The long and agonising death of Australian manufacturing has
been hastened by the Abbott government’s refusal to support the Australian auto
industry.
The foreign multinational car companies operating in
Australia have closed operations here because their loyalty is to a handful of
major corporate shareholders and not to the working people of the countries in
which they have based their manufacturing operations.
The neo-liberal restructuring of the economies of countries
around the world has resulted in severe dislocation, the rise of precarious
employment, and the flow of investment capital away from productive
applications and into the global financial casino.
In Australia, Labor and Liberal governments have loyally
followed the dictates of the World Bank and the International Monetary Fund for
deregulation, privatisation, and “free” trade.
Only a few at the top have benefitted.
In this publication, written by a worker in the auto
components industry, we look at the impact of imperialist globalisation on the
auto and components industries, and suggest the way working people must base
their demands around an independent and socialist future for the country.
………………………………………………………………………………………………..
PART ONE:
Soon after taking office
in 2013, the federal Abbott Coalition government took decisions which resulted
in the three main auto companies in Australia announcing they would cease
operations in 2016 and 2017. Holden, Toyota and Ford, employ about 9,000
workers nationally. The industry, historically, received about $550 million
government support in return for the companies investing $7.3 billion a year.
In classic, basic economic theory, capital exploited labour, as the main
factors of production, for massive benefit. The business was highly profitable,
generating in excess of $21 billion each year, with productivity return for
each worker being $128,000 annually. For every tax-payer dollar, a total of $31
was returned each year. (1)
The related Australian-based component sector directly employed an estimated 50,000
workers in over 700 factories, often close to the main auto manufacturers for logistical reasons to reduce transport costs. All the 719
companies are now considered vulnerable. (2) It has been suggested only about
10-20 per cent of the companies will survive the auto closure, with fears some not even reach the final date creating problems for the
parent industry with ready access to vital component parts.
(3)
It has been estimated a
further 100,000-200,000 workers, indirectly linked to the auto and component
sectors, will also be affected by the closures. (4)
Even the business-classes
have raised serious concerns about unemployment: many companies received
favourable terms from state governments for basing businesses in localities
where unemployment was already considered a problem. (5)
When questioned by
trade-union delegations about why the government had taken the decision to close the
industry and the problem of job losses, however, Abbott stated,
'that was our policy'. (6) Decisions,
about Coalition party policy, had, apparently been taken a few years earlier
with every intention of implementation once in office. Where, and from whom,
Coalition members received their information for establishing party policy
remains a matter of conjecture. Their 'confidential agents' consisted of few,
if any, with direct employment experience within manufacturing industries.
A closer study of such
decision-making has raised serious
questions about how Australia has fared in the era of globalisation. And who has benefited.
The era has been marked by a departure from usual, tried and
tested, trading patterns.
Australia, historically,
had a small economy and workforce, with strong trade links with Europe. To protect vital and vulnerable interests, the economy was highly
regulated. Huge profits were, however, generated with industrial enterprise.
Australia, throughout much of its recent near two centuries of modern history,
also achieved enviable living standards considered amongst the highest in the
world. There was also a strongly egalitarian political culture, marked by
social mobility.
During the 1980's period,
however, Australian federal and state governments began
implementing policies foisted upon them from international financial
institutions controlled by the United States. The World Bank and International
Monetary Fund (IMF), and others, issued directives for countries to undertake deregulation,
privatisation and liberalisation of their economies. It was conducted on the
basis 'of one size fits all'. Governments which questioned the judgements were
considered obstacles within the grand plan.
As the
international financial institutions issued more and more directives, the term
globalisation became vogue with round-after-round of so-called Free Trade
Agreements (FTAs).
The period was marked by
casino-type market-economics, with excessive risk-taking and the development of
a human form of cockroach capitalism: market trading would appear more akin to
scavenging. Activity on the stock-exchange is taken as good for business, as
opposed to other, more reliable means of assessing economic well-being.
The effect of
globalisation, upon Australia, was
dramatic. A vital prop, and buttress, for the manufacturing base of the whole
economy crumbled. The period also coincided with the rise of China as a
dominant, regional economic power, driving much of Asia in its trail.
The
changing balance of forces with the emergence of China has also thrown considerable light upon the
present so-called regional Trans-Pacific Partnership
(TPP) FTA of twelve countries which encompass forty per
cent of the global economy. It has been discussed in secret, has questionable
benefit for Australia and has excluded
China. The construction of the TPP, has, in effect, been more in line with US
regional defence and security planning and a perceived threat to their
hegemonic position, than trade. The TPP will also be a
further nail in the coffin of Australian manufacturing.
