En Passant

The debt crisis in Greece has opened two fronts - one economic, the other industrial.

All across the industrialised world governments borrowed and spent more to stabilise capitalism in response to the global economic crisis.

This occurred at the same time as private capital and consumers cut back on debt.

The result was that public debt replaced private debt as the driver of growth in many of the industrialised countries.

The levels of Government debt are huge. According to the CIA Japan’s is almost 200% of GDP. Iceland’s is 100 percent, and Greece’s slightly higher.

Greece is part of the euro-zone. This meant it could borrow at low rates on the back of the German economic powerhouse. It did, partly to satisfy the demands of its workforce.

But because it is part of the euro-zone, Greece cannot devalue its now non-existent currency to reduce the debt burden and increase its export competitiveness.

Talk of sovereign default is growing.  Now that the bankers suspect Greece cannot repay its debt, interest rates on its government debt are increasing. 

The recently elected Papandreou Socialist government promised as part of its campaign that it would increase real wages. It cannot keep this promise.

The Greek Prime Minister will attack workers to pay for the crisis. 

At the World Economic Forum Papandreou told the assembled ruling class elites that  he would ‘draw blood’.

Conservatives are calling for consumption to be cut ten percent. The European Commission has told the ‘Socialist’ Government to cut the budget deficit markedly and to cut public service pay.

The Greek working class has responded by calling two strikes next week against attacks on them. This is a class prepared to fight back.

Papandreou is using this to pressure the EU to bail out Greece’s economy.

But Greece is not the only EU country with large debts and doubts about its ability to repay. Spain, Portugal and Italy are also getting more attention from the bankers and having their risks re-assessed.

Germany cannot support them all.

The situation in Greece, both economic and industrial, is on a knife edge. It has the potential to spread.

The crisis of capitalism is far from over.

Here in Canberra the Independent Competition and Regulatory Commission has exposed the ACT Government’s subsidies to solar roof panel owners as both regressive and extremely costly. In a draft report the ICRC recommends reducing the present bloated subsidy from 50.5 cents per kWh generated to 37 cents.

Even at this reduced price, the subsidy is still almost three times the normal purchase rate.

In analysing the benefits the report says that ‘the payback period for an investor in a 1.5 kW system at the current premium rate is currently around seven years, and the overall nominal rate of return on the investment is 13% per annum.’

If the Tax Office holds to its incorrect view that the amounts received are not income then the real rate of return before tax is over 20 percent (assuming an effective marginal tax rate of 40 per cent).

On top of that the value if any the solar panels add to a person’s home will be free of capital gains tax.

The ICRC also points out that on the Stanhope Labor Government’s own figures the cost of abatement if the scheme is extended to larger businesses will between $195 and $434 per tonne. It notes that the Federal Government’s Carbon Pollution Reduction Scheme is based on a cost of $23 per tone.

To show you what a rort this scheme is the Commission says that it would be cheaper to buy Green Energy from the suppliers because their abatement cost is only about $70 per tonne.

One worst case scenario, according to The Canberra Times, from the Government’s own figures, is that electricity bills could rise $300 to cover the feed-in-tariff.

In a report in the Australian Financial Review (’Solar panel benefit is largely hot air’ February 6-7  page 5) John Breusch quotes Muriel Watt, the head of the Australian PV Association as stating that ‘it now costs 20c to 40c a kilowatt hour to produce electricity using solar panels, compared to 5c to 10 c for wind turbines.’ So we are subsidising a type of renewable energy that is up to four times more expensive than wind power.  Go figure.

Who benefits from these costly subsidies?

Individuals and small businesses who can afford to pay $10,000 to $15,000 for solar panels for up to 1.5 kWs. 

The scheme currently allows for subsidies to go to installations of up to 30 kWs. The cost of these is beyond the average purchaser and roof size and the rates of return are small at this stage.

However the ACT Government  is considering extending the scheme to subsidise larger businesses who do put panels on their roofs.

Given the large start up costs and the low rate of return to businesses as a consequence at the moment – somewhere around 3 percent according to the ICRC – the pressure will be on the local Government to increase the subsidy, not reduce it as the ICRC has recommended.

The New South Wales’ Government scheme is more generous at 60 cents per kWh generated and I suspect that the Minister, Simon Corbell, will be tempted to throw more of our money down the drain (this time to big business) by increasing the subsidy, not reducing it. 

The current feed-in-tariff arrangements are based on two bourgeois ‘principles’ evident in all of the debates on climate change - profit is sacrosanct and workers, not bosses, should pay for climate change.

