Monday, February 29, 2016

Amalgamations of unions - for better or for worse

Ned K.

In recent months there have been reports in the daily press about amalgamations of unions.

The first major one was between the Construction, Forestry, Mining and Energy Union (CFMEU) and Maritime Union of Australia (MUA).

A most unlikely amalgamation with respect to common or similar industrial and/or occupational coverage. Both unions are in the firing line of the multinationals and big business due to their member’s willingness to take collective action and their ability through struggle to win relatively high wages and good working conditions for their members.

Perhaps the executives of both unions thought that since the Australian Council of Trade Unions (ACTU) is not effective enough in uniting all unions to mobilise their members in support of the attack on the CFMEU and MUA, then they have no choice but to join together by themselves?

There may some truth in this. When the Builders Labourers Federation (BLF) was deregistered in the 1980s, there was no campaign by the ACTU to mobilise workers across all industries in support of the BLF. Will it be any different if the government deregisters the CFMEU and hands coverage of building workers to the much weaker Australian Workers Union (AWU)?

The more recent report of possible amalgamation between two unions is that between United Voice and Australian Metal Workers’ Union (AMWU). AMWU membership has dropped from around 200,000 to 80,000 over the last decade with the decline of mass production plants particularly in the whitegoods and car industries. 

Further loss of jobs and hence AMWU membership will occur with the closure of all car manufacturing plants by the end of 2017 and most of the component plants associated with them. With the loss of production workers as members, the AMWU's core membership will be maintenance workers, mechanics in the service sector. The only critical mass of workers they will have left as members or potential members is in the food and beverage industries and defence industries. The AMWU amalgamated with the Food Preservers Union in the 1990s which gave it coverage of workers in food processing plants. It is in food and beverage manufacturing where there is some common interest with United Voice which in some states covers wine industry workers, baking industry workers, brewery workers and milk and cheese manufacturing. Both the AMWU and United Voice are in the "Left" faction of the ALP nationally so the motivation of this amalgamation if it goes ahead could be to do with ALP faction numbers and influence.

However an amalgamation by United Voice with the AMWU may create difficulties due to the diversity of coverage it currently has. What has a child care worker or aged care worker or home care worker got in common with a manufacturing industry tradesperson working on building a naval ship or changing a production run for a different class of wine?

Amalgamations mentioned above and amalgamations generally have the potential to strengthen those sections of the working class the amalgamated union represents and hence the working class as a whole if the leadership of the new entities uses its resources to mobilise existing members in struggles and if it directs available resources to organising the unorganised.

For years when the AMWU had many members in large factories, little attempt was made to organise potential members in smaller workplaces because the union dues kept flowing from the big shops. Now those big shops are gone and there are dwindling resources left to organise smaller workplaces when these are the only workplaces left!

United Voice in the first decade of the 21st Century took a different path and initiated some well- resourced campaigns designed to organise sections of the working class on a national scale such as cleaning, hotel workers and child care.

They has some success in putting into practice Marx's idea that sometimes in struggles between capital and labour the workers are successful, but the real value in these struggles is expanding the organised capacity of the working class movement.

Hopefully the likely amalgamations of unions mentioned above will be used to bring more workers in to the general working class struggle for independence and socialism, and not be just a mechanism to dampen struggle in favour of more influence in the ALP.

ACTION STATIONS! - Australian submarines and United States military planning for the Asia-Pacific region


Editorial note: A reader has sent this article on US pressure for a Japanese build of the new Australian submarine fleet. Our position is that the submarines will most certainly be used to serve the predatory interests of US imperialism. We nevertheless support the call for Australian submarines to be built in Australia so as to frustrate US imperialism’s twin agenda of maximising the interoperability between its own and its “allies” armed forces on the one hand, and supporting Japanese prime minister Shinzo Abe’s attempts to scuttle Japan’s post-war pacifist Constitution and re-establish Japan as an arms exporter under US control.  We thank the reader for the article and the information it contains.

Revelations about secret deals and military tenders involving former Australian prime minister Tony Abbott and military hawks in the Pentagon have shown a dangerous escalation of militarism has taken place across the region through hidden diplomatic agendas.

War, for those concerned, is already planned.