The effects of globalisation
are not difficult to openly observe in Australia.
In the
five years leading to November, 2014, the Australian manufacturing base lost a
further 79,200 jobs, which amounted to 8 per cent of total, even before the
planned closure of the auto sector. (7) Whole areas of the country which for
generations had strongly localised manufacturing industries have suddenly
experienced unemployment. Factories and workshops have closed, the derelict
buildings bull-dozed into the ground.
Generational unemployment
embedded in sections of the working class is now set to expand,
which will serve as a convenient cover for the business-classes to further
challenge trade unions as they try to defend wages, terms and
conditions.
The present Abbott
Coalition-led Royal Commission into Trade Unions is an institutional approach
to undermine workplace-based labour organisation. It is backed by a compliant
media which has demonised any trade-union activity. The development has
amounted to little other than a massive muck-raking exercise intended to
undermine industrial relations in the workplace and the Australian Labor Party
which, to date, presents the only credible challenge to the removal of the
Abbott Coalition government.
Although Labor is a
parliamentary alternative to the Coalition, it must be remembered that it does
not present an alternative to the neo-liberal agenda developed to support the
domination of imperialist finance capital over industrial capital. Hawke and Keating pioneered the embrace by
Australian politicians of this agenda with their removals of tariffs,
deregulation of banking and finance, and promotion of the class
collaborationist Accord.
It would be almost
unthinkable for the Abbott Coalition government to subject rich and wealthy
Australians to similar smear tactics and dishonest agendas despite the fact a
substantial proportion of the 'global super-rich elite' are responsible for
hiding an estimated US $21- $31 trillion in offshore
banking locations, exempt from closer scrutiny. (8) The amounts of hidden
finance amount to as much as the combined Gross Domestic Products (GDPs)
of both the US and Japan together, and often have
links to organised criminal activity. The Abbott Coalition
government, however, remain curiously silent and unwilling to take action to
challenging the rich and powerful.
It is not difficult, however, to establish why the Abbott Coalition
government have targeted the auto and component industry for 'special
attention'. It has remained strongly unionised, with traditional industrial
relations procedures, even under previous hostile governments.
This runs counter to
Abbott Coalition objectives, in compliance with their cronies in the business
sector, to increase levels of casualisation and precarious
employment with the specific intention of weakening trade-unions and reducing bargaining power for workers confronted
with unreasonable demands from employers. They seek to reduce
wages and worsen their terms and conditions of employment.
Abbott and his cronies,
however, appear curiously out-of-step with reality. They
continue to blame trade-unions for demanding higher and higher wage-increases.
The claim is without substance. The only sensible explanation is that their
claim is ideologically driven.
Wage increases for most Australian
workers have not kept up with inflation rates for many years. Most
manufacturing workers regard themselves as fortunate if they receive two per
cent per annum wage-increases. Even this small amount, for some employers, is
not small enough. There are now employers in contemporary Australia demanding
the government introduction of wage-cuts to further boost profits. (9)
Despite the endless
diatribes issued in the name of respectable journalism from their friends in
the media, it was not trade-unions which have destroyed the
auto and component industries. To the contrary, international financial
institutions and Australian governments were responsible for the destruction.
The continual opening of the Australian economy to unfair trade conditions in previous
decades effectively undermined manufacturing in general and the auto industry,
specifically.
It is not difficult to
establish what happened. Reliable figures are easy to access. Australia
possessed only 1.5 per cent of global auto production facilities. The removal
of import controls and tariffs has exposed the industry to massive dumping of
foreign-manufactured cars subsidised by their own governments onto Australian
markets. It was unable to compete.
Some large auto
manufacturers clearly understand their industry better than governments.
It has been noted by Ford
Australia, in official correspondence, 'Australia's automotive import tariff at
5 per cent is already one of the lowest rates in the world but when new and
existing FTA's with automotive producing countries are taken into account the
effective tariff is closer to 2.6 per cent'. The company also further noted
tariffs would fall even further with the introduction of the TPP. (10)
The amount of foreign
government subsidy of their industries has to also be considered, in relative
terms.
Australian governments
have only subsidised auto-manufacturing to $18 per capita per annum. It amounts
to paltry support in comparison to other competitors. Their counterparts, in
Germany and the US, for example, subsidise their own auto-industries to the
tune of $90 and $260 respectively. (11) There is hardly a
motor vehicle made anywhere in the world which is not heavily subsidised by
their governments. And the reason, good business practice.
