Cook Islands PM condemns New Zealand’s “coercion”

John Braddock

New Zealand’s attempts to “coerce” the Cook Islands over its relationship with China will not work, Prime Minister Mark Brown said in an interview aired on Cook Islands Television last week. He said the Pacific island country still wants New Zealand support but the two countries need to work together as “partners” with the Cooks maintaining its sovereignty.

Cook Islands Prime Minister Mark Brown, New Zealand Deputy Prime Minister Winston Peters [AP Photo/Sergei Grits, Cliff Owen]

Earlier in November, it was revealed that New Zealand’s National Party-led government had suspended two aid payments amounting to $NZ29.8 million since February to the Cook Islands. The aid boosts the Cook Islands budget for core sectors including education, tourism and health. Following the withdrawal of the first aid payment in June, Brown said the punitive decision would “harm the country’s most vulnerable citizens.”

New Zealand Foreign Minister Winston Peters, leader of the right-wing populist NZ First party in the ruling coalition, blocked the payments after Brown signed strategic deals with China in February without “consulting” Wellington. Peters claimed prior approval was required under the terms of the Cook Islands’ constitutional position as one of New Zealand’s semi-dependent “Realm” countries.

Peters told Brown in a letter in October that “the gravity of the Cook Islands’ breach of trust” raised concerns about its “approach to the constitutional realities which impose clear limits on your freedom to act on foreign affairs, defence and security matters without reference to New Zealand’s interest or those of the Realm.” Brown, however, insists that Wellington was advised the China deal would not include security matters and that there was “no need for New Zealand to sit in the room” while it was drawn up.

Peters’ diplomatic bullying is part of increasingly belligerent attempts by Wellington to maintain its neo-colonial domination over the impoverished Cook Islands. New Zealand’s ruling establishment responded with outrage over the agreement with Beijing which covered economic development, including fisheries, infrastructure and undersea minerals, as well as strengthening diplomatic relations. The documents contained no military clauses.

In his television interview Brown declared: “The withholding and the pausing of financial assistance, development assistance, we don’t feel that that is a useful tool to try and coerce, if you like, a country into changing its policies—it certainly is not going to work with us.” By using its cash reserves the government had, Brown said, ensured the funding cut would not affect the delivery of public services, while GDP growth rate meant it was “well placed” for the coming years.

The dispute is an expression of the sharp geopolitical tensions created by the advanced US-led preparations for war against China. New Zealand and Australia—both imperialist allies of the US—are seeking to block China’s growing economic and diplomatic influence in the Pacific and are presenting Beijing in increasingly hysterical terms as a military threat. While using aid to pressure Pacific states, they are militarising the region and forcing them to cut economic and diplomatic ties with Beijing.

In 2001, New Zealand and the Cook Islands signed a Joint Centenary Declaration which broadly states that the two governments must “consult regularly on defence and security issues.” However, the declaration explicitly affirms the Cook Islands’ right to enter independently into “treaties and other international agreements” with any government or international organisations.

The Cooks—a tiny state with fewer than 20,000 people—is heavily dependent on outside aid. It has been diplomatic partners with China for almost 30 years, signing agreements to develop local infrastructure, and has diplomatic relationships with 70 different countries.

According to Brown, the Cook Islands government fulfilled its obligations to consult with New Zealand regarding the content of any diplomatic and economic deals and has followed “established protocol” in its talks with China. “I would not expect any of the countries that we discuss our bilateral relations with… to have them share those documents with a third country, and the reciprocal arrangement would also exist,” he said.

Brown assured the Cook Islands parliament his government is taking steps to mend the rift. Officials and ministers had “engaged consistently with New Zealand across every formal channel that is available to us,” he declared.

Brown however emphasised that the Cook Islands remain self-governing and independent in external affairs and that restoring the relationship must not come at the expense of their growing independence. “While we are fully committed to our relationship with New Zealand, we have learned a valuable lesson in that we’ve seen the risks that arise from over reliance on any single partner for our development needs,” he said.

Brown indicated a willingness to exclude countries other than NZ from involvement in security and defence issues, but this is evidently not enough to satisfy Wellington.

New Zealand, along with Australia, regards the southwest Pacific as its “backyard.” Prime Minister Christopher Luxon declared recently that New Zealand’s funding would remain “paused” until the Cook Islands government took unspecified steps to restore “trust.” The opposition Labour Party has joined in the denunciations of the Brown government, expressing only mild concern that Peters’ hard-nosed approach could be counter-productive.

New Zealand’s universally anti-China media plays a grimy role demonising the Cook Islands over its purported “treachery.” On November 24, the New Zealand Herald published an inflammatory “special investigation” alleging that the Cook Islands flag has been flown by over 100 oil tankers “accused of illicitly trading Russian and Iranian oil.” It claims the operation is run by a private shipping registry owned by Maritime Cook Islands (MCI) which was set up in 2000 by “government insiders” and delivers “modest fees” to the Cooks’ government.

