Socialist Party Australia - Political Resolution passed at 2004 SP National Conference

1996 marked a victory for a section of the ruling class, politically represented by the Howard Government, wanting to hitch their class interests at the US, the sole superpower since the collapse of the USSR.

This latter point has led to:
a) The rise of US economic bilateralism (such as exclusive trade + investment relations with individual countries via Free Trade Agreements or FTAs) as distinct from multilateralism (UN, WTO, IMF, World Bank etc);
b) US military preemption with the end of the previous balance of military/nuclear terror between East and West. This move away from multilateral to bilateralism is a sign of the Balkanisation of the world market. This once again highlights the contradiction between the objective economic imperative of capitalism to plan on a world scale, coming up against the continued existence of nation states. The big vote for anti-EU candidates in the June Euro election is symptomatic of the limitations of economic and political unity on a capitalist basis.

The Howard government has decided to pursue ever closer ties with the US, especially in the face of US unilateralism on military and economic fronts.

A recent Monash University report commissioned by the Department of Foreign Affairs and Trade (DFAT) recommended "a strengthening of the overall relationship with the US. It is appropriate that the defense core of the relationship be broadened by adding an economic core…Australia has an interest in maintaining a strong US presence globally and within the Asia Pacific region in particular".

The Australian ruling class have concerns about their position in the advent of a trade war between the major economic powers (especially the US and EU). This is shown by a recent DFAT statement: "Australia will now gain (thanks to a US/Australia FTA) the benefit of preferred status as a FTA partner with regard to any future global safeguard actions (codes for more tariffs, quotas etc) that is, we will be exempted from safeguard restrictions almost automatically, just as Can was for steel and lamb".

Australian military involvement in the Iraq war was a necessary downpayment for US military, diplomatic and economic backing for its influence in the Asia Pacific area. Only this can explain the desperate plead by Howard to be seen as part of the team of the ‘Coalition of the Willing’. US journalist, Bob Woodward, was given phone transcripts and granted interviews from the Whitehouse for his recent book Plan of Attack, concerning the preparations by the US administration for the Iraqi invasion. He reports Howard asking Bush if he would get a call from him before the US invaded. "Howard was worried about Australian public opinion, and said he needed one last official word from Bush before the war started. ‘Otherwise, it would look to the Australian people like Bush just started the war without even telling his biggest allies’. ‘No, no’, Bush said, ‘this isn’t the last call you’re going to get from me’.

Other sections of the local ruling class – politically represented by Latham and his supporters, the Fairfax media and others – are uneasy with the foreign and economic policy of Howard. This is most clearly seen by the rising unease in these sections of society with the quagmire in Iraq and the blow-back effects of Australia’s involvement there.

It can also be seen in relation to the US/Australia FTA, rushed through by Howard for political reasons.

This FTA was supposed to provide $4 billion worth of benefits for Australia. During negotiations, this was reduced to $3 billion with the rising $A. No wonder US Trade Representative, Robert Zoellick, "bragged to the (US) Senate Committee of how little the US had opened its key markets to Australian farmers under the new FTA...(he claimed) the US stood to gain abut $2.64 billion in increased exports of manufactured goods to Australia...no extra Australian sales could occur until the third year of the 18-year deal...on dairy products, he sounded especially pleased, using irony to call the Australian increase ‘huge’ and trumpeting the fact that Canberra had been unable to end the tariff protection for US dairy farmers." (Australian 11th March).

This is not to overlook the effects a FTA will have on the cost of medicines, as we almost alone warned about during Bush’s visit to Australia last year.

There are some sections of the local ruling class that may benefit from a FTA with the US, such as those with strong interests in the US like Wesfield Holdings, BHP Steel, Visy, Southcorp, the car industry and various others. However, most sectors will miss out and it’s no wonder a report prepared by ACIL Consulting for the Federal Government predicted a 0.2% reduction to GDP as a result of the FTA.

The main reason Howard pushed for this second rate FTA was politically grounded. He wants to drive Australia closer to Washington and have American backing for mini-imperialist adventures in PNG and elsewhere in the region. The Coalition wants to position itself as the main US ally in the region, as the UK has positioned itself in relation to Europe. Latham’s alternative capitalist geo-political strategy is to position Australia close to both the US as well as the neighbouring capitalist powers.