Today, however,
there are a total of 67 different brands and 400 models of car are available in Australia for about 1.1 million sales annually. It is not good business practice. Even the huge US market
restricts importation of cars to a maximum of 51 brands. (12)
There remains widespread
concern throughout Australia that successive governments have sold themselves
very short indeed with economic decisions taken about
manufacturing and the auto industry. Their
decision-making has not been particularly clever.
Government support for
other parts of the economy raise serious questions about their commitment, or
lack thereof, toward manufacturing,.
Manufacturing, for
example, still employs about 8 per cent of the Australian workforce with more
than 910,000 jobs. The finance sector of the economy, by contrast, which only
employs an estimated 2 per cent of the workforce, receives $763 per capita per
annum in government subsidies. (13)The support
would appear generous toward a small and privileged section of the Australian
workforce. A recent study of the industry conducted by Michael Page Australia
of 449 finance organisations, however, found 68 per cent
had no intention of increasing their workforces in the coming year. A total of
60 per cent were also awarding their existing workforces with between 3-5 per
cent wage-increases. (14)
The
mining sector of the economy, likewise, which only employs another 2 per cent
of the workforce receives about $4 billion per annum. (15) Many of those in
control of the mining companies remain strongly supportive of the Abbott
Coalition government.
It is as if Abbott and his cronies live in the misty realm of ivory
towers, totally detached from real life. Serious questions arise
about their competence, and the hidden agendas they appear to pursue. There
have been questionable benefits, for example, from most
FTAs, to date. They are unlikely to improve life for the mass
of the population in the future.
The problems resulting from unfair trade practices are
not only a major trade-union concern. Even business-groups recognise the
problems arising from FTAs, and the requirement of 'mutually reciprocal trading
conditions for Australia's automotive manufacturing industry'. (16)
To date, the Abbott
Coalition government have not even commented yet alone made a political
statement on business decisions taken by General Motors to re-locate to Germany
and produce Holden vehicles from March, in a country where labour costs are
higher than Australia and trade-union density is greater.
...................
PART TWO:
A number of significant
points emerge from the continued imposition of imperialist globalisation
policies upon Australia. It has altered the industrial
landscape and created a wasteland for most working people.
The policies of
globalised finance capital have also been responsible for strengthening power
relations between class and state. They have greater room for manoeuvre. Too
many trade unions remain at present cowed and over-powered by the triumphalism
of capitalism.
It has also led to massive discrepancies
and ever-widening levels of wealth accumulation. Reliable sources have shown that the seven wealthiest
billionaires in the country hold more wealth than the poorest 1.73 million
households combined . (17) There has
been no 'trickle-down of the wealth'. It has been grabbed and kept by those in
higher-socio-economic circles who possess no intention of sharing any bounty
from ill-gotten gains.
Similar studies including
the World Wealth Report conducted by Capgemini have revealed how already
well-heeled Australians increased their wealth with a further 226,000 people
being assessed as High Net Worth Individuals (HNWIs). It has
had the effect of strengthening the middle-classes. To enter the select
club, one has to possess more than US$1 million over and above the value of
their own home. (18) The wealth has largely been accrued
through investment in real estate, not manufacturing. No doubt the Abbott
Coalition government view such developments favourably: they strengthen
traditional authority-patterns and upper
class sections of society which historically have been their electoral
powerbase.
Serious problems,
however, are looming.
Decision-making
and political expediency shown with the
Abbott Coalition government in Canberra has been short-term. Even the IMF has
'raised concerns that austerity budgets in the post-Global Financial Crisis
world not only contribute to inequality but also act as a major brake on
sustainable economic growth'. (19)
One of the only real
indicators of economic growth and well-being remains the documentation of GDP,
which in classic economics is a measure of the total flow of goods and services
produced by an economy over a year. Levels of GDP growth reveal sustainable economic
development for most developed countries, but the opposite in Australia.
The Organisation of
Economic Co-operation and Development (OECD), of which Australia has been an
active member for over thirty years, has noted in official research that levels
of our GDP growth have been in continual decline since
2002 when it was recorded as standing at 3.967 per cent to this year when it
fell to 2.306 per cent. Total GDP growth for all OECD countries during the same
period rose from 1.689 per cent to 1.914 per cent. World totals, also rose from
2.862 per cent to 3.129 per cent. (20)
The Australian economy,
in reality, is going in the opposite direction to other OECD
members and world, with an ever-downward spiral
of decline, together with rapidly increasing
unemployment and deprivation. The closure of the Australian
auto and much of the component sector will further exacerbate and hasten an
already established pattern. The policies of globalisation imposed by the
imperialist world’s largest financial institutions are shown quite clearly to
be responsible for the destruction of the manufacturing base of the economy.