There is a great deal more to the whole matter than that which initially meets the eye, particularly if one reads between the lines. The whole matter has illustrated a chaotic state of affairs where agendas have been pursued without reference to usual “democratic” procedures. It has also been divisive, revealing a great deal about some of the figures involved and their means to achieve end results.

Australia, at present, has six Collins-class diesel-electric powered submarines based at HMAS Stirling in West Australia. It wants to increase the force to twelve submarines, operational by the mid-2020s. The doubling of the size of the submarine force is evidence, in itself, of the rapid wave of militarisation taking place across the region. It is explained by the US shifting their main focus away from European 'theatres of war’ in the past twenty years to the Asia-Pacific region.

Australia has had a long-standing military alliance with the United States and with the emergence of China as a world power, an estimated sixty per cent of US defence and security provision is now concentrated in the Asia-Pacific region. It is explained by Washington regarding 'US interests' and its hegemonic position to be under threat from China. While the US is dependent upon allies to provide regional provision they also want a strongly centralised military command with the Pentagon in control.

The issue of submarines, therefore, is regarded with the utmost importance. Submarines are used for intelligence collection, quietly gliding underwater into trouble-spots for surveillance of adversaries. They are in the forefront of Electronic Warfare (EW) systems, gathering intelligence through the interception of electronic communications. The intelligence is then quickly relayed to a centre for analysis, policy formation and implementation of hostilities should the situation warrant such action.

The present preoccupation with the perceived threat of China rests upon earlier US military planning. Assessments, from the 1990s, revealed widespread concern about the perceived economic threat from China.

Later, during the Bush administrations, the US formulated a Global Transformation of Defence and Security (GTDS) under Donald Rumsfeld as Defence Secretary. It sought to develop Japan as a fully-fledged hub for 'US interests' in the northern part of the region with Australia in the south.
Australia has been a strategic asset for 'US interests' in the region for decades, politically stable with a history of compliant governments. It is therefore no surprise the country has hosted a number of military facilities usually referred to as 'jointly-controlled' including the highly sensitive Pine Gap US intelligence base, linked to those on Diego Garcia in the mid-Indian Ocean. Their importance has increased dramatically in recent years with new responsibilities thrust upon Canberra from Washington.

The responsibilities have included greater influence for Australian diplomacy across the wider Indo-Pacific region. The boundaries for the greater responsibilities are not coincidental. The vast territory stretches from US intelligence facilities at Diego Garcia in the Indian Ocean to the international time-line in the Pacific. It is also the domain of the US 7th naval fleet. (4)

The GTDS planning of the past decade has now been implemented; US-diplomacy, in the region, is triangular with the specific intention of containing and encircling China. It also forms part of a bigger picture. Layer after layer of military alliances rest upon exclusive so-called Free Trade Agreements (FTA's). They include the recently formulated Trans-Pacific Partnerships (TPP) which has the specific intention of excluding China while fostering stronger links between the US and a number of Asia-Pacific countries.

The diplomatic positioning, while following a distinctly political line has caused division within the business-classes. Favourable diplomatic relations with China remain extremely important for Australia, it being one of the largest trading partners. The reality of the business-classes, however, runs counter to Pentagon military planning. The Canberra elite therefore played their cards very close to their chests.

But matters have now finally come to a head after months of denial.

An article in the January edition of The National Interest by Andrew Shearer finally broke the official diplomatic silence over US military planning for the Asia-Pacific region with Australian provision of vital submarines. (5) There had, seemingly, been long-standing controversy in Canberra about tendering procedures for a number of submarine contracts to update Australian submarine facilities. Officially, the US maintained their stated diplomatic position on being neutral about the Australian tendering procedure to allow German, French and other bidders. Their stated official diplomatic position, however, was something rather different. The recent article has noted, 'US officials privately want Australia to choose Japan as the winning bidder'. (6)

It is not difficult to establish why the US seeks the favourable position toward Japan. It is regarded by the US as one of the closest allies, strategically placed near China and the Korean peninsula an area of the region where Cold War hostilities are hot. There were nevertheless problems. Japan was situated very close to possible theatres of war and therefore vulnerable.
Australia, therefore, has been regarded by the Pentagon as being 'more central to US military strategy in Asia', and, 'Washington will increasingly rely on Australia for some critical capabilities'. (7)  It is far enough away from actual hostilities and planned as a 'safe haven' for logistics and troop rotations.

