Labor’s cuts threaten thousands of jobs in Australian universities

Mike Head

The Australian Labor government’s deep cuts to international student enrolments, on top of Labor’s continuation of years of chronic underfunding of universities, threaten to destroy thousands of educators’ jobs.

Economic modelling commissioned by the University of Sydney estimates that the expected cut to international student numbers by 63,500 next year will create a $1.1 billion revenue black hole and cause 21,922 direct and indirect job losses in 2025.

National Tertiary Education Union members rally in Canberra on May 11, 2023 [Photo: @NTEUACT]

The government not only plans to impose punitive university-by-university caps on international student numbers from next year, it has cut student visa approvals by a third over the past year, and last week more than doubled international student visa fees from $710 to $1,600.

In the year to April 30, the number of visas approved fell to 306,000, from the 465,500 approved up to April 2023. Universities Australia, the managements’ umbrella body, said its members are already facing a $500 million shortfall in funding this year due to the visa crackdown.

Acting in bipartisan unison with the Liberal-National Coalition, Prime Minister Anthony Albanese’s government is making overseas students and immigrants scapegoats for the intensifying cost-of-living, housing and social crisis that is causing immense financial stress throughout the working class. It has vowed to halve immigration, including student arrivals, to 260,000 in 2024-25.

University managements are wasting no time in moving to slash jobs. So far, Federation University, a regional institution in Victoria, has said it will axe 200 staff on the way to shedding 20 percent of its employees. The University of Tasmania has instituted a jobs freeze, and both La Trobe and Wollongong universities have warned staff of looming cuts to courses, subjects and jobs.

These moves highlight how much is at stake at Western Sydney University (WSU). A rank-and-file campaign is being developed there to fight the management’s plan to restructure WSU College, the university’s wholly-owned feeder college, at the overall cost of nearly 19 educators’ and learning coordinators’ jobs, or about 10 percent of the total. If not defeated, the pro-business restructuring of WSU College will set a precedent across the tertiary education sector.

Despite objections by university managements, Labor is pushing ahead with its Education Services for Overseas Students Amendment (Quality and Integrity) Bill 2024, which would give the education minister unprecedented political powers to cap international student enrolments and scrap courses.

According to the bill, the minister could cancel international enrolments and/or courses on the basis of “systemic quality issues,” or providing “limited value to Australia’s current, emerging, and future skills and training needs and priorities” or because it is in the “public interest to do so.”

Such vague and arbitrary language essentially means tying enrolments and funding to the narrow vocational demands of employers and the corporate elite as a whole, as well as other government “priorities.” These include military preparations, such as the AUKUS nuclear submarines and weapons program, for a US-led war against China.

In its submission on the bill, the University of Sydney said any cuts to foreign enrolments would have “very damaging flow-on consequences,” pointing out that it and the other “Group of Eight” elite universities take more than 30 percent of their total revenue from international student fees.

Likewise, the University of Melbourne said enrolment caps would lead to “disruptive job losses and course cancellations as early as next year.” The Regional Universities Network warned any reduction in its international enrolments would result in the “loss of regional university jobs [and] the closure of regional campuses.”

The National Tertiary Education Union (NTEU), which covers most university educators, is seeking to divert the blame for the job destruction solely onto the university managements and away from the Labor government.

NTEU national president Alison Barnes told the media she was “deeply concerned” that the managements might be weaponising the federal migration policy as an “excuse to threaten staff and students with decisions that damage universities.” She claimed it was “premature” and “cruel” to warn of job losses because the government’s policy details were not finalised.

In reality, the cuts to student visas are already biting, and the reactionary thrust of Labor’s measures is clear.

Labor’s attacks on international students are so financially damaging because successive governments, Labor and Coalition alike, have slashed funding and pushed universities into relying on international students as cash cows, charging them exorbitant fees, in order to operate.

A report last July calculated that federal government funding for universities, excluding the fees loan system that students must repay after graduation, fell from 0.9 percent of gross domestic product (GDP) in 1995 to 0.6 percent in 2021. That amounted to a $6.5 billion funding reduction in 2021, equal to almost half (46.5 percent) of current higher education funding.

This decline began in 2011‒12, during the “education revolution” instigated by the Rudd and Gillard Labor governments. Moreover, since 1995, private sources had doubled as a share of university revenue—increasing to 43 percent by 2019. Thus, the nominally “public” universities have become substantially privatised, while casualising their workforces and ramping up class sizes.

Despite the NTEU and other trade union apparatuses promoting illusions that a Labor government would reverse this historic assault, the opposite is occurring. In a media release, Barnes hailed the government’s May budget this year as “a first step on the road to major reform universities desperately need.”

Barnes highlighted the government’s headline claim that the budget earmarked $1.1 billion in funding over the next five years to implement recommendations from the Universities Accord. First of all, however, this figure camouflages the ongoing cut to funding, which Labor’s first budget, in October 2022, would decrease by more than 9 percent in real terms from 2021–22 to 2024–25.

At the same time, the Universities Accord proposes to tie funding, via individual university “mission statements” to the reshaping of tertiary education to satisfy the employment and research needs of big business and the preparations for war, such as the AUKUS military pact against China.

While starving the universities of funds, the Labor government is pouring hundreds of billions of dollars into military spending and backing the US-armed Israeli genocide in Gaza and the US-NATO war against Russia in Ukraine.

The NTEU bureaucrats have a long record of suppressing educators’ hostility to the increasing corporatisation of universities, even when they claim to oppose it. While striking regressive enterprise bargaining deals with university managements, all designed to assist restructuring, the NTEU machine has repeatedly blocked any unified mobilisation against it.

New Popular Front carries French snap elections as hung parliament emerges

Kumaran Ira & Alex Lantier

Jean-Luc Mélenchon’s New Popular Front (NFP) emerged as the winner of the second round of the French snap elections last night. The NFP carried 182 seats in the 577-seat National Assembly, against 168 for President Emmanuel Macron’s Ensemble coalition and 143 for the far-right National Rally (RN). Final turnout was 67 percent, the highest in the second round of legislative elections since 1997 and over 20 percent higher than the 2022 legislative elections.

