Australia Labor government unveils plans to slash disability funding

Max Boddy

The full depth and harshness of the Albanese government’s blueprint to gut the National Disability Insurance Scheme (NDIS) came into clearer view last week.

Australia's Disability Services Minister Bill Shorten addressing National Press Club in Canberra, April 2023 [Photo: ABC-TV screen shot]

NDIS Minister Bill Shorten released the final report of the government’s review of the scheme, containing sweeping recommendations to slash spending, especially for children. This fleshes out Labor’s plans to impose an 8 percent annual cap on funding increases, in order to satisfy the cost-cutting demands of the corporate and financial elite.

Despite some weasel words about not cutting off children already on the scheme, Shorten outlined measures to block most children from the NDIS, and to use “assessors” to deny access to many adult applicants as well. Having denounced the previous Liberal-National government for such moves, the Labor government is now proceeding with them.

The Productivity Commission, the pro-market think tank that drafted the scheme for the Gillard Labor government a decade ago, estimated that the NDIS would cost $22 billion a year, but it is costing more than $35 billion. That is set to rise to $50 billion next year, by some estimates. Shorten is in charge of slicing billions of dollars off the funding.

The chief mechanism for reining in costs will be pushing children with autism and developmental delays out of the scheme. Shorten told the National Press Club last Thursday that “almost half of participants in the scheme are children. None of the actuaries saw that coming.”

People with psychosocial disabilities also have been earmarked for removal. To accomplish this and more, the review recommends removing medical diagnoses as the central basis for entry to the NDIS. Currently, several diagnoses mean automatic access to the scheme, including some categories of autism. This will be replaced by assessments of “significant functional impairment and need.”

There are around 4.5 million people in Australia with a disability. The NDIS only supports those under 65, regardless of the age they were diagnosed or acquired a disability. That leaves 2.5 million people who are eligible. However, the scheme’s design is for just 510,000.

Of the 610,000 people currently on the scheme, around 313,000 are under 18 years of age. Of that group, 75 percent have a diagnosis of autism or developmental delay, accounting for more than a fifth of the scheme’s cost.

The reasons for the significant influx of children with these diagnoses are complex, but a significant factor is the dismantling of education and early intervention supports. This means families are forced to seek out a diagnosis to give them access to the NDIS to receive any basic support.

That is why Shorten often refers to the NDIS as a “lifeboat in an ocean.” That must end, he insisted. The purpose of the government’s review was to “reboot” the NDIS, he said, “to restore the original intent of the scheme to support people with permanent and significant disability.”

The review recommends the employment of “navigators” and “assessors” whose job will be to redirect applicants away from the scheme. The navigators will redirect people to “mainstream supports,” i.e., non-NDIS supports, and the assessors will determine if someone is allowed into the scheme based on their arbitrarily defined “substantially reduced functional capacity,” not a medical diagnosis.

The use of assessors is reminiscent of the last Liberal-National government’s proposed “independent assessments.” Shorten opposed that plan as “proof positive” that the Morrison government intended to “slash, slash, slash.” Such a program is now being implemented by Labor.

Likewise, the review recommends legislating a narrower definition of the “reasonable and necessary” support services that the NDIS will fund, echoing the Morrison government’s proposals.

To facilitate the removal of people from the scheme, the NDIS review made a series of recommendations to introduce “foundational supports.” These are non-existent but will supposedly be provided by state-based institutions such as schools, healthcare and early childhood facilities.

The federal government has cobbled together a deal with the states and territories to provide half the funding for this, by giving them tax and other concessions. The details are opaque and murky, but it appears the share of state and territory funding will be capped at $10 billion over five years, to be matched by the federal government.

This little over $4 billion a year will be a drop in the ocean. Schools and hospitals are already at breaking point, with mass understaffing and infrastructure failures. Labor’s federal budget in May cut education funding in real terms and slashed the annual health budget by $11 billion.

The review also proposes government regulations to oversee the disability “market,” which has produced a predictable disaster by privatising services, leading to profiteering at the expense of clients. The review states: “Service providers have responded to market settings that reward the volume of supports provided rather than quality of supports or outcomes for participants.”

Between April to June of 2022–23, over 154,000 unregistered providers received payments from the scheme. These providers do not have to comply with any standards of support, except for basic expectations in the NDIS Code of Conduct. They far outnumber the approximately 16,000 registered providers.

The review recommends that all providers be registered, but with reduced registration requirements. There will also be much tighter price caps for services and equipment, which is likely to undercut clients’ needs.

However, none of these measures will resolve any of the inherent issues produced by the so-called disability market. The NDIS was developed by the Gillard government to cut costs by ending direct governmental support for those with a disability and pushing all services into a profit-driven system.

When the NDIS was introduced in 2013, the states and territories immediately set about ending what remained of government-based supports. That accelerated the disintegration of special needs programs at schools, with parents being directed instead to the NDIS. Carers and advocacy programs were eviscerated and the remaining large residential facilities, supporting individuals with complex needs, were shut down, resulting in several deaths.

A December 7 Australian Financial Review editorial demanded that the government go further in demolishing the scheme. “The NDIS was established a decade ago amid the China-based resources boom that over-inflated political expectations of what governments could provide, especially for worthy causes such as severe disability and children’s education,” it stated contemptuously. The editorial concluded: “As harsh as it may sound, expectations of what the NDIS can do, and for whom, have to be wound back.”

This is a blatant statement that capitalism cannot afford basic care for people with disabilities, even as Labor allocates hundreds of billions of dollars for war and militarism, and income tax cuts for the wealthy.