Another political advantage of the FTA is that it gives the local ruling class an ideological weapon to hit workers with: ‘accept cuts to wages and conditions or face capital relocating overseas’.

Socialists say to workers that both FTAs and mulitlateral trade agreements are in the interests of the elite who run society. While exposing FTAs and the drift to bilateral agreement, preemptive military action as a symptom of the impending crisis of the system, we reject those reformists who hark back to multilateral agreements. It was the Structural Agreement Programmes of the IMF and World Bank that the masses in the ex-colonial world, trade unionists and anti-globalisation activists were fighting against in Seattle, S11 in Melbourne etc.

A defeat for Howard in the Federal election would be a blow to Bush and the Coalition of the Willing. This explains the unprecedented public intervention against Latham by Bush administration figures.

If Labor wins it is probable but not certain that the FTA will go through and probable that at least some Australian troops will be withdrawn from the Middle East region.

However, unlike Spain, Australia does not have an obvious local alternative pole of attraction (eg France and Germany for Spain). Therefore, on a fundamental level, the Aus/US relationship will remain the same.

The next government – despite the crowing of Treasurer Peter Costello – has an economy on chickens legs and a dangerous economic, political and even military regional environment.

Economy
From the end of World War Two until the mid-1970s there was a long-standing capitalist economic boom. Since its collapse in the final years of the Whitlam government, the system has been heading in a generally depressionary economic direction, whilst still experiencing cyclical periods of growth and slump within this reality.

The aim of the neo-liberal assault, born in the last years of Whitlam government and then taken up by Fraser, then Hawke/Keating, and now Howard, was to increase the rate of profit needed to overcome the crisis. The means were privatisation, cuts to public spending, ‘labour market flexibility’ (eg casualisation, cuts to wages and conditions). There has been a hollowing out of the industrial base of the economy over the past 30 years, and this has sped up with the expanding global ability of capital.

There has been a drop in manufacturing employment – with over 90,000 jobs lost since 1996 according to AMWU.

According to the ABS, "manufacturing was ranked second last in terms of the average annual growth rate over the past 10 years and last over the past 25 years, with increases of 1.2% and 1.8% respectively."

Investment in research and development has fallen since 1995-96, and is only 0.78% of GDP, low compared to other Advanced Capitalist Countries (ACCs).

There is a Casino economy developing. This is best seen in Victoria where 13% of State income is now from gambling revenue. Yet the real implications of Casino economy is the increasing reliance on profit making by gambling on the stock exchange because it reaps faster and greater profits than any serious long term investment. A lack of investment in railway infrastructure in that State has meant 8 accidents on rural rail lines this year alone. Casualisation in Australia is now the 2nd highest in the ACCs and most jobs created during the past few years are either casual or part-time. The long term economic crisis – or depression – was concealed in late 1990s by the stockmarket bubble and, when that collapsed in 2000, by a lowering of interest rates by the Reserve Bank that fuelled a property bubble.

This has led to a borrowing and debt explosion. There is a 125% debt/income ration for households, the highest figure ever. Household debt is $693 billion, a rise of 34% over the previous 2 years. Savings are at an all time low, from 11.1% of GDP in 1974-75 to –1.4% now. SP trade unionists can see the effect of this currently in those industries with relatively high wages, where workers have taken advantage of low interest rates to consequently get themselves into horrendous mortgage debt. This clearly undermines their ability to undertake industrial action for any length of time.

The rise in individual debt is mirrored in the growing Current Account deficit (when a country spends more on visible and invisible items from abroad than it earns from the sale of visible and invisible items) – which is now equal to 5.5% of GDP, compared to 5% in US, 1.5% in UK. While there are Current Account surpluses in Japan, France and Germany, the Australian trade deficit is also at an all time high.

The world economy today is propped up by massive Chinese imports and the giant US twin deficits of the budget and Current Account.

In Australia, there is a 3rd factor, the low interest rates and cheap money (plus until about a year ago a low Australian dollar which made exports cheaper).

