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Issue #1579      January 30, 2013

Editorial

Downward economic spiral

It was not a very merry Christmas for the 16,000 or more workers who joined the ranks of the unemployed in December or the many more who saw their hours of work and wages cut. Nor has it been a very happy New Year for the 1,500 or more workers who have already lost their jobs this year. Boral, Santos, Vodafone, BlueScope, Ford, Holden, Qantas, Macquarie Bank, ANZ Bank, Fairfax Media, BHP Billiton, Xtrata, Aurison (privatised QR National railway), and state and federal governments were among the biggest employers sacking workers during the past year. Thousands of smaller companies and community organisations have also been forced to sack workers or cease operating altogether.

There are thousands more jobs on the line in the year ahead as economic conditions look set to worsen. Gourmet Food Holdings (the group that owns Rosella) went into receivership. Rio Tinto and the NAB are expected to swing the axe.

The official number of unemployed is now over 650,000 – a figure which is alarming enough, but the reality is far grimmer. Just one hour of paid work, and according to the official figures you are employed. Yet, there is an appalling complacency, no sense of urgency about job creation by state or federal governments. On the contrary, government policies are having a contractionary effect on the economy resulting in more sackings and reduced working hours.

Thousands of single parents started the year with a loss of their parenting entitlements, causing considerable hardship. Their loss of income leaves them with less to spend. The slashing of 14,000 public sector jobs by the Queensland state government and federal government cuts will only drive the economy deeper into recession. Every sacking results in less demand for goods and services contributing to the demise of more businesses, small businesses in particular.

In the dying days of 2012, the Gillard government finally admitted that it would not achieve its sacred budget surplus for the financial year 2012-13. Having acknowledged what everyone knew, the government still refuses to reverse some of its harshest and cruellest cuts or increase below-subsistence unemployment, single parent and other benefits. Nor is it prepared to restore the highly successful Medicare Chronic Disease Dental Scheme – 80 percent of its beneficiaries were low incomes.

It used its budget surplus pledge as an excuse for cutting social spending and refusing to raise welfare payments. Its callous response to questioning how anyone could live on the dole’s $37 a day was that it was only a temporary measure, an incentive to find a job! What rubbish. With sackings continuing and job ads shrinking, it is not possible for everyone to find a job, let alone a job that pays a decent wage with good working conditions. Parents with family responsibilities and carers cannot up and move to the north west of Western Australia with a fly-in, fly-out schedule.

The budget surplus is not the reason behind the cuts. Nor is lack of money. The government has many other options such as raising instead of lowering corporate taxation, introducing a genuine tax on super profits, making real cuts (not postponed spending) to the military budget and abolishing its private hospital subsidy of more than $5 billion per annum (private health insurance rebate).

The below subsistence level of welfare benefits, the cuts to dental care, the inadequate funding of public education and public hospitals, the insidious winding back of Medicare benefits, mass sackings of public servants and privatisations, are all part of state and federal government neo-liberal economic agendas. The federal government abandoned its goal of a budget surplus because it was an election year. It knew that if it wielded the axe any deeper on the public sector and social spending it would be political suicide.

The economy needs an expansionary economic policy. People need better services, welfare recipients need higher incomes. With higher incomes the additional spending on goods and services will stimulate the economy, save and generate jobs in the retail, manufacturing, housing and tourism sectors which are presently so recessed. Without such expansionary action the downward economic spiral which workers pay for with the loss of their jobs and income will only continue to deepen.

Next article – WFTU denounces imperialist intervention in Mali

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