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Issue #1596      June 5, 2013

Obscene profits, obscene exploitation

Whoever said the class struggle is dead should take another look at the present campaign being waged by the resources sector with the assistance of the mass media. “Resources boom falls to earth”, “Growth hit by mining boom end”, “We are ill set for exiting boom era”, are typical of the flood of headlines. Below the gloom and doom headlines are grim warnings that “Australia’s international competitiveness is at risk.” And the main culprits, if you are to believe them, are overpaid workers and obstructive trade unions.

Billions of dollars of investment in liquefied natural gas, natural gas and petroleum and iron ore projects have been cancelled. As a result, they claim the Australian economy is at risk if the government does not act immediately and meet their demands.

“We remain optimistic about the Australian investment environment, but it requires significant national leadership to improve our international competiveness including fiscal stability, increased productivity and industrial relations changes that focus on Australia’s long-term interest,” warns Chevron Australia managing director Roy Krzywosinski

“Our country’s attractiveness as a place to do business in a highly globalised industry is slipping due to a combination of rising costs, declining productivity, increasing regulation and new taxes,” from the Minerals Council of Australia CEO Mitch Hooke is another typical claim.

The rising costs are wages, capital investment (which has a labour component) and government regulations such as approval processes and environmental protection. They want to operate in a totally deregulated environment where they can carry out drilling and mining anywhere they like, regardless of the impact on local communities, existing businesses and farms, water resources and other environmental consequences.

The reference to “declining productivity”, although no such evidence is produced, is boss-speak for labour costs. They want lower wages, longer working hours, unpaid overtime, loss of penalty rates and other entitlements and short cuts on health and safety. In other words they want to increase the rate of exploitation of workers, which is already the highest of any industry in Australia.

They are also anxious about attempts by trade unions to restrict the use of 457 Visa workers and to prevent their employment conditions undercutting industry standards. Employers have been exploiting them as a vehicle for undermining union negotiated collective agreements and award rates.

The Australian Petroleum Production and Exploration industry organisation claims the cost of wages paid to Queensland Curtis LNG employees, is about 30 percent more than East Africa. That gives an idea of how low they want the wages to go and the sort of employment conditions they are after in Australia.

To achieve their goals, they would like to rid their projects of trade unions and bring back individual employment contracts. The Coalition’s Policy to “Improve the Fair Work Laws”, a softer sounding rehash of Howard’s WorkChoices, promises to deliver for them, in particular its “Individual Flexibility Agreements”. They are campaigning for the abolition of the right of entry for trade union officials, outlawing of all strikes, pickets and all other forms of industrial action with harsher penalties.

The anti-union, building industry police force, the Australian Building and Construction Commission (ABCC), would have its powers increased and extended to cover the Maritime Union of Australia which is active in relation to oil rigs.

With unions out the way, and a completely deregulated environment, then the sky’s the limit when it comes to exploiting workers, gouging Australia’s resources and profit-making.

The complaint about new taxes is a direct reference to the mineral resources rental tax, which was designed by the Big Three mining corporations – Xtrata, BHP and Rio Tinto. It is hardly a burden! It is more about the principle, the hide of a government to introduce such a tax, that they are complaining about. To them it is a dangerous precedent and could always be amended to ensure they really return some of the wealth they extract to the people of Australia who own it.

Another demand from the mining CEOs is a “stable fiscal environment”. Essentially they do not want to pay taxes because this eats into profits. They fiercely object to any measures that might close tax loopholes or reduce tax credits. They are also highly critical over the government’s failure to carry out previous commitments to further reduce the taxation of their profits.

Every round of corporate tax cuts means less money for the government to spend on social welfare, education and health. These tax cuts hurt people – ultimately they come out of the pockets of students, the unemployed, pensioners, workers and their families. They are all affected whether it be cuts to universities, longer hospital waiting lists, failure to increase the dole, cuts to benefits or lack of public transport.

Just as the wages struggle in the workplace is an economic form of the class struggle so too is the demand for lower taxation of company profits.

The rise in the Australian dollar and falling commodity prices have also contributed to the decline in resource sector profits, but the same CEOs who want to starve workers are not so vocal on this issue. They support deregulation of the financial sector and “free markets”. They want workers and the community to pay for the higher dollar and the end of the mining boom so that their obscene profits are maintained and increased.

Some of these companies are making a gross profit of $1 million per worker per annum. Others only half a million.

Gina Rinehart, last year ranked the richest woman in the world, has seen her wealth take a hit as a result of the boom phase of the business cycle taking a downward turn. Her estimated accumulated wealth fell from $29 billion to $22 billion, according to the Business Review Weekly’s annual Rich 200 list. No wonder the poor woman has taken up the political struggle to protect her interests!

Fortesque Metals Group Andrew Forrest has seen his fortunes fall by $2.2 billion from $3.85 billion and Clive Palmer down $1.65 billion to $2.2 billion. They too have extended their participation in the class struggle to the political arena. Palmer has set up his own political party – needless to say it is extremely reactionary, with workers, trade unions and environmental protection high on the hit list.

In the coming period, the political struggle will be imperative if trade unions are to defend existing rights and conditions, and the environment is to be saved. It will not be won inside Parliament; it depends on the building of a mass movement and a left and progressive alternative capable of winning wider public support.   

Next article – Editorial – Electoral funding – buttressing the two party system

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