ga('send', 'pageview');
John Passant

Site menu:

January 2012



RSS Oz House



Subscribe to us

Get new blog posts delivered to your inbox.


Site search


My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. (0)

Time for a House Un-Australian Activities Committee?
Tony Abbott thinks the Australian Broadcasting Corporation is Un-Australian. I am looking forward to his government setting up the House Un-Australian Activities Committee. (1)

Make Gina Rinehart work for her dole

Sick kids and paying upfront


Save Medicare

Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. (0)

I am not surprised
I think we are being unfair to this Abbott ‘no surprises’ Government. I am not surprised. (0)

Send Barnaby to Indonesia
It is a pity that Barnaby Joyce, a man of tact, diplomacy, nuance and subtlety, isn’t going to Indonesia to fix things up. I know I am disappointed that Barnaby is missing out on this great opportunity, and I am sure the Indonesians feel the same way. [Sarcasm alert.] (0)



The spectre haunting Australia – unemployment

A spectre is haunting Australia; the spectre of unemployment.

Last year, according to the Australian Bureau of Statistics, there was a net loss of 100 jobs. This is the worst result in almost twenty years, since the end of the 1992 recession, ‘the recession we had to have, ‘ according to Paul Keating.

Victoria fared the worst with a net loss of over 11,000 jobs as manufacturing continued to decline. There were net losses of around 2000 in New South Wales and South Australia. All the other states had net job gains, with Queensland on 5600 and then the Northern Territory on 2500 the biggest. The mining boom states, including Western Australia with 1600 extra jobs, grew. So too did the ACT with 800 more jobs and Tasmania with an extra 700.

Overall the situation worsened in November and December with over 40,000 jobs going. In December the figure was 29,000.

Retailers for example took on almost 50,000 less temporary employees over Christmas than the year before.  Banks began shedding staff then and that will accelerate in the coming months.

Rather than employing more staff, employers asked current staff to work longer hours. The hours worked actually increased.

There was an increase in full time employment in December. It was swamped by losses in part time employment with a net loss of over 29,000 the result.

Despite this  unemployment remained at 5.2% during December.  

This was because the participation rate fell by about 0.3%. This means people gave up looking for work.

If the participation rate had remained the same  in December as in November unemployment would have increased to 5.6%.

There is worse to come.

The crisis in Europe seems intractable and is worsening. Standard and Poor’s downgrade of France’s credit rating  is but one indicator of the storm that could be about to sweep across Europe as ruling class politicians in country after country impose austerity and unemployment on their working classes in an attempt to save their own capital from a round of massive devalorisation.

Unemployment in the Eurozone is above ten percent and in the US 8.5%, although the fall in US unemployment looks more like disillusioned people dropped out of looking for work rather than that new jobs were created or they were moved off benefits after their time ‘expired’.

 Underemployment in the US  is still massive, and for blacks and Latinos there is no or little recovery.

China’s rulers have been loosening fiscal and monetary policy in an attempt to spark the economy as it shows some signs of decline, from high levels admittedly.

Nevertheless, a slow down in China even from a high rate would cut growth in Australia given the Chinese demand for our resources.

China is dependent for economic growth still on the US and Europe. Europe is in trouble. The US is not that great either.

The crisis in Europe is making borrowing by banks on international markets more expensive. So at the same time the Reserve bank is cutting or will consider cutting interest rates, the pressure on the banks is to keep them as they are or raise them.

If the crisis in Europe gets worse, the doubts about other banks may see, as happened during the global financial crisis mark I, credit dry up as banks refuse to lend to each other because they don’t trust their rivals.

If that is the case interest rates will go up. Of course, much of the Australian bank’s borrowing is within Australia so it may be that the international uncertainty argument is a cover for increased net interest margins and profits.

One of the things often missing from any discussion about the Australian economy is the fact it is a net capital importer. Australian capitalism depends for its existence not just on Chinese demand for our minerals but also on foreign investment. Most of the investment into Australia comes from Europe and the US. So the Eurozone crisis and the instability in the US threaten that.

Treasury predicted that unemployment would rise from 4.9% to 5.5% over the course of this financial year. The outlook for the figures on 3o June however is more pessimistic.

Last month’s budget forecast said there would be 114,000 new jobs created this financial year. With half the year over the figure to date is 8100.

The Government ahs begun to soften people up, with acting Treasurer Bill Shorten saying that Australia ‘was not immune from developments in Europe.’ The other tack the Government has been taking is to reject any idea of increasing unemployment benefits as part of a new attack on ‘dole bludgers’. it’s your fault you don’t have a job, not the system’s is their logic.

yet despite this gloomy prognosis, Labor remains committed to the chimera of a Budget surplus. The party rejected a proposal at its December conference to put jobs before a Budget surplus.

So at the very time when a stimulus might be needed because the market ahs retreated from creating jobs, the Labor Government is going to retreat and leave it to the market to continue to create unemployment.

There can be n greater indictment of Labor than its abandonment of any real commitment to jobs.

One way to defend jobs would be for the ACTU and unions to go on the offensive. here are some suggestions:

  •  fight for a 30 hour week without loss of pay;
  • end all restrictions on strikes and other industrial action;
  • campaign for a big wages increase to address the shift in wealth to capital at the expense of labour;
  • use the manufacturing plants and the skilled workforce to produce buses and renewable energy sources like solar farms and wind turbines;
  • end the gender pay gap by an immediate 20% pay increase for workers in the affected industries;
  • no job losses and an end to the job destroying ‘efficiency’ dividend in the public service .

Of course the ACTU and most unions long ago abandoned fighting for workers and instead will be swept along by increasing unemployment, wringing its hand and imploring employers to employ people. 

