Socialist Party statement on the Australian political situation

This document was discussed and agreed upon at the 2013 Socialist Party National Conference held in Melbourne on April 12, 13 & 14. It builds upon the perspectives outlined by previous SP National Conferences and should be read in conjunction with the world perspectives document agreed at the most recent meeting of the International Executive Committee (IEC) of the Committee for a Workers’ International (CWI).

Introduction

The entire world is reeling from the effects of the global economic crisis. There is practically no country that is not affected in some way. This is not only an economic crisis but it is also a political and a social crisis. Flowing from this almost every government in the world is unstable.

The severity of the political crisis is such that in some cases even liberal democracy has been pushed aside. In countries like Greece and Italy, the legitimacy of the capitalist parties has been undermined so much that so-called ‘technocratic’ governments have been installed. Even in the US, Detroit is under ‘emergency financial management’ in an attempt to stave off bankruptcy.

The social crisis is reflected in the fact that the gap between rich and poor continues to widen. In the US the share of national income going to the wealthiest 1% has doubled since 1980 to 20%. For the top 0.01%, it has quadrupled. In Australia income inequality has risen steadily since 2009. Figures show there was a 2.2% increase in inequality from 2009-10 to 2010-11 alone.

Part of the reason for this trend is the fact that the working class and poor have been asked to shoulder the burden of the crisis through austerity measures. In the main, capitalist governments of all shades around the world are forcing cuts and austerity measures on the working class. Their strategy is to snatch back reforms won by the working class over generations and in doing so open up new sectors of the economy for capitalists to exploit. Far from stimulating growth these austerity measures are only making the situation worse by reducing already weak demand.

Originally the International Monetary Fund (IMF) had said that for every dollar governments cut in their budgets, their economic growth would suffer just 50 cents. Now it has been revealed that for every dollar cut budgets have suffered by an amount closer to $1.50! In response to this ‘planned poverty’, workers have been fighting back by way of strikes, protests and in some places waves of revolutionary action.

Europe is at the centre of the economic storm and the European working class is currently at the fore of the fight back. The depth of the crisis there is exacerbated by the European Union (EU) – a union that has failed to overcome the contradictions of competing nation states. This makes it much harder for them to be able to agree on a way forward. There is an increasing divide across Europe whereby European economic policy pursued in the interests of the stronger economies is worsening the crisis in the weaker economies, bringing the future of the Euro currency into serious question.

On the one hand no one wants to pay to bail out the economies of Greece, Spain or Portugal, but if they don’t it could lead to the collapse of the European Union itself. The partial, or even total break up of the EU, is still a possibility. Even if just one significant country, like Greece, left the EU it would have huge economic and political repercussions across the world.

The main motor of world capitalism, the United States, is struggling with very weak economic growth accompanied by high levels of unemployment. A number of fiscal battles have posed huge dangers for the US and global economies. None of these issues have been fundamentally resolved and the risk of an international financial meltdown is still present.

A worsening of the situation in the US or Europe would inevitably impact on Australia and could bring an end to the relative stability that currently exists. However, the most important country that will shape the future in Australia will be China – Australia’s largest trading partner.

China

The Chinese economy is still in a fragile state recording its slowest growth since 1999. Chinese growth has dropped to around 8% but according to some experts could drop to as low as 3%. While 8% growth can sound impressive compared to rates in the advanced economies, in the underdeveloped world this really represents stagnation.

While China’s economy has avoided a ‘hard landing’ for now, this was only achieved thanks to a new wave of infrastructure spending and a further inflation of the housing bubble.

Far from solving any of the fundamental problems in the Chinese economy this has only led to increased indebtedness, higher inflation, and huge levels of over capacity. The shadow banking sector has grown massively in the past year, posing risks of a meltdown in the future.

There is a realisation within the ruling circles of China that the current economic model of investment-driven growth cannot be sustained. This has led to the biggest levels of overcapacity ever seen. It is estimated that capacity utilisation across Chinese industry averaged just 60% in 2011, compared to 90% in 2000. We now have the phenomenon of ‘ghost cities’ comprising of thousands of empty homes that ordinary people cannot afford to buy.