Jean-Luc Mélenchon, center, delivers a speech while Daniele Obono, second right, gestures, after the second round of the legislative elections Sunday, July 7, 2024 in Paris. [AP Photo/Thomas Padilla]

The result, bucking media expectations of an RN victory, testifies to the left-wing sentiment and the rejection of neo-fascism among broad layers of workers and youth in France.

It is a debacle for Macron, who throughout his presidency has claimed to be leading a fight against the far right. In reality, he has ruled systematically against the will of the people. His party has been relegated to a rump in the National Assembly as 70 percent or more of the population opposes his illegitimate pension cuts, which he rammed through without a vote last year, and his call to send French troops to Ukraine to fight Russia.

Minutes after the results were announced at 8 p.m. yesterday, Mélenchon spoke on national television, appealing to Macron to call upon the NFP to form a government. “The president has the duty to call the New Popular Front to govern,” Mélenchon said, hailing voters for having “’won a result that was said to be impossible.”

“The majority has made another choice for the country,” Mélenchon added, arguing that “the will of the people must be confirmed. … The president must give in.”

Mélenchon claimed the NFP would apply “its program, only its program, but all of its program.” Measures like repealing Macron’s reform raising the retirement age to 64, stopping price increases by fixing prices for key goods, and raising the minimum wage “can be taken by decree, without a vote,” he said.

Before the result was announced, Macron held a meeting at the Élysée presidential palace with Prime Minister Gabriel Attal and leaders of his Ensemble coalition. Earlier, it had been reported that either Macron or Attal would speak after the election results were announced. Afterwards, however, the Elysée palace reported that Macron would not be speaking Sunday evening and was “taking note of the results of these legislative elections as they come in, constituency by constituency.”

Macron will wait for the “structuring” of the new Assembly before “taking the necessary decisions,” the Elysée announced, including deciding who to name as a new prime minister to try to assemble a parliamentary majority. Attal later issued a statement to the press declaring that he is willing to stay in power “as long as duty will require it.”

The Elysée also reported that Macron will delay by one day, but not cancel his trip to Washington to attend a NATO war summit starting tomorrow. At the NATO summit, imperialist warmongers like Macron will discuss how to escalate the war against Russia while intensifying the attacks against the working class to finance the war economy. Macron, despite his election debacle, clearly intends to continue ruling against the people.

Today, Macron asked Attal to “remain as prime minister for the moment,” supposedly to “ensure the stability of the country.” Thus Macron will fly to Washington to continue NATO war plotting as a representative of a government that is rejected by the French people.

Last night, RN leader Marine Le Pen spoke on TF1 television to state that her party had suffered only a temporary setback and pledged that neo-fascism would one day rule France. She said, “The tide is rising. It did not rise high enough this time, but it is continuing to rise and, consequently, our victory is only delayed. I have too much experience to be disappointed by a result which allows us to double the number of seats we have,” citing a result that made the RN “the first party” in terms of the number of seats.

Frustration exploded at RN election headquarters, however, as RN officials issued foul-mouthed threats and denunciations of the French people for not electing them. “The French people are assholes, it’s a people of idiots!” one told the media, while RN legislator Julien Odoul said: “They will pay the price of this act of submission. They will pay the price of this non-choice.”

But the electorate has spoken against fascistic-authoritarian rule and the hated policies of Macron. The will of the overwhelming majority of the people that works for a living—repeatedly trampled underfoot by Macron and his right-wing allies—must be done. The war escalation against Russia and the genocide in Gaza must be stopped, Macron’s pension cuts and other austerity measures must be repealed, and the police-state dictatorship of the banks that he has imposed must be dismantled.

While the election marks a setback for the RN—that, like previous setbacks, will likely lead to criticisms in the RN of Marine Le Pen’s refusal to openly promote the heritage of French fascism and to advocate street violence—the RN has established itself as a significant force.

According to official French Interior Ministry figures, the RN led in absolute numbers of votes with 8.7 million, followed by 7 million for the NFP, and 6.3 million for Ensemble. There were 1.6 million blank or spoiled ballots, and 1.5 million votes for the right-wing The Republicans (LR) party. The NFP vote fell and Ensemble rose because the NFP largely favored Ensemble in tactical voting deals to block RN candidates: the NFP withdrew its candidates to back Ensemble candidates in 125 constituencies, while Ensemble supported NFP candidates in only 80.

Within the NFP, moreover, Mélenchon’s electoral negotiations gave away substantial positions to longstanding parties of capitalist government that support war with Russia and denounce opposition to the Gaza genocide as “anti-Semitism.” While Mélenchon’s own France Unbowed (LFI) party carried 72 seats, the big-business Socialist Party (PS) 65, the Greens 34, and the French Communist Party (PCF) 9 seats. The Pabloite New Anti-capitalist Party (NPA) did not win any seats.

Within the NFP, forces around the PS are calling for the NFP to make far-reaching concessions to Macron, because they in fact support his reactionary policies. Raphaël Glucksmann, who denied that a genocide is underway in Gaza while he led the PS campaign in the European elections this spring, told the media: “We are in a hung parliament and therefore we will have to act like adults, that is, we will have to talk, to discuss, to engage in dialogue, to get beyond ourselves.”

West Nile fever epidemic in Israel

Benjamin Mateus

Israel is seeing the largest outbreak of West Nile fever in almost a quarter-century. Case numbers are up 400 percent from the same period last year. Thus far, at least 175 people have contracted the mosquito-borne virus and at least 11 people have succumbed to the infection, according to the Israel Ministry of Health.

This initial stage compares to the entire length of the 2000 outbreak, when serological testing confirmed 439 cases with 29 fatalities.

The virus that causes West Nile fever is a single-stranded RNA virus, from the genus Flavivirus that also includes the Zika virus, dengue virus, and yellow fever virus. Birds are the primary hosts of the West Nile virus. Humans and horses both exhibit disease symptoms from infection, but there are only vaccines available for horses at present. Treatments for infected people are supportive only. Humans can’t transmit the virus to each other, except in rare cases through blood transfusions, organ transplants or from a mother to her infant during her pregnancy, delivery or while breastfeeding.

