Magazine of Socialist Action in Australia

Economic crisis: The system doesn’t work!

Reading Time: 2 minutes

As the global economic crisis worsens by the day, world leaders are having to admit that the crisis is far more serious than they previously claimed. Some Governments have already fallen and many others are facing an uncertain future.

In Australia, where the crisis has not yet hit as hard as in other wealthy countries, Prime Minister Kevin Rudd has changed his tune. After months of claiming that continuing growth in China would insulate Australia from the worst of the global downturn, Rudd has now admitted that “this crisis now affects Australia fundamentally”.

In reality a recession will mean that bosses will try to offload their problems onto ordinary people. Job losses, cuts to pay packets and cuts to hours will be first on the list. This coupled with rising costs of living will mean a massive decrease in the standard of living for millions of Australians.

Rudd’s stimulus packages may keep Australia out of a technical recession for a little while but a virtual recession is already underway. The cash handouts contained within the latest package will do little to help those facing unemployment and mortgage repayments. Similarly to the pre-Christmas handout, this money will evaporate almost immediately or be spent on reducing personal debts.

When proposing his stimulus plan, Rudd bragged that it was supported by the Reserve Bank of Australia, the International Monetary Fund and the Business Council of Australia. In doing so he shamelessly admitted that the package was being introduced to satisfy the interests of the rich and powerful. Instead of protecting jobs and raising the standard of living, the plan is using taxpayer dollars to sure up the profits of the bosses!

Unfortunately most unions are totally unprepared for unfolding situation. Some have already accepted job losses and pay cuts without even putting up a fight. It is not the role of unions to ask for their members to be fast-tracked into the dole system or to just challenge cuts in the courts. The job of the union movement is to fight to ensure that workers are not made to pay for the crisis.

Unions need to defend every job and fight to maintain pay rises for their members. If companies claim they can not afford to stay open, or give workers pay rises, unions should demand that these companies open their books and show where their profits have gone. If bosses are incapable of running companies then they should be nationalised under workers control.

There are two options currently facing Australian workers. The first is that we just stand back and let the bosses make us pay for the crisis that their system created. The alternative is that we fight to maintain jobs and decent standards of living. Capitalism can only offer unemployment, low wages and worsening living standards. Only by replacing capitalism with a democratic socialist system can a decent future be secured for all.

By SP reporters


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