The sympathetic diplomatic alliances between countries in the Asia-Pacific region and the US are not based upon equality. To the contrary, they are led by the US which conveniently hides behind the scenes. Other countries will fight their wars for them. Their alliances, to date, in the Asia-Pacific region have also enabled the US to use sympathetic countries to host massive EW systems to 'allow the US not only to cover all of North Korea, but also to peer deeper into China'. (8) It is the linkage between parts of these systems which reveal the existence of 'deep-state actors' in decision-making processes, in Australia and Japan.

It has been suggested 'the submarines are the single most important military capability Australia will possess'. (9) A closer look into the matter, however, has revealed questions arising about compatibility of secretive Signals Intelligence (SIGINT) facilities to the wider networks and serious doubts, by the US, about the reliability of some allies.

It has been noted, for example, a 'serious doubt that Washington will be willing to provide the US Navy's most advanced combat systems to Australian submarines if they are built by Germany or France' has arisen. (10) Fears, apparently, have arisen about the perceived inability of German and French bidders 'to protect critical defence technology from Chinese industrial espionage'. (11)

The problem would appear to have far-reaching implications for the role Australian submarines have been allocated within wider GTDS planning and provision. Reliable sources have suggested Washington has preferred Australia to operate conventional submarines rather than those adapted for nuclear use because the former 'can operate more easily and quietly in shallow waters, enabling them to hug the coastline of China or other intelligence targets without detection'. (12) The view is also supported by Don Chalmers, former head of the navy during the period 1993-95 who has been quoted as stating, 'what the US wants us to have are very quiet, smaller, less detectable submarines to help gather intelligence'. (13)

There are also important practical political considerations relating to employment matters in SA.
Australia has its own submarine manufacturing industry based at the Submarine Corporation  (ASC) in Adelaide, South Australia (SA). As a dominant part of the State Defence Industries it has been a large employer of workers of many trades with a supply-chain employing thousands more. Threats, therefore, by the right-wing Abbott Coalition government to award the submarine contracts to Japanese or other manufacturers led to a massive industrial campaign led by trade-unions to prevent job-losses in a state already undergoing turmoil with closures to the car and component industries.

The toppling of Prime Minister Abbott by Malcolm Turnbull took place largely due to the increasing unpopularity of the Coalition in SA because of job-losses. Since Turnbull assumed Prime Ministerial duties last year, however, the matter of submarine tenders has yet to be resolved. As if to add a further dimension to the controversy, Shearer, the writer of the National Interest article, was a senior advisor to Abbott, himself forced aside with the rise of Turnbull. Axes would appear to have been ground. The disclosures and 'planned leaks' reveal a great deal about the turbulence within Canberra decision-making circles. The timing of the publication of the article, as Prime Minister Turnbull made an official high-level diplomatic visit to Washington to meet President Obama, likewise, was also intended to be an embarrassment. And it has been.

Within only a few days of the disclosures, Tony Abbott casually announced he would not be retiring from politics at the next election later this year. He had every intention of pursuing his right-wing stance in future administrations, if elected once again as Prime Minister. He has also been quick to spread his pernicious influence and win support from influential sections the US Republican Party.

On a recent speaking tour of the US Abbott addressed far-right groups. One, the so-called Alliance Defending Freedom, formed part of a retinue from the previous Reagan and Bush administrations. (14) Both administrations were marked by crude anti-communist style politic, the crudeness of the political definition being anyone or any organisation which stood in opposition to the forces of capital.

Any serious study of the US political system reveals the extensive influence of shadowy, out-sourced intelligence-type organisations working as lobbyists in Washington. They tend to have a strong hold on patronage from the military-industrial complex, with numerous scholarships and employment for those regarded as 'being on-side'.

Organisations such as the Alliance for a Strong America, established by former Republican Vice-President Dick Cheney and his daughter in 2014, are a good example of such groups. It has lobbied for the US to adopt a more aggressive diplomatic position in world politics. (15) They attract retired military officials who retain contacts within defence and security.

It is therefore no great surprise the National Interest publication used by Andrew Shearer to 'leak' information about the role of the Abbott government and the submarine controversy is a journal linked to the far-right 'Reagan doctrine', linked to the Heritage Foundation and American Security Council. Their influence lurks within most corridors of power in Washington and the Pentagon.