Artwork featuring a female Culex quinquefasciatus mosquito—which transmits West Nile virus (image courtesy of CDC), Culex mosquito larvae(image courtesy of CDC), a cryo-EM reconstruction of West Nile virus (courtesy of NIH 3D Print Exchange), and a transmission electron micrograph of West Nile virus particles (orange) replicating within the cytoplasm of an infected VERO E6 cell (blue), captured at the NIAID Integrated Research Facility (IRF) in Fort Detrick, Maryland. [Photo by NIAID and CDC / CC BY-SA 2.0]

About 20 percent of infected individuals will exhibit symptoms of fever, headache, vomiting or a rash. One percent will go on to develop inflammation of the brain and spinal cord that can lead to neck stiffness, confusion and even seizures. Once the infection involves the nervous system, fatality rates rise to about 10 percent. Recovery can take weeks or months.

Typically, outbreaks occur during the late summer months, a byproduct of rising temperatures and humidity. However, given the recent acceleration of heat waves, together with torrential rains and flash floods becoming commonplace, outbreaks of vector-borne viruses like West Nile, malaria, Zika, and dengue are occurring earlier than expected.

Professor of molecular virology Roger Hewson, at the London School of Hygiene and Tropical Medicine, told the Telegraph, “Israel’s hot and humid summers create an ideal environment for mosquitoes to breed and proliferate. These conditions [climate change] can extend the mosquito breeding season and increase their populations, thereby enhancing virus transmission rates.”

The West Nile virus was first isolated in 1937 from a woman in the West Nile region of Uganda. The earliest documented outbreak occurred in July 1951 in an agricultural communal settlement of Maayan Zvi near Haifa, Israel. For decades afterward, most West Nile fever epidemics had occurred in Israel or Africa.

However, due to globalization and mass travel among the world’s population, the epidemiology of the West Nile vector-borne disease rapidly shifted by the 1990s. In a recent report on the West Nile virus (WNV), the authors wrote, “WNV was first detected in New York City in 1999 and subsequently spread rapidly throughout the entire Western Hemisphere, including the United States, Canada, and Argentina. Concurrently, epidemic activity increased in Europe, the Middle East, and Russia.”

They added, “In 2018, Europe experienced an unprecedented WNV epidemic, with human cases exceeding 1,900, seven times higher than in previous seasons. In 2020, locally transmitted cases of WNV were reported for the first time in the Netherlands and Germany. Evidence suggests interactive WNV cycles on all continents except Antarctica.”

Notwithstanding the impact climate change and globalization have had on the emerging rates of infectious diseases and threats posed by pandemic potential pathogens, there is an additional factor of concern in relation to the current outbreak of WNV in Israel. It coincides with the genocidal campaign that has seen Gaza’s infrastructure decimated. Health authorities have cited possible direct and indirect links between the outbreak and the ongoing assault on the Palestinian enclave.

Most of the WNV cases have occurred in Tel Aviv, Petah Tikva and Kiryat Ono, located within 80 kilometers of the Gaza border. As a November 2023 article in the Jerusalem Post noted, “It is important to note that many nature areas in the South have recently turned into military positions. These locations produce waste and stagnant water, which are ideal breeding grounds for mosquitoes. Moreover, due to the war, there has been a lack of treatment for breeding areas in the South, allowing the mosquitoes to thrive.”

Furthermore, the complete mobilization of all of Israel’s resources to prosecuting this campaign of annihilation also means funds for public health measures are being diverted at the population’s peril. Professor Hewson noted, “Disruptions caused by conflict can exacerbate poor living conditions, leading to inadequate waste management and increased standing water. [The] conflict strains public health resources, making it harder to control mosquito populations effectively and respond promptly to outbreaks.”

There has as yet been no mention of the implications of the WNV outbreak for the 2 million and more Gazans who are trapped in the enclave under conditions where the entire infrastructure has been demolished and access to healthcare, food, water and shelter are nonexistent. There is no way to implement standard public health precautions such as preventing formation of standing water and widespread use of mosquito repellent.

Gaza has become a breeding ground for infectious diseases, with the entire population made vulnerable to large scale epidemics of not just WNV, but flu, pneumonia, bacterial dysentery, cholera, polio, measles and meningitis.

The International Rescue Committee (IRC) noted in mid-April that even if an immediate ceasefire were implemented, they expected nearly 12,000 people would lose their lives in Gaza as a result of disease. And if the genocidal campaign persisted, nearly 90,000 could die of secondary health impacts.

Dr. Seema Jilani, Senior Health Technical Advisor for Emergencies, observed, “With Gaza’s health system decimated by Israel, diseases once easily controlled are now spreading, and children, especially malnourished children, are the most susceptible. Projections suggest that the spread of cholera, measles, polio, and meningococcal meningitis pose a mortal threat … Immunity, previously ensured thanks to high levels of vaccination, is now decreasing especially among children and babies, who have now missed multiple doses of key vaccines including Hepatitis B, polio, and rotavirus.”

Jilani added, “Respiratory infections and other endemic infectious diseases are currently widespread due to exposure, overcrowding in shelters, lack of access to proper sanitation facilities, and inability to access treatment. The IRC and partners working in Gaza have seen children die from diarrhea—affecting children at rates 25 times higher than before October 7th—otherwise easily treated with fluids and antibiotics. Half of the over 330,000 respiratory infections reported from October to January were children under 5, many of whom might face fatal or debilitating consequences given the current state of health care in Gaza.”

Debt cloud hangs over new governments in France and UK

Nick Beams

Jean-Luc Mélenchon and Keir Starmer [AP Photo/Thomas Padilla/Kin Cheung]

The shift to the left in the French elections, which saw a broad anti-fascist movement deal a blow to the ambitions of Marine Le Pen’s National Rally (RN) to form the next government and has led to a hung parliament, could have significant implications for financial and currency markets in the coming weeks.

