Monday, July 30, 2012

An independent working class agenda

Vanguard August 2012 p. 1
Nick G

The latest vicious attacks on the working class and their unions by Labor’s key Ministers Ferguson and Crean, and the Labor government’s attacks on the Greens upon whom Labor is dependent for its hold on office, illustrate more than ever the need for an independent working class agenda.

The fragility of their alliance came to the fore in the first weeks of July when Victorian State Opposition leader Daniel Andrews attacked the Greens and announced that Labor would be preferencing Family First ahead of the Greens in the by-election for the seat of Melbourne.

This came in the wake of the failure of the federal parliament to resolve the asylum seeker issue, with both major culprits – Labor and the Liberals – having a bipartisan bash at the Greens in the Senate for rejecting a so-called compromise. "I wouldn't want to find myself fundamentally compromised and being held to ransom and held hostage by a group of people who don't want to compromise and quite frankly don't live in the real world," said Andrews.

His comments set the tone for copycat comments by the NSW Right’s Sam Dastyari, the AWU’s Paul Howes, and the ALP’s federal parliamentary whip Joel Fitzgibbons. When Labor had sunk the Right boot into the Greens, it then started kicking with its Left foot: Doug Cameron and Greg Combet winning front page headlines and applause from the reactionary Murdoch media: “ALP Left joins Greens attack”.

Labor placing its credentials before the ruling class
Bourgeois media comment depicted this series of attacks as an attempt by Labor to win back its electoral base in the working class. There is no doubt that Labor is desperate to boost its popularity.

The bourgeois media failed to explain that what is really motivating Labor is the attempt by its leadership to curry favour with the ruling class, and to show that if supported at the next federal election and given the chance to govern in its own right, there would be no need to bring in the decidedly unpopular Tony Abbott and his mob of social vandals.

Abbott’s enthusiasm for intensifying the attacks on the people sits well with the ruling class, but he is a little too unpredictable and his lack of credibility with the people raises questions about his staying power and ability to deliver on what he promises. So Labor hopes that by attacking the Greens they can win backing for a second chance. That means showing that the Labor agenda is really in accord with the agenda of the multinationals and local big businesses.

Big business conducts its Labor orchestra
On June 7, the Business Council of Australia’s chief executive Jennifer Westacott told the ABC’s Lateline that economic activity in Australia was at risk from high costs and low productivity. A few weeks later Simon Crean and Martin Ferguson (“union veterans of the 1980-90s accord agreements -  both former ACTU leaders”) “launched an extraordinary broadside on the current generation of union officials, accusing them of strangling the resources boom and threatening billions of dollars in projects by placing short-term wages gain over long-term wealth creation.”

Their comments immediately invited further demands by the ruling class, with mining giant Woodside’s chairman stating that the “Fair Work legislation represents the greatest threat to future productivity” and the Minerals Council of Australia’s chairman stating that “industrial relations laws were impacting both the sector and the wider economy”. Given the inch of a Labor focus on productivity, the ruling class sets out for the mile of open slather, unprotected exploitation of the people.

With a rabid Abbott in the wings and a subservient Labor government on centre stage, we can confidently predict that whoever wins the next federal election will demand that the people make further sacrifices for the enrichment of the wealthy.

Independent working class agenda
That is why we call for the development and promotion of an independent working class agenda, one that can be embraced by the unions and community organisations and around which the working class can mobilise to pursue its own objectives.

It must incorporate the immediate demands of the people for improved living standards and for the protection and extension of their rights and liberties. It need not at this stage be a formal document to which various organisations must commit, but there should be a central core of demands that are put forward in various ways comprising items such as those in the accompanying list. The people through their organisations must have the capacity to struggle independently of whatever party of capitalism is given the task of holding back and preventing such struggle.

Some immediate issues and priorities on which the whole union movement and communities can unite and organise to promote an independent platform for the rights of working people:
  • Decent wages, conditions and living standards for working people.   Liveable pensions, social benefits, welfare and unemployment benefits linked to raising cost of living.  Link EBA battles to protecting living standards in Australia for all workers
  • Workers’ and union rights to organise and take industrial action on the job and around important social and political issues, right of entry, OH&S
  • Abolish the ABCC
  • Jobs and job security – no offshoring of Australian jobs; jobs for local workers before importing overseas temporary guest workers.  Develop sustainable manufacturing, agricultural and value adding (minerals processing) industries from the wealth created by the mining boom
  • Proper government funding for public health, education, child care, community services, disability benefits, housing.  No privatisation
  • No tax cuts to big business; no increase in GST
  • A mining super-profits tax minimum of the original 40% to pay for public health, education; develop processing and manufacturing industries that create jobs for Australia’s working people

Update on the struggle at LaTrobe

Vanguard August 2012 p. 2
Henry L

The last issue of Vanguard outlined the breadth and severity of the cuts to the Humanities and Social Sciences announced at LaTrobe University, Melbourne.

The cuts, the details of which include almost a quarter of staff within faculty being axed, the list of 913 subjects within the faculty being cut by up to 500 and whole streams of study such as Gender Studies and Linguistics being gutted and merged.