Australian politicians such as Tony Abbott and his colleague Andrew Shearer clearly feel comfortable in their company of the US far-right, assisting with their long-time tradition for war-mongering.

The continued embarrassment surrounding the whole submarine affair and high-level diplomacy between Australia and the US, however, recently took a further turn with the release of information concerning the nature of the AN-BYG 1 EW system planned for installation in the new vessels and its compatibility to a wider system.

Some years ago the US began implementing a vast Seaweb Underwater Sensor Network (SUSN). Submarines are regarded a vital part of the system. It rests upon US Cold War-type positions with the Pentagon in command of the highly centralised communications and intelligence system. (16)

There is some contemporary history involved with the matter.

The initial tender for the AN-BYG 1 equipment was awarded by the US Sea Systems Command in Washington, for the US Navy and RAN submarines in mid-2012. (17) Secretively, decisions were taken as, it was noted last year, the US 'have already transferred much of its combat technology to Japan' for a combat system of a 'highly confidential nature' with reliance upon the US Seaweb Sensor system. (18) Officially, however, the final decision by the Australian government about Japan manufacturing the submarines has not yet been taken. The Australian government is expected to announce the winner of the submarine contracts mid-year.

The controversy surrounding the whole affair and the embarrassment it has caused escalated during the last week.

As Australian Foreign Minister Julie Bishop made high-level diplomatic initiatives to both China and Japan and President Obama hosted South-East Asian leaders at a Californian desert retreat, the stakes about Japanese submarine contracts appear to have raised considerably.

The desperation of the US and their regional flunkies to build the submarines in Japan was illustrated with an announcement from Tokyo-based corporate sector leader, Shunichi Miyanaga, that his government would be willing to also add 'future warships contracts in Australia and to launch satellites for the Australian government or telecommunications companies to augment its campaign for the $50 billion submarines contract'. The salesmanship, reminiscent of the buy-one-get-one-free approach, was based in diplomatic initiatives in Washington and Tokyo. (19)
Two serious points have arisen.

A statement from the highest level of the Australian defence establishment has concluded, 'our feeling is that carrying the BYG-1 into the future submarines would not be the right course of action. It should be an informed decision made after conducting a robust assessment of competing systems', has illustrated serious disquiet in Canberra. (20) Such people, clearly, have no wish to be mere playthings of US military planning with the facilitation of 'real-time data transmission and high resolution imaging' in their submarines linked into the 'most advanced US military communications' for the sole benefit of 'US interests'. (21)

Their position has also been strengthened with revelations the Coalition government in Canberra during the period Tony Abbott was PM 'pursued a plan, driven largely from Tony Abbott's office, to buy the navy's new submarines from Japan'. (22) Vital information, concerning the whole matter, was officially suppressed. (23) Abbott, clearly, headed a government regarded by the US as a compliant administration in Canberra.

Secondly, there will be federal elections in Australia this year. They will be hard fought for millions of working people. The record, to date, of the present Coalition government in defending national interests and employment for Australian workers has been dismal. Their incompetence has been a disgrace.

The issue of unemployment has suddenly become very important as tens of thousands of workers traditionally employed in the manufacturing sector lose their jobs. The submarine contracts and local manufacturing in South Australia has become a central election issue, not only for the ASC but all those linked within the supply-chain across Australia.

The whole question about control of the Australian submarine fleet and whether it will be used for genuine defence and security or military aggression against our biggest trading partner has yet to be answered.

