Saturday, January 31, 2015

Imperialism demands more from Australian workers

Bill F

The Business Council of Australia represents about 100 of the largest multinationals and local monopolies in the country. 

As such, it speaks in the interests of imperialism, promoting vicious neo-liberal policies that continually attack the working class and trample on Australian sovereignty.

BCA chief executive Jennifer Westacott (below) used January 26, the day of British colonial invasion in 1788, to make a speech in Melbourne calling for faster implementation of the imperialist agenda.

On May 12 the federal budget for the 2015-16 financial year is due to be released, and the BCA wanted to send a strong message to the Abbott government that it demands more attacks on the working people and more cuts to public services and benefits.

In a not too subtle warning to Abbott, Westacott invoked Labor’s Gough Whitlam as an example of a leader with a long term vision and said, “I know there are political leaders across the country now who want to show this kind of leadership.” She even used the Keating era words “social contract” to imply that Labor might be better at conning the workers.

The speech set out several priorities for the Abbott government – the budget and fiscal arrangements, education and skills, and economic growth – code for another austerity budget to beat the working class into submission. It demanded further Productivity Commission inquiries into the aged pension and retirement system and the healthcare system.

A tool of the BCA

The Productivity Commission is a favoured tool of the BCA. It examines data and statistics, takes submissions, considers arguments and then, inevitably, recommends to government whatever the BCA wants.

Recently it was revealed that it has commenced a ‘review’ into the whole swag of industrial laws, with weekend and shift penalty rates top of the list. Reflecting the big business demand for ‘workplace flexibility’, the Productivity Commission will dig up the corpse of Howard’s original WorkChoices and trot out the BCA’s programme to water down or abolish laws on the minimum wage (It’s only $16.87 an hour now!), collective bargaining, unfair dismissal, ant-bullying and union access to work-sites. Recommendations to government are expected to be finalised by November 30.
Westacott just couldn’t resist saying that the ‘review’ was a chance “…to rethink how we work and how we stay competitive to succeed in a global economy”.

BCA and taxes

Another area where the BCA has been very vocal is taxation. It deplored the collection of revenue from taxes on the big mining companies and polluters, and now says that the 10% Goods and Services Tax (GST) that hits ordinary people should be lifted and broadened to raise necessary revenue. Items such as fresh food, education and healthcare services are currently excluded from this tax, but if the BCA gets its way, the working class will be hit with an even heavier tax burden.

To provide the smokescreen for this latest plot, the BCA have commissioned the Liberal Party pollsters Crosby Textor to propose changes to the taxation system, especially the GST.  

This comes on top of the Abbott government backing down on promises to chase foreign multinationals for taxes on income funnelled out of the country. (See article  MYEFO – giving the rich a break on this website).

Nationwide rallies March 4

The ACTU has called for nationwide rallies on March 4 to oppose the renewed attack on the working conditions and living standards of the Australian people. If organised well, there will be stop-work action in many unionised workplaces and widespread community support and involvement. The power of the mobilised working class will give heart to all those struggling against the harsh austerity measures being imposed.

This is the positive and should be encouraged and supported. As has been shown in Greece, when the mobilised masses stand up to the dictates of imperialism, it is possible to think of another future.  

Yet, if we recall the Right at Work community campaigns and rallies which mobilised hundreds of thousands of workers, the mass movement was gradually diverted into an election campaign by the Labor Party that carried Rudd to power and then gave us WorkChoices Lite.

Let’s not fall into the parliamentary trap again. Let’s not count on numbers in the Senate and all that rubbish to defend the working people. Let’s not ‘keep low’ and wait for a Labor government. 

Only an independent mobilised mass movement led by the working class can roll back the BCA attack.

What’s behind the oil price drop?

Josh S

The recent drop of over 40% in oil prices only presages increasing price fluctuations in the future.

The price drop has been caused by decreased international demand due to sluggish economies, and to serious overproduction.

The production increases have been mainly due to a massive increase in oil shale drilling in the USA, which now produces over 30% of the world’s oil, and is the largest producer of oil and gas. Increased prices this century, and the development of fracking technology, have made the extraction of oil from previously unviable shale deposits profitable.

20,000 new wells have been drilled since 2010.   In the Bakken field in North Dakota-Nebraska, the number of wells increased from 200 in 2005 to 78,000 in 2014. Not surprisingly, this oil rush in the Bakken is accompanied by the highest worker fatality rate in the US. This is besides the environmental consequences; serious spills of highly saline fracking residue have occurred as recently as early January 2015, and last July. Another spill in 2006 is still being cleaned up.

Shale oil comprised 0.5% of world production in 2008, but 3.7% in 2014. It involved 20% of world oil investment  in 2013.

Shale oil wells are quick and relatively cheap to initiate. A well can be drilled in a week for as little as $1.5 million. A field can be developed in a few weeks. Compare this to conventional drilling: Exxon Oil and Russian company Rosneft recently took 2 months and $700 million to drill one well north of Siberia.