Free, high-quality access to healthcare for all is a fundamental social right, including for those with a disability. Left in the hands of the financial elite and their political servants, including the Labor Party and the Liberal-National Coalition, services will continue to be slashed, creating social misery.

Year-end job cuts spread across the US

Jerry White

Job cuts are sweeping across the US economy as corporations purge their payrolls for the coming year. Since the beginning of December, tens of thousands of workers employed in manufacturing, tech, entertainment, finance, retail and other industries have received layoff notices as a holiday gift from their employers.

In the first 11 months of the year, companies have cut 686,860 jobs, a 115 percent increase from the 320,173 cuts announced during the same period last year, according to job placement firm Challenger, Gray & Christmas. This was the highest January-November job loss total since 2020—the first year of the pandemic—when 2,227,725 cuts were recorded. Prior to 2020, this year’s job cuts are the highest since the 1,242,936 cuts announced through November 2009, in the aftermath of the 2008 financial crash.

People wait in line for help with unemployment benefits at the One-Stop Career Center in Las Vegas. [AP Photo/John Locher]

Earlier this week, toy maker Hasbro announced it is cutting 1,100 of its roughly 5,700 employees over the next 18 to 24 months. The company cut 800 jobs earlier this year. CEO Chris Cocks said in a memo Monday that the move was due to weaker-than-expected toy sales during the first nine months of the year, after sales hit “historic, pandemic-driven highs.” Overall, US toy sales in November were down 10 percent from a year ago, according to research firm Circana.

Retailers are projecting slower growth this holiday season, as working class and middle class families curtail spending because of high prices and borrowing costs and the resumption of student loan payments for younger consumers. Holiday spending accounts for 26 percent of retail sales overall, 34.5 percent for hobby, toy and game stores, and 33.3 percent for department stores.

Hasbro headquarters, Providence, Rhode Island.

E-Commerce retailer Etsy is cutting 225 jobs, or 11 percent of its workforce. In a note to employees earlier this week, CEO Josh Silverman said that “the pandemic drove more people to Etsy than ever before,” but a “leaner, more agile team” was now needed to “maintain a sustainable cost structure.”

Seattle-based e-commerce company Zulily, which specializes in children’s clothing, is going out of business and cutting over 800 employees in Washington, Nevada and Ohio.

In what could be the final liquidation of the famed Macy’s department store chain, private investors, including those focused on real estate, made a $5.8 billion bid last week to buy the 500 stores operated by the 165-year-old company, which has been hard hit by online competition. “Macy’s has been offered a buyout of 6 billion, but not for the brand, for the real estate,” a Macy’s worker posted on Thelayoff.com. “So my impression on this buyout is that Jeff [Gennette] the ceo Parasite knew this all along and is walking out the door just as it’s announced. The board of crooks will get millions in buyout and all you blood, sweat and tears folks will go down with the ship ... this time it won’t be women and children first ... only the high brass...”

Challenger reported that large-scale seasonal hiring announcements are at the lowest point since 2013, with 573,300 seasonal positions announced in September, October and November of this year. Despite the peak holiday season, new jobs in transportation and warehousing are also down 21 percent since last November. The sector, which saw record-high employment last December, with 7,049,500 workers, now employs 53,900 fewer workers than in November 2022.

Union Pacific Railroad is laying off 1,350 track maintenance workers, reducing the current workforce to 4,737, compared to 6,078 in September and 8,791 in July of 2015. Union Pacific made $14.3 billion in gross profits last year and $13.7 billion in the first nine months of 2023. The layoff of the Maintenance of the Way workers will lead to a further delay and postponement of track repairs, exacerbating the danger of more derailments.

“Happy holidays,” one UP worker posted on Thelayoff.com. “Then in January we will furlough a bunch more people as a happy new year hit the road jack!”

Media conglomerate Paramount Global is preparing to lay off 1,000 workers by early 2024. These cuts are part of a jobs massacre in the entertainment industry in the aftermath of the months-long strike by writers and actors, which was betrayed by the Writers Guild of America and SAG-AFTRA unions. According to one study, current employment in the industry has fallen by 26 percent since its peak in August 2022, with more than one in four workers not getting called back after the strikes. Corporations are using Artificial Intelligence and other technologies to slash jobs and cut costs.

Film and television workers picket outside Paramount Pictures, August 11, 2023.

Ford Motor Co. is planning to cut production targets for its electric F-150 Lightning pickup trucks by one half in 2024, imperiling the jobs of 2,200 workers who build the vehicle at the Rouge Electric Vehicle-Center (REV-C) in Dearborn, Michigan. Facing lagging demand for EVs and stiff competition from Tesla and Chinese competitors, Ford, GM and Stellantis have trimmed back EV investments and utilized the new contracts signed by the United Auto Workers bureaucracy to slash jobs.

Automaker Stellantis announced last week that 1,225 workers will be laid off indefinitely at its Toledo Assembly Complex, starting as early as February 5. The company, which owns the Chrysler, Dodge, Ram and Jeep brands, also said it will carry out 2,465 “temporary” layoffs at its Detroit Assembly Complex Mack plant. The job cuts include 1,100 “supplemental employees” in Toledo, who the UAW claimed would be rolled over to full-time positions under their new labor agreements.

“This is BS, losing our jobs with the holiday around the corner,” a 20-year-old supplemental worker at the plant told the WSWS. “We have people who have been temporary workers for five or six years, and they’re losing their jobs before they can become full-time. It’s immoral and inhuman that you have CEOs making so much money while people are out here starving and struggling to keep their families fed.”

