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Issue #1566      26 September 2012

Fight to defend living standards

“Brace for falling living standards”, we are heading for an extremely painful “economic adjustment” when the resources boom turns to bust warns Professor Ross Garnaut, former economic adviser to the Hawke Labor government. Living standards are falling and are certainly set to decline dramatically if action is not taken to defend them. But the main threat to living standards is not from the next bust in the resources sector. It is from the concerted attack on the living standards of ordinary working people being waged by financial institutions and big business, with the assistance of state and federal governments.


Professor Ross Garnaut.

“I think we’re going to have a very difficult time adapting to the decline in living standards that’s going to be a necessary part of the adjustment to the end of phase one and two of the [mining] boom,” Garnaut told a conference on the rise of Asia.

Garnaut might think that a decline in living standards is necessary, that it is needed by the mining corporations. But the working class of Australian do not need it. It is not necessary.

Yes, the mining corporations are suffering from a plunge in commodity prices from record heights and from the relatively high value of the Australian dollar which makes their exports more expensive on international markets. Rather than copping the downside of the boom-bust cycle, the mining corporations are attempting to make workers and governments foot the bill. But they are only one component of the big picture.

The attack on living standards is part of the same offensive by global capital that is taking place in Greece and other European and industrialised nations that we see expressed in the austerity measures being imposed there. The aim is to take back more than a century of gains made in hard won struggles by workers and their trade unions.

The pain that Garnaut refers to will be felt by workers, students, the unemployed, age pensioners and other welfare recipients. It is their living standards that are under attack, not those of the CEOs of the financial institutions, the transnational corporations or mining magnates.

The aim of the attack on living standards is to increase the share of wealth pocketed by the big end of town and to reduce the share going to working people and their families. It is about a race to the bottom, a global levelling of living standards at the lowest possible denominator.

The attack on living standards takes many forms.

Attack on workers

Big business is on the offensive over “high labour costs” and “excessive government regulation”. Gina Rinehart was honest enough to indicate her (and not hers alone) aim of importing African workers on $2 an hour. Other corporate bosses are calling for a return to the Howard Coalition government’s individual contracts (AWAs) or complete deregulation with employers freed of any obligations regarding wage rates, hours of work, workers’ entitlements and health and safety.

The abolition of penalty rates is high on their agenda. So too is the aim of union-free workplaces. Workers’ compensation is also under attack meaning lower living standards for injured workers.

The Australian Building and Construction Commission (ABCC) continues to do its dirty work, albeit under a new name, hounding innocent trade unionists and their unions, attempting to bankrupt unions with millions of dollars in fines. The aim is to deunionise the industry so that employers can drive down wages and working conditions and import labour at $2 or $3 an hour.

Destruction of welfare state

It is not just in the workplace that the capitalist class is making demands for a massive take-back of past gains by workers and their trade unions – for a bigger share of the wealth created. This offensive is reflected in the criminal pursuit of budget surpluses by state and federal governments and privatisation programs. The pursuit of budget surpluses has become a holy grail pursued by the federal and state governments as an excuse to slash social spending and sack tens of thousands of public sector workers.

At the same time as pursuing cuts to corporate taxes and maintaining billions of dollars in corporate welfare, governments are crying poor when it comes to people’s needs. At best there are distant promises for people with disabilities, for carers, for dental treatment.

Meanwhile, aged pensioners, the unemployed and other welfare recipients are falling further and further behind on starvation incomes. There is a deliberate, punitive drive to force many welfare recipients, in particular single parents and the unemployed, off benefits. The more governments cut welfare payments, the more they can cut corporate taxes and the larger the pool of reserve labour desperate for any job under any conditions.

The unemployment benefit is deliberately kept lower than other payments forcing recipients into absolute poverty or dependency on charity and family. Apart from its punitive side, the aim is to reduce the dole so that the minimum wage can be reduced.

The public sector sackings, the cuts to services, privatisation, and the failure to adequately fund public services including education, housing and health, all take their toll on living standards.

The driving of people into private health insurance cover because of long waiting lists for public hospitals, the shortage of bulkbilling doctors, the insidious annual increase in the cost of prescriptions all undermine living standards. They leave people with less money to foot the bill for rent or mortgage repayments, for escalating electricity bills, petrol and other rising costs. These costs are not met by increases in benefits.

Students have been hit by higher university and TAFE fees and inadequate income to support them through their studies.

On every front the working class is confronted with rising costs and erosion of their income. Bit by bit, what is commonly referred to as the welfare state is being wound back, dismantled or privatised. Services disappear or become too expensive.

There are struggles on many fronts: public sector unions to save public service jobs; building and construction unions for trade union rights and jobs; manufacturing unions to save jobs and the future of the manufacturing sector; maritime workers against the full automation of their work and a share of the increased productivity from automation; firefighters, ambulance officers and police are in a struggle to defend their services; teachers in defence of public education; nurses in defence of the public hospital system; and so on. There are also ACTU campaigns for secure jobs and to defend penalty rates.

There are many individual struggles that all affect the jobs of workers, their incomes and the services that people receive. Behind all of these struggles, is the struggle between labour and capital, whether people and their living standards or profits come first.

The only way to defend and improve living standards is for a united fight-back against the current corporate offensive and policies of state and federal governments.

There is an urgent need to unite these struggles through joint trade union actions, through community involvement and development of alternative policies that put people first.

People first policies

Such a change in economic and social policies can only be won and defended by the united actions of the working class, all progressive forces and others such as small business people and farmers who share an interest in bringing an end to the domination of the transnational corporations and financial corporations.

It involves real change in government policies.

The Communist Party of Australia has put forward a number of policies towards improving the living standards of the people. These include:

  • immediate rise in wages, in pensions, unemployment and other social welfare benefits
  • increasing corporate taxes and marginal rates on higher incomes, slashing corporate welfare including the fossil fuel rebate
  • enactment of job security
  • a shorter working week with no loss in pay
  • a halt to privatisation of essential services and a start to reversing the process
  • promotion and development of the public sector
  • immediate slashing of ten percent of the military budget freeing up $3 billion for health, education, pensions, etc
  • increase in spending on public services and infrastructure – health, education, housing, pensions, as well as infrastructure for improved public transport, an expanded rail freight system, improved urban and rural water supply system and alternative sustainable energy, drawing heavily on a national superannuation fund
  • state control of the financial sector, including re-regulation of interest rates and currency and tighter regulations
  • laws guaranteeing basic trade union and workers’ rights including
  • the right to strike
  • repeal of all legislation curbing trade union and democratic rights, including abolition of the ABCC and repeal of the ASIO and terrorism legislation.

Neither major party is prepared to abandon its neo-liberal policies and make the necessary, far-reaching changes in policy direction to protect living standards. It will require the building of a broad movement and alternative political force uniting left and progressive forces. This includes trade unions, the Communist Party of Australia, the Greens, other left and progressive parties, environmentalists, peace activists and other community groups and individuals.  

Next article – Editorial – Imprisoned for seeking our help

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