Communist Party of Australia


The Guardian

Current Issue

PDF Archive

Web Archive

Pete's Corner


Press Fund


About Us

Why you should ...

CPA introduction

Contact Us

facebook, twitter

Major Issues





Climate Change



What's On






Books, T-shirts, CDs/DVDs, Badges, Misc


Issue #1745      August 24, 2016


Killing jobs and the environment

When the new Parliament begins its first sitting this month, the Turnbull government intends hitting the ground running with massive cuts to spending on renewable energy and social security. Public sector sackings will continue with public services deteriorating further. Medicare is still in its sights.

The Australian economy has not recovered from the global financial crisis and subsequent recession which was largely hidden from view by the mining boom and short-term government hand-outs. The government has no solutions to the present recessed state of the economy and the spectre of stagnation that haunts capitalist economists and corporate CEOs.

Living standards are falling. Retirees and others with some money in the bank are hurting as interest rates hit new lows.

The little that remains of the manufacturing sector continues to be hit with closures and the export of jobs overseas. Telstra, the banks, the steel and auto industries have shed thousands of jobs. Now it is dairy farmers who are being crucified in a deregulated industry. Australia, a country that is capable of being self-sufficient in food, has become a net importer.

Unemployment and underemployment are on the rise. Official unemployment figures released last week reveal a worsening situation with a leap of 71,600 in the number of people working less than 35 hours per week during the month of July. This reflects the trend towards unemployment and casualisation of the workforce. At the same time full-time employment fell by 45,500.

It is extremely misleading to describe a fall in unemployment from 5.8 to 5.7 percent as an improvement when someone doing one or more hour of paid work is counted as employed. The difficulty facing workers in finding full-time and secure work is compounded by pressure to accept lower wages or in a growing number of instances, no income.

Housing is less affordable than ever. Wages and living standards are declining. State and federal governments continue to privatise important public assets, resulting in further job losses. The economy continues to slide into recession, all compounded by a government that is intent on imposing the austerity program signalled in its 2014 budget. The then treasurer Joe Hockey made clear that the government’s plan was to withdraw from its responsibilities to provide for even basic services and support payments.

Hockey repeatedly reminded us that “the age of entitlement” was over, meaning the dismantling and destruction of social services and welfare: In place of government provision of services and pensions, will be “self-provision” by individuals. If you can’t afford to pay to see a GP then you won’t see one. Any pensions or benefits paid by the government will be a “safety net”, carrying a stigma of “charity”, or portrayed as undeserving.

That was the plan then, and remains so.

Low interest rates no solution

Earlier in the month the Reserve Bank of Australia cut the official interest rate by another 0.25 percent bringing it to a record low of 1.5 percent. This is not making housing any more affordable as the lower interest rates and high demand have pushed up housing prices. The lower interest rates have failed to stimulate investment and growth in the economy.

Lowering them further will also fail. But it will hurt the many retirees and others who rely on income from savings deposits. The banks are using the low interest rates to tempt people to take out investment products where risks are transferred from the bank to the person investing their savings. The temptation has the potential, but no guarantee, of a higher return.

In the European Union and Japan austerity programs and zero or even negative interest rates have failed to restore growth to economies in the grip of deflation and high unemployment.

The private sector only invests where it can see fat profits. At present, in a climate of declining incomes and reduced demand for goods and services, companies prefer to hire labour offshore. Only last month, Telstra announced it was sacking 450 workers and sending their jobs overseas.

The overall rate of profit is declining. Investment will only occur where the corporate sector can find a way to increase it.

This is one of the aims of the Trans Pacific Partnership and the Trade In Services Agreement (still being negotiated in secret). These agreements hold out the prospects of deregulation of the import of foreign labour along with lower wages and working conditions.

They are not in place yet and certainly will not be in the interests of Australian workers. Quite the contrary, they will drive down wages and conditions and should be thrown out when they hit Parliament.

The collapse in commodity prices - which in part was a result of the current crisis - hit Australia hard because of its reliance on the mining boom.

Transitioning to poverty

So what does capitalism offer the workers of Australia?

Under the Turnbull government it is promising innovation-led recovery by cutting spending on renewable energy, university funding, the CSIRO, and other institutions related to scientific research.