The initial reaction was a slight fall in the value of the euro. It dropped by 0.3 percent but then steadied. However, there could be a return to the turbulence experienced in the lead-up to the elections.

Reporting on the initial downward movement, a Bloomberg article said it was the result of the unexpected strong showing of the New Popular Front “as traders began to digest an outcome they’d largely written off just days ago, and has the potential to reignite a tumultuous few weeks for markets.”

A key issue for financial and currency markets is the level of French debt. The French budget deficit is running at 5.5 percent of GDP which is well above the level of 3 percent allowed under the rules of the European Union. The International Monetary Fund has predicted that without spending cuts or revenue raising measures total debt could rise to 112 percent this year.

The yield, or interest rate, on French 10-year debt, known as OATs, is 66 basis points (0.66 percent) above the level on German Bunds which are considered to be the safest. The spread had reached as high as 80 basis points last month, hitting levels last seen in the euro area’s sovereign debt crisis in 2012.

James Rossiter, the lead of global macro strategy at TD Securities, said what had been a “shocking result” wrote in a note the spread could go higher again. “Rates markets went into the elections with the OATs vs Bund spread pricing in a scenario for a hung parliament—but a hung parliament led by RN not NFP [New Popular Front].”

Rather than be returned as the main party in the new parliament, RN came in third behind French president Macron’s party and the NFP which secured the most seats.

Back in May, before Macron had called the snap election, the ratings agency Standard and Poor’s cut its rating for French sovereign debt to AA-.

In the run-up to the elections, the fear in the markets was that a government, which depended for support of the RN, would undertake increased spending. Now this fear has been transferred to the NFP.

Vincent Juvyns of J.P. Morgan Asset Management said the value of French bonds could decline relative to their peers.

“Markets may demand a higher spread [that is, a higher interest rate] as the new government hasn’t clarified its fiscal position. The European Commission and rating agencies are expecting 20 to 30 billion of cuts but the government will have to deal with a party which wants to increase spending by 120 billion.”

The demands of the financial markets and the institutions of the EU were articulated by the French economy minister Bruno Le Maire who said the country could experience a financial crisis if the program of the NFP were implemented.

Debt problems are by no means confined to France. Public debt in the UK has risen to 104 percent of GDP this year, compared to 86 percent in 2019 and 43 percent in 2007. In France the corresponding figures are 112 percent, 97 percent and 65 percent, according to the International Monetary Fund.

In the lead up the British election, which resulted in the victory of the Labour Party under Keir Starmer, a London-based think tank, the Institute for Fiscal Studies (IFS), said all the major parties had avoided making hard decisions in their manifestos.

According to Isabel Stockton, senior research economist at the institute: “Growth is set to be quite disappointing and debt interest is set to remain high. And that combination of things is looking worse than [for] any other parliament in the postwar history of the UK.”

That is a significant assessment given that the Attlee Labour government which came to power in 1945 confronted a British economy significantly drained by the war effort.

The IFS analysis was echoed by the incoming chancellor Rachel Reeves who, in her first major speech, said the Labour government had inherited “the worst set of circumstances since the second world war.”

The debt cloud extends beyond France and the UK. It is covering all the major economies, according to calculations by Capital Economics, which found that they are running deficits three percentage points above pre-pandemic levels.

Debt was very much on the agenda at the European Central Bank’s annual summer gathering held in Sintra, Portugal, at the start of this month.

In an address to the delegates, ECB president Christine Lagarde said “fiscal matters enormously” and that policymakers were “very concerned” that governments bring down their deficits in line with the EU’s limit of 3 percent.

She also indicated that the key target in the ECB’s “fight against inflation” is the wages of the working class. She claimed that wage rises of 5 percent, which do not make up for the real cuts imposed by inflation, were pushing up prices for services that were being passed on to consumers.

“We have to look what is behind it, which is a lot of labour costs,” she said.

The debt situation of the US is also coming under increased scrutiny. In a panel discussion at the Sintra gathering, Federal Reserve chairman Jerome Powell was asked about the impact of the spending and tax plans of the Democrats and Republicans in the upcoming elections.

He refused to be drawn on specifics but said the economy was too strong to be running such high deficits and this had to be addressed “sooner rather than later.”

In a sign of the accelerating pace of US debt accumulation, the Congressional Budget Office (CBO) last month revised its estimate for the deficit this year to $1.9 trillion, or 7 percent of GDP, compared to its projection of $1.5 trillion as recently as February.

Powell said the present level of debt, some $35 trillion, was “completely sustainable but the path we are on is completely unsustainable.”

The rising level of debt, much of it fueled by the higher interest rates imposed by central banks and the escalation of military spending in all major countries, is driving governments into a head-on confrontation with the working class as the financial markets dictate cuts to government spending on social facilities, coupled with the suppression of wage demands.

In an article on the “crushing debt” in Europe published on Monday, the Wall Street Journal, citing analysis by David Miles, an official at the Office for Budget Responsibility in the UK, noted: “Lower public spending might require reduced expectations of the role of the state. Those expectation have expanded significantly since the end of World War 2 and might not have adjusted to the reality of recent poor economic performance.”

As the article noted, this situation raised the prospect of a repeat, possibly on a bigger scale, of the Liz Truss experience in the UK. When the short-lived British Tory prime minister sought to carry out major tax cuts for corporations and the wealthy without making spending cuts, she set off a bond market crisis in September 2022.

This threat is not confined to the UK but hangs over every government, including that of the US.

Cuban government declares “war economy”, deepening austerity measures

Alexander Fangmann

On June 30, the Cuban government announced that its economic plan and budget for 2024 will be adjusted to conditions of a “war economy [economía de guerra].” The announcement of an economic war footing and the deepening austerity measures are a response to the profound economic, social and political crisis gripping the island, the result of decades of embargo and sanctions by US imperialism and the inability of the Cuban state to effectively counter them. 

