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Issue #1910      April 6, 2020

EXPOSES NEOLIBERALISM

Decades of neoliberalism slashing, and privatising public services are coming home to roost. The COVID-19 pandemic has exposed, for all to see, the consequences of “small government.”

The private sector has been found wanting and the government/public sector unprepared for such an emergency.

Unemployment is skyrocketing with layoffs announced on a daily basis. The retail, hospitality, and arts sectors are amongst the hardest hit. Qantas stood down 20,000 workers, Myer closed its stores and stood down 10,000 workers, the Country Road Group, Katmandu, Adairs, Bapcor, and so the list goes on, did likewise.

During 2019 the RBA repeatedly urged the government to take measures to increase people’s incomes. There was little more it could do lowering interest rates to stimulate an ailing economy. Big business – the Liberal Party’s big donors – and their economic advisers pressured the government to put money in workers’ pockets. The government eventually backed down realising the economy was on skid row. Hence the introduction of the JobKeeper payment.

The government is not making these payments out of concern for the working class. The primary aim is the economy, to pump prime it in a traditional Keynesian fashion contrary to its professed ideology. It is a throwback to when former Labor Prime Minister Kevin Rudd famously said the international challenge is, “to save capitalism from itself.”

That is what the Morrison government is attempting to do. The last thing the ruling class wants is workers to question the system of capitalism or look for a better way.

The Coalition government and Reserve Bank of Australia (RBA) have committed billions upon billions of dollars to prop up a collapsing economy, and more are likely to follow. One of the latest measures is the allocation of $130 billion for employers to employ or keep stood-down workers on their books.

JOBKEEPER PAYMENT

Employers qualify for the scheme if their turnover has fallen by at least thirty per cent as a result of the coronavirus. They will be paid the flat rate of $1,500 per fortnight to be passed on to employees stood down since 1st March or still working for them. This applies equally to full-time or part-time workers. Workers must also have worked for them for the past twelve months, and the money is not supposed to be pocketed by employers.

Within two days of announcing the payment, more than 430,000 employers had registered for the scheme. The system is based on trust – trusting bosses to pass on a legal entitlement! How the government will monitor the scheme and enforce employer obligations has not been spelt out!

The $1,500 falls far short of what the stood down workers require to meet basic living costs. It is approximately half what the Australian Council of Trade Unions was campaigning for. It remains to be seen if it is large enough to discourage desperate people from going to work when ill.

This payment excludes the two million temporary visa workers in Australia, those who changed employers or were unemployed for a period during the twelve months. Other losers include many casual, intermittent, and undocumented workers.

Labour hire workers are also amongst those who miss out. In the building and construction industry, the number varies from state to state, with as many as one in three in Western Australia.

These workers, desperate for any income, will be extremely vulnerable and easy targets for employers attempting to drive down wages and erode working conditions. Unions are demanding that all affected workers be included.

In a similar scheme, the UK the government subsidy is eighty per cent of wages up to $5,000 per month. In Canada, the wage subsidy is set at seventy-five per cent. These payments are important for housing, putting food on the table, and paying the utility bills. They are also critical in keeping the economy ticking, which is the main reason they are being made.

JobSeeker vs JobKeeper

The JobSeeker (rebranded JobSearch) allowance is $1,130 per fortnight – $370 less than the JobKeeper allowance of $1,500. The difference, $135 per week, is substantial and punitive.

It is consistent with former Treasurer Joe Hockey’s “lifters” and “leaners” or the more recent formulation of “deserving” and “undeserving.” The JobKeeper “rewards” the “deserving” with a higher payment than those who were not in work for the past twelve months with the same employer prior to the pandemic – the “undeserving.”

The difference between the two payments also has a divisive purpose, an attempt to pit one group of workers against another.

JobKeeper also conveniently makes a significant reduction in the number of unemployed approaching Centrelink, which is failing dismally as a result of years of cutbacks.

NEOLIBERAL POLICIES HIT HARD

The mask of neoliberal economics and politics has now been lifted for all to see it in its fullness. Policies of privatisation, deregulation, ongoing cuts to public services and research, corporate tax cuts, and subsidisation of the corporate sector have taken their toll.

Cuts to public health have left the public sector unprepared to cope with a pandemic. Not only was nothing done to have a back-up plan for a pandemic, but the hospitals were not coping before the health crisis.

The experiences of Ebola, SARS, and MERS should have sent a warning signal to the government to prepare a back-up plan for such a situation. It not only failed to do this, but ignored previous warnings by the World Health Organisation to be prepared for a future pandemic.

CentreLink is swamped with people attempting to apply for their entitlements. Years of cuts rendered the service dysfunctional long before the pandemic.

The government cut funding to medical research institutes and the CSIRO, some of which were working on developing a broad vaccine against the corona family. At the same time it paid billions of dollars subsidising costly private hospitals.

Too few nurses and doctors have been trained, with the government relying on a brain drain of poorer countries and the UK. This has also been the case with aged care and the various home care workers where the government relies on visa workers to make up the shortages and keep a lid on wages and working conditions.

Most of Australia’s stock of public housing has been sold-off – privatised – to developers. What remains is being run down.

How do the more than 115,000 homeless follow the “stay at home” instructions? How do the people sleeping rough on the streets protect themselves? Little is heard about housing the homeless, yet in major cities there are thousands of empty apartments in new housing developments. The state should take these over and house the homeless.

TEMPORARY TAKEOVER OF PRIVATE HOSPITALS

State and federal governments have encouraged and subsidised the proliferation of private hospitals. There are now 657 private hospitals and 357 private day hospitals. Last week the federal government reached an agreement with them to take over their facilities, equipment and staff at an initial cost to taxpayers of more than $1 billion.

This “partnership,” between the government and private hospitals, involves the federal government’s takeover of 30,000 hospital beds and 105,000 skilled staff. It and the states will fund fifty per cent each of the operating costs each and the feds will guarantee to pay the gap between income received and the private hospitals’ fixed costs. In other words, it will subsidise the losses.

In effect, it is a pseudo nationalisation, providing the public sector with more beds, staff, etc, to expand the public sector’s capacity to fight the COVID-19 pandemic on a temporary basis.

This action alone demonstrates that the public sector is best placed to deal with emergencies. The profit-driven private sector and so-called market forces are unable to cope. It requires a people-first, centralised approach.

As soon as the health crisis is over the private hospitals will be restored to the private sector on a profitable basis. It is the usual social loss and private gain model.

A government with a genuine concern for people would reverse the privatisations of essential services and strategic assets including nationalising the major banks, the private health system, insurance and telecommunication companies and utilities. It also requires an extensive expansion of quality, affordable public housing.

The way forward must be based on public ownership, a planned economy and services driven by need not private profit – socialism.

Next article – Editorial – THE TIMES THEY ARE A-CHANGIN’

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