Other recent layoffs include: Music streaming companies Spotify (1,500) and Tidal (1,000); Boston-based financial firm State Street (1,500) and San Francisco-Bay Area communications giant Twilio (300, after laying off 1,500 in February).

US Federal Reserve Chairman Jerome Powell has made no secret of the central bank’s aim of driving up unemployment in order to fight “wage inflation,” i.e., beat back workers’ demands for raises that keep pace with soaring prices. After raising interest rates to the highest level in 22 years, the Fed has kept rates steady over the last three meetings, with Powell indicating Wednesday that three rate cuts were planned for next year.

In response to the move, the Dow Jones Industrial Average jumped 512 points Wednesday, closing above the 37,000-point mark for the first time in history, as investors celebrated the plans to reduce borrowing costs for financial speculation.

As the New York Times noted, “Fed officials have also been heartened to see that the job market is cooling. Job openings are down notably, and employers are hiring at a robust but no longer white-hot pace. As supply and demand for workers comes into balance, wage gains have been slowing.”

Wages rose last month at a 4 percent annual rate, the Times reported last week, “extending a slow decline in the pace of pay increases but still above the 3 percent level policymakers view as consistent with their 2 percent inflation target.” After Powell’s announcement, the Times wrote, “Policymakers made clear on Wednesday that they could still raise rates if prices unexpectedly jumped. ‘Participants didn’t write down additional hikes,’ Mr. Powell said.”

The Biden administration has relied on the trade union bureaucracy to suppress wage demands and impose the austerity measures needed to finance the US military machine and continue funneling billions to the corporate and financial oligarchy. According to the Fed’s own Survey of Consumer Finances released last month, the top 10 percent of wage earners (who have an average net worth of about $6.6 million) saw their incomes increase by about 22 percent between 2019 and 2022. Overall, real median income rose by only 3 percent. The Fed noted that the rise in income inequality was “one of the largest three-year changes” since it began the consumer finance survey in 1989.

Despite the treachery of the union bureaucracies, the explosion in inequality is fueling a resurgence of the class struggle throughout the world. In October, there were 4.5 million workdays lost due to strikes in the United States, the most of any month in four decades, according to preliminary data from the US Bureau of Labor Statistics cited by the Wall Street Journal.

Sunak survives Rwanda deportation Bill rebellion but lurch to the right continues

Thomas Scripps

The factional warfare in the Conservative Party over the Rwanda deportation Bill saw the party’s extreme right-wing again set the agenda of British politics.

The Bill passed its second reading Tuesday evening by 313 votes to 269. This means that a majority of the Tory party’s right-wing factions, collectively making up 100 MPs, voted with the government. Of the 38 Conservative MPs who did not vote, intentional abstentions, as recommended by the European Research Group, were somewhere in the 20s.

Prime Minister Rishi Sunak delivers his speech to the Conservative Party Conference in Manchester, October 4, 2023 [Photo by Picture by Dominic Lipinski CCHQ / Parsons Media / CC BY 2.0]

A majority government’s legislation has only ever been defeated at such an early stage of its passage through the House of Commons once since the start of the 20th century—the Shops Bill in 1986, over an inconsequential issue.

That this was being discussed as a possibility yesterday is a measure of the weakness of Sunak’s position, sitting atop a fractious party fearing electoral oblivion. A defeat would possibly have precipitated his downfall and an early general election. But in the end the Tory right were not prepared to administer such a self-inflicted wound, in part because they anticipate Sunak making various amendments to placate them before a third reading, likely in January.

Sunak has therefore at best postponed a crisis, given that the demands of his right wing are opposed by an equal number of Tory MPs.

The legislation is intended to finally make the government’s plans to deport failed asylum seekers to Rwanda a reality, overcoming the objections of the Supreme Court, which last month ruled the policy illegal under domestic and international law. Its text declares Rwanda a “safe country” by government fiat, removes the duty of public authorities not to act in a way which is incompatible with the European Convention on Human Rights (ECHR), and of the UK courts to “take account of” relevant cases of the European Court of Human Rights (ECtHR), and allows ministers to ignore temporary injunctions issued by the ECtHR.

The brutality of the UK’s asylum policy was underscored Tuesday afternoon with the reported death of an asylum seeker, a suspected suicide, lodged on the prison ship the Bibby Stockholm—housing 500 people.

The groups representing the Tory right-wing, dubbed the “five families” in reference to the Italian American mafia, want Sunak to go further and effectively abandon the European Court and Convention altogether, removing even the right of individuals to appeal to these bodies based on exceptional personal circumstances.

A “star chamber” convened by the European Research Group (ERG) of Tory MPs published a legal commentary on the Bill Monday which argued, “Experience to date in cases about attempted removal of illegal migrants to Rwanda demonstrated that individual challenges are likely to be numerous, and that they have had a high rate of success,” before calling for “significant amendments”.

The government’s legal analysis notes that the proposed changes “would mean ministers accepting that those unfit to fly, for example those in the late stages of pregnancy, or sufferers of very rare medical conditions that could not be cared for in Rwanda, could be removed with no right to judicial scrutiny.”

It insists that 99.5 percent of legal challenges would be denied under its scheme.

Sunak and government whips spent the last two days in what an insider called a “belated, panicked and intense” effort to secure the Bill’s passage, with Sunak stating that he is open to “tightening up” the legislation.

The One Nation group of “moderate” Tories, the largest single faction in the party, comprising more than 100 Conservative MPs, is concerned that the more flagrant illegality being called for will jeopardise crucial international relations and worsen the UK’s post-Brexit isolation.