Cuban Government Cabinet meeting on Economic Projections, March 5, 2024. [Photo: Presidencia de Cuba]

Speaking at the meeting of the Council of Ministers in which these measures were announced, First Deputy Minister of Economy Mildrey Granadillo de la Torre, said they are intended “in essence, to correct macroeconomic imbalances; increase the attraction of foreign currency to the country through different means and concepts; incentivize national production, with emphasis on food production; and organize the functioning of non-state forms of management.”

No different from other capitalist states in the region, the bourgeois nationalist regime in Cuba finds no other solution than cheapening labor and embracing the diktats of global finance capital to attract investments, relying today primarily on Spanish, French, Chinese, Canadian and Russian capital.

According to a report on the meeting in Granma, the official newspaper of the ruling Cuban Communist Party, the government plans to reduce “budget items with the objective of reducing the fiscal deficit in 2024.” Such decisions are to be “centralized,” that is, made at the highest levels. Though the newspaper gives no solid figures, the depth of the cuts is indicated by the statement that the government intends to “postpone or even paralyze investments that are not essential at this stage.”

Granadillo said, “a single, inclusive pricing policy will be established on equal terms for all subjects of the economy, which includes both the state and non-state sectors.” Although the precise meaning of this has not been officially clarified, reports suggest price caps will be imposed on chicken, powdered milk, pasta, sausage, soybean oil and detergent, based upon import costs. 

Recognizing that the widespread legalization of privately owned businesses has created opportunities for siphoning off state resources, the government has instituted a measure “to limit the profit in purchases of products and payments for services and inputs carried out by the state sector to the non-state sector.” This policy, which already took effect as of July 1, limits profits to between 15 and 30 percent, with the higher figure reserved for “high technology and innovation companies,” according to the Cuban News Agency.

The new austerity measures follow an announcement in January of a “macroeconomic stabilization program.” That package of measures raised the price of gasoline five-fold and increased prices on electricity, water and cylinders of cooking gas, among other measures meant to reduce demand for fuel and other scarce imports. At the time, the government announced it would “review the state structures and payrolls,” a prelude to mass layoffs. 

The current crisis in Cuba has gone well beyond the levels those seen during the Special Period in the 1990s following the dissolution of the USSR and the end of its subsidizing of the Cuban economy. Official inflation for 2023 was recorded at 31 percent, down from 77 percent in 2021. Additionally, the economy contracted by 2 percent, and the Cuban peso has depreciated 50 percent against the US dollar on the black market. 

Large swaths of the island continue to experience hours-long blackouts, owing to a combination of fuel shortages and breakdowns of power plants. A 2022 fire at the Matanzas Supertanker Base reduced Cuba’s oil storage capacity, complicating efforts to ensure the thermoelectric power plants have enough fuel to generate electricity. 

Food shortages have also continued, with rationed, subsidized products often unavailable. Protests erupted in March over blackouts and food shortages in Santiago de Cuba and elsewhere, leading to dozens of arrests. 

As in the United States and other countries around the world, the invocation of a war footing by the Cuban government is an indication the state is preparing to undertake further repressive measures in the face of popular opposition to its policies. 

Over half a million Cubans, or nearly 5 percent of the population, have fled to the United States since October 2022 as conditions in the country have worsened. In an interview with the Associated Press, the head of the Directorate of Identification, Immigration and Foreign Affairs said around 3 million Cubans are currently living abroad, and the government admitted last week that 1.3 million Cubans maintain residency in Cuba while living in the US. In light of the unprecedented number of emigre Cubans, an upcoming session of the National Assembly is set to debate changes to citizenship laws allowing Cubans to live overseas for longer periods and expands citizenship and residency rights. 

Cuban president Miguel Díaz-Canel acknowledged that a significant factor in the economic crisis is “directly related to the bureaucracy and the inefficient control that we are carrying out from our institutional system.” Nonetheless, he claimed that, “All of us are here to save the Revolution and save socialism.” In fact, nothing could be further from the truth.

While the economic embargo, or blockade, imposed by US imperialism following the Cuban Revolution has been the most significant factor in the protracted economic crisis, the Cuban government, from the Castro era to today, has carried out a domestic and foreign policy which has left the country in a blind alley.

Flowing from the petty-bourgeois class character of the regime brought to power by the 1959 revolution and its long subordination to the peaceful coexistence doctrine of the Moscow Stalinist bureaucracy, the Cuban government has for decades sought to reach some form of accommodation with American imperialism, which the latter has had no interest in granting. 

Indeed, just this week, Republican Congressman Mario Díaz-Balart inserted into an appropriations bill a measure that would prevent the removal of Cuba from the list of state sponsors of terrorism, a slanderous designation that imposes additional US sanctions beyond the embargo. 

Although the Republican Party and the right-wing Cuban exiles in the US smell blood in the water, the Biden administration has largely maintained Trump’s rollback of relations begun under Obama. In any case, the latter’s opening of relations between Cuba and the United States was based on a conception of fostering the growth of a social layer wedded to American imperialism for the purpose of carrying out a regime change, not fundamentally out of a change of heart by the ruling class or the Democratic Party. 

The Cuban government was able to hold out against the embargo for many years based upon a sugar and tourism-based economy due to heavy subsidies provided first by the USSR, which gained an outpost in the Caribbean, then by subsidized oil supplies from Venezuela, which allowed the latter to burnish its leftist credentials. Venezuela, however, is no longer in the position it once was, due to sanctions on the country imposed by the American government. Oil shipments from Venezuela to Cuba are down to 27,000 barrels per day (bpd) from 80,000 bpd in 2020, and 51,500 bpd in 2023.

New whistleblower exposes Boeing's use of scrapped parts

Bryan Dyne

Merle Meyers, the latest in a string of Boeing whistleblowers that have emerged this year, has raised new allegations that the aerospace corporation knowingly used spare and defective parts in its 787 Dreamliner facility in Everett, Washington, to meet production quotas.

Meyers worked as a quality-control manager for 30 years, according to CNN which first broke the story. During the interview, Meyers told the outlet that since the early 2000s, Boeing took scrapped parts and put them into planes.