The feed-in tariff is an individualistic warm middle class inner glow response to a systemic problem. It won’t work.

It is regressive. It is extremely costly, and the cost is borne by working people.

Instead of rewarding the well-off and playing the politics of sanctimony, Mr Corbell should come up with a scheme that penalises the real polluters – those businesses who make profit out of polluting – and is a collective response to climate change.  

Taxing the rich in the ACT to fund large scale renewable energy projects and to buy green energy instead of slugging ordinary workers would be a good first step.

Here in the Australian Capital Territory the local Stanhope Labor Government has offered a pay increase of 1.5 percent, which in effect a wage cut of 2 percent. [Kim Sattler from Unions ACT has pointed out the offer is now 2% in the first year and 2.5% in out years and that all 8 unions have rejected it. I have adjusted the figures accordingly and re-sent the updated letter below.]

The union has responded, not with talk about industrial action, but claims for free public transport. This is window dressing and the union leadership’s attempt to avoid at all costs any strikes against ‘their’ Labor Government.

Here is a copy of a letter I sent to the Canberra Times on the issue.
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The Community and Public Sector Union rightly thinks the ACT Government’s 2 percent pay offer is poor.  (Canberra Times Friday 5 February).

Core inflation is about 3.5 percent so the offer from the Stanhope Labor Government is in fact a real wage cut of 1.5 percent.

The CPSU is affiliated to the Labor Party (with its leader Stephen Jones soon very likely to move into the safe Labor seat of Throsby). 

The CPSU leadership argued for affiliation on the pretext of being able to influence the Labor Party in Government to treat its employees fairly.  With the ACT Labor Government offering a real wage cut of 1.5 percent, plus an ‘efficiency’ dividend of up to 1 percent, that strategy is clearly in tatters.

Affiliation was really more about creating career pathways for the CPSU bureaucrats.

I have a novel suggestion for the CPSU leadership.  Fight this Labor Party Government, not capitulate to it.

Strike for a real wage increase. 

Unlike sucking up to Labor, strikes can win. Maritime Union members at Total Marine Services struck recently and won 30 percent pay increases. That will flow through to other workers in the industry.

The CPSU leadership strategy of doing nothing means Labor wins but members lose. 

I have a question for the CPSU paid leadership. Which side are you on  – the Labor Party’s or your members’?

On January 28 the My School website was launched with great fanfare – but in the face of strident opposition from teacher and parent organisations. They are rightly concerned that the information published there will inevitably be used to construct “league tables” that will “name and shame” many schools – especially those in the underfunded government sector – branding them as underachievers or failures.

Tony Abbott has concocted a climate change ‘direct-action’ plan that should appeal to every denier. Like Labor’s Carbon Pollution Reduction Scheme it pretends to do something while refusing to attack the big polluters.

Abbott’s ‘plan’ doesn’t stop CO2 emissions; it encourages them. According to Government figures (suspect, but likely to have some truth in them), Abbott’s scheme will see emissions increase 13 percent on 2000 figures by 2020.

The Opposition Leader has proposed a $2.5 billion fund to give grants to business and farmers to ‘reduce’ emissions. 

And where would the money go?  To farmers for storing carbon in soil. To the polluters for converting brown coal fired power stations to gas.

In other words, the free marketeers in the Opposition would have a huge bureaucracy deciding who gets these grants and for what.

Have the stalinists taken them over?

There is nothing in the package about reducing emissions, because the climate deniers don’t believe in that.

What they do believe in is getting elected and they think the majority of Australians support action to address climate change.

So they have come up with the appearance of action. No wonder the polluters love it.

It gets better.

We are going to plant more trees, proclaims action man Tony.  Well, who could be against that? Except it’s only 20 million trees over the next ten years. That will have a marginal impact at best on reducing greenhouse gas emissions.

20 million trees over the next ten years is about one tree for every 4 sq kilometres of Australia a year. That’s not even replacement rate.

Forestry operations in Australia will destroy more than the 2 million trees each year that our Tone wants planted.

Business has been using offset schemes like this for a number of years to increase their emissions.

Abbott has also promised solar panels on one million roofs by 2020.  He will provide a rebate of $1000 to homeowners to do this.

That of course will increase the price of electricity on the poor and working class to compensate for the regressive rebate and the  regressive subsidies the States and Territories are implementing for solar panel generated electricity.