The demise of three factors is now threatening. The Australian (3rd June) reported that: "a 1.3% slump in home building and renovations in the first three months of 2004 dragged down overall economic growth to a weaker than expected 0.2% in the quarter and 3.2% over the past year."

Therefore, fearing the future, Treasurer Costello was given the green light by Howard to spend, spend, spend in the Federal budget with the object of getting the Coalition over the electoral line.

The budget saw a $5.3 billion spending spree with tax cuts. This was a first in Australian history, tax cuts offered only to the rich. The poorest 70% of the population – that is those earning less than $52,000 a year – will get no tax relief at all. There was an obscene distribution of wealth financed through the gutting of public and social services and the restructuring of society along user pays lines.

There is a gradual undermining in the long term confidence in the future by the capitalist class – both amongst the big companies, the ranks of petty bourgeoisie and the lumpen proletariat. This is reflected in the rise in corruption.

Corruption always exists under capitalist and is the lubricant to the engine – yet ‘normal’ corruption is replaced by outright looting when all confidence is lost. We are not yet at that stage in Australia, but the level of police, ‘legal’ business and political involvement in the gigantic ‘illegal’ drug industry cannot be underestimated.

Corruption and speculation instead of normal capitalist investment is also seen at the highest levels of the system. A clear example of this lies in Australia’s second biggest company, the NAB, where traders lost hundreds of millions of dollars in for currency trading. They breached trading limits no less than 800 times. With the entry of foreign banks into Australia since 1984 (under the last Labor government), local banks saw their gross incomes as a ration of assets fall from 4.2% to 2.9%. This led to a slashing of jobs and numerous branch closures. Bank losses camouflaged somewhat by the 1990s stock market boom, and then the real estate bubble – now it is being exposed. Workers will pay for this crisis. Bank collapses in Australia are quite possible in the future.

The fear of the future by the Australian ruling class is reflected in their hanging onto coattails of US imperialism. SP must explain the economic processes to workers, especially the certainty at some stage in the future of a new deep recession, both here and worldwide. However whether or not this current weak upturn continues for a longer period is not as important as the fact that, boom or slump, today’s capitalism means that workers standard of living will fall anyway.

Regional developments
In the region the great hope is the continued growth of the Chinese economy, which now faces a classic capitalist crisis of overproduction. See attached article.

South Korea faces the possibility at any time of having to deal with an implosion of North Korea, driving the peninsula into long term downturn.

The US is turning away from East Asia as it is diverted by its domestic economic problems, and the mess in Iraq. This has meant increased pressure on Japan from the US to step up its military role in the region.

There is a rise in an anti-imperialist mood, not only against the US but also Australia especially as a result of Howard’s foreign policy. This mood is being capitalised on mainly by supporters of Political Islam, with the absence of a strong subjective factor or even mass independent working class struggles in the region at present.

In the immediate region of the South Pacific and Papua New Guinea, Australia (and New Zealand) have been more blatant in their neo-colonialism, mimicking the example of the US itself.

The Federal budget saw a 10% boost in foreign aid, with Australia’s neighbours in Asia Pacific region getting a minor boost, including PNG and Solomon Islands - with a cut for East Timor. This money is mainly for security however. Foreign Minister, Alexander Downer, says the shift in aid is in Australia’s interests because instability and poor governance undermine security in the Asia Pacific region: "First and foremost the support for the Pacific is important for the peoples of the Pacific themselves but it is important to Australia because in terms of our own interests. Stable neighbours are important to our own security and the security of our people."

Australia and New Zealand used the special meeting of the 16 member Pacific island Forum to assert control. The Forum leaders were persuaded to approve an expanded role for Secretary-General Greg Urwin (an Australian, insisted by Aus/NZ, the position usually goes to an Islander), empowering him to call early meetings of leaders, Foreign ministers or their representatives in response to "crises" deemed a threat to regional "security".

Howard is wanting to show worth to the US as its deputy sheriff in this neck of the woods.