If there is one lesson of the past 30 years it is that class collaboration doesn’t work. Trickle down is dead. Hear that ACTU?

Because this is a crisis of profitability in the developed countries, pussyfooting around and kowtowing to capital won’t work. In the words of the BLF: If you don’t fight, you lose.

The time to fight unemployment is now, not when it hits six or seven or eight percent.



Comment from Ross
Time January 23, 2012 at 6:44 pm

George Carlin,”It’s a big club and you ain’t in it.” George unfortunately died in 2007.He was absolutely hilarious and extremely perceptive.

John under this system of debt money creation,unemployment must rise.Truth News Radio sends me and others a bright idea like many of boycotting Westpac ,who are outsourcing jobs to India.Truth New and others want us to put our money in Building Societies and Credit Unions.Only banks have the power of fractional reserve money creation.This means that our banks will have less deposits and thus less power to create new money.We all then go into more OS debt to these criminal banksters.

Credit Unions etc ,will have to borrow from OS banks who just create it in their micky mouse computers as debt for us.

It would be better in the present to look at smaller banks like the Bendigo/Adelaide Banks to keep the money here.

In any productive society,there should never be a shortage of jobs or money.This shortage is created by the elites to control us.

Comment from John
Time January 23, 2012 at 7:13 pm

Yes. Many of my Facebook friends circulate his material. At Marxism 2012 over easter in mebourne one of my comrades is doing a talk on why it’s not money, money, money that is the real problem.

Comment from ng
Time January 24, 2012 at 4:22 pm

Yes, this is a classical structural crisis of capitalism – a crisis of overproduction and the falling rate of profit in the centres of capital accumulation. however, I am not sure if Austrlia is such a ‘centre’ – it is more like a semi-periphery making a living by selling raw materials and to some lesser extent semi produced goods (minerals/agricultural products)…a little like Saudi Arabia living on the oil rent..I did not quite understand your point about australia being a ‘net capital importer’ – it all depends on the levels of foreign capital investement in the australian economy, and the terms of that investment set by the state…I have no statistics on this…otherwise, having foreign capital investment does not mean, necessarily, capitalism is dependent on it for its growth (or existence (though this may well be the case in australia). Key features of australian capitalism, on top of my head and without having studied it, seem to me to be dependence on raw material production as the principal form of its link to the world market, and the accompanying failure to industrialise, and, in the recent decades, increasing and decline in the little manufacturing it has ever developed and the move towards the ‘services sector’ (this latter is common with the European capital, except for Germany which resisted this transformation). Australia is a semi-periphery, depending on your theoretical position.

But here is not the place for analysing the structure of the australian economy…the point is really that unemployment statistics are themselves highly quetionable… I am certain that they hide the extent of underemployment, precarious forms of work, agency work, contract work, short term and casual and seasonal work….it is at these statistics that we need to look to find out how desparate the situation really is….and how the labour market is segmented, insecure, and how these forms of employment are linked to to racial and gender characteristics of their bearers…and how this is going to get worse as the agenda of ‘labour market flexibility’ is being pursued…so really these issues form the heart of the matter – otherwise the actual number of the unemployed is made up to hide these realities – all bourgeois state statistics are made up to hide social realities….

and of course it is quite pointless and useless and naïve to expect anything from the unions – they are part of the problem rather than the solution – and have been so for a long time.
Cheers and apologies for this very long comment. It is good to read your posts.

Comment from John
Time January 24, 2012 at 8:15 pm

Yes ng. I fudge the question of Australia a bit. Some more recent but very preliminary analsyis seems to show that the levels in Australia are high, based on China I assume. This is unpublished. Mohun has some figures for up to 2001 which show a decline.

Australian exceptionalism might explain the ferocity of capital’s response to economic rent taxation. They want to keep the goose that is laying the golden eggs, rather than let the state use the tax system as substitute for competition to lower their high profit rates and equalise it across all industries and redistribute some in the form of tax cuts to less profitable sectors.

Foreign investment? When I was in charge of international tax reform in the ATO, the Treasury figures showed Australia as a capital importing nation but with our capital exports growing at twice the rate of our capital imports. Extrapolating from this they predicted we would possibly be a capital exporting nation by about now.
Only problem was the trend stopped about then but it as used as the basis for changing Australia’s international tax laws to both make it more attractive for foreign investment (no CGT on non-residents for example,except for land) and to encourage Australian capital exports. The Review of International tax Arrangements booklet in 2002 sets out the issues and figures but that was a decade ago. There will be more recent figures.

Glad you like the blog. I need all the support I can get. it can be lonely being a left wing blogger trying to attract an interested but essentially unconvinced audience..

Comment from ng
Time January 26, 2012 at 9:28 am

I must say I do not know much about the tax laws (you are the expert) and details of capital investement levels in australia – it all depends on the industry sectors where this investment takes place and the laws governing it – as you say, the state does what it can to promote it…one day I should read this literature properly.

Yes. it is very lonely here for any thinking person…I was going to ask you what it is like for you where you teach, you probably have very few or no ‘soul mates’, or do you feel isolated workwise, or even sidelined because of your politics? Do you also feel the stresses of an increasingly bureaucratised, utilitarian, conservative status quo and sub-literate university environment? This may be a sensitive question, but I would like to find out about your experience. Cheers John, and have a nice ‘Australia Day’!

Comment from John
Time January 26, 2012 at 1:31 pm

I meant that these documents had foreign investment figures. There are more recent ones. I’ll chase them up. As to the other stuff, I am looking for another academic job. I resigned from the University of Canberra last month. One mustn’t speak ill of the dead.

Write a comment