Tory MP Natalie Elphicke emphasised in Tuesday’s debate that diplomatic work needed to be done to get France’s support policing the Channel, arguing that refugees should be deported to France rather than Rwanda. Most importantly, senior White House officials have made clear the Biden administration’s concern that severing the UK’s connection with the ECHR would undermine the Good Friday Agreement for Northern Ireland, in which it is heavily invested.

Sections of the Tory right are reportedly still prepared to force yet another leadership election, in which they hope to install one of their own as prime minister. The Mail on Sunday recounts that members are planning an “advent calendar of shit” to destabilise his premiership. Former Home Secretary Suella Braverman already martyred herself in November in preparation for such a challenge—her departing letter focused heavily on Sunak’s “betrayal” of pledges to “stop the boats” carrying asylum seekers across the Channel.

On Sunday, immigration minister Robert Jenrick resigned, saying the Bill he was supposed to be leading through the Commons “does not go far enough”.

The ERG was the central force behind Boris Johnson’s ouster of Theresa May and the implementation of a “hard Brexit”.

There is even talk of Johnson returning as party leader and prime minister, which would first require him to regain a seat in the House of Commons through a stage-managed byelection. The Mail suggests a “‘dream ticket’ leadership tie-up with [former UKIP and Brexit Party leader] Nigel Farage is even being considered”.

There is a great deal of speculation involved in all these scenarios, with Sunak’s supporters telling the media off the record that the right wing has proved again that it doesn’t have the numbers. Changing leaders before a general election the party is expected to lose badly would in any event present Sunak’s successor with a poisoned chalice. Johnson is making far too much money outside parliament to be likely to be tempted to lead the party into failure.

But for the return of this political criminal alongside Farage to even be suggested is an indication of the sharp lurch to the right being engineered within British politics. A violently xenophobic, nationalist, draconian cabal of Tory MPs is still calling the shots.

It can do so thanks entirely to the political cover provided by the Labour Party, which has done nothing to tip the despised Tory government out of office, instead fashioning itself as an identically right-wing replacement.

While Sunak was holding emergency breakfast meetings with his rebels, Starmer gave a speech at Silverstone insisting, “We do all want to stop the boats,” denouncing the government for “losing control of our borders.” Securing borders and “protecting your country,” he went on, “is the basics.”

Labour’s opposition to the Rwanda scheme, he said, is purely on the basis that “It isn’t going to work.” Starmer referred to his own “experience of breaking gangs” of people smugglers and lamented how money paid to Rwanda “could have been used to bolster our cross-border force.”

Asked if he felt the Rwanda schemes was “morally wrong”, Starmer replied, “I don’t think it will work. I think it’s very expensive.”

Asked if he was opposed in principle to offshoring asylum claims, Starmer replied, “There are various schemes around the world where individuals are processed, often en route…elsewhere… That’s a different kind of scheme and I’ll look at any scheme.”

The ruling class is increasingly convinced by Starmer’s performance. Several major Tory donors have now fallen in behind the Labour Party. On Tuesday morning, the Tory house paper the Daily Telegraph published an editorial on Starmer more advisory than condemnatory, taglined “Parts of the Labour Party do not appear to see a problem with mass migration. How will Sir Keir Starmer deal with this?”

In his Silverstone speech, Starmer insisted that the party had “fundamentally changed” under his leadership and that “If you want a government committed to economic stability, the rule of law, good public services, restoring Britain’s standing, making family life more secure and putting the country first, this is what a changed Labour party will deliver.”

Key central bank meetings as higher interest rates start to bite

Nick Beams

The governing bodies of three of the world’s major central banks are meeting this week to make crucial decisions on monetary policy that will give an indication of the agenda for 2024.

The European Central Bank during a thunder storm in Frankfurt, Germany, Tuesday, Sept. 12, 2023. [AP Photo/Michael Probst]

The US Federal Reserve will announce its interest rate decision today followed by meetings of the European Central Bank and the Bank of England tomorrow.

While present indications are that all three will leave interest rates on hold, statements from each of the meetings, starting with the Fed, will set the path for next year.

The recent falls in inflation have led to a divergence between the demands of financial markets that interest rates must now start to be reduced, or at least that a timetable for reductions be set out, and the statements from the central banks that it is still too early to give an indication as to when that might take place.

The latest inflation data in the US, released yesterday, showed core inflation, which strips out changes in food and energy, rising by 0.3 percent in November with the annual rate remaining flat at 4 percent. This was taken as another indication that the Fed could not have confidence that inflation was coming down and would not be able to shift to an easing stance.

The key question for the central banks’ governing bodies, as it has been from the start of the so-called “fight” against inflation that began around 18 months ago, is wages. At first there was an attempt to cover over this objective, but it is now out in the open.

As the Financial Times noted, the three central banks are preparing to push back against investor predictions of falling interest rates because they “have signaled they want clearer evidence of weakening labour markets before cutting rates.”

That evidence is not yet at hand. In the US, a stronger-than-expected labour market report last Friday showed that the unemployment rate had fallen to 3.7 percent. In the eurozone, the unemployment rate remains close to a record low of 6.5 percent amid data which show unit labour costs rising at the fastest since they started to be collected in 1995.

While wage increases are less than inflation, and do not make up for the past cuts, they are still too high as far as far as the ECB is concerned. Last week, ECB board member Isabel Schnabel, regarded as an inflation “hawk,” said it was “going to watch upcoming wage agreements very closely” as they “will certainly also matter for our monetary policy decisions.”

At the beginning of the month, Fed chair Jerome Powell said it would be premature to conclude with confidence that the central bank had reached a sufficiently restrictive interest rate or to “speculate on when policy might ease.”