These cuts were pushed through by stealth while most students were away on the holidays, following absolutely no level of consultation. It was clear that those responsible for the cuts thought that making the announcement midway through the holiday period, with the so-called ‘consultation’ period ending a mere week after students arrived back, would render a fightback by students and staff almost impossible.

Despite the fact that many students were away or unable to get to Bundoora campus during the holidays due to work commitments, a diligent grassroots student campaign gathered steam over the holiday period, with many affected students and staff attending planning meetings as well as the sham ‘consultation’ sessions put on by the university. It was starkly demonstrated that the administration would not waver from what amounts to a clumsy ideological neo-liberal attack on staff and students of the Arts faculty, driven by the global capitalist crisis.

This campaign had clearly gathered a fair bit of momentum by the time the new semester was almost about to commence, so much so that one of those responsible for the cuts, the Dean of Arts, Tim Murray, was given a feature article in The Age to put forward the administration’s neo-liberal rationale for the brutal attack on the HUSS faculty.

Students and staff get organised
Carrying on with this momentum, during the first week back, on the 25th of July, a joint mass meeting was called by the LaTrobe Student Union and the LaTrobe branch of the National Tertiary Education Union. The meeting was extremely well attended, with more watching on via video link at the Bendigo campus. The 200 strong crowd at Bundoora overflowed off the seats and onto the floor.

It was pointed out by the LTSU that the Arts faculty was being decimated due to it not producing a surplus. The Arts faculty receives no subsidy from the university, yet continually breaks even. All business related schools at the university are heavily subsidised, but they are not being singled out for attack. This clearly established that these cuts are ideological in nature, aiming to turn LaTrobe further in the direction of being nothing more than a degree factory, producing cogs in the capitalist machine.

A motion was unanimously passed declaring that the students of LaTrobe oppose any cuts to our education and to respond to such cuts with an aggressive campaign of direct action. At the conclusion of the meeting, it was proposed from the floor that the campaign of direct action was commenced immediately. Another motion which was passed unanimously, resulted in the vast majority of those present at the meeting marching on the administration building of the university, ending up with an occupation outside the Vice-Chancellor’s office.

Eventually the 150 strong crowd was given some rather condescending treatment by the Chief Financial Officer of the university, who claimed that it was he and the administration that were on the side of the staff, referring to the rallying students and staff as ‘a threatening mob’. He was rightly laughed out of the room. During this occupation, those involved took the chance to discuss what tactics to in future. The idea of hitting the university where it hurts, through a public campaign to expose the cuts on occasions such as open days, was met with a very positive reception.

Mass rally planned for 31 July
The next step in the campaign is a mass rally at the LaTrobe Bundoora on Tuesday the 31st of July at 12pm. The LTSU, the NTEU and all supporters encourage as many people as possible to turn out at this rally to show their opposition to this wave of neo-liberal attacks on our ever diminishing tertiary education system.

Jobs go down the drain and rich get richer

Vanguard August 2012 p. 3
Jim H

The annual OECD Employment Outlook, published in July, reported that underemployment in Australia is well above the OECD average, with 875,000 workers, that is, 7.2% of the workforce, wanting more work than they are getting.

This is a gross understatement. Evidence from the Australian Bureau of Statistics (ABS) and other sources suggests that about a third of the workforce is in part-time and casual employment. Most want more work. Most do not get enough working hours to maintain a decent standard of living.

New jobs figures are going downhill. An increasing adult population means that the numbers on paper are even worse in real life. With 341,000 new adults in the last 18 months, only 27,000 new (mostly part time) jobs came into existence. In June alone 14,000 more became unemployed.

Unemployment and underemployment are both on the rise. In the short term, at least, a growing number of workers are being forced to take early annual leave or put into shorter working hours in existing jobs. Further evidence of the trend is that the total hours of work are falling. This is a glimpse of the real human cost.

Despite its serious limitations, the OECD statement does underline that unemployment is a serious issue that demands a proper answer. Genuine political leadership in the interests of the working people of this country has to take this on board as a priority. But true to their colours, the Coalition and Labor Party do not. It is not what they are about. In today’s political climate, more people than perhaps ever before are seeing that the concern of this lot is crawling servitude to the multimillionaires owning the biggest banks, mining concerns and other corporations operating in Australia. This few, many of them enjoying the high life in New York and London, call the shots. They are running Australia. The Coalition and Labor are in their pocket. 

Ultimately the OECD has similar credentials. So it goes on to claim that underemployment is better than unemployment because it provides people with opportunities and that this is really a good thing for Australia. The OECD report pretends that by being given flexibility in work and lifestyle, the underemployed are actually in a lucky and privileged position, where they can choose to do whatever they want to. No honest person could be taken in by this garbage.

For workers, the bad news is not only jobs. A larger proportion of the total income of Australia is going into the pockets of the very richest. The OECD report recognises this. In addition, it correctly points to the loss of bargaining power of workers as a major cause. It could have added that this in itself is the product of capitalist economic crisis and the predatory nature of the system. But this is too close to the bone for them.

The share of national income going into the pockets of workers fell by 8.9% between 1990 and 2007.

