Say no to Labor and Coalition racist scapegoating; for socialist solutions

Like in the rest of the world, workers in Australia have suffered almost three decades of what has been described here as “economic rationalism” and in the rest of the world as “neoliberal reforms”. These “reforms” have entailed massive privatisation of government-owned business and utilities such as banks, airlines, power stations, urban public transport, etc. Although done in the name of greater efficiency, privatisation has had the effect of concentrating wealth into even fewer hands and making the public pay even more for basic services. Economic rationalism has also meant massive deregulation of everything that could diminish profits, including protecting the environment and safety on the job. If this wasn’t enough, neoliberalism has also entailed massive cuts to public expenditure on social services like education and health care, while government subsidies for capitalist business have increased massively.

The most damaging effect of neoliberalism has occurred in the realm of ideas and social values. The concept of the “public good” has been replaced with “individual responsibility”, pressuring the poorest people in society to find solutions to their “own” problems and blaming and penalising them when they fail. In this way, the rule of the market has become unquestionable dogma, liberating “free” enterprise to make money with fewer and fewer restrictions. This was all justified with the promise that working people’s sacrifices would eventually pay off as increased profits would grow the economy, jobs and living standards. The lie involved is now self-evident and brutal.

Both Labor and the Coalition have made much of the ostensibly exceptional performance of the Australian economy when compared to the other developed capitalist economies. They hope to convince Australian workers that we will avoid the impact of the global crisis. However, the international linkages binding Australia to the global economy and its own structural weaknesses make the negative effects of the global crisis inevitable, even if they take longer in time and are perhaps lessened in effect.

The saving grace of the Australian economy is the continuing growth of “commodity exports”, principally coal and iron ore. But mainstream commentators neglect to mention a number of critical weaknesses in the scenario of Australia’s “resources boom”. These exports and their prices increased rapidly in the last decade. However, Australia’s share of global minerals production has declined. Australian industry still has to compete in the sale of its key resources and there are no guarantees of ongoing high prices and high profits. In addition, sales depend on the economic and political fortunes of others, and not just China. While China is the largest buyer of Australia’s major exports, Japan buys almost as much, and its economy has not looked rosy for a long time.

One of the biggest problems for the Australian economy is the same one that plagues all the developed capitalist countries: debt, in particular the debt of workers, where borrowing has increasingly substituted for real wage increases. The ratio of Australian household debt to income rose from 50% in 1992 to 160% in 2007, according to Reserve Bank figures. Overall domestic credit grew by 129% between January 2000 and the second quarter of 2007, more than 50% faster than it did in the US before its credit crunch. This is a similar rate of credit expansion to the UK and other developed countries, slower only than that in Iceland (754%), Ireland (277%), Spain (256%), Luxemburg (217%), Denmark (195%) and Greece (193%).

Growing poverty and inequality

Whatever the precise fate of the profits of Australian capitalist firms, there is no prospect of any boom for the majority of workers. On the contrary, Australian workers face increasing relative impoverishment; Australia is becoming an increasingly unequal society. At the end of 2007, Australia had 160,600 people with over $1 million of assets; this number increased by 10% in just one year, from 2006. The incomes of the chief executives in the top 51 companies listed as members of the Business Council of Australia averaged cash remuneration 63 times the annual earnings of fulltime workers in 2005 (up from 19 times the earnings of fulltime workers in 1990). Prior to the 2008 global financial crisis, the income of the richest 10% of Australia’s households averaged about 13 times those of the poorest 10%. In Sweden, Norway, Denmark and Japan the ratio is 5:1 or 6:1. Australia’s “egalitarianism” is fast becoming something like that of the US, whose pre-Global Financial Crisis income ratio between the poorest and richest 10% was 16:1.

Long-term analysis of income tax data shows that during the quarter century of neoliberal “reforms” the income share of the top 10% of Australians has become higher than at any point since 1949. It was Labor governments that initiated this wealth shift. According to the Australian Bureau of Statistics’ 2001 Yearbook Australia, between 1985 and 1994 the Hawke and Keating Labor governments were responsible for Australia becoming the fourth most unequal society in after-tax income out of the 21 Western countries.

In their 2009 book The Spirit Level: Why More Equal Societies Almost Always Do Better, researchers Richard Wilkinson and Kate Pickett note that Australia continues to rank as the world’s fourth most unequal developed society (after the US, Portugal and Britain). They point out that the richest fifth of the population in the US, Britain and Australia have respectively 8.5, 7.2 and seven times more income than the poorest fifth, or double the income inequality of Japan and the Scandinavian countries.