The whole Liberal scheme is a chimera.  It encourages and rewards business as usual activity, and only punishes with a feather those who emit above ‘normal’ levels.

How is Abbott going to pay for all of this?  He will cut public service jobs.  He will cut services like health and education so his farmer mates and the big polluters can continue on their merry way, with our money in their pockets.

But if Abbott is a snake oil salesman so too is Rudd. His Carbon Pollution Reduction Scheme is a furphy.

Unlike the Stalinist environmentalists in the Opposition, Labor proposes a market based mechanism – a cap and trade scheme – to convince polluters over time to reduce their emissions.

Like the Liberals, Labor’s goal is a five percent reduction on 2000 levels by 2020.

The CPRS won’t achieve that, but even it it did, it is too little too late to address climate change.

Rudd’s scheme will cost about $120 billion over ten years, of which about half will go in compensation to the polluters and associated industries. And the banks will make a motza out of the trade in permits before the market collapses.

The irony here is that the ALP is proposing a market based solution while the Opposition is championing a state interventionist approach.

Neither will work.  Greenhouse gas emissions are systemic to capitalism.

Voters are worried about the impacts of climate change. That’s why both parties give the impression of action without addressing the fundamental problem – the relationship between profit and pollution. 

Neither snake oil salesman offers a solution. To abolish greenhouse gas emissions we need a movement committed to abolishing the profit motive as the driver of society.

Only working people can develop an alternative society in which the change over to renewable energy on a mass scale can occur through democratic planning at no cost to society or the workers who create its wealth.

Something interesting happened the other day. Strikes won Maritime Union members at Total Marine Services a 30 percent pay increase.

8.5 percent is backdated to September.  Another 3.5 per cent starts this month.

And from July there will be 6 percent pay increases every year for the next 3 years. 

On top of that the union won a new construction allowance which Ewin Hannan, in a piece called  ‘Union forces $50,000 pay hike’ in the Australian today, believes is $175 a day, increasing to $214 a day.

48 hour rolling strikes won the increases. 

Now that TMS has buckled, other shipping companies like Farstad and Go Offshore may do the same. They can all afford it. They are rolling in the money workers make for them at the offshore oil and gas projects.

Funny isn’t it? All the time we keep getting told how there isn’t any money for pay increases; that strikes are old fashioned; that the class war is dead.

And then along come the MUA workers at TMS who blow the whole load of crap out of the water. (Bad pun intended).

The next time my union tells me strikes are old hat and don’t win, I’ll point to TMS and the good gains the MUA has won.

And when my officials say the MUA are much stronger than us I’ll merely say that’s true but we would be powerful too if we actually took concerted industrial action to win decent wage increases and roll back the bosses’ power over the workplace.

Thanks MUA. Militancy can work.

A stopped clock is right twice a day. So it was that Joe Hockey, the Shadow Treasurer, summed up the Labor Government’s intergenerational report succinctly today:

Quite clearly Australians, according to this Government, will have to work harder for longer with less reward in more crowded cities.

The Liberals in power would do the same. It’s what Workchoices was about. But that doesn’t detract from the truth of Hockey’s criticism of Labor’s ‘Australia to 2050: Future Challenges’ report.

Labor increased the retirement age to 67. Labor is talking about increased productivity but without the massive infrastructure investment necessary to avoid speed ups, even longer unpaid hours and more slave driver workplaces.

Both Labor and the Liberals have put in place industrial and other laws which have transferred more and more of the value our increased productivity has created over the last 30 years  to the bosses, not us. 

While real wages have increased the share of national product going to labour has fallen to its lowest level ever.

Australia has the longest working week of any OECD country.

Workers’ personal debt levels are among the highest in the world, fuelling a level of consumption that is perhaps unsustainable in the long term. 

Now we have an education revolution whose real aim is to turn our schools into little factories and our kids into learning automatons. 

The forced savings model of the 9 percent superannuation guarantee is built on a wage cut. 

Yet despite this workers when they eventually retire will not have enough in their superannuation funds to live reasonably well.

Superannuation, when the market is in crisis, is not safe at all. It destroys futures, not protects them.

Fifty years of working for the man and all you get is a goodbye card and a poverty pension.

Why can’t we work shorter hours and retire earlier?

The drive for profit and its reinvestment in more and more expensive capital vis a vis labour creates a tendency for the rate of profit to decline.

Increased productivity, reduced labour rewards and living standards, cuts in social spending and a longer working day (plus the devalorisation of capital in crises) can address that tendency for some time. 