Crucially for Australia’s export driven mining sector, overcapacity in the steel industry in 2012 was 200 million tonnes – a higher figure than China’s total steel output 12 years ago. More steel plants are still being built while demand and steel prices have fallen sharply as the housing market weakens. As Reuters reported in September 2012, “By the end of last year, China’s steel industry had a total debt burden of $400 billion – around the size of South Africa’s economy”.

China now faces a potentially catastrophic debt crisis, with corporate debt rising to 122% of GDP this year from 108% in 2011. This far exceeds the 90% level deemed “risky” by the OECD.

Local governments are “the weakest link in the Chinese economy” according to Credit Suisse bank, after ratcheting up huge debts from manic infrastructure construction. The banking system is storing a time bomb in the form of bad loans arising from such over-investment and the property bubble.

Fitch Ratings estimates that Chinese state-owned banks’ new loans have totalled US$14 trillion over the last five years. “This is equivalent to replicating the entire US commercial banking sector in just five years,” commented the head of Chinese bank ratings at Fitch.

In light of the looming debt crisis the Chinese government has decided against “kicking the can down the road” in the form of major new stimulus programmes. At the moment they are instead moving in the direction of economic ‘restructuring’ to break up and privatise sections of the state-owned economy. This they hope will open up new profitable sectors in the economy.

If this was to work it would only mean the working class shouldering the burden via higher prices and reduced services therefore further cutting across any attempts to re-balance the economy towards more household consumption. Attempts to shift away from exports and towards an economy based on domestic consumption in China have consistently failed. China’s low wage economy is both its biggest asset and worst enemy.

Under the surface China’s economy is extremely unstable. Add to this a growing social and environmental crisis, and political divisions opening up in the regime, and you can see that far from being the saviour of Australian capitalism it could in fact become a huge liability.

Political and social developments in China can also have an impact on the situation in Australia. Recent confrontations between the state and ordinary villagers demanding more democratic rights and an end to corruption are a glimpse of the possibility for huge scale revolutionary explosions to take place. Such events would have an electrifying effect globally. Young people and workers in Australia would undoubtedly be politically influenced and have their confidence to struggle boosted.

If China experiences a hard landing it would likely lead to the Australian economy grinding to a halt. Apart from the economic impacts this would have on people’s lives, such a development could shock the working class and have a stunning effect leading to a certain reluctance on behalf of Australian workers to struggle against the impacts of the crisis.

A softer downturn, on the other hand, could have the effect of revealing the true nature of the crisis while still leaving the class with the confidence to fight against the austerity measures that the government and employers will inevitably try to implement.

Australian economy

Up to now, Australia – compared to most of the advanced world – has been less affected by the economic crisis that is gripping the world. The Australian economy has been somewhat sheltered by the economic turmoil thanks to a boom in the resources sector and high levels of exports to China.

That said Australia has a two speed and highly regionalised economy with mining dominating in the west and other sectors like manufacturing, retail, education and tourism predominately on the east coast. Many regions on the east coast are struggling. Victoria, South Australia and Tasmania are already in recession and this is giving rise to tensions between business interests in the different sectors.

The export-led mining boom has helped to strengthen the Australian dollar. So too has Australia’s triple-AAA (safe haven) status and relatively high interest rates. The strong exchange rate has harmed the non-mining sectors, with manufacturers now finding it much harder to compete on the world market. Given some other advanced economies are lowering the value of their currency in an attempt to regain international competitiveness this is likely to worsen.

A recent report calculated that over 100,000 manufacturing jobs had been slashed since the start of the global financial crisis in 2007. There are predictions that the entire car industry could collapse before 2016. Desperate to maintain their profits manufacturers are demanding concessions (like lower tax rates) and assistance (generally in the form of subsidies) from the government.

But at the same time the mining industry bosses are demanding that the government represent their interests. They hold political sway over the government thanks to mining investment driving much of Australia’s 3.2% growth in 2012 and the fact that the big mining companies are donors to both the major parties.

When Kevin Rudd previously proposed a mining super profits tax, which was aimed at redistributing profits from mining to the less profitable sectors via cuts in company tax etc, the mining bosses revolted. Their interests are in maximising their own profits not donating to poorer performing capitalists. The pressure that was brought to bear on the ALP forced them to replace Kevin Rudd with a more compliant Julia Gillard.