In addition to the growing inequality that neoliberalism has brought Australia, it has increased impoverishment. An increasing number of workers and their families struggle to hold things together and live in growing poverty and uncertainty. In 2005, the St Vincent de Paul Society, using ABS household income data, showed that over 40% of Australians (8 million) had an equalised disposable income of less than $21,000 per annum.For growing numbers, the experience of poverty is most sharply manifested in the problem of housing. One Victorian home owner is being evicted each day and advocates express fears that household repossession will increase as interest rates go up. In the past when you bought a home in Australia it was a certain guarantee of security. And why not, when you could buy a home in seven years or less and then be secure in the knowledge that you had somewhere to live. But during the Howard government’s final years — with borrowing up to a rate of $200 million a day, much of it spent on bidding up the price of housing, and with the headline rate of capital gains tax halved — house prices doubled. According to the Senate Select Committee on Housing Affordability in Australia, which tabled its report in mid 2008, the average time for people to buy off a house is now around 25 years. Considering the increasing age of childbirth and marriage, this means that a growing number of people may pass on debt to their children, rather than paid-off houses as in the past.

According to the 6th Annual Demographia International Housing Affordability Survey: 2010 Ratings for Metropolitan Markets (Data for 3rd Quarter 2009), of the 62 “severely unaffordable markets” in the world, 22 are in Australia. Melbourne, Sydney, Adelaide, Bundaberg and the Gold Coast are in the world’s 12 least affordable markets, with Melbourne now being less affordable than New York City. But people are still buying. This is because, according to the Senate Housing Committee, “housing lenders are now much more likely to allow customers to borrow amounts that require more than 30 per cent of income to service and will lend a higher proportion of the value of a property”. Sound familiar?

The other important reason that people who can’t really afford it are still buying, is because as the Senate report notes, “investors who used to account for only 20% of housing loans took out 40% and swept aside owner-occupiers and pushed up prices and rentals”. The richest 10% of Australians own 62% of rental properties, the top 1% own 22% of rental properties.

For a growing number of workers, the “lucky country” rhetoric is sounding increasingly hollow.

Workers must unite: we have no nations or colour

The majority of people in Australia have nothing to gain from the growing wealth of a shrinking number of big corporations, owned by a small number of billionaire families. This includes Australian companies like Coles and Woolworths that try to convince us to “buy Australian” and make them wealthier. Australia’s biggest corporation, BHP, posted an after-tax profit of $6.5 billion for the six months ending December last year. Such corporate profits guarantee a luxurious lifestyle for a very small number of people in Australia.

Who should run this country — these giant companies that profit from our labour, or the ordinary working people who everyday produce all the goods and run all the services we need? The Revolutionary Socialist Party says that working people keep the country running, working people should run the country. But this can’t be achieved through the parliamentary system, which purposely leaves workers unorganised, atomised voters unable to bring their greatest strength — their cooperation in the workplace — to bear on political decision-making.

Furthermore, capitalist rulers and their Labor and Coalition politicians deliberately foster all sorts of divisions among working people in an effect to stop us acting together in our own common interests. In this election, they are openly seeking to have Australian-born workers blame non-white immigrant workers for the social ills caused by the capitalist system. New arrivals do not cause unemployment nor increase the price of housing or groceries. On the contrary, people who come to this country bring enormous wealth to our communities. Every migrant, refugee and overseas student creates jobs and experiences that make our communities a much richer place to live. Problems such as unemployment and rising housing and living costs are caused by corporations and government policies that put company profits before all else, not by new arrivals.

The RSP calls for Australia to open its borders and build bridges not gates between the people of all nations. We have a responsibility to help the poor countries of the world, especially so when Australia participates in wars that devastate these countries. We should demand that the refugee boats be allowed to land and people fleeing war and persecution be given sanctuary, not locked up for years in detention prisons.

We also demand an end to the government intervention into Aboriginal communities. Both Labor and the Coalition plan to extend the Northern Territory intervention, increasing controls over income management and expanding the acquisition of Aboriginal land. Aboriginal people are increasingly being turned into prisoners in their own homes. The only people who have “rights” over land in Australia are now the mining companies.

Socialism is the alternative

The RSP advocates bringing working people of all colours together in solidarity against social injustice and prejudice. Only by acting together can we effect meaningful social change.

The RSP says that the problems of inequality, discrimination and ecological destruction, can only be addressed by making fundamental changes to the way the Australian and global economies are organised. Decision making has to be put in the hands of ordinary working people and taken away from the corporate rich who presently control the economy and government. The RSP believes that working people must act collectively to fight to build their own movements and organisations and construct a radically different form of government and society — a socialism of the 21st Century.

In the August 21 election the RSP is standing two candidates — anti-racist campaigner Van Than Rudd and anti-war activist Hamish Chitts — against Prime Minister Julia Gillard and former PM Kevin Rudd respectively. In these two electorates the RSP advocates voters give the second preference to the Green candidate, then Labor and put the Liberal candidate last. Elsewhere, the RSP advocates a first preference vote for other socialist candidates, then the Greens, followed by Labor, with the Coalition candidate put last.