It says it is “transitioning” from a mining boom by focusing on iron ore and natural gas, digging its head in the sand when it comes to climate change and the economic impact that will have in the years to come.

It says it is going to create jobs by investing an additional $195 billion in building Australia’s military capacity over 10 years with only $1.6 billion of that supporting advanced manufacturing and high tech jobs in Australia. Most of it will be invested overseas, in the US or elsewhere.

Prime Minister Malcolm Turnbull, in a speech to the Council of Economic Development on August 17, told a receptive audience: “We must meet the challenge of getting our budget under control, bringing down debt and deficits …”

That is shorthand for more austerity measures. At the same time Turnbull and his Treasurer Scott Morrison are promising $48.7 billion in cuts to company taxation over the next 10 years.

The only way to balance a budget and clear debt when slashing company taxes is to make even deeper cuts into health, education, the public sector, social security and renewable energy.

Head in the sand

Meanwhile, the government continues with its head in the sand, determined to push through the cuts in the 2014-15 Abbott/Hockey budget.

It has issued a challenge to Labor Opposition leader Bill Shorten to support its austerity measures. In Europe such measures have resulted in recession, high levels of unemployment and impoverishment. They would do the same here.

The reality is the government does not have a plan for Australia, for the people. It serves the interests of big business and how to maximise their profits.

“Everything our government does is focused on powering economic growth – more investment, a strong and vibrant business sector and hence more jobs,” Turnbull told the CEDA gathering.

The government has no economic, social, environmental or cultural plan for Australia. It shoots from the hip and jumps when the big end of town or think tanks such as the Organisation for Economic Cooperation and Development tell it to jump. As a capitalist government it is wilfully incapable of planning for future prosperity and well being.

Way forward

Australia needs a strategy to create jobs, address climate change, social issues, improve living standards and the cultural aspects of life with the aim of developing a sustainable and inclusive economy.

As a starting point the focus should be on the public sector.

Large investments are required in public education at all levels along with the abolition of fees. Likewise the public health system, with the public hospital system properly funded, Medicare improved and expanded to include full dental care and a focus on preventative health care. The government could save billions of dollars by withdrawing its subsidies to the private hospital system.

Public transport and public housing are two key areas of infrastructure development that would create jobs, reduce the production of greenhouse gases and eliminate homelessness.

Capital controls should be imposed to prevent the flow of capital in and out of Australia. Taxation reforms are required to reduce the tax paid by those on low incomes and ensure that the corporate sector pays. Scales should be developed on progressive lines, based on ability to pay.

Australia needs a publicly owned and democratically run national bank and also national insurance arms with progressive social charters. These would soon force private banks to change some of their practices or lose customers.

With a cut in military spending and conversion of manufacturing plants, workers could be retrained to build wind turbines, solar panels and other equipment for renewable energy.

As coal mines are closed, planning for alternative jobs in manufacturing, renewable energy, ecotourism and other areas should see them supported and able to take on new jobs within their capability.

For superannuation, a national scheme could be set up which workers could join on a voluntary basis. This scheme would be used to provide defined benefits payments on retirement – that is an indexed amount for the remainder of a retiree’s life.

A proportion of superannuation funds should be dedicated to infrastructure programs including the building of public housing.

The age pension should be universally accessible and public transport free for people over 65 years of age. Aged, disability and other care should be public or community, not based on profit motive.

The funding of such measures would come from billions of dollars being slashed from the offensive, war fighting military budget, the phasing out of the private health insurance rebate, reforms to the taxation system and to ultimately reduced health care costs.

Re-regulation of the dairy, wheat and other critical areas of agriculture could see family farms given a boost and reduce Australia’s dependency on imports.

The above are just some of the alternative policies that would serve the interests of the people of Australia and put the country on a sustainable path well into the future.

Such change requires a new type of government. A government prepared to stand up to the monopolies and serve the interests of the people.

Next article – Editorial – Long Tan – misdirected indignation

Back to index page

Go to What's On Go to Shop at CPA Go to Australian Marxist Review Go to Join the CPA Go to Subscribe to the Guardian Go to the CPA Maritime Branch website Go to the Resources section of our web site Go to the PDF of the Hot Earth booklet go to the World Federation of Trade Unions web site go to the Solidnet  web site Go to Find out more about the CPA