By Peter Boyle
It wasn't very long ago that we listened with horror to reports on the so-called "New Zealand experiment". The Australian equivalent could turn out to be worse. Jeff Kennett's "radical" program of labour market deregulation and austerity cuts goes further.
Not content with forcing individual workers to face their employers in unequal negotiations for employment contracts, Kennett has virtually outlawed strikes and introduced fines for breach of employment contract. John Hewson promises to implement similar policies on a national scale.
But if a Hewson government comes in, will it be a qualitatively new development, or just a variation on the course of the last decade? How will the labour movement stand up to the challenge of a Thatcherite assault? And would a Keating ALP victory offer us a very different future?
The debate in the commercial media suggests that the federal elections will offer a real policy choice. Labor, it is said, has returned to traditional Keynesian interventionist policies while the Coalition stands for "radical free market reform". But a closer look shows that the difference between them is about how to impose austerity, privatisation and deregulation.
The major parties have basically the same response to the economic stagnation that has beset world capitalism since the 1970s.
Intensified economic competition has led to a global cost-cutting race with terrible social consequences. All around the world less competitive industries are being closed down, and millions of workers are being thrown on the scrap heap. In Australia, 5 million people are dependent on the welfare system even as it comes under unprecedented attack by cost-cutting governments.
Australia's high unemployment is not just a symptom of the recession that began in 1990. Australia is over a year into "recovery" from the recession, but the "lean and mean" businesses which survive into the 1990s have not finished shedding jobs.
The economists predict that official unemployment will remain close to 10% for much of the decade. Reserve Bank chief Bernie Fraser says "full employment should be defined as 6%"! A recent study by National Institute of Economic and Industrial Research
grimly concluded that high unemployment is expected for the next 20 years.
Major social problems are ignored or deepened as Labor and Liberal governments single-mindedly pursue lower corporate costs. For example, in the face of dire warnings about greenhouse gas emissions, state governments are destroying public transport systems and building more freeways.
No easy answers
Cost-cutting may save the profit levels of some capitalists (at tremendous social cost), but it obviously cannot save all capitalists and certainly does not offer a solution to the overproduction crisis. In fact, it deepens the crisis as more productive, fewer and generally bigger corporations compete with each other, increasingly calling upon governments to help them beat their competitors, with hypocritical references to the "national interest".
While the restructuring project is presented as a national response to a national problem, it is actually the immediate interests of corporations that are served, often at the expense of abstract "national interests".
Big business makes much of the $32 billion debt of the Victorian government, but the mostly private foreign debt, now about $185 billion, continues to rise. Last year, just the interest bill of the biggest 1000 corporations in Australia was $79 billion, 2
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The suggestion that this is simply a "once off" restructuring of a pampered Australian economy is belied by the experience of post-Thatcher Britain, which is still sunk in deep depression. The 1990s will be the third decade of capitalist restructuring and cost-cutting, with no happy ending in sight.
While two decades of restructuring in Australia have not addressed the real problem of stagnation, they have served dramatically to shift wealth and income to the corporate rich.
Common Wealth For The Common Good, a statement by the Australian Catholic Bishops Conference in 1992, summarises the effect of this process:
- By 1984, the wealthiest 1% owned 25% of all wealth, the top 5% about 50% and the top 10% more than 60%. The least wealthy 30% have more liabilities than assets.
- The total wealth of the richest 200 more than trebled over the last eight years — from $7 billion in 1984
to $25 billion in 1992.
- Families earning between $20,000 and $40,000 suffered a 20% drop in their share of national income between 1975 and 1983, while well-off families increased their share by 10%.
- The gap between the incomes of the rich and poor widened further between 1983 and 1989. In 1982-83 the income of the top 1% equalled the earnings of the bottom 11%; by 1988-89, the top 1% earned as much as the bottom 21%.
- 10% of national income was taken away from workers and given to the owners of capital in the period 1983 to 1989.
The bishops drew two important conclusions from these figures. First, Australian egalitarianism is now a myth. Secondly, the discrepancy between the wealth and income distributions indicates that the assets owned by the wealthy in Australia are not being put to productive use.
Deregulation cannot "clear the markets" and end the crisis of overproduction, as the economic rationalists promise. The basic problem, Marxist economist Ernest Mandel argues, is that the accumulation of capital inevitably tends to reduce capitalist profitability. Previous long periods of global economic stagnation were met by similar restructuring programs but only climaxed in world wars which destroyed huge amounts of capital, weakened the labor movement and temporarily gave one group of capitalists dominance over others.
Long-term project
The current round of restructuring began in the mid-1970s with the Whitlam government's opening assault on tariff protection and the boosting of trade with Asia. It continued with the Fraser government's wage freeze and austerity drive, but this met a strong labour movement response and a setback for the capitalists with the "wages break-out" in 1982.
The failure of this early experiment with Thatcherism in Australia gave way to the Labor-ACTU Accord. While this was called a Prices and Incomes Accord, it imposed record industrial peace, wage control and austerity without controlling prices. Inflation, corporate debt and corporate profits soared while real wages and the "social wage" fell dramatically.
