.

Despite Rudd’s current popularity there is a huge divide between the interests of ordinary people and the policies being carried out by the Labor Government. Because the economic crisis has not yet hit Australia as hard as other countries, this gap remains largely hidden.

At the moment people are hoping the recession will not be as bad as expected and will perhaps pass them by. Unfortunately, the downturn is the most serious we have seen since the Great Depression and will likely be long and severe. It is only a matter of time before the full effects are felt in Australia.

As the crisis deepens and more and more people lose their jobs and homes, as has happened in Europe, the US and Japan, Rudd’s allegiance to big business and the bankers will be exposed.

The current task of the labour movement is to prepare workers for the seriousness of the crisis and develop a strategy to protect jobs, wages and conditions. We can have no confidence in the pro-capitalist Labor Party who seek to prop up a failing system. The only genuine alternative to this madness is to overthrow the system of capitalism and organise society on a planned, socialist basis, where boom/bust cycles will be a thing of the past.

By Mel Gregson


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