As COVID-19 vaccines are rolled out and lock downs and economic crisis measures wind up, governments, including Australia’s, are trying to paint a rosy view of the economic recovery.
At the same time, they are trying to lock in benefits for the capitalist class and turn the crisis to their own advantage.
Two important means through which they will seek to do this will be: the ratcheting up of the levels of casualised and precarious work; and the use of taxation and spending to transfer wealth upwards.
Neither of these are new, but the COVID-19 crisis presents new opportunities through which to pursue these measures.
In Australia, casual employment rose from 15.8% in 1984 to 27.7% in 2004.
Some have tried to highlight the fact that this level stabilised after that to around the 25% mark.
Yet, this ignores the fact that this still leaves an enormous proportion of the working population with no sick pay or annual leave, no guarantee of hours or any work at all from one day to the next and limited bargaining power for improved pay or conditions.
It also ignores the growth of other forms of insecure work, such as “sham contracting”. According to the Australian Council of Trade Union’s 2018 Australia’s Insecure Work Crisis report, Australia has more than 1 million “independent contractors”.
The report said that in 2011, 40% of those independent contractors claimed they had no authority over their work, suggesting they were not genuine independent contractors but merely another group of employees with no leave entitlements or work security. By 2016, this had increased to 64%.
The most notorious example of this has been the global growth of Uber. Uber has fought challenges around the world to stop its drivers from being legally recognised as workers and gaining the benefits of being employees.
The Australian Fair Work Commission, in 2017 and 2018, rejected challenges by Uber drivers to be treated as employees with rights against unfair dismissal. Uber drivers in Britain, however, had a victory against this global trend when the Supreme Court upheld a decision that they are not self-employed and should be entitled to sick and annual leave.
When the COVID-19 pandemic struck and much of the economy closed down, the food delivery business boomed. Uber and similar companies massively expanded their workforce based on their “independent contractor” model.
The sharp increase in unemployment and desperate, stranded overseas students provided a ready pool of exploitable workers with little choice but to take any work they could find.
In their December 2020 paper Year-End Labour Market Review: Insecure Work and the Covid-19 Pandemic, Dan Nahum and Jim Stanford of the Centre for Future Work reported that:
“Workers in insecure jobs lost work far more severely than those in standard, permanent positions. Casual workers lost employment 8 times faster than those in permanent jobs. Part-time workers lost work 3 times faster than full-time. Insecure self-employed workers lost work 4 times faster than those in more stable small businesses.”
They also found that: “The rebound of employment since May has been dominated by insecure jobs. Casual jobs account for 60% of all waged jobs created since May. Part-time work accounts for almost three-quarters of all new jobs. And very insecure positions (including own-account contractors and ‘gigs’) account for all of the rebound in self-employment.”
A Federal Court decision last May threatened to roll back some casualisation of the workforce by ordering a labour hire company to pay compensation for past leave entitlements for an employee whom the company had claimed to be casual.
Alarmed, the Scott Morrison government moved to overturn this progress in workers’ rights with its industrial relations “omnibus bill” which passed parliament on March 18.
This makes it easier for employers to define workers as casual as they see fit and reduces their liability for compensating misclassified workers. Fortunately, other anti-worker measures in the bill failed to pass.
The growth in insecure work serves not only to hold back the rights of those in such jobs, but also to hold back working-class bargaining power more generally.
The massive increase in government debt, due to pandemic crisis spending, also presents an opportunity which the government will use to enhance the wealth of the capitalist class at the expense of workers and the poor.
As is well known, after years of howling about the “debt and deficit disaster”, largely resulting from the Kevin Rudd government’s 2009 financial crisis stimulus package, the Coalition government boasted that it was bringing the budget back to a $7.1 billion surplus in 2019–20.
The supposed need to balance the budget has long been an ideological tool for governments to justify restricting or cutting social spending and the Coalition government used it incessantly.
Yet, in the space of less than a month, last March, the government abandoned the surplus and announced more than $200 billion in crisis spending measures, pushing the deficit and debt to record levels. The government fell silent on the desperate importance of balancing the budget.
At no time, however, has the government (nor the Labor Opposition for that matter) recanted its commitment to a balanced budget.
As crisis measures have now practically disappeared, the government will start to crank up its calls to reduce the deficit and pay back the accumulated debt.
If there really is a need to limit government debt, the most starkly obvious step would be to cancel the government’s stage two and three tax cuts, legislated for 2022 and 2024.
A 2020 Parliamentary Budget Office analysis, prepared for the Greens, said that tax cut packages since 2017 would cost the budget $325 billion by the end of this decade. It also said that 58% of these would go to the wealthiest 20% of the population and just 0.1% to the poorest 20%.
The government nonetheless has refused to countenance rescinding the stage two and three cuts — the stages that most heavily benefit the wealthy.
It can be expected that the burden of reducing the deficit and debt will instead be forced onto those less well off. This can already be seen in the government’s move to slash unemployment benefits, increased during the pandemic crisis, almost back to their pre-pandemic poverty levels.
On the positive side, the pandemic has served to make a mockery of governments’ claims that we can’t afford social spending because of the need to balance the budget and blunted it as an ideological weapon against those less well-off.
Claims that “we” have to balance the budget have always lacked credibility: they are always there when discussing the level of unemployment benefits but never when it comes to “defence” spending and wars. Even in the midst of the pandemic last year the government found tens of billions of extra dollars for new weapons.
The pandemic has strained the credibility of such claims further.
Significantly, the Reserve Bank of Australia (RBA) has embarked on a major quantitative easing program — the purchase of government bonds or other financial assets to inject money into the economy — since the beginning of the pandemic. The United States Federal Reserve had already been doing this for a decade, since the 2008 Global Financial Crisis.
Through this, the RBA has simply bought up government debt which, as the government institution with the authority to create money, it can readily do.
The RBA announced on February 2 that it had already bought $52 billion in government bonds under its existing program and had decided to purchase $100 billion more when that program finishes in April.
Given that this government debt has been purchased with money simply created out of nothing by the RBA, there is no necessity for it to be ever paid back. It could simply be retired, as the Bank of England has done with large chunks of British government debt.
Neither the government nor the RBA have shown any inclination to do this.
So the expectation remains that they will, at some stage, sell the bonds back to the private sector and then proclaim that “we” have to pay back the debt and balance the budget.
However, the credibility of this ruse has been greatly tarnished. The government will talk of “fiscal responsibility” and “budget management”, but it will need some effort to put the genie back in the bottle.