Calculations by economist and Labor MP Andrew Leigh show that - even after tax accountants had done their best - the top 1% of earners declared 8.9% of all taxable income in Australia, up from 4.6% in 1981-82.

Since the crisis came out into the open in 2008, the upward drift of national income is beginning to look more like steady flow.

Here are a few more facts:
  • The top 0.1% of adults (17,500 people) earned at least $650,823 each - 3% of Australia's income.
  • The top 1% (175,000 people) earned at least $194,365, and almost 9% of all income.
It cannot go on. Not only because of the hardship visited on many individuals, but also because it can only lead to deepening economic crisis.

In defending their collective interests, workers have no other choice but to use their organisational strength and militant determination to defend existing jobs and demand genuine action to create new and proper jobs. Not only this. Workers have no choice but to take up the demand the changing share of national income be reversed – that the rich be made to pay. While these demands must be taken to the reactionary politicians, of whichever persuasion, time and time again, experience shows that they are unlikely to move. This is especially so in the current economic climate. Victories have to be won through action on the ground.

Building the capacity of working class struggle

Vanguard August 2012 p. 3

Recently, some groups of workers have been in intense battles defending their conditions in various EBA negotiations.

Workers from Swift Cold Storage, Baiada Chicken Processing, Schweppes, Victorian Nurses and most recently the Toll/Coles warehouse workers have succeeded, through hard and long struggles, to defend their existing conditions against the unprecedented assault on the Australian working class by multinational monopoly capital. 

The Baiada Chicken and Toll/Coles workers’ victories went even further, to win some improvements on their inferior conditions.  Social and community sector workers won equal pay for equal work, after their protracted struggles.

In all of these struggles, workers and their fighting union leaderships drew wide support from the community and other unions, and found ways to overcome or get round the oppressive, anti-democratic Fair Work laws, designed by big business and aimed at crushing workers and unions to maximise corporate profits.

This has been achieved through the discipline, determination and courage of many workers and their unions. Workers are crying out for fighting union leadership, dedicated to protecting and upholding working people’s interests, above all else.

A number of newly emerging union leaders and activists are dedicated to building an independent union movement that fights for the rights of workers and working people first and foremost. This is an encouraging sign for the working class movement in Australia. Workers know well that the decisive battles are not won in the bourgeois courts, but on the ground, by mobilising and organising the rank and file and their supporters.  Experience has shown time and again that leaving workers’ livelihoods in the hands of big business, Fair Work or the bourgeois courts and lawyers, is a recipe for defeat.

Building the organised capacity of united and independent working class struggle and people’s mass movement is critical to defending the working people in the present period

Melbourne sprawl: Planning for the rich

Vanguard August 2012 p. 4
Bill F

Planning and development of cities under capitalism is dictated by the need to generate profits for big business, and not the real needs of the people for a relaxed and sustainable environment with accessible amenities and services.

In July, Planning Minister Mathew Guy announced changes to zoning rules in Melbourne, expanding the boundaries by 6,000 hectares. Three categories of residential zones will be created, but there was no detail of where they will be. In the absence of such detail, the brief two month consultation period is a mere token, and limits the ability of people to object to any changes until it is too late.

Not likely to object are the wealthy owners of large properties in the leafy suburbs; the rich and filthy rich. Most of them will continue to be safe and secure in ‘Neighbourhood residential zones’, where sub-divisions and high rise developments are banned or restricted.

The rest of us, the working people, will live in either ‘General residential zones’ with so-called “modest growth and development” or in ‘Residential growth zones’ alongside high-density development. New developments will be able to go ahead without the traditional planning permits, nor will residents have the right to be notified, or to object or appeal.   

Changes to commercial zoning will strip the right of local councils to set limits on the development of shopping centres, hotels, high-rise apartments, car parking and other issues that defend their communities. Even the “green wedges” around Melbourne will be opened up for large scale commercial tourism venues and industrialised farming.

This only benefits the big developers, the finance companies and banks, and corporate investors; in other words, the usual suspects within the ruling class. Planning expert, RMIT Professor Michael Buxton commented, “Allowing developers to build dysfunctional suburbs, big retailers to destroy small business and big agriculture to ruin landscapes will advantage only them, at massive cost to everyone else.”

The outer suburbs of Melbourne are already lacking amenities such as decent schools, hospitals, public transport, social services, and recreation facilities. The new planning zones will only add to and magnify the existing problems for working people living “on the outer”.

Can’t buy, Can’t sell

Vanguard August 2012 p. 4
Bill F

The anarchy of development under capitalism is clearly revealed by the situation of housing in working class suburbs across Melbourne.

A Melbourne University research report, The end of affordable housing in Melbourne, said that rising housing costs had crippled the dreams of young people to have their own home. Dr. Bob Birrell, leader of the research team at the university, noted that “Melbourne will follow the Sydney pathway with new households having no choice but to adjust to apartment living as renters, fewer people moving into the city and more people moving out, and an end to the dwelling construction boom.” Even cheaper housing on the outskirts of the city was “well beyond the financial means of most first home buyers”.

