Are Australians moving rightwards?

January 19, 2005

Lisa Macdonald

Since the federal election there have been hundreds of articles asking the obvious question: How could a Coalition that has been caught out in so many lies, provoked the biggest protest marches in Australian history, forced some in the ruling class to publicly condemn its foreign policies, and hasn't won a state or territory election for years not only win the federal election but gain control of both houses of parliament?

Almost all analyses of the election results state that people's hip pocket was a major factor in their vote. There is considerable truth in this. However, the conclusions drawn from the economic realities by both the right and the liberal left and Laborites that this reflects a willing embracing of neo-liberalism and imperialism by the working class en masse is wrong.

The Coalition does look pretty untouchable at the moment. We should not overstate the magnitude of its win — the two-party preferred vote for the Coalition was lower than its 1996 vote. Nevertheless, election day was not an aberration. The polls say that both PM John Howard and the Coalition's popularity have increased slightly since October 9.

And this pattern seems to be being repeated in the states. A Newspoll in WA found that if an election had been held on December 11 or 12, the Coalition would have won with 49% of the primary vote. Labor would have scored just 35%.


A large part of the Coalition's electoral support is attributable to the healthy state of the Australian economy, which has experienced the longest period of sustained growth for several decades, and has, over the last decade, been the fastest growing of the developed economies. Economic growth has averaged 3.75% since 1996, higher in the last few years.

Recent growth in the world economy has been the strongest since the late 1970s, and the Australian economy has benefited, especially from the strongest economic growth being in Asia, with which Australia does much of its trade; and also because there has been a significant decline in the price of manufactured goods, resulting in falling import prices for Australia, and a big increase in the prices of resources, especially oil, iron ore and coal, resulting in huge export profits for Australian companies.

All of this has translated into the share of profits in national income reaching its highest ever recorded, at 25.6%.

The figures are truly obscene. For example, in the September quarter alone the mining industry made pre-tax profits of $4.7 billion, a 123% increase on the previous quarter and almost double the average in 2003. This was despite sales dropping by 4%. Retail sector profits increased in that quarter (before the Christmas spending spree) by 32.7% to $1.8 billion.

Wages, jobs & debt

But it's not just profits, and shares and investments, that have grown. Wages and jobs have increased also, although this is not evenly distributed.

The wages share of the increasing national income has remained at about 56% for the last eight years. Enterprise agreements have consistently delivered annual wage increases of 3.5-4.5%, and average weekly ordinary-time earnings for full-time working adults have risen about 5% each year since 2000. At the same time, inflation has been around 2-2.3%.

On the jobs front, as business investment has grown, employment has risen — from 9 million in 2001 to 9.7 million in 2004. In the last 12 months, employment grew 2.5%, the majority of that being full-time jobs.

The official unemployment rate has fallen to 5.2%, a 27-year low.

The growth in jobs and wages has resulted in consumer spending increasing by 30% in the last five years, but a large proportion of that increase has been on the back of escalating household debt.

At the end of 2002, two-thirds of households had debt, collectively owing $422 billion — around 60% of Australia's GDP. The average debt of $60,000 per household was comprised of $39,100 in mortgage; $12,000 in other properties; $1300 in HECS; $1000 in credit cards and $7000 other.

The largest share of household debt increases has been for housing purchases, accounting for 60-70% of debts. In 2004 the average full-time worker buying a home took on a debt that was 50% larger in comparison to their wages than a worker buying a home 10 years ago.

Years of rising house prices have given the illusion of wealth, and between 1999 and 2004 consumer spending increased by $110 billion. However earnings rose by only $77 billion, and the ratio of household debt to disposable income is now 150%, one of the highest in the industrialised world.

More than 30% of all households now have credit card debts, totalling $27.8 billion last August. Credit card debt has more than quadrupled in the last eight years.

For people well over their heads in debt, the fear of rising interest rates or unemployment, and of consequent poverty, are much more powerful motivators than fear of asylum seekers or terrorists. It was the Coalition's recognition of this that underlay the effectiveness of its election campaign focus on economic issues.

Acknowledging that a certain baseline conservatism in the working class of this rich little imperialist country has been reinforced by a decade of economic growth, and that people's vote is influenced by their perception of their own future economic security, is not the same as concluding that there has been a massive working-class swing in support of neoliberalism, nor even a rightward shift in mass consciousness.

It's not just that we have seen more mass protests over the last half a dozen years (the 1998 fight to defend the maritime union, the S11, 2001, protests in Melbourne at the World Economic Forum meeting, protests for reconciliation and refugee rights, and against war). Nor it is just that the Greens' national vote has increased from 1.7% in 1996 to 7.2% in 2004. Nor is it just the huge popularity of dissenting books and films by the likes of Michael Moore and Naomi Klein.

It is also that the Coalition's 47% primary vote is contradicted repeatedly in polls showing majority, sometimes overwhelming majority, opposition to public health and education cuts, the erosion of Medicare, the detention of refugees, Telstra privatisation and the Iraq war.

Progressive shift

In fact, there are clear measures of a progressive shift in public attitudes on a wide range of issues. Results of the ANU's Australian Survey of Social Attitudes, and the Australian Election Surveys, for example, show that in 2003, compared to 1987:

  • 9% more people thought big business has too much power.

  • 27% fewer people thought unions have too much power.

  • 33% more people supported spending more on social services as against tax cuts.

  • 42% more people thought women should be able to obtain an abortion easily.

  • 8% fewer people thought government help for Aborigines had gone too far.

  • 10% fewer people thought equal opportunities for migrants had gone too far.

  • 18% fewer people thought there should be stiffer sentences for breaking the law.

The recent wage increases and job creation have nowhere near made up the reductions in real wages and working conditions that occurred during the 1980s and early '90s, especially as a result of the Prices and Incomes Accords. And workers now have less job security, work longer hours or not enough hours, do more unpaid overtime, work in 24-hour, seven-day operations, suffer speed-ups and worse safety conditions, and have lost many other entitlements.

Today a quarter of casual and part-time workers say they need more hours. Even last year's Senate Poverty Inquiry highlighted the new phenomenon of the working poor, concluding that "Driving this change has been a casualisation of the workforce in the last two decades and a more recent weakening of the industrial relations systems". Meanwhile, more than half of those working at least 50 hours a week want less work.

Nor do the figures translate into less inequality in wages. Whereas in 1992 executive pay was on average 22 times higher than average weekly earnings, by 2002 it was 74 times higher.

Likewise, the healthy official jobs growth figures don't convey anywhere near the whole picture. For one, the official rate counts as employed anyone who works for one hour or more a week, concealing a huge level of under-employment. As well, tens of thousands of long-term unemployed are not counted because they've simply stopped looking for work, in particular men over 55, a big proportion of whom now survive on disability support pensions.

Then there are the half a million teenagers existing in limbo, in neither full-time work nor full-time study, the highest in six years.

I'm not going to risk any crystal ball gazing about when or what will trigger the end of the current economic sunshine. But it is 100% predictable that when the US takes a dive, and the world economy goes down with it, the degree of pain in the Australian working class, which has become hugely indebted, made no major wage gains and lost ground on working conditions and the social wage over the last period of growth, will be severe.

That pain is highly likely to cause a rapid disillusionment with the Coalition and "business as usual" politics.

[This is abridged from a speech given to the Marxist Summer School held by the Democratic Socialist Perspective, an affiliate to the Socialist Alliance, in Sydney in January.]

From Green Left Weekly, January 19, 2005.
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