Privatisation got off to a slow but steady start under Labor. There was little effective opposition as it accelerated at the end of the 1980s, with the Commonwealth Bank, Australian
Airlines/Qantas, telecommunications and pensions being the big plums in the federal privatisation program. Big business also covets state-owned utilities such as gas, oil and water, because these offer safer and more profitable investment prospects in conditions of stagnation.
After the Accord
Big business is demanding even more sacrifice from others despite the Accord's record achievement in wealth and income transfer. The question is whether they can get more under Hewson's confrontationist approach or through Labor's corporatist approach.
Big business is considering a change of direction partly because of the exhaustion of the Accord process, marked by Accord Mark VI and the ACTU move to enterprise bargaining. The Accord first sought to trade off wage increases for indexation, improvement in the social wage and full employment. All of these have since been dropped; having run out of trade-offs, the union bureaucracy now trades wages and conditions simply for agreement to the involvement of the ACTU and new super-unions in negotiations.
The Accord also produced a legitimacy crisis for the ALP among its traditional supporters, as part of a growing public disillusionment with politicians in general.
Big business may calculate that the booting out of Labor governments after they have done the dirty work might dissipate some of this disillusionment in the political process. But it is not all in the hands of big business. Whether Kennett's and Groom's victories will be followed by Hewson's depends also on the labour movement response to the new program of attacks on its rights.
The Keating alternative may promise business slightly less, but it also promises less risk. Thus Keating is out to prove both his ability to control the labour movement and the prospect of labour unrest under a Hewson government. The anti-Kennett campaign is being manipulated to this effect.
Big business was clearly rattled by the mass response to Kennett in Victoria on November 10. The Age editorial of November 11 was revealing:
"The Victorian government must control its costs or become insolvent, and Mr Kennett clearly has a mandate to do that. But that does not absolve him from using his brains. Yesterday's strike and rally has energised and empowered his real opposition — led by John Halfpenny and Bill Deller — in a way they could only have dreamt of ... Mr Kennett should back off, and
keep his eye on the substance of change rather than the form".
The Australian and the Financial Review also counselled Hewson to distance himself from Kennett.
They were not the only ones running scared. The union bureaucracy soon indicated its unwillingness to take on Kennett in a serious and united campaign of industrial and mass action, ALP politicians refused to endorse strikes and some, like NSW opposition leader Bob Carr, even condemned strike action on the pathetic National Day of Action on November 30.
Labour movement weakened
After a decade of the Accord the trade union movement is considerably weakened, as figures compiled by the ACTU for its 1991 congress show:
- Overall unionisation is down from 51% of the work force in 1976 to 40.5% in 1990.
- In the private sector only 30.8% of workers are unionised, and 67% of workplaces have no union members at all.
- The biggest decline in unionisation is among young workers — down from 51% to 33.5%.
A major reason for the fall in unionisation during 1980s was that most new jobs were in poorly unionised casual and part-time work. But the ACTU admits that many workers, especially the young, don't see the value in joining a union.
However, after November 10, we can see that at least in Victoria the union movement is still organisationally formidable even though marked by major ideological weakness. Most union leaderships are under Labor Party political hegemony and are unused to struggle.
This is a direct result of the Accord, which actively promoted employees and employers working together to improve international competitiveness. Union officials argued that they were taking the initiative in the face of the New Right ideological struggle, but it is arguable that they were more influential in spreading the underlying ideology of economic rationalism than scores of diatribes by the likes of Hugh Morgan.
What some union officials admit was a controlled strategic retreat now threatens to become a full-scale rout.
Greens
The process in the union movement in the 1980s was echoed in the social movements, particularly the spectacular cooption of much of the green movement. In the 1970s Labor's attempts to coopt the women's, black and gay and lesbian rights movements all involved substantial offers of material support. The peak environmental movements were "romanced by the ALP" with a couple of national parks and the mere promise of involvement in the Environmentally Sustainable Development talkfest.
Labor's success crippled the emergence of Green political parties. The early hostility of peak environment bodies to the Greens, paranoia over left involvement in the movement and the crass parliamentary aspirations of many would-be "Green" politicians combined to limit this political movement and leave it divided into factions around a handful of "stars".
The left remains still too small to take full advantage of capitalism's crisis. This problem presents itself as the need for a new party to the left of the ALP to regroup the progressive forces and to challenge Labor's hegemony over the movements.
Recent electoral victories of several Green or progressive independent candidates (such as Phil Cleary) show the potential support for a political alternative. However, none of these has developed into a broad and democratic political project.
The absence of a significant challenge from the left to the major parties restricts the union and social movements' ability to resist attacks on their rights and interests. In the short term it can also result in temporary polarisation of public support between the major parties, as many polls indicate may have happened in late 1992.
However, Labor is unlikely to permanently regain its traditional support base as long as it remains committed to privatisation and deregulation. Even if Labor is voted out in the federal elections, the behaviour of its sister parties in New Zealand and Britain indicates that it is unlikely to turn to the left. The crisis of Social Democracy is likely to continue to dominate progressive politics in Australia.