Is this as good as it gets?

June 22, 2007

In an effort to be reelected for a fifth term PM John Howard is trying to convince workers that this is as good as it gets. Looking at his favorite figures, we might be forgiven for thinking he's right. In May, unemployment was at a historic low of 4.2% and the economy was growing at an annual rate of 3.8%. Employment grew by 39,400 that month while unemployment fell by 5500. However, these figures hide the reality that the benefits of the boom have been very unevenly shared.

Among the most excluded are the long-term unemployed. Howard has used falling unemployment rates to justify another attack on this vulnerable section of the community. Citing the strong job market, Canberra has decided that from June 18, those who have been unemployed for two years or more will be compelled to work for the dole for 25 hours a week for 10 months a year. This punitive measure was previously reserved for those whom Centrelink decided were "deliberately trying to avoid work". Failure to participate risks losing one's entire benefit for eight weeks.

From July 1, single parents on the Welfare to Work scheme will come under even greater pressure: pensioners whose youngest child has turned seven will be required to work for at least 15 hours a week; and those who can't find enough work within six months will be required to work for the dole.

Meanwhile, the June 19 Sydney Morning Herald reported that personal bankruptcies are on the rise, with more than 6900 registered in 2005-06 in NSW, and predictions of more than 8000 for 2006-07. The number of personal bankruptcies has increased by 50% on 1999-2000 figures, although in the western Sydney suburb of Blacktown where unemployment is more than 10%, the increase was 99%.

In Melbourne, the greatest number of personal bankruptcies — 81% over the last five years — are in the new housing estates in the city's outer suburbs. According to the June 18 Herald Sun, more than 5400 personal bankruptcies were registered in Victoria last financial year.

Data released in March shows that late payments of mortgages has risen to all time high of 1.17% of all mortgages. The level of personal indebtedness is $1 trillion, while household debt has reached 160% of household income according to the Sydney Morning Herald.

Interest payments on an average mortgage eat up to 11% of income — more than in 1989 when interest rates were at 17%. The story is no better for those who rent, with predicated rises of up to 20% this year in Sydney as landlords sell up and put their money into superannuation or shares. In March, rental vacancy rates in Sydney reached a historic low of 1.4%, according to the Real Estate Institute of NSW, while nationally they fell to 1.36%.

Australian Bureau of Statistics figures on household income reveal that the gap between the rich and the poor is getting wider. Figures comparing household income from 1993-94 to 2002-03 show that the income of those in the top 20% increased by 20.6% ($179 per week), while those of the lowest 20% went up by only 15.7% ($27 per week).

Add to this workers' uncertainty under Work Choices, including being forced to trade away hard-won conditions under an AWA (individual contract), no access to unfair dismissal laws and the threat of large fines for taking industrial action, and it's hardly surprising that, for many, Howard's promises of continuing good times are wearing thin.

Howard's neoliberal strategy has delivered for the wealthy, boosting its share of income and wealth at the expense of the rest of us. The big question for working people is how much better would a Labor government be?

Shadow treasurer Wayne Swann may well criticise the Howard government for rising petrol prices, high childcare costs and spiralling mortgage repayments caused by eight consecutive interest rate rises, but Labor's isn't offering much of an alternative. This is because, as former Labor PM Paul Keating said, the "reforms" of the Hawke and Keating governments were the bedrock of structural change on which Howard's neoliberal policies grew.

"The Labor Party will do no good running away from the great structural reforms of the '80s and '90s", Keating told the ABC's Lateline program on June 7. While Rudd Labor may not explicitly evoke the Keating example, the fact is that Labor's commitment to fiscal conservatism, neoliberal orthodoxy and market mechanisms is just as strong as the Coalition's.

While the minor changes Labor promises to make to the IR laws and environmental regulations are enough to make it important to elect federally, this won't be enough to defend workers' rights, rebuild public infrastructure and halt environmental destruction. For that, we need a political alternative that is committed to building independent political movements with the necessary clout to force the neoliberal parties back.

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