Running out of room

September 2, 1998
Issue 

Running out of room

There are at least two important messages to be drawn from the sharp decline in the Australian dollar, which last week fell to its lowest level ever against the US dollar.

One is that the Howard government has been lying through its teeth for the last year, when it claimed to have insulated the economy from the effects of the crisis in Asia.

At a time when national industries are more oriented to the world market than ever before, such a claim was always an absurdity. The economic collapse now spreading through Russia and Latin America will have profound effects on the entire world, although the particular effects will vary from country to country.

The second point concerns how to understand properly what the government really means when it makes this claim. Fundamentally, it is saying that it has put, not "Australia", but Australian big business in a favourable situation in which to ride out the economic storm. How? By throwing working people overboard, of course.

This is now being obliquely discussed in the business press, for example by Max Walsh in the August 28 Sydney Morning Herald. Discussing the possible inflationary impact of the falling dollar, Walsh wrote that some inflation was inevitable, but would be bearable "as long as there is no concerted and successful push for wage increases in order to maintain living standards".

Such a push was unlikely in the "present nervous environment", he continued, because workers are more afraid of losing their jobs than they are concerned about maintaining real wages.

In summary, the big business program for the economic crisis is to let working people pay for it through reduced living standards and higher unemployment. The Howard government has done its best to help that program succeed by bringing in the anti-union Workplace Relations Act, savagely reducing spending on social welfare, destroying the CES, excluding new migrants from social security, preparing a new tax system that will be even further skewed to benefit the wealthy and stepping up the scapegoating of Aborigines, migrants and the socially disadvantaged.

Of course, this government of vandals has neither the courage nor the wit to do that all by itself.

It has had considerable help, for example, from the Australian Democrats, who used their "balance of power" in the Senate to pass some of the Coalition's most reactionary legislation.

It's had the advantage of an "opposition" that confines itself to tut-tutting and hoping that people will forget how it foreshadowed most of Howard's measures when it was in government. (It's no wonder Cheryl Kernot has been able to find a home in the ALP.)

Last but certainly not least, it's had the benefit of a union movement that, with only a few honourable exceptions, has done its utmost to avoid fighting back against an enemy clearly determined to continue attacking unions until it is forced to stop. The symbol of this foolish retreat is ACTU president Jennie George weeping in Canberra in August 1996: not because of what the government had done or was planning to do to workers, but because some angry workers had behaved impolitely towards it!

The latest economic news should be read as indicating that working people and their unions are running out of room in which to retreat. The time has drawn appreciably nearer when the only alternatives are reversing course or being pushed over the edge.

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