The 'one size fits all'
approach adopted by imperialism in its restructuring of Australia is totally unsuitable for the country. Or for most other
countries, for that matter: evidence produced by international financial
institutions would appear to contradict their aims and objectives.
A statement from the
World Bank at the beginning of the year, referred to 'another disappointing
year in 2014', and 'underneath the fragile global recovery' were growth
estimates for high-income countries of a mere 2.2 per cent for the period
2015-17. The developing countries, by contrast, achieved growth estimates of
4.8 per cent rising to 5.4 per cent for the 2015-17 period. (21)
It remains highly significant to note the latter have
temporarily benefited from huge flows of capital in search of higher returns
and have also tended to increasingly ties with the BRIC countries which
sometimes offer more favourable trade terms.
Since the World Bank
issued the statement in January, furthermore,
deterioration in the US economy has been duly noted. The
new estimate, an official 'Mid-Session Review', revised
previous forecasts down from 3 per cent to only 2 per cent. (22)
The terse, two, extra-short column media statement, issued by the White House
was subsequently hidden in various business media outlets.
Such developments are not
good for those who rely upon generous handouts to lobby governments and
businesses with policies which do not foster economic improvements, but rather,
only lead to further decline. It might be noted which
Australian lobby organisation has been the first to collapse under the strain,
not even making the finishing-line of the Senate Enquiry into the auto and
components sectors in November.
The Federation of
Automotive Products Manufacturers (FAPM), recently announced it had folded. The
Australian business and employer-based lobby group, with about 120 members, was
liquidated in July. (23) They may well have established
richer pickings and pastures elsewhere. The FAPM, however, could hardly deny
they were oblivious to the problems created by their incessant lobbying to
implement globalisation policies. The organisation had a research department. The
likely outcome of globalisation policies was already predicted among those who
read newspapers and monitored developments from reliable source material.
One of
the most damning criticisms of globalisation was issued in 2000, from official
US government circles. During the late 1990s period the top
US intelligence body National Security Council (NSC)
commissioned an 18-month research project with 'independent experts' into the
likely effects of globalisation. The final report concluded 'it is unlikely
that economic globalisation will lead to general well-being during the next 15
years, because the gap between rich and poor – both between countries and within
them – is growing'. (24) The report, which was leaked to
a Spanish-language media outlet, caused huge embarrassment, also warned of
growing unemployment levels, alienation and political
instability.
It has not been difficult
to monitor the accuracy of the report over the past fifteen years.
It is
highly relevant to note the major drama being played-out in contemporary
Australia. While the Abbott Coalition government remain intent on policies
which include 'the balancing of the budget' and an austerity package, reliable
sources have shown total global wealth has doubled since 2000 to an estimated
$263 trillion. During the short 2013-14 period a further $20.1 trillion was
added. (25)
The Abbott Coalition
government austerity policies have been aimed at penalising the lower
socio-economic groups while opening further possibilities for those at the
'top-end of town' to further amass wealth. Their rapid increase in wealth,
however, has not made society or the world a better place for the mass of the
population.
Those who reside in dreamland and think the benefits
of increased global wealth will eventually 'trickle down' to lower
socio-economic groups continue to live in their ivory towers. There
is no evidence of any distribution of wealth taking place, whatsoever.
World-wide, the richest one per cent own more
than 48 per cent of all wealth. (26) In
Australia, a recent study found the wealthiest fifth of households owned an
estimated 70-times more than the poorest. A spiral had been created, escalating
out of proportion. Those at the top had accrued a 28 per cent increase in their
wealth, in recent years, while the bottom fifth achieved only a further three
per cent. (27)
The report was also
supported by research conducted by Oxfam Australia, which found, ' the rise in
income that the top one per cent have enjoyed in the past three decades was
second only to the increase experienced by their peers in the US'. (28)
The
problem also has implications which are counter-productive. The rapid escalation of wealth is unsustainable. It is purely
speculative, not based on firm ground. The unequal distribution, likewise, has
raised serious questions about its prolonged viability. In fact, even Credit
Suissehave raised fears that growing inequalities 'could trigger a recession'.