Boeing managers used an “elaborate off-the-books practice” that involved taking parts from the company’s internal scrap yards and putting them back on the production line, despite being marked with red paint as defective.

A Boeing 787-8 Dreamliner

Throughout the process, the defective parts were hidden from the Federal Aviation Administration in, as CNN described, “organized efforts designed to thwart quality control processes in an effort to keep up with demanding production schedules.”

In total, Meyers estimated that 50,000 parts “escaped” quality control and were put into aircraft now in use. Meyers noted, “It puts people’s lives at risk ... A lot of these are flight-critical parts.”

When asked, “Why Boeing would do this ... to make money?” Meyers responded, “Yeah.”

One of Meyers’ earliest internal complaints to Boeing management dates back to 2002, in which he noted how few investigations were being done regarding the use of the defective parts. “Their investigations are about analyzing excuses by process violators, and not taking action against those committing compliance violations,” he wrote.

Another email, 20 years later in 2022, warned that Boeing’s internal investigators routinely ignored, “eye witness observations and the hard work done to ensure the safety of future passengers and crew.”

Meyers’ allegations are among the most damning of the deluge that have been brought forth this year in the wake of a door plug blowing off of a 737 Max after takeoff in January. It makes clear that, for decades, every level of Boeing management has not merely been complicit but actively involved in making defective planes in pursuit of ever greater profit.

“I think they need to punish, to fire people that blatantly violate the process and endanger the flying public. It’s a huge problem,” Meyers said.

One can go further. Since 2002, there have been more than 60 fatal accidents of Boeing aircraft, killing hundreds of passengers, crew and bystanders on the ground. It is well documented that at least two of these crashes, the two MAX 8 crashes in 2018 and 2019, were the direct result of Boeing’s drive for profits at the expense of human lives.

In another complaint filed last week, whistleblower Richard Cuevas noted that, during his work as a contractor for Boeing and Spirit AeroSystems, workers were being forced to drill holes for fasteners larger than they should have been, “to speed up a slow process.”

Cuevas warns that larger holes means the plane’s forward pressure bulkhead isn’t as secure as it should be, and risks both depressurization and power failure.

He also alleges that he was fired from his job after bringing forward these warnings.

Meyers and Cuevas’ revelations, alongside those of all the other whistleblowers that have come forward, strongly suggest many of the other accidents were also engendered by the money interests of executives.

Whatever “punishment” Boeing suffers from either its own internal processes or the federal government, however, will be minimal at best. The Associated Press revealed Sunday that the Department of Justice is seeking a plea deal with Boeing for “criminal fraud” for the two MAX 8 crashes.

In other words, Boeing won’t be prosecuted for murdering 346 men, women and children who died in the two crashes. The federal government’s concern is merely that they were lied to by Boeing, and are content with letting the corporation off with a fine and no charges brought against any executives.

These include former CEO Dennis Muilenburg, who made more than $80 million in salary and benefits during his tenure, which oversaw the development and production of the deadly MAX 8 aircraft. It also includes David Calhoun, Muilenburg’s successor and also a Boeing executive during the MAX 8 crashes, who has made an estimated $76.5 million since he became CEO in 2021.

The subservience of the American government to Boeing was also demonstrated in a recent Senate hearing in June, in which Richard Blumenthal (Democrat-Connecticut) gave a stage-managed “reckoning” with Calhoun.

In reality, Blumenthal held the hearing in an attempt to restore Boeing’s credibility, “because we want Boeing to succeed.” He also added that the company had to be protected “for the sake of our military.”

Therein lies the real reason Boeing has been allowed to get off scot free with its murder of commercial passengers, because it is complicit in so many more crimes committed by American imperialism.

In 2023, Boeing was the fourth largest defense contractor in the US, receiving more than $14.8 billion to produce weapons for wars abroad. Boeing’s military pedigree includes making and maintaining F-15 fighters, V-22 attack helicopters, and B-52 strategic bombers.

Such aircraft are critical components of the US war drive internationally, including the ongoing genocide by Israel’s Zionist regime against Gaza, the US-NATO war against Russia in Ukraine, and the escalating war plans against Iran and China.

Any real change to the aerospace industry as a whole will not come from appeals to any “better natures” of corporate executives and the capitalist ruling elite but from the working class, the only social force opposed to sacrificing human lives for profits.

The ongoing contract talks between Boeing and the 32,000 machinists of the International Association of Machinists and Aerospace Workers (IAM) can play a significant part in this process. One of the key demands of the machinists is that the numerous safety and quality inspector positions that have been cut are restored. Boeing has so far refused such demands.

Landslide victory against Tories, but collapse in Labour’s popular vote heralds UK government of crisis

Chris Marsden

Sir Keir Starmer’s Labour Party has won a landslide election victory against the Tories, despite making almost no gain in its popular vote outside Scotland. While Labour won a 170-seat majority, with 412 seats against 121 seats for the Tories, Labour’s share of the national vote was just 33.8 percent.

Labour’s 170 seat majority is its largest since 1997 under Tony Blair, but its national share of the vote is up by just 2 percent since 2019, and five percent lower than under Jeremy Corbyn in 2017 when Labour lost narrowly on a much higher voter turnout of over 68 percent.

Britain's Labour Party Prime Minister Sir Keir Starmer makes speech 10 Downing Street in London, Friday, July 5, 2024. Labour leader Starmer won the general election on July 4, and was appointed Prime Minister by King Charles III at Buckingham Palace. [AP Photo/Kin Cheung]

Labour takes power with the lowest share of the popular vote of any incoming government in British history.

Its victory was won off the back of a mass anti-Tory vote. The Conservatives recorded their lowest ever vote. The party suffered a massive 20-point decline since 2019, with 11 senior ministers losing their seats, including former prime minister Lizz Truss, Defence Secretary Grant Shapps and prominent Brexiteer Jacob Rees-Mogg.

Outgoing prime minister Rishi Sunak, who retained his seat, has resigned as party leader.

