It is now nearly a year since the election of the Albanese Labor government. When the election was held and Labor won easily on the night, an enormous sigh of relief swept across the working-class suburbs of Australia. The defeated Liberal/National Party government was seen as a malignant force that brutalised the unemployed and crushed workers’ rights and wages.
The conservative Liberals won their lowest proportion of seats since their formation in 1946. They were thrown out of many of their blue-ribbon seats by a wave of independent candidates and even lost their Deputy Prime Minister, Josh Frydenberg, in this massacre. With the Liberals on the ropes the question workers are asking is can Labor fix the cost of living crisis?
However, the new Albanese Labor government was soon to discover that it had inherited a poisoned chalice that it was ill prepared to confront. The “responsible economic managers“ had built up a trillion dollars in national debt during their eleven years in power. Most of it had been accumulated as massive handouts to their big business mates during the COVID lockdowns. Unlike the unemployed who were persecuted for imaginary debts dreamt up by an algorithm, the Liberals big business mates had no accountability at all for what happened to the billions of dollars they were tossed from the government purse. This massive debt restricted the ability of the Albanese government to pay for even the most modest reforms as it was made clear that even though they hadn’t accumulated the debt they were expected to pay it down.
On top of this the government also inherited a surging inflation rate as prices skyrocketed across the board. The Australian Bureau of Statistics has revealed that Australia’s inflation rate had risen to 7.8% for the year to December 2022 the highest level in 21 years. In response to this surging inflation the Reserve Bank began a series of ten consecutive interest rate rises that have raised the cash rate to 3.6% the highest level in over a decade. These rate rises were expected to slow the economy down and thereby reduce inflationary pressure but all they really did was put further pressure on an already embattled working class and make them bear the costs of the inflationary crisis.
Real term wage cuts
Albanese promised to raise wages if he won but there has been little sign of any wage rises yet. In fact, the surge in inflation has effectively cut the wages of workers. With Australian employers budgeting for a 3.0% median salary increase in 2023 and inflation at 7.8% this is effectively nearly a 5% wage cut for the year. This is on top of decades of low wage growth suffered by Australian workers as company profits have surged to record levels.
And now the rate of unemployment is beginning to climb as planned by the Reserve Bank. The Reserve Bank wants unemployment levels to rise to put pressure on wage demands by workers. They blame inflation on nonexistent wage rises rather than the surging profits of the corporate sector.
Workers are being squeezed on every front, those buying a house are facing soaring mortgage repayments and those renting are facing staggering rent increases. If they go to shops prices never stop rising but when they look to their pay packets to cover the rising costs, they see it effectively shrinking due to stagnant wage rises and out of control inflation.
A recent survey before the upcoming NSW State election now shows that over 50% of voters consider the cost of living as the number one election issue. But when workers look to their Labor government for answers, they hear soothing words of understanding but little else.
Now the Actuaries Institute is predicting Australia faces a severe recession in the near future and all that that will entail. The Labor Party promised only the mildest of reforms to ameliorate the suffering of the Australian working class but will be hard pressed to even deliver on these if recession hits and Treasury receipts collapse and debt repayments soar. The Labor government seems unable or unwilling to address any of the real issues facing Australian workers.
Capitalists look to workers to pay for their crisis
This most timid of Labor governments has no wish to confront the bosses and their demands, instead they think we can all be one big happy family. But that is not what reality or Australia’s capitalist bosses have in mind. They are already preparing demands for wage cuts and cuts to government spending to put any burden, yet again, from a recession on the backs of the working class.
In an attempt to maintain their profits, the capitalists are preparing to sack thousands, and drive down wages & conditions even lower than they are now. They will expect further massive tax cuts and will expect government spending on social services, health and education to be cut to pay for them.
If Labor wishes to manage the capitalist system then it will have to in one way or another implement their demands. Labor may sooth themselves with the platitudes that they will implement the cuts in a more humane and understanding manner than the Liberals would, but the impact will still be felt most brutally by those that can least afford it. The poor and the working class.
But there is an alternative. Labor could confront the capitalists and refuse to implement their cuts and attacks on the working class. It could stand up and fight for those people who elected it and put them in power. It could fight for the poor and the working classes just as hard as the Liberals fight for the interests of the rich and the powerful in our society.
That would mean a dramatic change in direction and the adoption and implementation of real socialist policies that would change the balance of power in society away from the rich capitalist class and towards the working class.
Labor must break the dictatorship of the capitalist class has over all aspects of our lives. To do this the major corporations that control our lives must be nationalised and managed under the democratic control of the workers in each industry. A democratically planned socialist economy could then be implemented, and the chaos, waste and destruction of the market economy done away with. A planned socialist economy would release an enormous productive potential that we would then be able to use to solve the many issues facing us today.