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Issue #1529      30 November 2011


Balance the Budget, belt the workers

Wayne Swan must love the sound of the title “world’s greatest treasurer”. It doesn’t matter that the “honour” is handed out by Euromoney magazine for ministers who go beyond the call of duty to pursue the privatising, union-busting, neo-liberal agenda. Image and media spin are important factors in the politics of a capitalist country like Australia and governments will go to great lengths to get approving sounds from the corporate media about “fiscal responsibility” and “delivering on promises”. Swan is clearly prepared to pull out all the stops to deliver on one of those big commitments – a balanced budget in 2012-13.

The Treasurer and Finance Minister Penny Wong have been sounding the warning bells for some time. The mid-year economic and fiscal outlook (MYEFO) is due to be released as The Guardian goes to press and the news is, reportedly, very bad. “Government revenues are down by $130 billion over the five years to 2012-13 from the pre-GFC [Global Financial Crisis] forecast,” Mr Swan said on Sunday. The European sovereign debt crisis is being blamed for foreshadowed cuts across the board. Tough decisions will have to be made.

So, in line with treasurers and finance ministers across the developed world, Mr Swan is preparing to dish out austerity measures of his own. When we say “austerity measures”, however, we need to be precise. It means belt tightening for those who are already doing it tough. Imposing cuts on the big end of town is simply not going to happen. Look at what became of the much-vaunted, so-called mining super profits tax. A fizzer. Big polluters are hardly quaking at the thought of the introduction of the carbon tax, either. And any pruning of the proceeds of the Private Health Insurance Rebate flowing to finance transnationals will somehow be just too hard for the federal government.

State governments such as those of NSW and SA have shown the way; slashing jobs and legislating for the erosion of pay and conditions, reducing services and imposing higher charges for the community. Expect more of the same from the federal government in the days and weeks ahead.

Pressure is building for even more “productivity” and “flexibility” from the work force. The chairman of the Future Fund, David Murray, was handing out lots of brickbats and very few bouquets for the federal government’s handling of its economic affairs in a speech to the annual Australian Business Economists’ conference last week. He was concerned that the industrial relations system allowed some scope for workers – like those at Qantas – to keep fighting back or “pushing back against productivity improvement,” as he put it.

The “world’s best treasurer” would have taken note and, no doubt, will do better to encourage “flexibility” in future. This is in spite of the fact that most workers are not living well off the back of the resources boom. A big section is struggling to make ends meet at all. “Today, nearly half of all Australian workers are engaged as casuals, fixed term workers, contractors or labour hire workers,” ACTU President Ged Kearny pointed out in a speech earlier this year. “These types of work have now increased to such an extent that they’re almost the norm.” These workers can’t get housing loans even if they could afford to repay them. And their belt tightening is already causing headaches elsewhere in the economy.

When workers’ purchasing power declines, they spend less in the shops; they don’t trade the old clunker in on a new car; they cancel their holiday up north, they put off going to the dentist, and so on. It’s not rocket science. The effects of high real unemployment (the official figure of 5.3 per cent is a joke), higher prices and stalled income levels are becoming clear. The Reserve Bank has lopped 0.5 per cent off its 4.5 per cent GDP growth forecast. Most commentators expect more interest rate cuts to try and get people borrowing and buying again.

Unfortunately, like its neo-liberal counterparts elsewhere the Gillard government is not about to do what is required and throw its pro-corporate agenda into reverse. It won’t put industries back into public ownership and control or spend appropriately on items that lift the living standards of workers and their families and create secure jobs. The days of targeted stimulus are over and the days of “austerity” have arrived. If workers are not going to be belted by big business and governments serving its interests, they are going to have to organise and fight like never before.

Next article – Victorian unions say ‘No’ to violence against Women

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