4.     U.S Seeks New Asia Defences,  The Wall Street Journal, Friday-Sunday, 24-6 August 2012.
5.     Website: The National Interest (U.S.), Andrew Shearer, and, “US eyes strategic benefits from Japan subs deal”, The Australian, 22 January 2016.
6.     Ibid.
7.     Asia-Pacific Rebalance 2025, Capabilities, Presence and Partnerships, Center for Strategic and International Studies, Washington, quoted in the Weekend Australian, 23-24 January 2016.
8.     “US signals foreign policy shift away from military might”, Guardian Weekly (U.K.), 6 June 2014.
9.     Wall Street Journal, op. cit., Friday-Sunday, 24-6 August 2012.
10.   “Cautious US gives Japan edge in subs”, the Australian, 25 January 2016.
11.   Ibid.
12.   “Why didn't we go nuclear?” the Australian, 22 January 2016.
13.   Ibid.
14.   “Don't damage marriage: Abbott”, the Australian, 29 January 2016.
15.   “Cheney rides again for tougher America”, the Australian, 2 June 2015; see also,
        “The Neo-Con Game”, The Nation, (New York), 14-21 September 2015.
16.   Website: Underwater Warfare; Magazine, US Submarine Force, Summer, 2011.
17.   Website: Signal, AFCEA Magazine, 17-19 February 2016.
18.   Website: Submarine Matters, 22 September 2015, Part Two.
19.   “Japanese warn of risks in rival subs”, the Australian, 16 February 2016.
20.   Website: Australian Defence Magazine, 18 March 2015.
21.   Website: New Communications Contract Attracting Bidders, AFR Weekend, 15 September 2015.
22.   “Japan sub talks well advanced before glitches ended deal”, the Australian, 2 March 2015.
23.   Ibid.

White Paper locks Australia into US confrontation with China

Bill F.

The Turnbull government’s recently released Defence White Paper could easily have been called the Offence White Paper, since it virtually places Australia’s military forces at the disposal of US imperialism and its aggressive foreign policy agenda in the Pacific region.

Tax payer dollars for the corporate arms industry

While the government is tight-fisted with funding for schools, hospitals and social services, there is no restraint on spending when it comes to ensuring so-called “interoperability” with US military forces.

The White Paper sees military expenditure rising from $32.4 billion in the 2016-17 financial year to $58.7 billion in 2025-26. Much of this will go to US corporations such as McDonnel-Douglas, Raytheon and others who need wars and political tension to justify their existence and to expand their profits.

A sinking feeling

Headline grabbing was the announcement of 12 new submarines – shockingly expense – $50 billion with delivery over 10 years from 2030 through to 2040. Maintenance costs are expected to be a further $100 billion over the projected life of the subs.

The White Paper stresses that they should be “regionally superior submarines with a high degree of interoperability with the United States …” (and as an after-thought) “… to provide Australia with an effective deterrent”.

So far no contract for building the submarines has been announced, with bids still being assessed from companies in France, Germany and Japan. However, with the emphasis on “interoperability” don’t be surprised if Japan gets the nod as this would cement US aspirations for further US-Japan-Australia operations. And, given the problems that Australia has had in crewing the Collins class submarines, you can almost bet that US, and probably Japanese, officers will climb on-board as well.

Other expensive items, that dove-tail with US military plans for the Pacific region, are the 72 F-35A Lightning II Joint Strike Fighters, 12 E/A-18G Growler electronic attack aircraft and new helicopters for the SAS special forces.

The airfield on Cocos Island in the Indian Ocean is to be upgraded to take heavy military aircraft; something the Americans enquired about last year, much to the concern of local islanders. 
As for Australia’s direct defence, the equipment is mainly replacement items such as 9 frigates to replace the Anzac class, 1000 army patrol vehicles, some surveillance and heavy-lift aircraft, and a small increase in military personnel numbers.

New bits include both armed and surveillance drones and land-based missiles to defend the off-shore oil rigs and gas infrastructure of the multinationals.

Spy in the sky

Further billions will be spent on satellite surveillance systems and studies into the development of an Australian satellite. They say it could be used to monitor bushfires and floods – now who could question that?

This would be an addition and complement to the US space telescope to be installed at North West Cape in Western Australia.

Lest we forget – three years ago Australia forked out $900 million to pay for the US to launch a satellite to monitor local and regional communications and images from military drones. 

Justification?? Serving US imperialism, of course!

To quote the White paper, “…there is no more than a remote chance of a military attack on Australian territory by another country”.

In spite this, it then goes on at length to repeat all the positions taken by US imperialism in its contention with China over islands in the South China Sea and the “threatening behaviour” of the People’s Democratic Republic of Korea. 

Another shot at justification is the sudden concern for our Pacific neighbours threatened by rising sea levels and extreme weather caused by climate change.

To quote from the White paper, “Climate change will see higher temperatures, increased sea-level rise and will increase the frequency and intensity of extreme weather events. These events will exacerbate the challenges of population growth and environmental degradation, and will contribute to food shortages and undermine economic development… high expectations on us to respond to instability or natural disasters, and climate change means we will be called on to do so more often”.