East Timor
Australia is flouting international law and keeping control of the lions share of oil and natural gas reserves in Timor Sea. This demonstrates clearly that the military intervention in 1999 had nothing to do with humanitarian motives. In the lead-up to the latest talks, demonstrations of up to 1,000 people took place outside the Australian embassy in Dili, organised by a group referring to itself the Movement Against the Occupation of the Timor Sea. The protesters backed East Timor’s demands for a new deal over the exploitation of the Timor Sea’s reserves. One member, Joao Sarmento, told the British-based Guardian newspaper that popular feeling against the Australian government was running high. "People are thinking that it’s a second invasion," he said.

Under current arrangements via International Unitisation Agreement (May 2003) Australia gets about 80% of royalties from the largest field in Timor Sea - Greater Sunrise. East Timor wants the dispute settled under UN Convention on law of the sea, which would see a boundary drawn half way between the two countries. East Timor is demanding that the maritime and seabed borders be set half way between the two countries. Australia is using obscure geographical arguments that the border should take into account its continental shelf which stretches to within 40 km of East Timor. Australia’s grabbing of the rich oil and gas fields in the Timor Sea between the two countries has been described as "daylight robbery". A fair border would lead to a tripling of East Timor’s income from oil and gas.

Australia steals $1.4 million a day from oil and gas fields under dispute, more than making up for the cost to Australia of the 1999 intervention - a good deal for Australian capitalism all round.

In the meantime the East Timor masses are stuck in poverty. Oxfam reported last month that 41% of the population are below the poverty line, and the level of literacy to be less than 50%. One in 10 children born this year will die before reaching the age of 5.

Class struggle
One strength for ruling class in Australia is the inability of the workers’ movement to take advantage of recent upturn to recover past losses.

One reason has been the role of the trade union bureaucracy who in many cases agree with, or see no alternative to, neo-liberal, trickled down effect theories. The ACTU leaders and many other union leaders play the role of industrial police, selling acceptance of redundancies and real wage cuts to the working class. They provide plenty of crocodile tears about corporate salaries and politicians’ superannuation but no organising to fight back.

The other reason has been objective. The economic changes have seen the growth of casual jobs at the expense of fulltime jobs in areas of the economy that had traditionally been unionised.

All this has meant that wages as a percentage of national wealth is down, while profit share is up. In 1974/75 wages were 61.5% of GDP, now that figure has fallen to 54.4%. The level of industrial action is low. According to the Occupational Health and Safety Authority: "Work related illness and injuries cause the loss of 3 to 6 times the number of working days lost in industrial action." In fact the illness of depression alone leads to more working days lost in Australia than does strike action!

The role of the ALP and union bureaucracies in disarming the working class is key to these developments. The central task for the working class is overcoming the crisis of leadership in their movement. The ALP has become completely ‘embourgeoisified’ with pro-capitalist policies and leaders and a complete lack of real internal democracy – as seen in the Peter Garrett ‘preselection’ issue. In the unions, while many leaderships are part of the process of selling the cuts, the organisations themselves remain workers’ organisations based in the workplaces and still open to the possibility of rank and file action and organisation.

This is shown by the rise of what SP has described as ‘class struggle leadership’ victories in some unions, mainly but not solely in Victoria, such as in the ETU, Plumbers, MUA and sections of the CFMEU.. However political weaknesses remain amongst these layers – as seen in pro-ALP stance by all the ‘class struggle’ unions in the next election and crisis of Workers First (see article in issue 6 of The Socialist by Anthony Main).

The role of the SP trade union comrades in critically supporting and offering a way forward to workers, even in the better unions, is key. In some unions, such as the rightwing monolith of the SDA, we may well find ourselves involved in part of a rank and file internal revolution for democratic and militant leadership.

Social Polarisation
The effect of 30 years of neo-liberalism, ‘labour market flexibility’, privatisation, spending cuts, and user pays has been a rise in social division. A recent ACTU pointed out that: "60,000 go without meals, 36,000 can’t heat their homes, 100,000 regularly pawn their possessions for cash. 500,000 can’t pay their bills."

Official unemployment figures are useless today. One only has to work one hour a week to be taken off the figures – no wonder they are at their lowest in 23 years. They hid the crisis of under-employment with one recent survey showing that one third of all workers want to work more hours, especially those who are part of the casual worker army of 2.7million. Even the skewed figures show a 68% rise since 1999 in the number of people unemployed for 5 years or more (from 75,173 to 126,650).

