Comment by Peter Boyle
With Paul Keating snapping at Bob Hawke's heels over rising unemployment, the ACTU has presented its "Charter for Jobs" to federal cabinet. Not surprisingly given the former treasurer's long association with ACTU secretary Bill Kelty, his and the peak union body's positions are very similar.
The ACTU charter (adopted without dissent at its September congress) outlines a 12-point strategy consisting of elements of the Hawke government's current policy, some proposals from Keating, and a short wish list from the ACTU. It doesn't challenge the economic "rationalist" framework of current government policy, nor does it propose any immediate job creation measures.
In common with the Hawke government, the charter supports "locking in" low inflation over the long term, "with sustainable, lower interest rates". The problem is that the present low inflation, touted as the government's only economic bright spot, is due overwhelmingly to the recession, which is also the cause of high unemployment.
Prior to the recession, inflation was driven mainly by price rises, as persistent unemployment and Accord controls cut into real wages through most of the 1980s. Prices began to fall only when the recession was brought on by high interest rates.
The ACTU and Keating are now calling for immediate and major cuts to interest rates, but the Hawke government fears this will simply result in another short speculative boom, which will blow out the balance of payments and bring a return to high inflation.
Keating and the ACTU also want business tax concessions to permit build-ups of stock, but again this is more likely to result in a renewed speculative boom, since few businesses will invest productively when there is no market for more goods and services.
While such a boom might create some short-lived jobs, it would almost certainly end in an even bigger crash and a deeper recession with even higher unemployment. What's more, it could further destabilise an already shaky financial sector (now carrying about $25 billion in bad debts) and add to an already monstrous foreign debt. The last speculative boom delivered by the former "world's greatest treasurer" stands as a stark warning against the Keating-ACTU "solution".
The second major push from Keating and the ACTU is to fast-track major resource development projects, including a new pulp mill for northern Tasmania, and aluminium processing and mining projects. In pursuit of this, the jobs charter calls on the government to "establish clear and consistent world class environmental guidelines as a means of enabling development projects to proceed" — a thinly veiled call to bring on resource security legislation and crush any environmental objections.
The ACTU seems obsessed with resource processing. "Almost $10 billion per annum could be added to our exports if all aluminium was transformed from bauxite and alumina to aluminium metal before export", the economic report to the ACTU congress speculated. Another $8 billion could be added if all wool was processed into fabric. While it admits that all these figures are unrealisable, it does not add that such projects would hardly make a dent in the 125,000 new jobs needed each year to solve the unemployment problem.
The ACTU message is based on the backward and false notion that environmental responsibility means high unemployment. In fact, environmental irresponsibility and profit-driven economic growth created the present high unemployment.
The ACTU also continues to support the Hawke government's micro-economic reform program. Indeed, it calls for an acceleration of this by reducing business input costs for new projects. This would involve increasing government subsidies for transport, energy and communication costs, delivering further wage cuts and further tightening working conditions.
In a rare departure from the Keating position, the jobs charter does acknowledge that the problem of unemployment will not be solved by big business, and it includes some half-hearted suggestions on job creation. Significantly, Kelty has not chosen to highlight this part of the charter. These proposals include:
l effective superannuation as a major savings resource;
l a national industry and infrastructure development fund;
l advancement of the Better Cities and Towns program;
l maximisation of Australian content in all projects of national significance;
l assistance to business for research and development, labor market development and marketing, and enforcement of anti-dumping measures.
Given the scope of the problems facing our cities, the $850 million allocated for Better Cities and Towns over several years in the 1991 federal budget marks it as an image-enhancer for the government rather than a serious project, at least at the present time.
Moreover, during the '80s the Victorian, SA and WA Labor governments learned at first hand, and a cost of several billion dollars, just how risky it can be persuading business to be more socially responsible and far-sighted. But the ACTU calls for more of the same.
As well, it insists (though government and the major financial institutions have dismissed this as a joke) on risking workers' superannuation funds on a national development fund that will provide low-interest funds to medium-sized businesses willing to take risks.
Risking public money without public control is madness in the light of recent experience. The ACTU still refuses to face the fact that long-term, sustainable and ecologically and socially responsible economic development is not possible without public control and administration, even if that is unfashionable these days. n0>