A few days earlier, the president of Germany’s central bank, Joachim Nagel, had pitched the same theme declaring: “It would be premature to lower interest rates soon or to speculate about such steps.”

However, the clamour in financial markets for monetary policy easing continues. They consider that the Fed and other central banks are going to be forced to act. As is always the case, there are two psychological motivations at work, greed and fear.

There is the hope that a cut in rates will open the way for a resumption of the vast accumulation of wealth that took place when interest rates were at historic lows and fear that if rates are not cut there will be major consequences.

Data on financial markets conditions point to this.

A report this week on Bloomberg, based on research by Oxford Economics, said the amount of maturing US corporate debt is set to double in the next two years, reaching around $1 trillion in 2025, and will triple in the eurozone to the equivalent of $400 billion.

According to Curtis Dubay, chief economist at the US Chamber of Commerce: “Any business that has a loan they took out pre-2022 is now going to be facing higher refinancing rates.” He said there was a “lot of financial tightening occurring” because of the Fed’s past actions—lifting interest rates to their highest levels in 22 years—and this was one reason why he saw the economy slowing in 2024.

Companies that have issued debt at below investment grade, during the period of ultra-low rates, are regarded as particularly vulnerable.

The recent collapse of the Austrian property group Signa, which owned Selfridges in London and the Chrysler building in New York, could well be a sign of things to come. The company had a property portfolio of $29 billion and racked up around €13 billion in debt when borrowing costs were next to nothing.

In the words of one European property executive regarding Signa chief René Banko: “He gorged himself on cheap financing, left, right and centre.”

However, Banko was just an extreme example of what was a universal process. Now the chickens are now coming home to roost as a recent report in the Financial Times makes clear.

Alex Knapp, the chief investment officer at the $100 billion global real estate investor Hines, told the FT: “The scale of the cyclical reset in terms of real estate valuations is as big as the early 1990s or the global financial crisis. This is a big one, if that wasn’t obvious.”

As the FT reported: “Tom Leahy, executive director at MSCI research, estimated in September that about 50 percent of London’s commercial real estate assets are now worth less than what they were acquired for. New York fared relatively better, with just a fifth under water.”

The collapse is marked in Europe where, according to one analysis reported in the FT, more than €3.3 billion worth of UK and European office buildings failed to sell after being put on the market, including the Commerzbank Tower in Frankfurt. The firm conducting the survey said its list was probably just “the tip of the aborted sale iceberg.”

One of the areas in the US most heavily impacted by the higher interest rate regime is high-tech start-up firms. As the New York Times pointed out in a recent article, WeWork, which raised more than $11 billion in public funding, Olive AI, a health care start-up which raised $852 million, Convoy freight start-up, $900 million and Veev a home construction start-up, $647 million, had all filed for bankruptcy or shut down in the past six weeks.

It reported that around 3,200 private venture-backed companies had gone out of business this year after raising $27.2 billion in funding amid what it called “an astonishing cash bonfire.”

These issues will not feature in the comments and statements emanating from the central banks over the next few days—one of their tasks is to “talk up” the economy and the financial system and maintain they are “sound and resilient.” But it is certain they will come up in the closed-door discussions.

Australian working class confronts deepening social and housing crisis

Vicki Mylonas

Household living standards across Australia have fallen to 2014 levels, according to data released by the Australian Bureau of Statistics (ABS) earlier this month. Per capita household disposable income fell 6.6 percent in real terms in the year ending September, following a 3.8 percent decline in the 12 months to September 2022.

Workers queuing outside an inner-western Sydney Centrelink office in early 2020.

The dire situation confronting workers in Australia is part of a global assault on living and working conditions amid an escalating crisis of capitalism. Along with its counterparts worldwide, the Labor government is carrying out a war on the working class at home, in part to finance spiraling military budgets in preparation for global conflict led by US imperialism.

Economics journalist for the Guardian, Greg Jericho, explained that “one of the biggest reasons for the decline” was the removal of the low-middle income tax offset (LMITO), which slugged most workers with a $1,500 tax increase. While the decision to ditch the LMITO was made under the previous Liberal-National government (with bipartisan support), the targeted attack against the working class was carried out by Labor.

The tax hike comes on top of soaring inflation, declining real wages and repeated interest rate rises. Consumer prices rose 1.2 percent in the September quarter and 5.4 percent over 12 months. The largest annual increases were in automotive fuel (7.9 percent), utilities (12.6 percent) and housing (7.0 percent). Rental prices rose 7.6 percent over the year, the largest increase since 2009.

The soaring cost of groceries and falling real wages have produced vast rewards for the major supermarket chains, which have increased their profit margins to record highs. In the 2023 financial year, Woolworths posted profits of $1.62 billion, up 4.6 percent year-over-year, while Coles reported a 4.8 percent rise to $1.1 billion.  

While workers struggle to afford housing, the banks have reaped record profits. In total, Australia’s “big four” banks reported $32 billion after-tax profits in the 2023 financial year, 8.2 percent higher than in 2022.

Through the imposition of 13 interest rate hikes since May 2022, the Reserve Bank of Australia (RBA) has, with the full support of the Labor government, increased the cash rate to 4.35 percent. As a result, home ownership is being pushed ever further out of reach of the working class and becoming a “preserve of the rich,” as the head of one of Australia’s major banks recently noted.

While house prices have increased 6 percent per year since 2000, wages have risen by a paltry average of 3-4 percent annually. As a result, the median house price to income ratio is now greater than 7:1, well over the 5:1 level considered “severely unaffordable.”