The Senate Report on Poverty released earlier this year showed that a massive 4.1million people (22.6% of the population) live in poverty.

It stated: "The working poor are the new face of poverty – over 1 million (over 5% of population) are poor, despite living in households where one or more adults are employed. This compares to 1975 when only 2% of households where somebody worked was poor". This growth of the working poor reflects the fact that net wages, or the positive effect of employment on one’s standard of living, is less than past. ‘Labour market reform’ means lower wage levels have been driven down and profits up, while labour market flexibility has resulted in a huge rise in casualisation.

Between 1988-02, casualisation rose by 87.4%. Now 27.3% of workers are casual. In 1990s the number of fulltime jobs actually fell by 51,000 or 1%.

The rich are getting richer, and the poor poorer. Professor Peter Saunders of the University of NSW told the Senate Inquiry: "Almost half of the economic wide increase in income generated by economic growth under Howard government was of no benefit to the bottom 4/5s of the population." In 2000, the bottom 50% of the population owned 7% of wealth, while the top 1% incredibly owned 13% of wealth! Housing costs have also risen dramatically, with 100,000 homeless in Australia. Education costs have risen 173% since 1989-90. 1/3 patients wait more than 8 hours in emergency departments across Australia for an available bed, according to a recent survey conducted by the Joseph Espstein Centre for Emergency Medicine Research.

In 2001-02 charity groups assisted 2.4 million people, an increase of 12% over the previous year.

No wonder the (well advertised) lure of gambling has taken a hold over so many people who see no other way out, being alienated, demoralised and depressed by the effects of modern capitalism. Last year Australians bet $128 billion, equal to $8571 per adult!

Both parties ignore or shrug their shoulders at the effects of the neo-liberal assault on ordinary people. ‘Civilising Global Capital’ is Latham’s pathetic and illusionary response. There is a race to the bottom between the Labor State governments as they compete with each other to attract ‘foot loose’ global capital by lowering taxes for companies, slashing government spending, and demonstrating their toughness to public sector unions.

The Question of consciousness
Despite the low strike figures and the lack of a workers’ party, there is a rising disenchantment with official society. Illusions in capitalism are lower than in the 1970s, despite a higher political level then existing amongst workers and youth. The collapse in socialist consciousness has come side-by-side with a collapse of confidence in capitalism. The former reflects the ideological offensive of the 1990s as Stalinism collapsed, social democracy shifted to the Right, and capitalist academics and media proclaimed ‘victory’ over any alternative to their system.

For workers, they can oppose cuts to Medicare whilst simultaneously being vulnerable to the fear campaign on refugees. For youth, cynicism, alienation, depression and anger reflect a search for an alternative as well as a lack of confidence in the system. The growth of sub-cultures have emerged such as Hip Hop amongst non-Anglo youth as well as the element of thinking white youth partially outside direct capitalist control (notwithstanding attempts by big business to commodify anything that may provide a profit).

The searching for a new alternative is seen in changing attitudes towards religion. Latest ABS figures show that the number of Christians fell from 86% of the population in 1971 to 68% in 2001. Buddhism rose from 200,000 in 1996 to 358,000 over the same period. Non-Christian religions as a whole rose from 0% in 1931 to 5% now, and those Australians claiming No Religion from 0% 1931 to 16% now. It is easier to raise anti-capitalist ideas on even the most basic of campaigns eg Unite fight against the exploitation of casual workers. Sharp turns and sudden changes can be expected in consciousness in the next period. The rapid growth of the Greens (see below) reflects a sharp barometerial incline in the future of genuine socialist ideas, especially with the development of a new workers’ party.

Labor
The ‘Metoo-ism’ of Latham (for example matching Howard dollar for dollar on the proposed tax cuts for the rich in the Federal budget) – is the one thing that could lose him the election. In fact in relation to the Budget, Latham promised to ‘save’ an extra $4 billion overt the Coalition.

State Labor governments throughout the continent show what a Federal Labor Government would be like: Penny pinching battles with public sector workers over wages, conditions and resources to schools, hospitals, and emergency services. In WA the Labor Government have kept in place the State Taskforce against CFMEU first introduced by the previous Liberal government. There are no absolute guarantees that Latham will adhere to his already weak promises to pull out Australian troops from Iraq by Xmas, abolish the anti-construction union Taskforce, and boost Medicare spending (especially if the economic situation worsens).