This is all true, but totally hypocritical coming from a government that has wimped on seriously reducing greenhouse gas emissions in Australia, denigrates renewable energy, panders to climate deniers and slashes foreign aid to neighbouring countries in desperate need. 
Predictable responses

The White Paper received a stamp of approval from US ambassador to Australia, the ever-grinning John Berry, who said it was “a well-considered, comprehensive approach to addressing evolving security challenges”. It satisfies the economic and military aims of US imperialism with its TPP and “Pivot to Asia-Pacific” strategy.  
However, Chinese foreign ministry spokeswoman Hua Chunying said the reference to the South China Sea was "negative" and that China was "dissatisfied with that".

Pine Gap

Much less publicised was a report by the Nautilus Institute for Security and Sustainability which reveals the expansion of the highly secretive US spy base at Pine Gap in Central Australia. Allegedly a “joint facility”, the activities there are critically important to US imperialism’s global military posture and the conduct of wars of aggression.

The list includes intercepting military and civilian communications, monitoring space satellites, monitoring military manoeuvres and missile launches, communicating with US nuclear submarines, aircraft and warships, directing drone warfare, and collecting information on the economies of foreign countries, including Australia.

This year marks the 50th anniversary of the establishment of Pine Gap and an equally long history of people’s struggle to close it down.

Invasion planning

US imperialism is never satisfied with its puppets. Another paper comes from the Australian Strategic Policy Institute calling for the establishment of an Amphibious Centre of Excellence to "inculcate amphibious warfare expertise across the ADF".

This is being pushed by US special forces officer Ken Gleiman and defence academic Peter Dean who write, "In any major crisis in the region, pooling US and Australian amphibious forces ... would allow the formation of a combined US-Australian expeditionary strike group”.

They basically want the HMAS Canberra and HMAS Adelaide to be diectly integrated into the US Marine force structure for use in any sea-launched invasion US imperialism cares to conduct.

For an independent Australian foreign policy

The Australian people do not want to be dragged into an American war with China or the DPRK. Nor do they want to have the sea lanes and air corridors closed off by conflict or trade embargoes. And they certainly don’t want to be a nuclear target!

The ANZUS treaty won’t save us – it only requires the US to “consult” in the event of an attack on Australia. US imperialism would be too busy looking after itself.

Yet this could all be the consequences of subservient politicians bowing to a ruling class dominated by and dependent on foreign corporate monopolies and their local collaborators.

Sooner or later the Australian working class will stand up to this dangerous nest of rats and lead the people in chucking them out and building an independent republic where socialist principles will guarantee peace and security for the people.

Saturday, February 20, 2016

Crush the ABCC not workers’ bodies!

Nick G.

Just over a year since Jorge Castillo-Riffo was crushed to death in a scissors lift accident on the Royal Adelaide Hospital building site, another worker has lost his life.

Like Jorge, he was crushed in a scissors lift, caught between the lift platform and the top of a door frame.

Workers on the site are being pushed to meet a November 2016 completion deadline after builders indicated that they could not meet the formal April 2016 deadline.

Media reports prior to the latest death referred to a “race against time”.

Also engaged in a race against time is the federal government which has failed once before to introduce legislation for a revived and strengthened Australian Building and Construction Commission (ABCC), the so-called “tough watchdog on the beat”.

In a previous incarnation, the ABCC infamously persecuted rank and file CFMEU member Ark Tribe over his involvement in a safety dispute at a Flinders University site.

Ark stood tall and faced a mandatory six-month prison term as workers nation-wide rallied in support, and the ABCC lost its case.

Wanting stricter penalties and sharper teeth for the “watchdog”, prime minister Turnbull is desperate to revive the ABCC.  There are indications that a second rejection of legislation will trigger an early federal election.

No such concern for time has been extended to the partner of Jorge Castillo-Riffo.  Pam Gurner-Hall has called for an inquest into his death, saying she wanted the circumstances surrounding his death and safety standards in the construction industry, including the casualisation of the workforce and use of scissor lifts, thoroughly investigated.
On Saturday, she said she was “gutted” another death has occurred at the RAH site.
“I’ve been calling for 14 months for a coroner’s inquest into Jorge’s death just so something like this could be prevented,” a clearly distraught Ms Gurner-Hall said.
“Both these men should still be alive. They must change the rules for operating scissor lifts and enforce them because operators don’t do it themselves.
A dozen construction industry deaths in the first seven weeks of the year should be the focus of the federal government’s attention.