This hasn’t stopped the head of the RBA, Michele Bullock, declaring that households are, overall, doing fine and that Australians are coping with interest rate hikes. She declared: “What I’d like to highlight here is though, despite that noise, households and businesses in Australia are actually in a pretty good position. Their balance sheets are pretty good.”

Bullock’s claim that Australians have built up large “savings buffers” flies in the face of ABS figures showing the household saving to income ratio has declined from 7.0 percent in September 2022 to just 1.1 percent 12 months later, the lowest level in almost 16 years.

Recent research from financial comparison site, Finder, reveals that 37 percent of homeowners and 44 percent of renters are struggling to make housing payments. Almost 80 percent of the more than 50,000 people surveyed are “extremely or somewhat stressed” about their finances. In November 2020, just 45 percent felt this level of financial pressure, with 18 percent of homeowners struggling to make repayments.

Charity organisation, St Vincent de Paul Society, reported a 40 percent annual increase in requests for assistance, stating that: “Currently, there are 761,000 children whose families lack adequate food and struggle to pay essential household bills.”

As workers have struggled to keep up with the rising cost of basic essentials, they have slashed their spending on discretionary items, with consequences for the economy more broadly.

Westpac senior economist Andrew Hanlan noted that the data showed that Australian households and the economy have “hit the wall,” with the Australian economy “almost” coming to a “standstill in the September quarter.” Consumer spending stalled, real disposable income collapsed and, had it not been for the COVID-related backlog in new car deliveries, consumption would have been even lower. 

The Australian economy grew just 0.2 percent in the September quarter and 2.1 percent annually, according to the ABS. This is down from the June quarter when the economy grew by 0.4 percent.

If population growth is excluded from the figures, the GDP actually fell by 0.5 percent, the third consecutive quarter in which the economy has contracted on a per-capita basis. This has not taken place since the 1982-83 recession. 

Jericho was blunt in his assessment: The economy is struggling “mightily” and the GDP numbers released by the ABS are “not good.” What little growth occurred was from “change in inventories,” resulting from lower-than-expected sales, meaning that a greater fall is likely to follow as companies reduce orders.

The Labor Government, despite these dire figures, continues to remain “optimistic” about the future of the Australian economy, with Treasurer Jim Chalmers, stating that “welcome and encouraging progress is being made on the economy, even as it slows in expected ways.”

Ordinary working people do not share Labor’s “optimism” however. In the latest Guardian Essential poll, a mere 26 percent of respondents said 2023 had been a “good year” for their families, and only 24 percent believe next year will be better.

Just 34 percent of respondents said they trust the federal Labor government, while a majority said more needs to be done to increase wages (61 percent) and housing affordability (76 percent) and reduce energy prices (77 percent) and grocery prices (76 percent).

Less than one third of respondents rated Prime Minister Anthony Albanese favourably, down from 47 percent in February.

Conscious of mounting opposition to Labor and the entire political establishment, the Australian Council of Trade Unions (ACTU) issued a media release last week defending the government.

The ACTU claimed the ABS data “confirmed that the Albanese government is easing the cost of living for working families, with wages starting to rise.”

In fact, wages “grew” just 4 percent in nominal terms over the year to September 2023, while inflation measured 5.4 percent. Real wages are falling, not growing. This is a direct result of Labor policy, expressed sharply in sub-inflationary pay increases throughout the public sector and for those dependent on federal award rates, and the role of the unions themselves. 

Functioning as an industrial police force of corporations and governments, the unions have repeatedly shut down or prevented industrial action by workers, driving down wages and conditions through one sell-out enterprise agreement after another.

Union Pacific railroad lays off 1,300 maintenance of way workers

Leon Gutierrez

Union Pacific maintenance of way worker. [Photo: Union Pacific]

Union Pacific is laying off around 1,350 of its maintenance of way employees, reducing its total workforce to almost half of what it was seven years ago, according to a letter to federal regulators written by the Brotherhood of Maintenance of Way Employes (BMWED).

The layoffs at Union Pacific, one of six remaining Class I railroads in the United States, are part of a years-long attack on jobs by the railroads, which have become the most profitable industry in the country through massive levels of exploitation. Last year’s ban on a national strike passed by Congress with bipartisan support, including “left” Democrats such as Bernie Sanders and Alexandria Ocasio-Cortez, amounted to a blank check to the railroads to continue slashing spending to the bone, endangering both the workforce and the public at large.

A letter from BMWED President Tony Cardwell to Martin Oberman, chairman of the federal Surface Transportation Board dated November 22, says that the planned furloughs will reduce the railroad’s maintenance of way workforce to 4,737, compared to 6,078 in September and 8,791 in July of 2015. With these layoffs, the ratio of employees to miles of track will have increased from one worker for each 6.45 miles of tracks in 2016 to over 11 miles per track.

While Union Pacific has claimed that the furloughs are temporary and that the workers affected will return in January, the BMWED said in its letter that in reality the company “has not guaranteed” this. “Moreover, Union Pacific has yet to confirm a work program for 2024.”

Management has explicitly told BMWED that the layoffs are purely a financial decision. “Simply put, unforeseen, large-scale service interruptions greatly accelerated our spend through the first three quarters of the year,” an email from management stated. “The need to balance the workforce was not readily apparent until very recently, thus leadership made the difficult decision to push a number of projects into 2024.”

In a statement announcing its third quarter results on October 19, Union Pacific reported a decrease in net profits and total revenues, bringing an operating income of about $2.2 billion, a 17 percent decrease, and an overall operating revenue of $5.9 billion, or a 10 percent decrease compared to the Third Quarter earnings in 2022. However, 2022 was the most profitable year ever for the railroad, in spite of the possibility of a national strike looming until late November.