Gillard proceeded to water down Rudd’s tax so much that it became totally ineffectual – even from the perspective of the more far sighted sections of the ruling class. The tax raised only $126 million in its first six months – for a net contribution to the budget of $88m because miners can use their payments to reduce their company tax. This is compared with the original budget projection of $2 billion across the full year.

To make matters worse the federal government gives just over $4 billion in direct subsidies to mining companies each year – mainly in the form of cheap fuel and tax breaks for building roads and railways.

All this while BHP Billiton recorded earnings of $27 billion in the 12 months to June 2012 and booked profits of $15 billion. Rio Tinto booked half-year earnings of $5.9 billion while Xstrata recorded half-year earnings of $4 billion. In the eyes of ordinary people the Gillard Labor government has helped facilitate these super profits and contributed to the rising inequality that exists.

Crisis facing Labor

Far from taking from the super rich to give to the rich (as Rudd had envisaged) the government has not been able to capitalise on the mining boom. At the same time none of the tensions that exist between the employers of the different sectors have been resolved. It is these tensions that lie at the heart of the crisis affecting all of the political parties that strive represent the interests of one or another section of big business. This is particularly the case for Labor.

So deep is the crisis facing Labor that there is still a possibility that they will be forced to change leaders before the September election. Gillard’s opportunistic and xenophobic attack on 457 visa workers is just one example of how desperate she is to maintain support.

Tensions within the Labor Party reflect how politically weak and crisis prone the entire Australian establishment is. Behind the façade the Australian ruling class is extremely unstable. Its biggest asset is the political and organisational weakness of the working class – as maintained by the trade union leaders and the ALP itself.

Adding to these tensions and the instability in the government is the fact that the mining boom seems to have peaked or is about to peak. Indicators show that the peak in investment and commodity prices has passed. With most other sectors of the Australian economy performing poorly, many capitalists will now be looking for higher returns on their investments in other parts of the world.

In anticipation of a slowdown in the mining sector, and the huge impacts this will have on the Australian economy, Treasurer Wayne Swan has gone back on his promise to deliver a budget surplus this year. This measure was intended to assuage big business and the financial markets, though was spun to make people think it was a matter of ‘responsible government’. Having hung his hat on this promise for at least 3 years his failure to deliver will be seen by many voters as a betrayal and a sign of poor economic management.

It was always going to be near impossible for Labor to deliver a budget surplus. Consumer spending has been down impacting on tax revenue and company tax receipts have also been lower in general terms. The ineffectual mining tax has only added insult to injury.

The only way to potentially achieve a surplus would be to make even deeper cuts to public spending. In an election year this would have been political suicide given the anger that already exists against Federal Labor thanks to the carbon tax and a string of corruption scandals. In most states Labor is similarly despised thanks to their policies of cuts to services and privatisations.

The problem facing Labor is that that they have disappointed huge numbers of people on a range of different issues. Their dilemma is that they are a big business party, at the moment the key representatives of the mining industry, yet they rely on the votes of working people to stay in power.

When they do what big business asks of them they disappoint their voter base. And when they mouth populist ideas to try and placate their working class supporters they are chastised by their financial backers. The fundamental contradiction of Labor trying to balance between two classes is what lies at the heart of their constant state of crisis.

Greens

The Greens have attempted to present themselves as some sort of left alternative to Labor but have similarly failed to make an impression on the broader working class. The failure of the Greens to outline an economic and political alternative to the major parties means that the best they can hope for is to be king makers as opposed to developing into a genuine third force in Australian politics.

Previously in Tasmania the Greens have chosen to go into coalition governments with the Liberals. More recently at a federal level they pragmatically decided to hedge their bets with Labor.

They have spent the last 3 years trying to lay claim to some of Labor’s so-called achievements while simultaneously attempting to criticise them from the left. This has not benefited them as people see them as either hypocritical, naive or both.

They are now seen as connected to unpopular and ineffectual policies, like the carbon tax, while at the same time criticising things that they have voted for like the mining tax. We should remember that in recent years the Greens have had effective control of the Senate and could have used their position to block or strengthen a whole raft of legislation. In their minds maintaining their defacto coalition with Labor was more important than fighting for any real reforms.