Starmer made no voting gains in major urban centres, where there were significant victories for candidates opposing Labour over the Gaza genocide and huge abstentions of almost half the electorate with a national turnout of 60 percent, the second lowest since 1885.

Starmer has no popular mandate for his pro-business Tory continuity agenda, above all his plans to thrust Britain into a direct confrontation with Russia at the July 9 NATO summit in Washington D.C.

Far from heralding a Labour honeymoon, social and political tensions rooted in morbid levels of inequality and hardship presage explosive confrontation with the working class.

Amid a slew of headlines hailing Starmer’s victory, Channel 4’s political editor Gary Gibbon accurately described the result as a “loveless landslide”.

Labour’s main gains came via the collapse of the Scottish National Party (SNP), while also picking up several Tory seats. It secured a 17-point increase in Scotland, with the SNP’s vote down 15 points, losing almost 40 seats to Labour, including all six Glasgow seats.

Had Nigel Farage’s right-wing nationalist Reform party not taken a huge slice of the Conservative vote, the result would have been far narrower.

Reform won 14 percent of the vote. This gave the anti-immigrant party only four seats under Britain’s first-past-the-post constituency system, including Farage winning in Clacton. But in 98 constituencies they came second, beating the Tories and handing Labour the prize.

Labour suffered a 4 percent fall in Wales. Its overall vote in England saw no change except a six-point increase where it captured former Tory seats.

Starmer’s relentless pro-business, militarist and nationalist message won backing in the Tory shires, Murdoch’s The Sun and Times, and Financial Times, but only alienated workers.

The Financial Times reported: “In the 63 safest Labour seats heading into the election, the party’s average vote share decreased from 67 percent to 50 percent.”

The most significant electoral shifts in working class constituencies, especially those with Muslim populations over 10 percent and where Labour’s vote fell by 11 percent on average, was the vote for candidates opposing Starmer’s obscene support for Israel’s genocide on Gaza.

Four pro-Palestinian Independents beat Labour, while expelled leader Jeremy Corbyn trounced Labour in Islington North by 24,120 votes to 16,873—by around 50 percent.

In Dewsbury and Batley, Iqbal Mohamed beat Labour by almost 7,000 votes.

In Blackburn, Adnan Hussain beat Labour by around 200 votes, while Workers Party of Britain candidate Craig Murray came third with more than 7,000 votes.

In Leicester South, Jonathan Ashworth, Labour’s shadow Cabinet Office minister, with a massive majority of more than 22,000 votes at the last election, was beaten by Shockat Adam by around 1,000 votes.

In Birmingham Perry Barr, Labour lost to independent Ayoub Khan by 500 votes. Other leading Blairites were hammered including Jess Phillips, whose majority was slashed from over 13,000 to 693, by Workers Party candidate Jody McIntyre.

Independent Leanne Mohamad lost to Labour Shadow Health Secretary Wes Streeting by just over 500 votes, and Workers Party leader George Galloway lost Rochdale, the seat he won four months ago from Labour by 1,400 votes.

Keir Starmer’s own share of the vote fell by a massive 17,757 votes in Holborn and St Pancras, halving since 2019. Independent Andrew Feinstein came second with more than 7,000 votes or 19 percent of the vote, while the Greens won 4,000 votes. Turnout was just 54 percent.

This lent an air of unreality to Starmer’s victory speech, posturing as the herald of “change” and a new unified national purpose. He invoked his role in purging Corbyn and his thousands of supporters from the party, reciting Labour’s paean to national unity: “country first, party second”.

This, he said was “not a slogan—it’s the guiding principle of everything we have done and must keep on doing—on the economy, on national security, on protecting our borders.”

He made clear: “The changes we’ve made are permanent, irreversible and we must keep going. We ran as a changed Labour Party and we will govern as a changed Labour Party.”

Problems mount in Russian economy as government tries to finance war machine

Andrea Peters

The Russian government is facing mounting economic and social problems as a consequence of shifting the country onto a war footing. Last year, the state raised military and security expenditures to an unprecedented 40 percent of the federal budget for 2024. The Kremlin made various “guns and butter” promises, claiming that it would finance both the military and social programs. This is failing and inequality is mounting in Russia, in the face of an unsustainable budget that cannot survive the breakdown of the world order.

Russian Prime Minister Mikhail Mishustin, centre, arrives for an expanded meeting of Russia's Council for Strategic Development and National Projects and State Council's commissions at the Kremlin in Moscow, Russia, Wednesday, May 29, 2024. [AP Photo/Dmitry Astakhov]

The Kremlin is currently attempting to paint a rosy picture of the Russian economy. On June 28, President Putin announced that the country’s GDP is expected to grow by 5 percent this year. Real wages are also reportedly up, as is consumer spending. Official unemployment is just 2.6 percent. Thus far, as Moscow regularly notes, NATO has failed in its aim to destroy Russia’s economy through massive sanctions, asset freezes, and the ejection of the country from key global markets.

However, the Kremlin’s ability to maneuver in the context of the rapidly escalating world war is highly tenuous. Above all, it is predicated on a) making the Russian working class pay for the oligarchy’s struggle to survive and b) containing and suppressing mass opposition to the fratricidal war unleashed not just by NATO, but by the restoration of capitalism in the USSR by Stalinist bureaucrats, to which Putin is an heir.

The current driver of Russian economic growth is massive state investments in war-related industries, which, while funneling profits to big business and a narrow layer of the population, are draining Russia’s coffers. Government spending in 2024 is now expected to significantly exceed what was previously approved, even as income from the energy sector is predicted to drop by 768 billion rubles this year. Meanwhile, the liquid assets of the country’s National Welfare Fund, an emergency financial reserve, fell by 44 percent between January 2022 and December 2023. Between $300 and $350 billion of Russian government assets are frozen in foreign accounts.

In response, the Duma is approving increases to deficit spending, with the legislature authorizing a boost in borrowing for 2024 of nearly 33 percent, up to 2.12 trillion rubles from the estimated 1.595 trillion rubles in the original budget. The Kremlin is simultaneously making changes to the tax structure, shifting the country from a flat-tax system to a progressive one, whereby as a person’s income increases, so does their tax burden.

