SA economy crippled by grip of imperialism

Vanguard February 2013
Ned K.

In mid-December 2012, the South Australian Government Treasurer announced more cuts to jobs and services in a mid-year budget.

The then Treasurer, Jack Snelling, announced a government deficit of $1.7 billion and predicted the current government debt of $5.1 billion would spiral to $9.7 billion by 2015-16.

One of the main causes of this situation is the dominant position of multinational corporations in the mining and manufacturing sectors of the local economy. The state’s economy has been reliant on mining and automotive manufacturing for the provision of jobs and government revenue.

The decline of the automotive industry in the state is due to US and Japanese imperialism’s withdrawal of the industry from South Australia, with the closure of Mitsubishi and the contraction of General Motors Holden plant at Elizabeth. These multinationals have demanded and received millions of dollars in subsidies from the state government over the last decade, eliminated thousands of jobs and sent all their profits overseas to parent companies.

Faced with a declining manufacturing base, the state government put most of economic development ‘eggs’ in the BHP Billiton mining ‘basket’ at Olympic Dam, hoping to raise sufficient taxes from the mining operation to wipe out government debt and deficit. It also hoped the mining expansion would provide money to pay back to the private consortium that is building the new public hospital, the RAH.

However decisions of multinational companies do not necessarily always align with those of governments that bend over backwards to serve them. Such is the case with BHP Billiton, who have decided not to go ahead (for now) with the biggest uranium/copper/gold mining expansion in the world.

Desperate to offset the damage caused by the decline of automotive manufacturing and the stagnation of the Olympic Dam expansion, the state government has turned to expansion of the military sector of the economy at Tech Port near Port Adelaide. However, this just puts the economy in the grip of a different section of multinationals.

The economic and social consequences of remaining in the grip of multinational corporations are more of the cut backs like those announced in the mid-year budget. Soon after the mid-year budget announcement, the Health Department announced closure of the Acute Referral Unit (an emergency department) of the Repatriation General Hospital, at a savings to the government of about $1.5 million per year. To put this in perspective, $1.5 million is about 25% of the cost of building a foot bridge over the city River Torrens from an expanded Adelaide Casino to the new Adelaide Oval.

It seems that the state’s economy and the political survival of the current state government now rest on the ‘circus’ of a Casino expansion and a modernised cricket ground!

Meanwhile, in a mid-January Cabinet reshuffle, Premier Jay Weatherill has placed himself in charge of the Treasury and sent Snelling with a brand new axe to run the Health department.  Snelling’s first public statement was to say that he was not the axe man, which just goes to show that you can’t believe anything until you’ve heard it denied by a politician.