The one issue that many people had hoped the Greens would be able to influence was same-sex marriage rights. Even here they have been a dismal failure. They have focused their attention almost purely in the parliamentary arena as opposed to building a social movement.

In line with their general political approach, they have never put any serious demands on Labor. In reality they guaranteed them supply and confidence in exchange for a few bureaucratic meetings. They refuse to understand that real reforms are won by movements and signed into law only when politicians are put under due pressure. This means the focus needs to be on movement building with progressive parliamentarians playing a mere auxiliary role.

In part due to the Greens mistakes, the movement for same-sex marriage rights has been dwindling. If a conservative government comes to power and further blocks same-sex marriage laws it is possible that young GLBTI activists take their focus off same-sex marriage and struggle around other GLBTI issues like systemic homophobic bullying or police violence.

More recently the Greens have realised that being associated with Labor is going to be a liability come the federal election in September. Because of this they have moved to try to decouple themselves from the alliance. Shamelessly they have sighted matters like Labor’s mining tax (which they voted for) for the breakdown in relations.

As we have seen in the recent Western Australian election the fact that they have been associated with Labor has led to a drop in their support. In that state their support dropped to 7.9% in the recent election, after polling at 16% in June 2010. They too are now threatened by the anti-incumbent mood that exists.

The Greens may be able to hold their votes in the more middle class areas of inner city Melbourne and Sydney, and in areas where their members are actually involved in community campaigns, but in general terms it is likely that they will suffer a drop in support in more working class areas.

If they did manage to lose their only lower house seat in Melbourne, and perhaps even miss opportunities in the Senate, it is not ruled out that this could have a big impact on the party. The loss of their leader Bob Brown has already been a blow to their prestige. Given that they are based on a wavering layer of the middle class, these people could abandon the party if the Greens take a political knock.

Unlike the early 2000’s when the Greens made some significant electoral breakthroughs, the party has since diminished its presence in campaigns and social struggles. In many areas they have increasingly become an exclusively electoral formation. This means any future electoral setbacks will impact heavily upon them.

In the absence a genuine left alternative to Labor, the Greens will likely linger. Even then, it will probably be the case that the Greens will be more of a regional phenomena rather than winning more generalised support in working class areas.

Federal election

The 2013 Federal Election will dominate the political agenda this year. In many ways this election will be a phoney war of words. Both the Liberals and Labor support the profit driven capitalist system and both see themselves as representatives of big business.

While the Liberals are the traditional party of big business, Labor are seen as the alternate party of the capitalist class. The difference between the two is more about style than substance. Far from being a lesser evil Labor would be better described as a wolf in sheep’s clothes.

Despite their poor record Labor will be trying desperately to convince people that they are not as bad as the Coalition. The issue of migrant workers on 457 visas is just one case in point. Despite both parties presiding over an expanding 457 visa scheme Gillard is now pretending that this is a point of difference.

While having full agreement on all the major issues, the Coalition are similarly trying to portray themselves as something different to ALP. If the election were held today the polls show that the Coalition would win by a fair margin. This is not because people have any love for Tony Abbott, but because people have been disappointed by Labor and are asking: “Can the Liberals really be any worse?”

With the lack of any genuine progressive alternative available, the mood of many people is to continue to use one of the major parties to punish the other. It will likely be a case of people voting for whom they hate the least at this point in time, not who they think can improve their lot.

Much of the mainstream media and the political caste don’t seem to understand this process. They seem to think that working people somehow don’t understand and that they are on the cusp of throwing Abbott in to power to their own detriment. While we do not welcome the coming to power of the Liberals we do understand the reasons behind people’s frustrations with Labor.

In part we put the blame on the Labor Party’s shift to the right and on the trade union leaders who play a rotten role supporting this party while they proceed to tighten the screws on workers’ living conditions.

The truth is that there is no real enthusiasm for any of the establishment parties. Despite it looking like the Liberals will be thrown into power nationally, in places like Victoria the Liberal government is in crisis. They hold onto power by a one seat majority and only a couple of months ago they were forced to change leaders. Similarly the conservative government in the Northern Territory also ousted their leader around the same time.

In March 2012, the Liberal National Party government in Queensland was elected in a landslide that reduced Labor to just a handful of seats. Since then, three MPs have defected, and three ministers have been forced to stand down. At the same time the governments support has dropped significantly. In the main an anti-incumbent mood dominates with voters prepared to punish anyone who they see as responsible for cuts and ramping up cost of living pressures. Changing leaders can give a government some breathing space but does not address the root cause of the problem.

