New economy', same old principles
Stockbrokers, market analysts, finance journalists and politicians have been breathlessly singing the praises of the "new economy", supposedly based on the rapid growth of communications and information technology, and financial services.
However, two announcements in the space of two days have shown that this "new economy" is not new at all. Whatever its technological advances, it works on exactly the same principles as the "old economy": corporate greed comes first, last and always.
On March 8, the Commonwealth Bank announced a $9 billion (according to the Australian Financial Review) offer to buy Colonial bank's shares. The takeover would allow the Commonwealth to compete against the big boys of the world financial market, company executives claimed. It would also mean the likely loss of 2000 jobs and the closure of up to 200 branches, many in rural and regional areas.
On March 9, Australia's largest company, Telstra, announced a record half-yearly profit of $2.1 billion after tax, up from $1.8 billion last year. It also announced plans to slash its work force by 30% before 2002: 10,000 will be offered voluntary redundancies while another 6000, who work for Telstra subsidiary Network Design and Construction, will have to try their luck with whoever NDC's new owners turn out to be.
Telstra's job cuts come on top of 26,000 positions already cut since privatisation began in 1997. The total - 42,000 jobs lost in six years - is equal to half of Telstra's 1997 work force.
The announcements show the lie of the free marketeers' argument that increased corporate profitability is the key to a better life for all: more jobs, better pay and greater prosperity.
Who will really benefit from the Commonwealth Bank's or Telstra's plans? Certainly, workers won't. Close to 20,000 will lose their jobs. Those who remain will find themselves worked harder and longer as they are expected to do the work of those fired.
Consumers won't benefit either. Country people will be worst affected, losing more bank branches and waiting longer for telephone connections and repairs. According to unions, services in the cities will also suffer - even for the 80,000 people who own small bundles of shares.
The government's telecommunications industry ombudsman has reported an increase in complaints about service provision and maintenance, and that public concern about Telstra services is at an all-time high.
The Australian Communications Authority has stated that Telstra has a record of not passing "efficiencies" on to customers, either as lower prices or better services. The Commonwealth Bank has a similar record.
On the other hand, the companies' already grossly overpaid directors will benefit from salary bonuses and stock options. Major shareholders are expecting large dividend payouts.
Telstra's directors and major shareholders are likely to do even better if the government sells the rest of its 50.1% majority shareholding. On March 9, Telstra chairperson Bob Mansfield and CEO Ziggy Switkowski travelled to Canberra to brief politicians on why the government should do just that.
Telstra's jobs cut announcement should sound the alarm bells as to what Mansfield and Switkowski will do if the company is fully privatised. For communications minister Richard Alston, however, the announcement was an argument in favour of privatisation.
Not only are operating principles of the "new economy" no different from those of the "old", but the government's understanding of who its real masters are also has not changed.
Profit is the real scandal
A nursing director described her experiences working for profit-making and non-profit aged-care facilities in the March 3 Sydney Morning Herald. She explained that in the profit-making nursing home, "I could not get basic things like crockery, cutlery, linen and medical supplies". However, when she worked in a well-resourced, non-profit home, "I was overwhelmed by the difference".
Her observations indicate the real scandal in the Australia's system of aged care. As long as aged care is run for profit, medical care and accommodation in nursing homes will be kept at the lowest possible levels to cut costs.
Government regulation is insignificant because the government protects private profit making. It has been subsidising the money-making sector of aged care with $3.5 billion a year in public funds.
However, even privately owned, non-profit homes ultimately exist to serve the aims of their church and charity organisation owners. The Herald noted, "Even at some of the better homes, the residents now get perfunctory care because of staff cuts".
Only publicly owned aged-care facilities which are available to all who need them can fulfil the social responsibility for high quality care for the aged because such facilities would be directly and fully accountable to the people who use or will in the future use them.