Tuesday, February 27, 2018

South Australia: overview in approach to March 17 state election

Ned K.


As the deadline for the March 17 state elction approaches, a number of features of the South Australian situation require our attention.


1. Car industry closure

October 2017 saw the final closure of the car industry in South Australia with the complete closure of General Motors Holden plant and associated car component factories. These closures also impacted negatively on diverse service industries that relied on these factories’ operations for a living. For example, a cafe on Phillip Highway directly opposite the Holden factory in Elizabeth closed putting 14 people out of work. Twelve full time Wilson Security officers at the Holden plant had the choice of being made redundant or taking part time or irregular casual work that Wilson had available. Contract cleaners who cleaned the car and car component factory buildings lost jobs completely or had to be content with reduced hours of work and income in cleaning jobs at other locations.

The state Weatherill Government tried to paint a rosy picture of new jobs through “new manufacturing” opportunities for car industry workers thrown on the scrap heap. It announced that a Victorian based business would re-develop the closed Holden car plant at Elizabeth and turn it in to an “industrial park” for unspecified “new manufacturing”. However, it is more likely that the new investor will focus more on modern warehousing facilities at the site and that “new manufacturing” jobs will be few and far between, but perhaps well paid.

More recently the British capitalist Gupta company which is investing in the steel works at Whyalla, announced that it wanted to buy General Motors-owned machinery from the Elizabeth plant and use it to manufacture electric cars. This was used by the Government to give hope to discarded car workers that there was a future for them back at the Elizabeth plant. The Premier Weatherill is reported to have written to General Motors US head office to ask General Motors to sell machinery to Gupta to facilitate the electric car manufacturing at its old Elizabeth plant.

That “good news” story has died away for the time being but we may not have heard the last of it.

2. Electricity Supply and Price Rises

In the long term the people of South Australia are being told by the Weatherill Government that the continued growth of wind farms, the replacement of the coal-fired power plants at Port Augusta with a solar thermal plant and the establishment of an electric battery plant in the mid-north of the state will steer the state to self-sufficiency in production and distribution of electricity and in lower the cost of power. This in turn, so the story goes, will attract business investment to South Australia and hence jobs.

There is probably a significant degree of truth in this as far as supply of electricity goes, but whether it reduces the cost of electricity to households remains to be seen as the electricity generation and distribution will still remain in the hands of foreign-owned corporations whose main objective is maximising profits.

In the short term though, increasing electricity costs for both the people and small business in particular continue to rise with a recent increase in electricity prices as high as 25% in one hit.

Even for the “new manufacturing” being sprouted by the Government as a potential saviour to the northern suburbs of Elizabeth in particular, the cost of electricity and water for that matter becomes a higher percentage of manufacturing operating costs as the percentage of operating costs attributed to direct labour declines due to automation.

3. Defence and Space Exploration Industries

The biggest manufacturing industry in the state now is connected to Australia’s integration into the US military plans for the Asia Pacific region. At Osborne near Port Adelaide the naval defence and associated electronics industrial area is expanding. Submarines and other naval vessels look like being assembled at this location for at least the next two decades. The number and type of jobs this will create for local people of the northern and north western suburbs of Adelaide needs some more investigation. From press reports it appears that there is a continual struggle between the foreign owned corporations involved in the military/defence industry and the Weatherill and Turnbull Governments as to how much of the work required to be done to construct these vessels is done here and how much is done overseas.

Further to the north of Osborne at Technology Park Mawson Lakes and Edinburgh, large multinational corporate “merchants of death” like Raytheon and BAE are designing and manufacturing weapons of mass destruction and/or drones and electrical equipment to guide these weapons of destruction to their destinations when needed. At the moment this is mainly the Middle East, but in coming years the destination is likely to be more towards East Asia as US imperialism lashes out militarily to try and stop the advance of Chinese hegemony in the region.

4. Tertiary Education, Health Research, “Bread” and “Circuses” To Revive the City Centre 

The Weatherill Government has relied largely on the growth of the tertiary education industry and health research industry to rejuvenate economic activity in the city centre of Adelaide. Expansion of both Adelaide University and University of Adelaide campuses has seen tens of thousands of overseas students study and live in the CBD of Adelaide. This expansion has seen growth in construction jobs (temporary in nature) in new university buildings and a growing number of high rise apartment towers filled by overseas students. This growth in jobs has offset the decline in white collar office jobs and the increase in vacant office space caused by the march of technology and companies withdrawing regional city offices in favour of centralised offices in Sydney or Melbourne but sometimes overseas to places like Singapore.

The Government has also gone to expensive lengths to attract all sorts of events to the newly built “colosseum” better known as Adelaide Oval. In early February it even put up between $5 million and $8 million to secure the playing of a NSW versus Queensland State of Origin Rugby League at Adelaide Oval! Any “circus” is worth the price if the “masses” of Adelaide can be entertained as passive on lookers if it wins a few more votes on election day! Exploiting class rulers have not changed in some ways from the Roman Empire rulers who “thrilled” the masses with gladiatorial fights to the death.

The “Bread” provided to the people by the Government has been in the form of contracting huge multinational construction developers to build road overpasses and new freeways. The government has marketed these suburban road expansions as “good for jobs” at a time of “good jobs” disappearing in manufacturing industries in the city. However, the CFMEU State Secretary recently exposed this as an exercise in swindling by these big construction companies. While the thousands of workers on these road projects wear the big corporately badged clothing, 90% are employed by sub-contracting layers, on minimum casual award rates if they are lucky!