The purchase price of apartments has also escalated in recent years, as demand has picked up in the inner and middle suburbs where amenities are better, and overseas buyers are active. But, “Even in the middle zone, the mean price of a unit/apartment had increased to about $423, 463 by 2010”.

In spite of the current slump in house prices over the past year, there are fewer sales as more working families find it harder to qualify for housing loans and to compete with cashed-up speculators and ‘negative-gearers’.

At the other end of this madness is a glut of 55,000 unsold homes in Melbourne, with 35,000 in the outer suburbs. Households caught with high mortgage repayments, lack of public transport and services, traffic congestion, insecure employment or unemployment, and the ever-rising cost of living, might want to sell up, but find they are trapped in “negative equity’ – their mortgage debt is greater than the sale price for their home.

What a crazy system! Even with falling prices, people can’t afford to buy, and people can’t afford to sell! Yet, against this background the Planning Minister Mathew Guy has announced the release of even more land for subdivision, enough for an extra 65,000 housing lots.

No light at the end of the tunnel

Vanguard August 2012 p. 4
Bill F

The only solution capitalism can devise to overcome Melbourne’s chronic traffic congestion and sprawling outer suburbs is to impose more costs on the people by privatising public infrastructure.

Infrastructure Australia, headed by Sir Rod Eddington, has recommended selling off major freeways such as the Eastern Freeway, the West Gate Freeway and the Western Ring Road to private operators who could then levy tolls. In addition, all new major roads would also be built as privatised tollways, with dedicated tollways linking the ports, reserved just for trucks and commercial vehicles.

The plan envisages that proceeds of the sell-offs could be used by the state government to fund other infrastructure such as the Avalon Airport rail link and the east-west tunnel under inner Melbourne.

This prospect has caused a flurry of interest among financiers and construction companies. About 100 of these ‘entrepreneurs’ met with Department of Transport officials in July, focusing on the Baillieu government’s preference to kick-start the east-west tunnel project.

Baillieu himself, is coy about tollways, but has said, “We can swap assets around, we can trade assets to fund, we can use debt, we can use surpluses, we can use the private sector – there will be balance of those in any infrastructure project”. In other words, the privatisation agenda that characterised the Kennett government is to be rolled out again.

As for the east-west tunnel, will it really solve the congestion problems or will it just funnel cars into the city a bit quicker than before? The Western Ring Road was also supposed to provide a by-pass around the city, but has ended up clogged with trucks and cars and a nightmare in peak times.

More suburban sprawl means more freeways, more tollways, more cars, and more profits for developers, construction companies, banks, car makers, insurance companies and lawyers. For exhausted workers, it means long and stressful hours stuck in traffic, chewing up petrol dollars and wondering why cars built for 200 km/h have to only do 40km/h.

As for a real alterative, such as a massive expansion of fixed rail public transport, forget it say the big business bosses. Even with government subsidies, the rate of profit isn’t good enough for them. Necessary projects that would make life easier for the people of Melbourne, such as the long-delayed Doncaster rail link or the rail service to Tullamarine Airport are still in limbo. Capitalism only ever does things for profit, regardless of need, and hardly ever to serve the people.

Affordable housing is the problem

Vanguard August 2012 p. 5
Jim H

It has long been suggested that Australia faces a significant housing shortage. This is not true. The fallacy of a housing shortage was exposed in the good work of economists like Kris Sayce and Steve Keen.

The problem is that Australia faces a shortage of affordable housing. The distinction is extremely important, for it points towards a different sort of solution.

Tackling the problem by merely building lots of new dwellings might make real estate and building companies happy. It does not address the reasons why the cost of housing has hit the stratosphere. This is what needs to be understood and addressed.

In the first place, high prices are the result of an ongoing speculative bubble. This is the result of firstly, an economic crisis that has diverted an increasing portion of investment capital away from production and into speculation. It is no accident that historically, an early sign of deepening economic crisis is a boom in property prices. The current period has followed the classical pattern.

This shift in investment is so marked that for quite a few years the majority of dwellings sold (over 60%) have been bought up by companies and individuals, not as prospective householders, but to benefit from rising prices and rents. A housing shortage exists only in the sense that these speculators crowded out a portion of would-be householders. 

Expansion of credit
A second important factor has been the massive expansion of credit, much of the private component of this has been used to purchase property.

Large scale cutback on state provision of affordable housing over the last 20 years or so, has had a heavy impact on the most vulnerable, particularly since the closure of many institutions that once looked after people with mental health problems, and the elderly. Many of these people have been thrown into sub-standard estates and abandoned without the special services that they need in order to cope well.

Housing is the single biggest cost for most. As economic crisis deepens, as unemployment and underemployment rise, as the growth in real wages declines and national income moves upward, the burden of the cost of housing becomes an even bigger problem. It affects all aspects of life. As the mortgage or rent rises, cuts have to be made to other expenses. The standard of living falls.

Housing affordability is therefore one of the most important issues facing the majority of Australians. There is an urgent need for proper solutions.

Many are calling for a major boost in government investment in affordable housing. The record shows that the private market will not provide this. It is a good demand that must be supported. Large scale housing projects on their own would do a good deal to lower housing costs.