The solution for working people is not to just keep using one big business party to punish the other. This routine needs to be broken and a new party that represents the majority of ordinary people needs to be built. Such a party needs to be constructed in conjunction with the development of a movement of people that can challenge the rule of corporate profit and the system that facilitates it.

While this is the ultimate solution, at this point in time there are no obvious points of reference for such a party to coalesce around. The trade unions for the most part are wedded to Labor. Adding to the obstacles of a new political movement developing out of the trade unions is the lack of Left opposition currents in the movement.

For any new party to be successful it will need to develop links to the organised working class. That said, given the current situation it is possible that developments towards a new workers party could take place around community campaigns or similar struggles. For example campaigns standing their own candidates against the major parties would be a step in the right direction. A flexible approach will be required around this question.

Whether it is the Coalition, Labor or some form of minority government that wins the election this year it will be little more than a poisoned chalice. With no recovery in sight for the world economy, and Australia’s situation looking more and more fragile by the day, whoever comes to power can look forward to a rocky road ahead.

Trade unions

Despite the fact that the ALP have undermined the living standards of workers since coming to office, most trade union leaders are preparing to throw their weight behind Labor’s election campaign with money and human resources. When taken in its proper historical context this is a dark time in the history of the labour movement.

The Gillard ALP government is one of the most right-wing governments that has ever presided over Australia and yet the trade union bureaucrats are doing all they can to try and save it from oblivion. They peddle the line: “While Labor is bad, the Liberals are worse and we need to keep them out”.

This ‘lesser evil’ argument is designed to block the emergence of any progressive third force, for many of the trade union bureaucrats themselves are key players in the ALP and use the party as a vehicle to climb the political ladder for their own personal agendas. This is but one reason why many have lined up with Gillard in a nationalist campaign against migrant workers on 457 visas.

They will do all they can this year to ensure as little struggle as possible takes place. Far from having the best interests of the working class in mind they prefer Labor in power as it means they have their feet under the desk in Canberra and at least a finger on the reins of power.

Despite 25 years of continuous economic growth the bulk of the current trade union leaders have failed to take advantage of the situation. Far from winning a bigger share of the wealth, all indicators show profits as a share of the economy rising at the expense of wages. In other words living conditions have gone backwards under their watch.

This is not an anomaly. It is a direct result of the pro-capitalist politics that dominate the trade union movement at this point in time. Both the consciousness and the organisation of the working class has been thrown back since the pro-ALP forces have taken near full control of the union movement.

We have noted this process in relation to the collapse of Stalinism and the shifting to the right of old social democratic parties but perhaps even we have underestimated just how much damage the current trade union leaders have done to undermine the working class’ ability to struggle. This is true not just in Australia but all around the world.

In many countries conservative union leaders are they only ones standing in the way of struggle. On the basis of their commitment to the market they are refusing to organise a struggle against the system. In many cases they are even refusing to organise against austerity giving the false impression that if workers accept cuts now things will get better in the future.

The current union leaders, in the main, are wedded to the ideas of social partnership and collaboration with employers. The situation in front of us requires a rejection of these ideas and an actual struggle against the powers that be. In many examples these politics are not only to be found wanting but they act as a block in the situation.

In Victoria for example the recent resignation of rogue MP Geoff Shaw from the Liberal Party, and the subsequent sacking of Baillieu as Premier, showed just how weak the government is. If the trade unions had organised even modest cross sector industrial action the government could have been brought down months ago.

Similarly in the manufacturing sector the unions refuse to organise industrial action against the stream of job losses. To make matters worse they spend their time campaigning for tax-payer funded subsides for employers. Not only are they overseeing the destruction of jobs, but they are actually campaigning to hand over workers money to the bosses!

While they might be able to get away with this now they will find it much more difficult when the objective situation shifts. We need to be prepared that in the future the union leaders will probably organise limited actions, short strikes etc, to relieve pressure from themselves and allow the members to let off steam. This will especially be the case if Abbott comes to power in September.

