Europe’s crisis is coming to a crunch. In Greece, the scale of the austerity has produced much suffering, but also an immense political radicalisation. A victory for the left reformist party SYRIZA in the Greek elections will lead to a fight over tearing up the austerity pact and a potential Greek debt default. A default would ricochet around the world financial system.

Spain has now become the fourth EU country, after Greece, Portugal and Ireland, to be bailed out. Spain faces the same issues of spiralling government debt, soaring borrowing costs and deepening recession that have struck Greece. But it is also the fourth-largest economy in the Eurozone.

The situation is bringing the crisis even closer to home for France, Germany and the United Kingdom.

Even if the EU can somehow avoid an immediate disaster, austerity policies are crippling economic growth and pushing Europe back into recession.

Even if the EU can escape an immediate disaster, austerity is pushing Europe back into recession

China, which sends 25 per cent of its exports to Europe, is watching nervously. The Chinese economy continues to slow, with indications factory output is falling and “iron ore stockpiles near record highs, textile firms losing money and the government trying to prop up rare earth [metal] prices”, as Angus Grigg wrote in the Financial Review. The Chinese government has moved to announce new government spending, and cut interest rates for the first time since 2008.

Meanwhile, unemployment rose back up to 8.2 per cent in the US, with the fewest jobs in a year created in May. Economic growth has slowed again.

Whose boom?

Australia will not be immune if global woes deepen. While Wayne Swan announced strong growth figures in early June, boosted by the surge of investment in mining states like WA, there are fears here too.

Treasury Secretary Martin Parkinson admitted that the department is already contemplating the need for stimulus spending and abandoning the budget surplus in 2012-13 if Europe deteriorates. If that happens, he said, “all bets are off”.

But even while the supposedly historic Australian boom continues, it’s not workers who are getting the dividends. Gina Rinehart has become the world’s richest woman with nearly $30 billion to her name, while workers are anxious about the economy and the rising cost of living. A mass round of job cuts is fueling concern.

Two thousands jobs are at risk after the collapse of Hastie group, 500 jobs have been lost at Qantas, another 500 at QR National and 66 jobs outsourced at Fairfax.

The Liberal state governments in Victoria, NSW and Queensland are also starting to reveal their true colours. Fresh from steering the full privatisation of the power stations through the NSW upper house, attacking workers’ compensation and contracting out Sydney Ferries, the Sun-Herald has revealed NSW government plans to privatise Sydney buses, which employs 5000 staff. A budget shortfall is being used as the pretext for another 10,000 job cuts in the public service, on top of 5000 already announced.

Victorian Premier Ted Baillieu is pushing ahead with $100 million in cuts to TAFE and 4200 job cuts across the public sector. Campbell Newman in Queensland is playing a game of divide and rule straight out of Joh Bjekle-Petersen’s rule book.

“Aussie” jobs?

In this context, union leaders’ talk of a threat to “Aussie jobs” from overseas workers on 457 visas is dangerous. It encourages the racist idea that immigration is to blame for job losses.

This comes on top of a renewed fearmongering about refugees and a hysteria about people smugglers triggered by Four Corners. Labor is again trying to out right Abbott by calling on him to drop his opposition to the Malaysia deal.

Unions and the left need to stand against the racist myth that the number of refugees and immigrants are any kind of “problem”.

Focusing on “Aussie jobs”  lets Australian bosses, like Rinehart, Palmer and the rest, the ones really to blame for attacking wages and living standards, off the hook. The solution to job losses and wage cuts is strikes and industrial action.

A union fightback could start to deliver working class people our share of the mining bosses’ enormous profits. For all Labor’s talk about the mining bosses, they’ve backed away from seriously taxing them or re-directing mining subsidies to schools and hospitals.

Miners in Queensland’s Bowen Basin have been leading the way, taking a second week-long strike against BHP in late May. At a state level, the Victorian teachers’ strike could be the first step in an industrial campaign building on the action taken by Victorian nurses that stopped cuts to nurse to patient ratios. The same kind of action could stop the privatisation and job cuts in NSW and Queensland.

2 COMMENTS

  1. Spot on about “Aussie jobs” argument, within days of this being printed Fairfax announces a “cut” (more like scythe) 1,900 jobs at this Aussie employer and Qld Premier Campbell Newman says he wants to cut 20,000 Qld public servants jobs.

  2. “The solution to job losses and wage cuts is strikes and industrial action.”

    I agree that unions should take a much more combative approach to job and wage cuts. However, that will much easier in some places than others. Traditions of militancy and strong workplace organisation cannot be simply conjured into being by force of will. They have to be built systematically and carefully. So in many parts of the workforce that are suffering losses (e.g. finance, retail, hospitality) simply saying that ‘industrial action’ is ‘the solution’ is likely to be regarded as simplistic and unrealistic.

    Yes, we need to encourage self-organisation and defence against employer attacks. But in many workplaces there is a lot of work to do before calls for strikes will resonate with workers who have little or no experience of self-organisation – never mind taking and winning strike action.

    Even then, ‘industrial action’ by itself is unlikely to provide a ‘solution’. To be effective such action needs to be linked to a coherent political and economic alternative. Given the low level of politicised class consciousness at present, linking action immediately to socialism is likely to resonate only with very small numbers of activists. We need to develop an alternative that appears credible and attainable by the large number of workers whose political horizons are presently defined by Labor and Liberal policy positions. That means identifying those aspects of present policy that hold progressive potential, and pushing for more radical versions that encourage workers to fight for them as a first step toward more ambitious positions.

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