Union Pacific CEO Jim Vena blamed the results as due to inflation and lower carload volume. “We faced many challenges in the quarter, including continued inflationary pressures and a drop in carloads,” he said, adding, “through our day-to-day actions, we will continue to make improvements as we exit the year.” In other words, cuts to maintenance and other critical spending.

In its letter, the BMWED requested the Surface Transportation Board to “use [its] authority to continue challenging Union Pacific on this matter.” In reality, as the BMWED bureaucracy knows perfectly well, the STB will continue to “use its authority” to allow Union Pacific to do whatever it wants, perhaps covering its tracks with a handful of meaningless public hearings.

The BMWED letter was sent only a few days before the one year anniversary of Congress’ strike ban, passed at the request of the Biden administration. The strike law imposed a contract that workers themselves had already rejected, which was modeled after a report from a White House-appointed Presidential Emergency Board, and which resolved none of workers’ demands, especially dramatic overwork that has pushed tens of thousands out of the industry in only a few years.

It amounted to a declaration that the management can continue to drive the railroads into the ground in order to maximize profits, secure in the knowledge that the government will use its authority to shield them from the consequences, including by ripping up the right to strike.

Job cuts continued almost immediately after the ban was imposed. Three Class I railroads, including Union Pacific, announced pilot programs to implement one-man crews on their trains, a longstanding industry goal which would effectively eliminate the conductor position. Barely a month later, BNSF announced it was outsourcing locomotive maintenance work out of the bargaining unit to third parties, in flagrant violation of the contract. In the spring, the Biden administration slashed railroaders’ unemployment and sickness benefits in response to the impending government debt ceiling.

Meanwhile, the deteriorating physical conditions of railroad infrastructure as a result of cost-cutting has resulted in accidents becoming routine, with an average of three derailments every day in the United States. The consequences of this were graphically exposed in the East Palestine, Ohio disaster, where a derailed train carrying toxic chemicals poisoned an entire town. Norfolk Southern was backed from the start by the government, including its decision to conduct a dangerous “controlled burn” in order to reopen the tracks as quickly as possible.

Such disasters continue. Last month, Kentucky declared a state of emergency after a CSX freight train of about 15 cars derailed and two breached railcars caused a chemical spill of sulfur and injured one worker. The derailment impacted over a dozen homes, which CSX claimed they would temporarily house for the cleanup.

The ability of the railroads, with the backing of the government, to act with impunity depends upon the crucial role of the trade union bureaucracy in suppressing all forms of opposition from workers. The strike ban last year was preceded by two months of delays, in which the bureaucracy sought to buy time for Congress until after the midterm elections to pass the legislation.

UK government snubs key NATO ally Greece over stolen Parthenon sculptures

John Vassilopoulos

A diplomatic row erupted last month between Britain and Greece after UK Conservative Prime Minister Rishi Sunak cancelled a meeting with his Greek counterpart Kyriakos Mistotakis, head of the ruling conservative New Democracy Party (ND).

The meeting was scheduled to take place in London on November 27 but was cancelled at the last minute over comments Mitsotakis had made the day before to BBC journalist Laura Kuenssberg regarding the statues and friezes known as the Parthenon Marbles, or Elgin Marbles in the UK. The artefacts were part of the Parthenon temple, situated on a hill overlooking Athens, that was built in the fifth century BC in dedication to the Ancient Greek goddess Athena.

They were removed from the Parthenon in the early 1800s by Lord Elgin, Britain’s ambassador to the Ottoman Empire, who ultimately sold them to the British government in 1816. They have been in the trusteeship of the British Museum since.

Statues from the Elgin Marbles at the British Museum [Photo by Chris Devers / Flickr / CC BY-NC-ND 2.0]

Greece has campaigned for their return since the 1830s, after the country secured independence from the Ottomans. In the interview, Mitsotakis likened their removal to “cut[ting] the Mona Lisa in half and you would have half of it at the Louvre and half of it at the British Museum.”

Sunak told reporters, “It’s very clear, as a matter of law, the marbles can’t be returned, and we’ve been unequivocal about that. I think the British Museum’s website itself says that in order for the loans to happen the recipient needs to acknowledge the lawful ownership of the country that’s lending the things and I think the Greeks have not suggested that they are in any way shape or form willing to do that. Our view and our position on that is crystal clear: the marbles were acquired legally at the time.”

Doubling down on its snub, Downing Street said that Mitsotakis could meet with Deputy Prime Minister Oliver Dowden instead—an insult turned down by Mitsotakis.

Speaking to parliament on November 29, Sunak accused the Greek prime minister of wanting “not to discuss substantive issues for the future, but rather to grandstand and relitigate issues of the past,” claiming, “Specific assurances on that topic were made to this country and then were broken”.

Talks have in fact been going on in the background since 2021 after UNESCO called on Britain to resolve the issue. With his Tory Party trailing 20 points behind Labour in the polls, a leadership challenge brewing and a general election looming next year, it was Sunak who decided to grandstand on a nationalist platform.

Mitsotakis’ actions were no more progressively motivated, intended to whip up his own right-wing constituency. They found a response in the front page of the fascistic Eleftheri Ora, which greeted Sunak’s snub with an English headline that read, “Fuck You Bastard.”