The calling of limited actions can act to draw out the process of consciousness developing in a progressive way. In other words it will take some time and experience for the class to see and really recognise that pro-ALP ideas are incapable of offering any real solutions to their problems.

The danger for them is that if they block a certain path the class can sometimes decide to take a different track. The M15 movement in Spain is one example of this process and we should be prepared that similar types of struggles can develop here outside of the control of official labour movement structures.

While the situation in Australia is not at the same fever pitch as in Europe the same processes are occurring and the same politics dominate. We are lucky in the sense that we have the luxury of learning from the experiences of the European working class. Australian workers need to prepare now to ensure our movement is equipped to deal with the attacks that are set to come down the line.

We should have no illusions in the capabilities of the trade union leaders, but instead do all we can to pressure them into struggle. While most will end up on the wrong side of the fence some will be forced by the pressure of events to go further than they had planned. Struggle, even if limited, can open up space for radical ideas to flourish and for new and more militant leaderships to emerge.

We need to be patient as consciousness catches up to reality and while going through the struggles with the class we should consistently explain that both the rebuilding of a militant trend in the labour movement and the building of a new workers party will be necessary if we are to combat the bosses’ attacks in the years to come.

Perspectives for struggle

While the union leaders may be open to organising some limited industrial action after the election, this side of September they will be doing all they can to keep a lid on struggle. It is likely that any struggle that does take place this side of the election will happen outside of their control.

It is possible that they can be forced into limited defensive battles over jobs and pay agreements etc but any offensive battles that could potentially further destabilise federal Labor are ruled out. It is possible that even battles with various Liberal State governments could be wound back as the election nears. The union leaders will want to do all they can to present themselves as responsible allies of the ALP.

It is possible that groups of organised workers can take action against the wishes of the union leaders or that groups of unorganised workers can also act against attacks. Perhaps the most likely scenario is that the bulk of struggles prior to September will take place around community campaigns against cuts, privatisations etc and on social issues like environmental questions or issues affecting women.

Women

In the past year there have been significant mass demonstrations around the world on gender issues. The gang-rape and murder of the young woman in India provoked an outpouring of anger about an issue that affects millions of women world-wide.

In Ireland we have seen mass protests for abortion rights. In other countries we have also seen the Slutwalk movement and increased participation in Reclaim the Night marches. In Melbourne we saw huge protests in the aftermath of the rape and murder of Jill Meagher.

These movements have not developed in a vacuum. The rise of these movements is connected to objective conditions, in particular the economic crisis. As the crisis deepens, women are being asked to bear an unequal measure of the suffering. The majority of the world’s jobless, homeless and hungry are women as are the bulk of people who are victims of domestic violence and rape.

Hard-won welfare reforms are being annihilated by austerity budgets in many countries. Even here in Australia, before the full effects of the crisis have been felt, sole parents (the majority of whom are women) have been asked to pay via cuts to their welfare payments. As has been pointed out in the press the government has cut more from sole parent’s payments than it has brought in from the mining tax! This is a perfect example of which section of society they think should pay for the crisis.

In many ways the rise of the women’s movement can be seen as a precursor to more generalised struggles developing. Consciousness goes through different phases in the context of a crisis. In many cases people first struggle around specific issues before they see the need to identify and struggle as part of their class. In anticipation of the situation getting worse, women are initially coming together to draw a line in the sand.

We welcome the rise of these movements and have participated in many of them. At the same time we emphasise how women’s oppression is rooted in the division of society into classes and the need to widen the struggle and link up with other sections of the working class in order to achieve lasting social change.

Refugees

The question of refugee rights is still pressing especially given that the regressive measures implemented by Gillard are even worse than those implemented by Howard. The problem facing the movement at the moment is that it is dominated by NGOs, middle class types and soft Lefts who refuse to answer the economic arguments that dominate the thoughts of most people.

Unlike the peak of the refugee movement 10 or so years ago, most people today are extremely concerned about cost of living pressures and jobs. 10 years ago most people thought the boom would last forever. This opened up space for a layer of people to be convinced by the moral arguments put forward by the NGOs.

Today there is a feeling amongst working people that things are becoming more difficult. The major parties, the media and even the Greens have fuelled the arguments that there are limited resources and that population controls are necessary. This gives rise to the idea that perhaps immigration should be tightened.

