The Guardian 5 March, 2008
Editorial
Economic pain & military spending
Kevin Rudd’s razor gang will not touch the huge military expenditure which successive governments, both Liberal and Labor, have been pumping up. Military expenditure is planned to reach a record $20 billion dollars each year by 2010 — about $55 million per day: obscene in itself. John Howard had declared that he would increase military expenditure by 3 percent each year and Kevin Rudd is not about to reduce that figure.
Australia is also being manoeuvred into the North Atlantic Treaty Organisation (NATO) that was originally designed for Europe but which more recently extended its reach to the whole world.
Now, Australia is preparing to join the US missile defence program which is a major military system and a central part of the preparations for future war that would primarily target Russia and China. The overall cost of this system is said to be a cool $100 billion and if Australia was to join, it would be obliged to take a share of this huge additional economic burden. Defence Minister Joel Fitzgibbon told US Defence Secretary John Gates on his recent visit to Australia that the government would "consider" joining this program.
Australia already supplies essential military intelligence to the US though the US spy base at Pine Gap. But to feed the gargantuan appetite for profits of the arms manufacturers, new schemes and new weapons have to be constantly designed and foisted on any nation that can be persuaded or forced to spend huge amounts on military hardware.
The wasteful military expenditure produces nothing at all for the civilian population but is one of the major factors fuelling inflation in the economy. This has a tendency to force up prices in addition to the deliberate screwing of the community and economy by the big corporations who put up prices at will.
Rudd’s razor gang has yet to announce the programs it is going to slash in its touted war on inflation. As it will not touch the military expenditure its only alternative is to cut existing programs and services going to one or another civilian purpose. He has already put the public service on notice. Treasurer Wayne Swan says that budget expenditure has to be cut "drastically" while warning of the "pain" to come. It will not amount to "pain" for the upper middle class, the captains of corporations or the CEOs of the banks.
These promised cuts will inevitably further lower the living standards for many as well as families having to deal with the increased interest rates imposed by individual banks which have put up interest rates above those decided by the Reserve Bank.
Already more than a million households are paying more than 30 percent of their income on rent or mortgage repayments. Yet nothing is being done to rein in the banks, finance institutions and the developers who are steadily pushing up rents and the cost of buying a home.
These developments may well prove to be the Achilles heel of the Rudd government as living standards of hundreds of thousands of Australian families sink lower with no effective measures to control the source of the gathering economic storm.
Fast bucks
Described by the media as "More bang for more bucks", Holden unveiled its latest upmarket model at the Melbourne motor show last week. The V8 Supercar is not your ordinary sedan. It was billed as the fastest, most powerful and most expensive Australian-made car ever and has the biggest brakes ever fitted to a Holden. It is powered by a massive petrol-guzzling 7.0 litre, V8 engine: you’ll need a fat wallet to buy and run it. The new car will cost a cool $150,000 when it comes onto the market later this year.
The glowing media coverage of the car and expectations of a market out there for such a vehicle, sits strangely alongside reports of speculation on higher interest rates, mortgage-stressed families, and predictions of hundreds of thousands of families likely to default on their home loan repayments. Some of these mortgages are no larger than the price of the V8 Supercar. The cars have changed since Karl Marx’s day, but the source of the big bucks of some and financial hardship for others has not — the capitalist system is still based on the exploitation of workers, on the theft by a minority of the fruits of the labour of the majority.