But this executive committee of the ruling class is committed to the intensification of labour and the accumulation of profits across all industries and workplaces, and has no regard for workers and their safety.

A tough industry needs a strong union.

We should crush the ABCC, not workers’ bodies.

And we will do it by building unity and struggle in our workplaces and communities,  as part of our own independent agenda, rather than by reliance on the talking shop of parliament and its parties of capitalism.

Wednesday, February 17, 2016

The world enters a third wave of economic crisis, with more to come!

Max O

In November last year The Economist, that foremost economic journal of capitalism, stated that "The world is entering a third stage of a rolling debt crisis..." The first one centred on the US with the collapse of the real estate market (2008), the second one centred on the European Union and its members’ sovereign debt crisis and now the current or third one on the Emerging markets - places like China and Brazil.

The financial crash that we have been witnessing at the end of 2015 and the beginning of 2016 may be far larger as it unfolds than in 2008, possibly causing the entire global economy to grind to a halt.

Global and Central Banks cause the crisis

As usual the large global banks and financial institutions are up to their necks in this crisis. With the collapse of oil and gas prices these banks are at risk because their loans to energy companies are now bad debts.

Europe's biggest bank, the Deutsche Bank, has suffered a loss of more than 9 per cent (due to its loans exposure to energy companies) and has hit Australian banks hard.

Morgan Stanley investment bank reported that 'Australia's big four banks' are owed $31 billion from energy companies. The Commonwealth Bank has the biggest risk of $11.6 billion owed to it. Since the beginning of this year, the market values of Australia's two major banks have nose-dived: ANZ down 18.66 per cent and Westpac 14.5 per cent.

J.P. Morgan bank reported that private-sector debt in emerging markets climbed from 73% of GDP at the end of 2007 to 107% of GDP by the end of 2014. The emerging markets debt figure rises even more sharply to 127% of GDP if credit from non-bank financial institutions (so-called “shadow banks”) is included.

The US Federal Reserve and other major central banks through the policy of quantitative easing (printing money), have pumped trillions of dollars into the global financial system. This led to an outbreak of borrowing by corporations in emerging markets, quadrupling their debt from $4 trillion in 2004 to over $18 trillion by 2014. This money is now heading out of the emerging economies and in the process crippling them.

Stock market and financial panic

The current panic sell-off on stock markets in China, Europe, US, and including Australia has seen trillions of dollars wiped out from global share values. As a result of investors getting spooked over fears of the world economy the Australian share market has lost more than $40 billion so far this year.

Money has flooded out of stocks with any trace of risk causing a 'bear market' of panic selling in stock markets worldwide; and Australia's stock market has fallen quicker and more violently than others in the developed world.

'Australian banks' are not shielded from the contamination of tumbling oil prices onto their financial accounts as energy companies become crippled by debt.

It ought to be remembered that 'Australian banks', especially the big four would've collapsed during the 2008 GFC had the Federal Government  not come to their rescue and guaranteed them. They were unable to refinance their overseas loans because the global credit markets had come to a standstill.

The 2008 crisis saw Australian banks borrow $120 billion at the taxpayers’ expense. This was the biggest bailout of an institution in our history.

In September last year overseas borrowings by Australian banks had reached 53 per cent of GDP. Obviously they refuse to learn any lessons from the 2008 GFC.

Now Banks and hedge funds are gripped with terror and alarm as they are forced to confront week after week of collapsing share prices and asset values. Close to 1000 hedge funds in the US were closed down in 2015.

When the US Federal Reserve lifted interest rates above zero whilst the dollar rose, commodity (oil and gas) prices crumpled putting huge a burden on energy companies and economies. Then rivals Japan and some European countries went into negative with their interest rates.

Now central banks are at war with each other by pushing their currencies lower to get whatever trade advantage they can with exports. No doubt central banks and governments will be having serious but covert meetings haggling over what to do with capitalism's latest anarchic economic crisis.

The shift to negative interest rates, as has quantitative easing, will inevitably damage the global banking system. The Royal Bank of Scotland’s advice (which was scoffed at early in January this year by the financial media) to its clients to “sell everything..." and that 2016 could be a “cataclysmic year” appears now to be wise counsel.