5. Regional Areas

While declining living standards, unemployment and underemployment in the capital city Adelaide are thorns in the side of the Weatherill Government as it approaches the March 2018 parliamentary election, the picture in some regional areas is considerably different. In the Riverland, Barossa Valley South East and Southern regions, in the at times boom-bust wine and viticulture industries, there is an ever-increasing export market, particularly to China and other Asian countries. These industries provide thousands of regular full-time jobs, most of which are paid well above the award. Union membership in these areas is relatively high compared with other private sector industries, high enough have the strength to preserve penalty rates and pay increases above the private sector average.

The wine and viticulture industry in SA is dominated by multinational corporations such as Accolade and Treasury Wine Estates (both US-owned) and Pernod Ricard (French-owned). Collectively these multinationals have as a rule not tried to “take on” the collective strength of their workers and have been prepared to agree to wage increases of between 3% and 5% per year for the last decade. Combined with preservation of penalty rates and plenty of overtime, these big corporations have been one of the few “success stories” for trickle-down economics that both Labor and Liberal politicians support.

For working class families in these regions, many say they are doing ok compared with what they can see happening in the “big smoke” of Adelaide.

The economic “good times” in regional SA have extended to the dairy manufacturing industry as well where there is a high export demand for milk powder in particular. This has led to the re-opening of two milk product factories in the lower Murray River region at Murray Bridge and Jervois, the conversion by a Victorian-based rural capitalist of a potato processing plant at Penola in to a milk products factory and the establishment of a Chinese corporation-owned milk powder processing plant at Tantanoola north west of Mt Gambier.

Combined, these four new plants employ over 300 people in full time work.

To the north of South Australia, the total collapse of the industrial base of Whyalla has been temporarily averted due to the decision by British capitalist Gupta to invest and modernise the steel works once owned by BHP when Whyalla also had a thriving ship building industry. Whyalla has been saved by the benevolent capitalist! That has been the extent of the state and federal government attempts to salvage the damage done to people’s lives in the state through the near complete destruction of the state’s manufacturing base ironically developed under the long parliamentary office of the Liberal Party’s Playford Government.

6. Contradictions - Agriculture, Environment, Mining

For the regional areas of South Australia and indeed for the majority of the state’s people living in Adelaide there is an on-going threat to people’s livelihoods through boom and bust cycles of capitalism. That is the competing capitalist interests and their various parliamentary political cheer-leaders putting these interests before the interests of the people and the state as a whole.

This includes the interests of Indigenous People more than all others. Mining companies, many foreign-owned, never stop wanting to mine on land owned by Indigenous People. The talk of expanded uranium mining never goes away and on top of uranium mining Indigenous People have to put up with both state and federal governments wanting at various times to build nuclear waste dumps on their land! In relation to the latter, Premier Weatherill has been forced to back off (for now) on his disastrous thought bubble for a nuclear waste dump in SA.

However, he seems unable or unwilling to control his Energy Minister Koutsantonis’s (some call him Fractonis) enthusiasm for Coal Seam Gas expansion in to prime agricultural regions, especially in the South East. Koutsantonis is also probably largely responsible for another project announced by Weatherill: a somewhat different form of gas extraction, an Underground Coal Gasification (UCG) project in Leigh Creek, Adnyamathanha Land in the Flinders Ranges.  The Government’s push in favour of these forms of gas extraction is a grave danger to not only the agricultural industries that it relies on so substantially for its own government revenue, but also to the vast underground water basin in the driest state in the driest continent.

Then in the same breath, the Weatherill Government comes out guns blazing as the champion of “Saving The River Murray” as the Murray Darling Plan literally dries up due to competing economic interests along its arduous, meandering all the way to its clogged up mouth at Goolwa.

These are examples of how the parliamentary parties and the capitalist state are unable to solve the basic issues of the people. They put the interests of one or other group of capitalists before the people and in desperation turn to capitalists (eg Gupta) to provide solutions to people’s basic problems.

Even this snapshot of what is happening in SA in the last 6 months demonstrates the crying need for a planned economy which only an independent (from imperialist vultures) socialist Australia as a whole in which regions are part of a national plan for sustainable development can deliver.

7. The SA Parliamentary Election of March 2018

Faced with this situation, how will the majority of people vote at the coming March election?

It is pretty clear to most working people that neither Labor or Liberal Parties will put working people’s interests first on a consistent basis.
How will people react to the SA Best outfit of Nick Xenophon? Even the “insiders” of the Labor Party machine say they have no idea how this election will turn out.

The Liberals’ only hope is that many people vote for them just because they want a change after 16 years of State Labor government.  The gormless leader of the Libs, Steven Marshall, is pushing the line that Labor is tired, but the infrastructure boom referred to earlier, together with the reintroduction and extension of trams to the city and all of the spin associated with the Gupta and Elon Musk initiatives make it hard for him to sustain that line of attack.

SA Best is not really interested in winning the election but presenting as a “keep the bastards honest” option for people, an option that does not stack up with the reality that Xenophon is at heart a representative of one section or another of the capitalist class just like Labor and Liberal.  His popularity will probably wane after this election, even if he emerges as a “kingmaker” in the formation of the next government. We need a good analysis of what he represents and why he is so popular.

The only benefit for the working people in re-electing Labor is that it will be easier to protect them from further privatisations due to Labor’s still significant relationship with unions and a greater commitment by Labor to renewable energy, notwithstanding Koutsantonis’s love of coal seam gas fracking!

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