Renewed panic on global stockmarkets shows that the economic crisis that began in 2008 is entering a new stage. This time in addition to debt problems in Europe that threaten to drive governments into default and bring down the banks, growth in the real economy is failing.
Desperation and rage has burst onto the streets of Britain as riots shook the country. This comes on the back of brutal cutbacks to government services and spiralling unemployment.
Until now Australia has been relatively unscathed, with low unemployment and a booming mining sector thanks to continued economic growth in China.
But now, even before recession hits, corporate Australia is moving to slash jobs and throw workers on the scrap heap—all while continuing to chalk up record profits and hand out huge CEO salaries. BHP Billiton’s profit for last year was $22.46 billion, the highest ever in this country.
Westpac increased its profit to $3.17 billion for the last six months of last year, then turned around and announced 1000 job cuts. The Financial Review explained why, noting, “headcount reductions and offshoring would help Westpac achieve good earnings growth”—read bigger profits. The other banks are expected to follow.
Qantas made $552 million in the last financial year, more than a four-fold increase on the year before. But it is pushing ahead with a restructuring plan and 1000 job cuts.
Some industries, like retail, manufacturing and construction, are being squeezed by the strong Australian dollar and weak consumer spending. This has led to 1000 job losses at BlueScope steel and 400 at OneSteel.
But their CEOs are not even taking a pay cut—at BlueScope executives pocketed a staggering $3 million in bonuses in the year to June.
An average CEO at one of the top 100 companies earns $2.4 million, according to research cited in The Australian. The top 10 per cent of them can expect to grab an obscene $5.1 million a year.
But the jobs massacre is set to continue. Tim Rocks, from investment bank Merrill Lynch, told clients in late August that there are, “100,000 job losses in the pipeline”. The bank says it has already tallied 7000 job losses since June, with many more going unreported.
Unemployment edged up to 5.1 per cent in July, its first rise in a year. Full-time job growth also slowed. Just 26,000 jobs were added in the six months to July, compared to 39,000 a month in 2009.
Cutbacks and the cost of living
We are also getting a small taste of the budget cuts being imposed overseas. In NSW the new Liberal government has public sector workers in its sights. It has pushed through new laws allowing it to directly set public sector workers conditions and impose pay cuts through a wage cap of 2.5 per cent on pay rises.
A series of job cuts are also expected in September’s budget, with the Department of Primary Industries facing a 25 per cent cut and hundreds of job losses.
Federal public sector workers are also battling a below inflation pay cap. Inflation is running at 3.6 per cent. But the Analytical Living Cost Index compiled by the Bureau of Statistics showed a 4.5 per cent increase in costs over the last year.
It’s no wonder Tony Abbott’s campaign about the carbon tax and the cost of living is biting. Workers are feeling the pinch. But what is the Labor government doing to make life easier?
Instead of looking after workers, Labor continues to pander to business with endless talk about “economic reform”. It tries to sell the carbon tax as “the same sort of economic reform, hard economic reform, which this country has fronted up to in the past”. This is precisely the language John Howard used to justify WorkChoices, and the Hawke-Keating government before it used to justify its own neo-liberal onslaught. It means nothing more than a ruthless agenda of cutting wages and trashing living standards—all so business can keep turning in record breaking profits.
With job losses growing, and the threat of another world recession, we need to learn from those resisting austerity in Greece and across Europe. The Greek government has been shaken by a succession of huge general strikes.
Qantas workers are gearing up for industrial action against the job cuts. In the federal public service the fight over pay deals is continuing.
Nurses, public servants, teachers and firefighters will all be taking stopwork action on September 8 in NSW against Liberal Premier Barry O’Farrell’s attack on public sector workers.
This needs to be the first step in a concerted union campaign to force an end to the agenda of cutbacks and neo-liberalism, and send a message that workers will resist if business tries to sacrifice more workers’ jobs to maintain their bulging profits.