The demoralisation of layers of Labor supporters and youth, with Peter Garrett’s sellout would occur again after a Latham victory, as a Garrett-run Environmental Ministry continues to allow logging of old growth forests in Tasmania, gives corporate welfare to logging companies and so on.

The recruitment of Garrett by Labor also signifies the formal end of the ALP as a party of internal democracy. This has not been lost on the more advanced layers of the class and has long term dangers for capitalism. The Australian’s political editor, Dennis Shanahan, commented on 11th June that: "Peter Garrett’s recruitment by the ALP is the end of the Labor Party as we know it. It’s not because of the recruitment or who or what he is. It’s because it provides a stark illustration of a change that has been taking place during the past few years. Political parties, not just Labor, are in crisis—it’s a crisis of faith demonstrated by falling membership and a decline in old-fashioned dedication…The danger is that our political parties will increasingly become marketing machines, designed to make money and capture power. We have already seen one new party created as a company and know where that can lead."

Of course we saw in the anti-war movement last year, in the refugee and anti-globalisation movement, and during the MUA dispute in 1998 that ‘dedication’ is there aplenty where workers and youth feel they are fighting for a just cause. For the major parties, they can never recover that enthusiasm.

Greens
The tops of the trees move first. The growth of the Greens reflects the progressive sections of petty bourgeois (Brusnwick St not Chapel St or King St not Darlinghurst). Also their growth has had the effect of attracting other petty-bourgeois layers ambitious for the fruits of office. They have partially filled the electoral vacuum to the left of Labor, but while they could rise to 15% or so (especially under a rightwing Latham government), there is a limit to their possibilities inside working class areas who have a natural class aversion to the Greens. In our role we must strike a balance between having an orientation towards the best layers in and around the Greens and their voters as well as warning of the inevitable betrayals by this party once in power.

Post election perspectives
A re-election of the Howard government, which we think is possible but not probable, would lead to an almighty new assault on unions, cuts to public spending, increased repression, and the continued introduction of a reactionary social agenda for women and gays. With the state of the labour movement leadership as it is, this could lead to various defeats for groups of workers, a period of mild reaction and further retreats for the organised working class movement. This is especially likely if a downturn occurs undermining workers’ confidence to fight.

However, as with under Thatcher in the UK in the 1980s, these objective difficulties would run parallel with a radicalisation of society, especially amongst the youth. Big opportunities for the growth of socialist ideas would stand tall. There would be a spate of defensive union battles and broader political/environmental mass movements supported by the youth against the government and big bosses. This, in turn, would lay the foundation of a recovery for the movement, especially as the economy comes out of the next recession. The election of a Latham government – after a brief honeymoon– would inevitably result in a wave of disappointment, even if expectations are quite low amongst workers and almost non-existent amongst more advanced layers. SP will need to judge the mood and quite rapidly in the aftermath of a Latham victory, move towards much more active campaigning for a new workers’ party. We could find that the latent support we gather for this idea could improve rapidly. If we are caught off guard the Greens will capture the disaffected Labor supporters and the far Right will recover in one or other reincarnations and also grow. This will occur anyway, but amongst politically conscious youth and active trade unionists and community activists the call for a new workers’ party will gain a renewed lease after a Latham victory.

Conclusion
We are living in very interesting and complex times. Our role is to offer an explanation of the processes underling workers’ lives, a fighting alternative ideas, and most importantly organisation to lead the workers to power. The difficult period of the 1990s (capitalist ideological offensive, shift to Right in workers’ leaders, neo-liberalism) is being replaced by a different yet still difficult period of the new century’s first decade (terrorism, insecurity, and neo-liberalism).

Our ideas and analysis have allowed the CWI to understand and develop during a difficult time. Much of our opposition on the Left and in the workers’ movement have made their peace with capitalism or been demoralised by developments they didn’t expect or even understand.

There is every reason to have confidence that the SP in Australia with its youthful membership and good position in the workers’ movement will grow. We must ensure it becomes a key factor in the struggle in the years ahead.