Much more can be done as well. In the long run this cannot be avoided. At the head of this is to apply measures that effectively put an end to speculation.

Negative gearing
One example of this practice is the negative gearing provision, which allows investors to gain a windfall through taxation benefits. This should at least be outlawed for properties over a ceiling that marks them as beyond the average household. Larger scale investment into the housing market for speculative purposes should be outlawed, and properties over a given value should be nationalised and turned over to affordable housing.

Expansion of public housing should be a priority. Public housing estates should not be dumping grounds for the most vulnerable. They should encourage the development of communities working together for a better life for all.

Cooperative housing
In this vein, more residential stock should be turned over into cooperative housing. Cooperative housing is another means by which to build communities. Conscious cooperation to look after the collective interest provides a good means to lift the position of individuals in many ways. It can also serve as an important school, training people how to not only work together, but to become more conscious of their common interests, the need for and possibility of building a very different type of society. This is a positive perspective, tied up with the struggle to end capitalist social relations once and for all. Not everyone shares this vision at this point in time. But all can agree that steps can at least be taken to ensure that the burden of housing cost is made lighter for the majority.

The shenanigans at Barclays Bank

Vanguard August 2012 p. 6
Alex M

In the UK, the CEO of Barclays Bank, Bob Diamond resigned on 3 July as a result of the LIBOR rate fixing scandal. Under the stewardship of Diamond and his CEO predecessors, staff at Barclays falsely reported interbank interest rates.

The false reporting of the rates by Barclays started in 2005 and seemingly continued through to 2009, coinciding with the first two years of the Global Financial Crisis (GFC). The London Interbank Offered Rate (LIBOR) is the benchmark rate for interbank loans. That is, LIBOR is a collection of the daily average interest rates that banks charge each other for loans.

It is important because a number of financial instruments such as derivatives, interest rate swaps and the like also use the LIBOR as a benchmark. There are 223 member banks that report on a daily basis to a firm called Thomson-Reuters who then publish the rates after 11 am, London time.
All very well, but what has come to light is that some of the banks, such as Barclays, manipulated their interbank loan rates not only to hide the true state of their financial affairs but also to boost their profits.    

Profit maximisation as motive
The driving force of global capitalism is profit maximisation. The case of Barclays Bank and the LIBOR rate fixing scandal is a case in point. In the period 2005 to 2009, Barclays consistently ‘fudged’ their true interest rate positions, due in part, it has been suggested, to less than optimum performance. Senior management instructed Barclays LIBOR staff to lower their interest rate submissions to Thomson-Reuters to match other banks, dispelling any doubts about the bank’s viability. More importantly, the deliberate misreporting not only masked Barclays’ true financial position but it boosted profits.

The Marxist economist Michael Roberts in a highly critical piece on the sordid scandal illustrates how: “ … imagine you are a company [that] wanted to borrow some money from a bank and they wanted to look at your  books to see how risky that loan might be. If your books were not that great, the bank may want to charge you a higher rate to cover the risk. But what if you got a lot of your customers to say they were paying more for what you sold them and you got your suppliers to say they charged less. Your books would look a lot better and you would be able to borrow more and at lower rates and so boost your profit. In effect, Barclays’ traders engaged in this trick in league with other banks to get the cost of their borrowing down.”

When it came to Barclays lending money to small businesses and ordinary people, it charged them the official LIBOR rate of interest, not the manipulated rate, giving the bank extra profits. For this financial ploy to have succeeded for the time that it did, required the cooperation of a number of banks. Investigations in the US and the UK have focussed on Bank of America Corp., Citigroup, Royal Bank of Scotland, UBS, Lloyds Banking, Deutsche Bank and others.

Barclays is the first of the banking cabal associated with this blatant corruption to have been caught out. Barclays was fined US $200 million by the Commodity Futures Trading Commission, US $160 million by the US Department of Justice and ₤ 59.5 million by the Financial Services Authority. The fines handed out to Barclays were discounted by 30% as reward for confessing their sins to the regulators. As Michael Roberts points out: “If the fine is $450 million at a 30% discount, … imagine the size of the trading involved and the profits made – it runs into billions.”  

To help give an idea of how this rorting could run into billions, consider one of the abuses that the US Department of Justice is investigating in conjunction with the LIBOR scandal. As mentioned above, the LIBOR rates are the benchmark for a number of financial instruments such as derivatives. The trade in derivatives, whilst difficult to quantify, was estimated in 2008 to be in excess of $590 trillion US. Traders were allegedly in communication with bank staff, gathering information about that day’s rates. Such knowledge enabled traders to have a real ‘feel’ for the movement of the rates, to predict as it were the day’s rates.

There is evidence that for each basis point (0.01%) that the rate fluctuated, traders in the know could garner approximately a couple of million dollars on a given day’s trades. Multiply the number of traders in on the action and the number of trading days and a picture emerges about the possible amounts involved in just this aspect of trading activity. Clearly then, profit maximisation is the real driving force behind these corrupt bank practices.