This is expected to bring in an additional 2.5 to 2.7 trillion rubles ($28 to $35 billion at current exchange rates). The tax hikes for upper earners and corporations are being presented to the population as a sign that the government is committed to making the rich pay for the war and limited, although costly in budgetary terms, increases to pensions and welfare benefits authorized over the last year. The foreign press is also highlighting Putin’s alleged “assault on the wealthy.”

The reality is different. First of all, broad layers of the population, which are so poor that they fall in the bottom tax bracket, will see no relief from the reform. They will continue to be taxed at the extremely high rate of 13 percent. To the extent that wages are rising for some in Russia, as the lowest earners get a little bit more, they will move into a higher bracket and pay for their gains. Furthermore, the profit tax, which is levied on personal income derived from things like dividends, savings, and investment—assets held only by the well-to-do—will remain unchanged.

While corporate profits will be taxed at 25 percent, up from the 20 percent previously, Russian businesses reportedly lobbied in support of the reform because they see it as a way to evade one-time “windfall” taxes that the Kremlin imposed previously to fill the breach in the federal budget.

The social programs that the Kremlin says it will finance with the additional revenue—pensions indexed to inflation, payments to injured veterans, benefits for large families—even if they actually materialize, will not fundamentally change the social position of tens of millions of Russian workers whose living standards have been falling for years and whose salaries are being eaten up by inflation.

While the government and economists are highlighting the fact that, according to the official statistical agency Rosstat, as of March of this year real wages rose by 12.9 percent compared to the same time in 2023, this improvement is overwhelmingly concentrated in a handful of economic sectors—banking, oil, gas, and war-related industries. Furthermore, It does not make up for 10 years of falling real incomes in the country. In March, economist Yevgeny Suvorov at Centro Credit Bank described the period from 2014-2023 as “a lost decade” for the majority of Russian households.

Inflation, which the government claims it is getting under control, is currently running at about 7 percent. However, the everyday life of working class Russians is shaped overwhelmingly by the costs of essential products, not average inflation across the whole economy. According to a June 29 article in Novyie Izvestiia, in the last six months, the price of beets has risen by 95 percent, potatoes by 80 percent, carrots by 63 percent, onions by 32 percent, and apples by 29 percent. While costs for vegetables and fruit usually fall during the summer growing season, the current pattern is bucking this historical trend.

On July 1, utility rates went up across Russia. Households in the overwhelming majority of regions in the country will have bills that are 9 to 14 percent more than previously. The hike, approved by the federal government, will be in place for “three years,” states the official declaration. No sane person anticipates it will decrease afterwards.

To finance its spending on war and national security, the Russian government cut expenditures on healthcare and medicine in both relative and real terms in 2024. The cost of attending many of the countries most competitive universities and higher education programs is now on the rise, with some institutions jacking up fees by as much as 20 percent, reports the newspaper Vedomosti.

Efforts to substitute Russian-made products for cheaper foreign-produced goods that sanctions prevent from being sold in Russia is also placing many products outside of the reach of ordinary people. With great fanfare, the country’s auto industry released a number of new models in March. The cost of the Lada Iskra, presented as a triumph of domestic industry, far exceeds the average annual income in Russia.  

Domestic gasoline prices are also now going up, as the government ended limits on overseas exports of refined oil. While this has resulted in increased profits for the energy sector, which prefers to direct its product to foreign buyers who pay more, it is driving up costs on the Russian market.

A February study commissioned by the Russian central bank found that 28 percent of people report either not having enough money for food or can buy food but not clothes and shoes.

Late last year, Chairman of the Russian Constitutional Court Valeri Zorkin reported that the decile wage ratio—the gap between the top 10 percent and bottom 10 percent of earners—has grown substantially and is nearly 17:1. This official figure significantly understates the reality, he noted. According to TASS, he described inequality as “the main source of tension in Russian society at the present stage.” Earlier this year, Rosstat reported that the country’s gini coefficient, a measure of income inequality, grew to .403 from .395 over the course of 2022-2023.

Over half of respondents to a survey just conducted by the sociological research firms CSP Platforma and OnIn insisted that inequality has risen in Russia in the last five years. Thirty seven percent said that it was worse than at any other time in the country’s history—including the 18th and 19th centuries, when the vast majority of the population were enserfed peasants living in conditions of near slavery.

Fifty seven percent of those surveyed, overwhelmingly people from the working class, said they regard the very existence of inequality as wrong. “Sociologists note that the proportion of those who strive for complete equality is especially high among poorly educated people with low incomes,” reports RBC in a June 25 article about the survey’s results.

The squeeze of the Russian working class will only intensify, as the country’s ruling elite faces an increasingly precarious situation. Many signs indicate this is happening.

Over the course of June, news leaked that Chinese banks—the Bank of China, ICBC, China CITIC Bank, and most other financial institutions in the country—are now refusing to process yuan payments through their Russian affiliates. How trade between the two states can be sustained in this new context is unclear.  

Vladimir Chistyukhin, the first deputy chairman of the Bank of Russia, said his “export-dependent and import-dependent country” faces “ruiniation,” unless it can find a solution. 'Everything needs to be tried,' he said, according to press outlet RBC. Raising the prospect of turning to credit swaps and crypto currency, he declared that Russia had to do what 'seemed unpopular to us yesterday.'

China is Russia’s largest trading partner and the leading buyer of Russian energy resources. While Moscow regularly portrays Beijing as an economic ally, the relationship between the two countries is more of dependency and constant strain. China is currently demanding that it be able to purchase future gas deliveries through the planned “Power of Siberia 2” pipeline at heavily subsidized domestic rates. Beijing will also not give guarantees as to the amount it will buy.

Russia’s dependence on oil and gas, as well as China, continues, however, as Moscow’s non-resource-related exports are falling. The recent strengthening of the ruble, which means that goods that Russia sells overseas are less competitive and bring in fewer rubles, is creating additional complications. Economists are also now warning of a banking and debt crisis.