Sunak’s buffoonish jingoism notwithstanding, negotiations between the Greek government and the British Museum have been fraught. Mitsotakis told Kuenssberg, “We have not made as much progress as I would like”. The sticking point has always been Britain’s position that the marbles were legally removed by Elgin, who claimed that he was granted permission to do so by the Ottoman authorities. This was not accepted by many even at the time, most famously British poet Lord Byron, who denounced Elgin’s actions in his poem “The Curse of Minerva”.

Such was the controversy that the British government felt it necessary to convene a parliamentary inquiry in 1816, which duly concluded that Elgin had acquired the marbles legally. This was reinforced in 1963 by the passage of the British Museum Act forbidding the museum from disposing of its holdings except in a very small number of instances.

To gloss over the fact that most of the artefacts on display are the fruits of imperialist plunder, the British Museum has postured as a benign custodian of cultural treasures that would otherwise have fallen into ruin in their home countries.

In the case of the Parthenon Marbles, this arrogance is belied even by the manner of their removal, which caused structural damage to the Parthenon as well as to the marbles. In a letter to Elgin, the Italian painter Giovanni-Battista Lusieri, who was overseeing the operation, wrote, “I have been obliged to be a little barbarous”. Further damage was inflicted to the sculptures in the 1930s after they were cleaned with an acid solution.

The “benign custodian” narrative has been further undermined by the Museum’s being allowed to fall into disrepair, with frequent leaks from the roof in the galleries housing the Greek and Assyrian exhibits. Following the 2008 financial crisis, the museum’s budget was cut by 30 percent.

The stand taken on the marbles creates problems for British imperialism. Many museums in Europe are actively engaged in returning artefacts to their countries of origin, animated by geopolitical considerations. An article two years ago in The Art Newspaper commented, “The restitution debate has afforded certain governments a new way of establishing themselves through diplomatic links and geopolitical influence, a particularly cultural form of ‘soft power’.”

This “soft power” is seen by the imperialist governments as an important means of maintaining good relations with their Greek client state. By virtue of its proximity to the wars raging in Ukraine and Gaza, and as a member of the alliance, Greece forms an integral part of NATO’s war efforts. The country ranks as the highest military spender by proportion of GDP among NATO members, spending 3.54 percent of GPD last year, even higher than the United States’ 3.46 percent.

Greece is also at the forefront of the European Union’s war against migrants, employing barbaric “pushback” tactics and abandoning people in distress to the sea, resulting in the deaths of hundreds of refugees and migrants. The UK is engaged in its own fascistic “Stop the Boats” campaign. In her interview with Mitsotakis, Kuenssberg remarked, “Not so long ago, Suella Braverman, who was the Home Secretary until recently, visited Samos in the Aegean Sea, and she said she felt the UK had a lot to learn from Greece.”

Sunak’s diplomatic stunt prompted concerns that these partnerships were being undermined. The heavily pro-Tory Daily Telegraph cautioned that Sunak “could have taken the opportunity to spell out his position without a diplomatic breach.”

Labour leader Keir Starmer again presented himself as a safer pair of hands for British imperialism, stating in parliament, “The Greek prime minister came to London to meet him, a fellow NATO member, an economic ally, one of our most important partners in tackling illegal immigration. But instead of using that meeting to discuss those serious issues, he tried to humiliate him and cancelled at the last minute. Why such small politics, Prime Minister?”

Even King Charles subtly intervened, opting to wear a tie incorporating the design of the Greek flag while addressing the COP28 summit last week, interpreted as a signal of his support for the deal being negotiated between Greece and the British Museum.

Addressing the proposed “Parthenon Partnership” in a speech last month, Chairman of the Trustees at the British Museum George Osborne (chancellor under Prime Minister David Cameron), described “an agreement with Greece” for at least some of the British Museum’s sculptures “to be seen in Athens” in return for “other treasures from Greece, some that have never left those shores, to be seen here at the British Museum”.

The British Museum, he said, was seeking a deal which “requires no one to relinquish their claims, asks for no changes to laws which are not ours to write, but which finds a practical, pragmatic and rational way forward”.

A similar deal was reached last year between the Greek government and the Metropolitan Museum of Art in New York over the private Cycladic Art collection of New York City-based billionaire Leonard Stern.

Composed of 161 Neolithic and Bronze Age figurines from the Cyclades islands in the Aegean, the deal stipulates that the artefacts will be displayed at the Met for a period of 25 years, with the collection gradually being relocated to Greece between 2033 and 2048 in exchange for loans of other antiquities. Meanwhile ownership of the antiquities will be held by a non-profit entity set up by the Athens-based Museum of Cycladic Art in the US tax haven of Delaware under the name of the Hellenic Ancient Culture Institute, HACI.

The deal has been slammed in Greece and internationally because it has excluded any oversight by archaeologists over the artefacts. The illicit trade and forgery of Cycladic art is rife. Writing in Kathimerini last year, archaeologist and former UNESCO official Maria Andreadaki-Vlazaki said the Stern collection deal “not only legitimizes the collection, it also certifies its authenticity, without any proper evidence.”

These concerns were substantiated by Christos Tsirogiannis, a forensic archeologist and head of UNESCO’s Working Group on Illicit Antiquities Trafficking, who has traced one of the artefacts back to Sicilian art dealer Gianfranco Becchina, convicted in 2011 of dealing in illicit antiquities from Greece and Italy.

The Parthenon deal will likely be watered down even further; Starmer has also signalled that a future Labour government will uphold the 1963 British Museum Act. Given that the question of ownership will be bypassed altogether, any agreement will likely involve leasing the marbles to Greece in exchange for antiquities as collateral to be displayed in the British Museum.

Greek Culture Minister Lina Mendoni responded by declaring that “reunification of the Parthenon sculptures through lending or leasing is out of the question.”