The GFC in 2007/8 was the tip of the iceberg. The economies in the advanced capitalist countries had been showing signs of slow growth for a number of years and were being boosted by recourse to huge amounts of credit/debt. The financial sectors in the US, UK and Europe had been let off the leash through deregulation, beginning in the 1980s and continuing into the new millennium.

When the credit bubble burst in the US it set off a chain reaction which not only spread through the banking systems of most of the world, it also enmeshed capitalist states in places like the US, the UK, Ireland, Greece Portugal, Spain and Italy for instance. What ensued in a number of countries was the bailing out and propping up of banks and financial systems by governments, a process which has seen the enormous private debts of private sector banks magically transformed into massive state, hence public, debts.

States in capitalist countries have done the bidding of powerful financial corporations; amongst other things relaxing and/or reversing regulatory oversight, and when things went bad in the GFC, bailing them out. It is no surprise then that Barclays’ dirty dealings occurred.

What is the answer?
There can be no doubt that capitalist states, financial capitalism and the capitalist social system will always seek to enable profit maximisation (capitalist states) and pursue profit maximisation (financial capital and the system as a whole). Global capitalism, financial capital and capitalist states are moribund political and economic entities. They have to be transcended by socialism.  


Further Reading:

13th Congress Resolution on Education

Vanguard August 2012 p. 7

Australian education - put students first!

The public sector has become a particular Australian focus in the worldwide imperialist offensive against the people. The desire to destroy any vestiges of working class organisation, to exercise ideological control over what and how young people learn and to exploit new areas for profit, come together in public education. Education becomes a commodity to be bought and sold in the market place.

Universities have funds cut, research privatised to suit multinational corporations, tenure systematically attacked, courses and work hours cut, class sizes increased, student services slashed and fees increased. Courses encouraging critical thinking are replaced by those that make money. Staff and student representatives on boards are removed. Private universities grow in size and influence.

The same occurs in TAFEs, with years of funding cuts, and huge increases in casualisation. The latest Federal Government catch cry, "contestability of funding", creates a massive ramp-up of publicly-funded privatisation. Giant corporations like Coles and Woolworths offer courses vastly inferior to those once run by TAFE. Shonky operators offer ipads or iphones to potential students and sign off on courses without delivering them. These companies pocket the profit, while working class kids are deskilled.

Likewise, decades of anti-public school propaganda and a massive funding shift created a tiered school system, with elitist private schools at the top and public schools at the bottom. Under the secret tutelage of self-styled education expert Rupert Murdoch, who covets the online provision of education worth $55 billion in the US alone, Gillard ramps this up through nationwide high-stakes testing. This has seen league tables published on the MySchool website and in newspapers, leading to a rush by the most economically and intellectually advantaged students from the "lowest performing" schools to "better" schools, including within the state system, a narrowing of the curriculum and widespread teaching to the test and even cheating.

Meanwhile, the break-up of the state system into "empowered" local schools spreads from overseas and from Kennett’s Victorian experiment to other states, despite overwhelming evidence that this leads to worse educational outcomes. Scrutiny of teachers shifts towards the oppressive inspectorial systems of the past. The aims? To further commodify and charge for education, while financially supporting the future managers and exploiters, to enforce principals’ roles as economic managers not educational leaders and force them to accept individual blame for government funding cuts which they impose at the school level, to destroy permanency, to divide and rule our youth on economic, ethnic and religious lines and, critically, to disempower education workers and their unions.

This roll-back of education into nineteenth century organisational conditions is lauded as moving us into the twenty-first century; with a constant hymn that individual "teacher quality" is the key cause of student success and failure.

The multinationals alternately use federal and state governments, Labor and Coalition. As illustration, the NSW Coalition Government shifted TAFE, already carved up into corporatized individual institutes by Labor, to Gillard’s FairWork Australia, to hamstring joint TAFE-school industrial action.


The CPA (M-L) supports education workers in resisting the neo-liberal push to further privatise education.

We support their vision for a public education system funded to meet the holistic needs of students to develop as united, empowered and ethical citizens of Australia and the world.
Instead of importing failed ideas from the imperialist heartland where education systems are performing badly and failing working class and minority children, the Government must raise the entry standards for teaching, raise teachers’ wages and reduce the teaching load to provide time for collaborative practises such as peer classroom observation, lesson preparation teams, and school-based research groups.

These are the features of those systems that perform well internationally in cultures as diverse as Shanghai and Finland. Public education workers are the key to achieving this goal, and must build a united front with parents, students, the public sector and the wider community.

Action based must be based on systematic study of all aspects of education. The first priority must be to maintain the ability to organise and fight. Holding back and even reversing the twin juggernauts of devolution and "choice" is critical. To do this they must place the needs of their students front and centre in the minds of the public, and take full strategic advantage of their presence in every community across the country. In an increasingly national fight, they must overcome petty regional or state jealousies, build tactics that support victories even if in only one state or locality rather than action that tags behind those states where ruling class strength is greatest.

More importantly, anti-imperialist consciousness must be raised, so that the mass of teachers learn and not only understand what is happening, but why and for whom, and begin to spread this analysis wider still.