Shale wells typically have a very short life: output usually falls by some 60 – 70% in the first year.

US shale oil companies carry huge debt. Shale accounted for 20% of the world investment in oil production last year. Total US debt for oil exploration and production has doubled since 2009.

Several hundred wells have already closed down in the past few months, and the number of drilling applications in the Bakken field dropped by 40% in November alone. This trend is expected to continue; many companies are likely to go bankrupt at current prices.

This situation presents a serious dilemma for US imperialism.

As world (over)production levels are maintained, as insisted on by Saudi Arabia, many US companies will go bust and US production will decline significantly.

However, the US and its allies and clients, like Saudi and the Arab oil sheikhs, want to weaken rival oil-dependent countries such as Russia and Venezuela.

The Future

Some capitalist mouth pieces, such as The Economist magazine, pronounce hopefully that shale oil, of which there are enormous deposits across the globe, will ensure stable supplies for the future and an end to price volatility.

However, given the complete anarchy of capitalist investment and production cycles, as capital desperately chases the highest returns regardless of need or rational planning, and the ease and speed of opening shale oil wells, increasing overproduction and price fluctuations are far more likely.

The oil boom – bust cycle, and the price instability, will become worse, not better. And these will have flow-on effects to the rest of the world’s economies, and to the pressures on people’s livelihoods.

Wednesday, January 28, 2015

Riverland grape growers at the mercy of imperialist finance capital

Nick G.

South Australian Riverland grape growers are angry at the prices offered for the coming harvest’s grapes by Berri Estates Winery (above).  The wine company is owned by US-based Constellation Wines, the largest wine producer in the world.
Growers are being offered as little as $180 per ton of grapes although their co-op has a contract with Constellation to base prices on an industry average which is around $230 per ton.  They regard the $50 differential as unacceptable and are prepared to go to court over the matter.
All of this is a far cry from the boom times for wine producers when payments to growers sat around $1000 per ton. 
It reflects both the anarchy of the capitalist market and the growing separation of producers from the big companies controlling wine production.
Berri Estates Winery is the largest combined distillery and winery in Australia.  Much of its bulk wine is shipped overseas, but a sizeable component is also used to add volume to wine produced in other parts of Australia.  Often this goes unnoticed as a bottle of wine can have up to 15% of its wine included from outside its declared region before having to have it identified on the label.

The Riverland was once the home of the Australian citrus and fruit industry, but the orange and pear trees, the apricot trees and others have long gone following the removal of tariff protections and the subsequent competition from overseas corporate growers.
“Blockies” – families working on and owning their small irrigated blocks on the 300 km stretch encompassing Blanchetown, Morgan, Waikerie, Barmera, Berri and Renmark – ripped out their fruit trees and pulled down their packing sheds and put in vines, hoping to secure a future on the land.

Now many find themselves at the mercy of an overseas giant run by private equity firms out for a quick return on investment and with little regard for small communities distant from international boardrooms.
The blockies are both hard-working physical labourers and small-scale capitalists.  Their dual identity is both a strength and a weakness.  Around 600 blockies belong to the local co-op, CCW, and use that to try and present a united front to Constellation.
At one time they had considerable control over their livelihood.  There was a strong Australian market for Riverland produce and apricots, oranges and pears paid for many elite private school educations and overseas holidays.
With the change to vines, CCW was formed in 1981 from the merger of two Riverland co-operatives – Berri Co-op Winery & Distillery Ltd and Renmano Wines Co-op Ltd – with the main aim to produce wine from shareholders' fruit and offer a satisfactory return to CCW growers on fruit delivery.
In 1989 CCW was restructured, forming the publicly unlisted company Berri Renmano Limited which then merged (1991) with the Hardy Wine Company based at suburban Reynella south of Adelaide.  The new entity, BRL Hardy continued to expand but as it did, so grew the distance between growers and producers with the former becoming increasingly marginalised.
Whilst these factors create conditions for unity among the growers, their internal divisions prevent a more militant approach to the conglomerate that owns the winery.  They are divided into first, second and third class suppliers by Constellation based on grape quality and compete for status and recognition as growers.

Growers did unite and carried out a collective action last February (2014) with a tractor drive and protest outside Parliament House in Adelaide (see  It was an emotional and heartfelt rally.  But the growers are divided into those who want more action of this type and those who want a more conservative approach.
“We hear suggestions from some, who should know better, that we should ‘withhold supply’. It won’t happen,” said a writer on the Riverland Wine Grape Growers  Association website on January 9.
Others want a campaign to give growers an extra 20c per bottle return.  Currently they get around 25c per bottle.  The same writer dismisses the idea.  “It won’t happen”, he says.
A mass campaign and united mass action directed at Constellation could be much more effective than the proposed legal path, but the inherent conservatism of the blockies works against them.
The blockies may not see it is these terms, but capitalism has led them to declining fortunes and an uncertain future.  They are now at the mercy of giant imperialist corporations and have an objective interest in lining up with the working class to win genuine independence and a secure place as co-operatively organised growers in a planned socialist economy.