The logic of the system is to pour more and more petrol onto the fire until it engulfs us all. 

The more value we create the more it goes to capital and the more voracious the system forces it to become to produce even more to counteract declining profit rates 

Capital sucks more and more life out of us for its own survival.

It’s time to kill the vampire and reclaim life.

That of course is for the future. Here and now?

A 30 hour week and retirement for all on the average wage at sixty is affordable.

Make the bosses pay for their system, not us.

The lie of  US ‘humanitarian’ intervention in Haiti becomes clearer by the day. 

American authorities have suspended flights of critically injured or sick Haitians to the US. Why?

The Miami Herald sums it up:

The key issue that led to the halting of the military airlift that was bringing critically injured Haitians to the United States for treatment is cost.

So let me get this right. The US has suspended flights, which means according to one estimate up to 100 could die in the next 48 hours, because neither the State nor Federal authorities in America want to pay for it.

That same article quotes one doctor as saying treatment of 50 Haitians to date could cost between $50,000 to $100,000 each. That totals at most $5 million.

The country that bailed out its banks with $1 trillion dollars can’t afford a few million to save the lives of Haitians?

This of course is the same country that has ships stopping Haitians fleeing to the United States.

The US presence in Haiti is not an intervention; it is an invasion. It has nothing to do with helping the Haitians; it has everything to do with restructuring Haiti in the interests of the bonus bludgers in Wall Street and their ilk across the country.

It is about providing a springboard for deepening the neoliberal experiment with the Haitian economy, and preventing the Haitians from re-electing left-wing leaders prepared to challenge American imperialism’s destruction of the Haitian economy.

This is how the Conservative US think-tank the Heritage Foundation put it (before they pulled the comment from their website):

The U.S. response to the tragic earthquake in Haiti earthquake offers opportunities to re-shape Haiti’s…government and economy as well as to improve the public image of the United States in the region.

The other thing this cancellation of flights shows is the crime against humanity that the US health system is. If you’re poor you don’t get treated.  That is as true of poor Americans as it is of Haitians.

What a rotten world we live in.

This site will collect the more colourful sayings and comments of Australia’s Opposition leader, Tony Abbott, to help remind people of what they will get if they vote for him and the Liberals and Nationals. The interview with Abbott in the February 2010 edition of the Australian Women’s Weekly provides fertile ground. Feel free to send in other comments.

On sex before marriage

‘I would say to my daughters…[virginity] is the greatest gift you can give someone…’

On dope

‘I puffed on a marijuana cigarette, but I didn’t inhale.’

On abortion

‘…I would like to see fewer abortions.’

On his six months paid maternity leave proposal

‘My thinking has moved on since then and I think … it’s very important that any national scheme doesn’t disadvantage small business.

From an article by Annabel Crabb on the ABC site The Drum quoting Abbott:

‘My father reckons that, as child in the north of England during the depression, he went to a kind of communist Sunday school where they sang the Red Flag instead of hymns. These are the disadvantages I have had to overcome!”

And from the same piece, talking about John Howard:

‘…the best political mind that conservative politics has produced in 50 years.’

On his political heritage (from Mark Metherell in the Sydney Morning Herald on 27 November 2009):

‘[I am] the ideological love child of John Howard and fellow conservative Bronwyn Bishop.’

On climate change (from the Pyrenees Advocate):

‘The climate of science change is absolute crap.’

On boat people:

‘…in the right circumstances you’ve got to be prepared to turn boats around.’

On the possibility of him becoming Prime Minister

‘Shit happens’.

Readers might also like to have a look at The selling of Mr Abbott.

PAY TRIBUTE TO AND CELEBRATE THE LIFE, SADLY PASSED, OF ALISTAIR HULETT, REVOLUTIONARY SONGWRITER AND PERFORMER

A memorial for Alistair Hulett will be held on Sunday February 14th 3.00-6.00pm at the Gaelic Club in Sydney.

Everyone is welcome, we will have video of Alistair’s performances, photos, posters from the struggles in which Alistair played a role fund raising and immortalising them in his songs, etc. If you have any memorabilia, please bring it, or contact Diane Fieldes or Sandra Bloodworth to organise it to be added to any displays we are assembling.

Tim Anderson, about whom “Framed” was written, will be there to speak and remember his times with Alistair and their struggle together, and we hope to have speakers from unions Alistair did fundraisers for, etc. As the program is put together, we will send out notices so everyone knows who is coming to pay tribute and celebrate Alistair’s life.

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