Immediate demands
• Put students first!
• Say no to fees!
• Implement Gonski immediately!
• No carve up of public systems!
• Support TAFE, resist privatisation!
• Roll back high-stakes testing!
• Education for life, not for profit!
• Prosperity, not austerity!

The Victorian campaign against TAFE cuts grows

Vanguard August 2012 p. 7
Jim H

Victoria’s regional and city TAFEs face the prospect of cuts to courses, students and staff.

The Lilydale campus of Swinburne has already shut its doors. Bendigo’s Kyneton Campus and RMIT’s Centre for Graphic Technology are going. Others face a similar fate. Fees are to go up across the board.  Many teachers have been forced into shorter hours and students into fewer classroom hours.

Victoria’s Baillieu Coalition government cuts are an act of vandalism, not only affecting those who work and study in the TAFE system, but an attack on the future of the people. The TAFE system is critical to the development of a broad range of skills that are needed on the job.

But the ruling class, headed by foreign and local monopolies, particularly those in the financial and mining sectors, demand that all resources be turned to themselves. From their point of view, spending money on education is a waste. They demand that government expenditure be cut back in order to create a large surplus – to be used to protect their sectional interests in the face of a deepening economic crisis. The Baillieu government is their creature, lock, stock and barrel.

The TAFE cuts are a step in the shift to a new austerity wave. There will be more – to the extent that they can get away with it.

Staff and students are not taking this lying down. Under the broad banner of the TAFE4ALL campaign, the leadership of the Australian Education Union and the National Tertiary Education Union are building the capacity to fight back against the cuts.

In the meantime, many actions are being taken around Victoria by staff and students. Metropolitan and regional councils, farmers, small business people and rural organisations are uniting with TAFE staff and students in opposing the cuts. Many unions covering workers in a wide range of industries have given their backing to the TAFE4All campaign.

Strong regional opposition to cuts
It is particularly important that there are developments in regional and rural areas, including the heartlands of the National Party. Many of its supporters, and even members, are starting to feel betrayed.  Farmers are dependent on the local TAFEs for the skills needed to run the farm today. TAFE colleges are important pillars of regional economies, and for providing job opportunities for young people. Yet these are at the greatest risk of being forced to close their doors. Union representatives are currently criss-crossing the state to talk to and build unity with local communities.

Widespread unity is being forged, to an extent that has not been seen since the Kennett school closures of the 1990s. Concerted and developing union and community action can and will win the day in the end.

An important consideration in the present context is that the TAFE cuts are a component of a general attack against the conditions of ordinary Australians. The slashing of a range of government services, perhaps on a scale not seen before in living memory, is an important aspect. It is important to see the connection between the global economic crisis and the TAFE cuts.  Consciousness of this bigger picture broadens the base of support for staff and students.

The TAFE4All campaign has got the support of many other unions. There have been a number of successful rallies. Pressure is being put on politicians.

A mass rally will be held in Melbourne on August 16th
All have good reason to support the campaign against TAFE cuts, in whichever way possible.

13th National Congress Resolution on the Australian Economy and Imperialism

Vanguard August 2012 p. 8

The Australian economy is dominated by the clash (contradiction) between the people and the core of the capitalist class - US, British and European imperialisms.

At the centre of this, is the clash between the working class and foreign imperialist interests. .The people are under pressure while capital plunders. We see the clash in the constant pressure on household budgets, on mortgages, food and grocery prices, petrol prices, and growing costs of education and health. Just look at the cost of university education and pharmaceuticals, as examples.

At the same time, mining monopolies make billions upon billions, big banks announce multi-billion returns, and supermarket retail conglomerates drive small retailers out of business while making super-profits from the people’s basic needs for food, clothing and household goods.

The working class, with some working small business people, produce all the wealth realised in Australia. According to the Bureau of Statistics, the gross domestic product of Australia was $1,341 billion in 2010-11. Even according to an incomplete overstated official measure, just 52.8% of GDP went into wages and salaries and government services to people. That compares with 62% in 1975.

The profit portion of GDP grew from 17% in 1975 to a record 28% plus for the three years of the GFC (ABS Total Factor Income Ratios) – A straight swap from working people to private profit.

There’s plenty of money around Australia. It’s just that it is going to profits, not to the people.
The exploitation of the workers has grown remarkably. With automation and computerised production, the fixed portion of capital (input into production, machinery, materials, energy, and wear and tear) has risen particularly over the last 20 years.

The other side of this is that the variable portion of total capital invested in production, fundamentally wages, has fallen. The rate of profit on each dollar invested drops, as profit made from exploitation of workers becomes less when more money is put into machinery, energy and materials etc. Companies work to make the most profit possible by cutting workers’ share. Workers rightly struggle to keep their share up. The clash of the titans haunts imperialism. The workers and patriotic people are many. The imperialists and their coterie are few.

The economic malaise, where big foreign monopolies are supported and the people lose out, will be resolved by the working people taking command of the means of production, initially the key industries and resources now in the hands of foreign monopolies and conglomerates.

Struggle against imperialism is vital for the working class and the patriotic oppressed in small business. It puts the people first, and takes command of the future of the country. Some steps can be advocated now that reveal the intensity of imperialism’s exploitation and set out the possibilities of the alternative.