The super profits of the big mining companies alone show that there is more than enough wealth to go around. Far from being a problem of scarce resources it is a problem of how wealth is distributed under capitalism.

If the refugee rights movement is to achieve any traction amongst the bulk of working people these arguments will need to be waged and won. Moralism can have a certain impact on sections of the middle class who are less affected by cost of living pressures but if we are to convince the bulk of the population the economic questions need to be answered.

For our part the Socialist Party will continue to intervene in the refugee rights movement putting forward socialist solutions. This is the best way to undermine nationalist and racist ideas.

This work however goes hand in hand with the need to build a progressive political alternative to the major parties. If a left alternative is not built it is possible that right-wing populist forces can intervene to fill the vacuum.

This has been seen in places like Britain with the British National Party and in the Netherlands with the Party for Freedom. These parties blame migrants and refugees for many of society’s problems and by playing on the fears of the working class have been able to make some electoral inroads. These parties play a useful role for the ruling class in that they help divide people and make it easier for them to introduce their attacks on our living standards.

Aussie jobs farce

Desperate to cling onto the votes of frustrated working class people the ALP have in their own way recently tried to scapegoat migrants. In their case they have attempted to paint migrants, who have come to Australia on the 457 skilled worker visa, as taking jobs from locals.

Understanding the anxiety that exists in relation to jobs and the economy, Gillard has attempted to portray herself as a defender of ‘Aussie jobs’. She has announced a so-called ‘crackdown’ on 457 visa rorts and a tightening of the visa conditions.

While there is evidence that workers on 457 visas have been super exploited the government’s intentions are not to put a spotlight on dodgy employer practices. The government is merely trying to manufacture a difference between itself and the opposition.

The figures themselves show just how hypocritical Gillard is being. This government has actually presided over the biggest yearly increase in 457 visa approvals in the past 15 years. Immigration Department figures reveal the number of 457 visas approved in the 2011-12 financial year was 125,070, a 52.3% increase on the previous year.

Far from being a defender of jobs, unemployment, underemployment and casualisation has risen under the ALP. At the behest of big business they have also helped facilitate a situation where migrant labour, under the 457 visa scheme, is being used to try and drive down wages and conditions.

The real purpose of 457 visas is to provide employers with cheap non-union labour. Temporary migrant workers, even if paid the same rates as local workers, are always vulnerable because the employer has the ability to terminate the visa at any time for any reason.

The nationalist call for “Aussie jobs for Aussie workers” only feeds the flames of racism and creates divisions between workers when we should be striving for unity against those who are exploiting us all. Only a strategy that seeks to organise all workers against the real enemy can win.

In the short term unions need to put the time and resources into organising migrant workers. They need to find ways to initiate joint struggle between migrant workers and local workers, as well as educating their members about the real causes of unemployment. Side by side with unionising migrant workers unions should fight for their permanent residency and equal rights.

These issues should be the primary focus of any union campaign. The secondary focus should be the scrapping of all dodgy visas including the 457 visas. Far from this approach many unions are mistakenly running ‘Aussie jobs’ campaigns and opportunistically presenting Gillard as some sort of jobs advocate. This is just another example of the rotten nature of the tops of the trade unions today.

The truth is that the fight to scrap 457 visas, and to force the bosses pay for the skills they wish to exploit, are campaigns that in the end will only be won on the basis of a political shift in the labour movement. In the meantime however we need to do all we can to counter racist and nationalist ideas with the ideas of internationalism, solidarity and joint struggle.

Consciousness

25 years of economic boom is the main factor which shapes the broad outlook of Australian workers and young people. In general terms people are concerned about the future but are hopeful that Australia can somehow miss out on the depths of the crisis that we have seen in Europe.

The main concern amongst youth is employment. Of 14-25 year olds, 64% worry about getting a job and 74% of 25-30 year olds worry about having enough money a recent report showed.

Many young people seem to be under the illusion that this crisis is temporary and that they will only have to put up with casual jobs and low pay for a couple of years. This is the myth that is peddled to them at school, at university and via the mainstream press. ‘Study and work hard and you will get ahead’ they are told.

At a certain stage it is going to become more apparent that despite their hard work there will be no rewards. After years slaving away in a low paid job while struggling at university all that will be in front of them will be a huge student debt and another casual job if they are lucky. Most will never be able to afford to buy their own their home.