(29)
The policies of
imperialist economic globalisation, which have enabled the rich to fling
capital to the four corners of the globe in search of ever higher returns with
no social responsibility for the outcome, carry within themselves the seeds of
their own destruction. The people responsible, the finance capitalists of the
major imperialist powers, are not productive.
They are indeed their own grave-diggers as they impose directions on the
economic development of capitalism that make that system unstable and prone to
crisis.
Those of
us who manage to keep our health into older age might even witness the whole
pantomime created by those who seek mega-profits over any semblance of social
responsibility collapse and disappear without trace into the rubbish bin of
history. They will be, largely, responsible for their own destiny.
Those on
the receiving end of the economic policies of US and other imperialisms,
including the Australian auto and component sector workforce, will be
better-off without them.
Australia can have a productive
manufacturing sector but the guarantee of that cannot come from within the
economic and political system of capitalism, the Australian version of which is
totally enmeshed in the web of imperialism.
Manufacturing and other
workers must raise demands for the independence of our nation from imperialism,
and for the replacement of capitalism with socialism.
These demands already
exist in embryonic form within a developing independent agenda of the working
class. It is not constrained by the
Labor Party. It refuses to rely on the
Labor Party and instead seeks to apply rank and file pressure to Labor leaders
to support elements of the workers’ own demands.
Only when the people’s
immediate demands are connected through a vision for anti-imperialist independence
and socialism will we have the key to a better and less precarious and
uncertain future.
..........................
(1) Thousands of jobs
lost at Holden, AMWU News, Summer 2014, page 5.
(2) Federal Parliamentary
Submission for Senate, 2015,
Government of South
Australia, Section 2, page 4.
(3) Ibid, Business SA,
February 2015.
(4) Op cit., AMWU News.
(5) Op cit., Business SA.
(6) Information provided
by Mike Smith, AMWU, FORUM. 25 February 2015.
(7) Manufacturing,
Australian Jobs,
Australian Government –
Department of Employment, (ISSN 1832-7230), page 20.
(8) Super-rich hide $21
trillion,
The Guardian Weekly
(u.K.), dated, 27 July 2012.
(9)
Carnell supports real cuts to wages,
The Australian, dated, 5
November 2014.
(10)
Parliamentary Submission for the Senate, 2015,
Ford Australia, February
2015.
(11)
Macro Business: Car Industry Subsidies in Perspective, 11 April 2013, and
The Conversation – Fact
Sheet, FactCheck,, quoted Lateline, 22 July 2014.
(12)
Federal Parliamentary Submission for Senate, 2015,
Federal Chamber of
Automotive Industries, March 2015.
(13) Op cit., Macro
Business.
(14)
Finance industry feels the pinch,
the Australian, dated, 14
July 2015.
(15)
Manufacturing, Ibid., and,
Financial and Insurance
Services, page 19, and
Mining, Industry
Overview, Employment by industry, page 14, and,
Macro Business, Ibid.
(16)
Federal Parliamentary Submission, 2015,
Federation of Automotive
Products Manufacturers, April 2015,
Recommendation 28/Market
Access.
(17)
The Australian Institute, quoted, Richer rich bad news for us
all,
Money
Section, the Age (Melbourne), dated, 16 July 2014.
(18)
World Wealth Report, Capgemini Asia-Pacific, quoted,
World Wealth Report, The
Australian National Review, dated, 10 July 2015.
(19) Trickle-down theory
all washed up now,
The Age (Melbourne),
dated, 28 May 2014.
(20)
OECD STAT., Economic Outlook, Number 97, June 2015.
(21)
Global Economic prospects, World Bank, Washington, 13 January 2015.
(22)
Review cuts US growth forecast,
The Australian, dated, 16
July 2015.
(23)
Decline sees car industry group fold,
The Age (Melbourne),
dated, 8 July 2015.
(24)
Hunger does not subside and slavery returns,
Granma, Cuba, dated, 24
June 2001.
(25)
Global Wealth Report, October 2014, Credit Suisse Research
Institute, page 15, see also,
Davos
salutes DWF's in a celebration of global capitalism,
The
Australian, dated, 29 January 2008.
(26)
Ibid.
(27)
Wealthiest get wealthier as gap widens on poorest,
The Age
(Melbourne), dated, 22 June 2015.
(28)
Op cit., Global Wealth Report.
(29)
Ibid.
No comments:
Post a Comment