Australia a target for export of capital
Capitalism in its imperialist stage is marked by the export of capital. Australia is a major target of capital from the US, Britain and Europe.

In the era of removal of barriers to the unrestricted flow of capital and commodities into dependent countries, and the opening of formerly government sectors to direct private ownership in the last 25 years, US and European operating companies and financiers have moved into formerly government sectors. They include areas like electricity and water, mining, rail, air and other transport, some defence industry, education and health services, communications and infrastructure.

These have been some of the most rapidly growing sectors of the economy. Capital has governments working as boards for the capitalist class as a whole, to deliver these plums for plunder. The overwhelming bulk of these plums have been grabbed by European and US capital, with some new Asian capital involved. Corporate brands like Veolia and Optus mark the new phase. Imperialists keep pressing for new advantages against the people. The Trans-Pacific Partnership Agreement (TPPA) is pursued by imperialism to further open the country to plunder, and the people to exploitation. 

Mining resource monopolies confront the people
On top of that, mining and resource monopolies are taking over wide stretches of rural and urban land, along with Aboriginal lands. It builds on coal mining regional dominance in NSW and Queensland. They are led by Rio Tinto and BHP Billiton, with a coterie of Japanese conglomerates including Mitsui, Mitsubishi, followed by the oil and gas majors including Santos, Chevron, Woodside and others.

Major clashes have broken out over rich agricultural and environmental reserves, as well as urban land, for coal seam gas exploitation, open cut mines in the Hunter Valley and Liverpool plains, prime flood-plain cropping land, and the Pilbara clash over Aboriginal coastal land sought for a huge gas refinery. The dominance of resource monopolies over the people is exposed in the eastern states, through the coal seam gas struggle to” close the gate” against the coal and gas monopolies who are backed by government and the capitalist law.

South Australia is being reoriented with the extraordinary Olympic Dam uranium development, and is moving into the overwhelming dominance of the state by resource monopolies, joining WA and the Northern Territory.

This dominance is reflected in the decline of manufacturing, as finance flows into mining ventures. Equipment and wages in manufacturing wallow, while mining booms. Governments provide endless advantages to mining monopolies and foreign car monopolies, while multiple local manufacturers are starved of work and support.

A section of capitalists in Australia, completely reliant on foreign funds to support their enterprises, Gina Rinehart, “Twiggy” Forrest, Clive Palmer and Nathan Tinkler among the highest profile, have become increasingly shrill and seek to impose themselves on public policy. They are quite reactionary, being completely subjugated to foreign finance to sustain their businesses and positions. They make dangerous tinder on which fascist tendencies may be inflamed.

The resources of this country are being torn from the ground for monopoly capitalist plunder, leaving tens of tens of thousands of despoiled mullock heaps in their wake. The people want protection for their communities, and for their lands and environmental treasures, and an end to exploration and mining rights overriding land and community rights.

Australian capitalist crisis
The rapid expansion of resource exploitation, the practice of a quasi- Keynesian government stimulus policy, and maintenance of credit in some sectors, has sustained the capitalist economy in Australia through the global economic crisis. The price has been growing dependence on foreign capitalist input, now in decline.

International capitalist crisis, followed by government austerity practices aimed at making the people pay, are causing stagnation and rebellion across Europe, Japan, and to a lesser extent, North America. The new wave of austerity is being taken up in Australia with the drive to “balance the budget” beginning a new phase of screwing the people.

The alliance of supermarket conglomerates with their petrol station partners, the banks, finance companies and mining monopolies, are draining the country and exploiting the people. Governments from Canberra to each state capital are attacking wages, jobs, education health and transport services in an austerity drive, rejecting peoples’ rights to security of their lands and areas from mining monopoly despoliation. Stagnation threatens.

The turn against austerity in Europe, on top of the Latin American outburst against imperialism, may provide a new wave of rebellion and resistance to imperialism. The “Close The Gate” protests, struggle against government destruction of government jobs and holding down wages, demands for clampdowns on supermarket and petrol monopolies, and condemnation of the banks, all feed into the broad struggle against imperialism for the people.

The working class and other patriotic people in Australia stand against imperialist plunder of Australia
The working class demands governments stop destroying jobs and services in new austerity “budget-balancing” exercises to support the bankers’ and mining companies’ economy, and instead make the monopolies pay
  • Support rural, urban and Aboriginal people who ‘Close the Gate’ to mining monopolies encroaching on their land, environmental treasures and communities!
  • Clamp down on retail conglomerates’ market dominance, to relieve the squeeze on retailers, farmers, and local manufacturers of consumer commodities!
  • Support public transport, and oppose petrol monopolies’ price gouging!
  • Lift the wages and government services portion of GDP by 5%. Raise wages by 12 % with more for the lower paid. Increase pensions, and implement a disability support scheme!
  • Lift Government funding to Education, Health and Public Transport by $30 billion p.a. for a start!
  • Really make mining and gas monopolies pay, to provide services for the people and support to manufacturing!
  • Re-nationalise public transport for systematic, people-centred transport operations!
  • Reject the TPPA!