Day of reckoning for the destruction of production

The Bank of International Settlements (the banker's bank) contends that there has not been enough wiping off the value of useless investment, what Marxists call de-valorisation. In other words the unthinkable is our reality; the present economic crisis is in fact the implosion of the capitalist system.

The BIS has stated that there needs to be a day of reckoning where huge wipe off from assets and investments needs to occur; which in effect means the closing down of plants all over the world. For example China has excess capacity in steel-making that is larger than the entire steel-making capacity of Japan.

Up till now governments' economic policies have been the postponement of the day of reckoning, because they are politically scared of what the social and political consequences of such actions will be.

However, from the capitalist point of view, there is no alternative to the BIS plan of recovery but to slash government debts and wipe out excess capacity - close down firms, plants, machinery etc. What has happen to Greece will now occur throughout the world!

The free trade agreements with Japan, Korea and China and the Multinational corporations investment protection agreement called, the Trans Pacific Partnership, are a way of forcing through  de-valorisation i.e. the wiping out of excess firms, plants, machinery etc.

Wave of job losses follow the day of reckoning firm closures

A wave of job cuts world-wide demonstrates the declining depression-like conditions of the global economy. In the US 40,000 coal mining jobs have gone; Wal-Mart slashed 10,000 jobs and 154 stores; and the freight transport industry is in a slump.

Here in Australia whilst the Australian Bureau of Statistics (ABS) reports an unemployment rate of 5.8 per cent (727,000) the Roy Morgan survey for January gives a more realistic unemployment rate of 10.3 per cent (2,575,000).

Two major retailers have collapsed: Dick Smith Electronics has placed in jeopardy 3,300 jobs and 393 stores; Woolworths announced it will exit its Masters hardware business, threatening 7,000 jobs and 63 stores.

Last year Chevron cut 1,200 jobs in Australia. In January Clive Palmer's Queensland Nickel Yabulu refinery closed with 237 jobs gone.

The loss of jobs in the mining industry in Australia is never ending:

CBH Resources - 116 jobs
Panoramic Resources - 50 jobs
Mincor Resources - 90 jobs
Independence Group - 28 jobs
Newcrest Mining - 100 jobs
Oz Minerals - 100 jobs
ANGLO American - 245 jobs

Other industries are also carrying out job cuts:

Freight carrier Pacific National - 46 jobs
Ship builder BAE - 325 jobs
Ship repairer Forgacs - 150 jobs
Auto parts manufacturer SMR Automotive - 140 jobs
Banking giant Barclays - 80 jobs
Bank of Queensland - 50 jobs
Lion Beer, Spirits and Wine Australia - 39 jobs
The University of Western Australia - 300 jobs
 CSIRO - 120 jobs
Arrium (formerly OneSteel) – hundreds forecast along with possible closure of Whyalla steelworks
The federal government - 700 jobs
WA government - 1,163 jobs

Only a different mode of production can overcome the economic crisis and threat of war

It is obvious that finance capital through its central bankers and capitalist governments has only expanded and intensified the continual waves of economic crisis that it inflicts on the world. They are only interested in the accumulation of capital for themselves and consequently like mad men pour cash into financial markets sparking off speculation and parasitic mergers and fire-sale buy outs.

This finally brings about the day of reckoning of widespread destruction of productive activity (wipe out excess capacity - close down firms, plants, machinery) and job and welfare losses to the working class.

The escalating global economic crisis additionally risks igniting the geopolitical pressures and the drive to war by the US and other imperialist countries.

The US military strategy of the 'Asia Pivot' and the conflicts it has sown in the Ukraine and Syria are pointed directly at blunting competition from China and Russia.

As Marx pointed out long ago only a different mode of production, socialism then communism, will remove the exploitation and oppression that the working class has to endure under capitalism. However this requires that the working class wrest state power from the capitalists and imperialists, and destroy all the capitalist state’s functions and structures.

The state’s role in a capitalist society is to enforce upon the worker the task “…to satisfy the need of existing values for valorization (i.e. creating growth of and for capital). In contrast to capitalism, communism is“…the inverse situation, in which the objective wealth is there to satisfy the worker’s own need for development.”

The humane purpose of communism is that “…the free development of each is the condition for the free development of all.”