Once they realise that they have been lied to and that they will not be better off than their parents, anger and a more combative attitude can develop quickly. As we have seen elsewhere in the world young people can enter the scene in an extremely dynamic way. With a feeling of having nothing to lose they can draw far reaching conclusions about capitalism as a system and the need to change it.

At the moment many young people have an individual consciousness. This is to be expected as many have never witnessed the benefits of collective struggle. In recent times the movements that they have created (like Occupy) have been politically confused and uneven. Regardless we recognise that any steps towards collective struggle are steps in the right direction therefore we strive to participate with enthusiasm.

Young people’s absent experience of collective struggle and mass movements also means, on the positive side, that they have not experienced the defeats and betrayals of the past and have not been demoralised by bad experiences. Consequently their apparent apathy and inaction can shift rapidly to extreme optimism.

Our focus needs to be on understanding the moods and attitudes of young people and participating in all of their struggles. We need to try and draw the most radical, the best fighters and the most politically developed into our ranks.

Just because older workers have more responsibilities and more pressures on them than the youth, it does not mean that they cannot also be radicalised quickly. With the experiences of the rest of the world in front of them the Australian working class may not take so long to move into action.

It is possible that Australian workers can draw some lessons from Europe and jump over some of the hurdles more quickly. This will be fast tracked even further if we can grow and help sections of the class draw the right conclusions.

Conclusion

In general terms we can say with certainty that this crisis is an international one and that it will be of a drawn out character. But within that general route there will be many twists and turns.

If the situation in Europe or the US worsens, this will further impact on China. Even without Europe and the US, China is facing a series of crises itself. Any number of factors can lead to the Australian economy slowing significantly – even in the short term. With many regions on the east coast already in recession we could quickly see a situation here that closely resembles that of Europe.

That said it is possible that China can draw out the process a little longer, it is definitely the case that the length of time that Australia can continue to avoid the worst is limited. The direction is clear but the question is one of timing.

In this period, where people’s consciousness is yet to catch up to events, we need to focus on growing and strengthening our modest forces in order to be able to take full advantage of things when the objective situation does shift more in our favour. A growing number of people are questioning the system and interest in socialist ideas is already growing. If every opportunity is taken there is no reason why we can not expand by way of numbers and influence.

If Abbott comes to power in September we anticipate that it will be an unstable government from the beginning. Regardless of what majority he has in the parliament people will not see this as mandate to further undermine their living standards. While it is possible that people could be initially shocked at the severity of the austerity measures implemented, it will not be too long before people realise the only solution is to fight back.

Abbott will be under immediate pressure from big business to implement an even harsher austerity regime in order to try and protect their profits against the impending downturn. This in and of itself will compound the already existing problems with the Australian economy. In a similar way to what we have seen in Queensland with Campbell Newman people can lose faith in the government quite quickly. Exactly how things pan out post September will depend on other international factors but we can expect a change in people’s attitudes.

Feeling that they have exhausted all opportunities or that they have been blocked on the electoral front workers can instinctively look to towards the extra parliamentary arena to struggle. Because of the weak state of the labour movement struggles will not always result in victories but the experiences gained by the class will be invaluable.

Feeling under pressure, and seeing themselves as locked out of the political process for some time, the unions may decide to organise struggle within some limits. This can help facilitate more political debate in the labour movement and open space for socialist ideas to get a wider hearing.

While we would obviously welcome any increase in struggle we also need to constantly warn that struggles will be best won by developing a new militant trend in the labour movement – including the development of a new workers party. Mass organisations of the working class, set up on the right political basis, are the best way to guard against set backs in the struggle.

At the same time reforms are always seen by the ruling class as temporary under capitalism. What they are forced to give with one hand they will try to take back with the other. At the moment the system itself is putting every gain won by previous generations into jeopardy.

Just as we have seen elsewhere in the world the Australian working class will not just sit back and accept this. On the contrary, we will see widespread opposition. On the basis of experience the working class will draw the conclusion that the only alternative to capitalist misery is democratic socialism – the public ownership and the democratic planning of society’s resources in order to be able to raise everyone’s living conditions. This is the type of future we are fighting for.

Committee for a workers' International publications

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