According to the Herald, the flagged “shadow fleet” enables “pariah countries” Russia and Iran to generate “huge revenues.” It also gives end users, notably China and India, a secure flow of energy at cheap rates while evading unilateral sanctions imposed by the US and Europe. Allegedly, nearly half of the flagged tanker fleet of 150 vessels has been formally sanctioned by the US, United Kingdom or the European Union.

Brown has refused to comment on the Herald story. Peters declared that New Zealand’s support for Ukraine in the war with Russia was being deliberately undercut by the Cook Islands: “This is a completely unacceptable and untenable foreign policy divergence,” he fumed. The flag registry is just one of “a range of actions and statements” by the Cook Islands, Peters said, that have “damaged its free association relationship with New Zealand and the trust that underpins it.”

In other words, any alleged activity that can be sheeted home to the Cook Islands government and construed as inimical to Wellington’s pro-US agenda for escalating war is deemed illegitimate. The Cook Islands and other Pacific countries must accept their subservient neo-colonial status.

Whatever truth is in the Herald article, the flag operation is likely similar to those run, among others, by Vanuatu and the Marshall Islands, the sale of “passports of convenience” by Tonga, Nauru and Vanuatu, or the tax havens and offshore financial centres in Fiji, Niue and Samoa, all desperate attempts to attract foreign capital.

Ultimate responsibility for the proliferation of such ventures—many blacklisted by capitalist overseers and financial institutions such as the EU and OECD—lies with the imperialist powers. For the past century they have kept the fragile Pacific micro-states in conditions of poverty, economic backwardness and oppression, while exploiting them for cheap labour and now, for geo-strategic ends in the escalating US-led confrontation with China.

Childhood Poverty in Germany in 2025

Thomas Klikauer

Screenshot from German public radio: www.deutschlandfunk.de/kinderarmut

Despite the false promises of neoliberal capitalism and its tireless ideological cheerleaders, capitalism has always coexisted with – and at times produced – staggering levels of child poverty. Not even the sacred dogma of “personal responsibility” can hide that fact.

Germany, so often presented as a wealthy nation, exhibits shockingly high levels of child poverty. According to Germany’s own statistical office – to make it all very “official” – every seventh child is already at risk of poverty. That means living right on the edge of the poverty line.

In everyday life, this translates into a broken bed that cannot be replaced, no cinema, no participation in school excursions, and certainly no vacation. Welcome to Germany, 2025.

The raw numbers are devastating: 2.2 million children and young people in Germany are at risk of poverty. These children cannot all have made the “wrong life choices,” they cannot all be lazy, and they certainly cannot all be unwilling to work.

In short: statistics defeat neoliberal ideology. The much-trumpeted notion of “competition” produces not only winners but an entire raft of losers.

Beyond the general dynamics of capitalism, additional risk factors include a social mobility that is hardening into near immobility. Leaving the precariat, the manual working class, or the Lumpenproletariat is becoming nearly impossible.

Worse: the low educational level of parents almost predetermines a child’s future poverty. According to German statistics, 15.2% of all children – or 2.2 million under 18 – are at risk of poverty.

And this is an increase: the previous year’s rate was 14%. These children live with less than 60% of the average “net equivalent income.” In other words, when others have €10, they have €6. When a school trip costs €200, they can pay only €140 – €60.- short.

For a household of two adults and two children, a net income below €2,900 per month ($3,340) means poverty risk. That might look like a lot — but in a high-cost country like Germany, it is not.

Take housing: a random search for a three-bedroom apartment in Frankfurt — for example, in Frankenallee 98 – 102 – shows a Kaltmiete between €820 and €2,800 (excluding heating, gas, electricity). A small 65m² apartment in Frankfurt-Nied costs €1,190. Averaging these figures, one can say such a family might rent a Frankfurt apartment for around €1,500 per month – before utilities.

With an income of €2,900, that leaves €1,400 per month, or €350 per week, or €87.50 per person per week. Not much for life in Germany. Incidentally, a pair of Levi’s 505 jeans on Amazon.de costs €101. Buying one pair of non-luxury jeans means having no money left for food that week.

For single parents with one child, poverty risk begins below €1,800; for a person living alone, below €1,381 per month. The consequences are severe:

19%       of children live in households that cannot replace broken furniture;

12%       cannot afford a week-long vacation;

5%         must forgo leisure activities like sports clubs or cinema; about

3%         cannot afford a second pair of good everyday shoes. Between

1–2%     of children under 16 cannot invite friends home, celebrate birthdays, or eat fresh vegetables daily.

Germany’s hyper-bureaucratic definition of deprivation involves 17 indicators – and failing three means a child is considered materially and socially disadvantaged.

According to the Statistical Office, more children are at risk than last year. Child poverty in Germany is worsening, not improving. The data is described as “unfavourable” – a polite euphemism for poverty. In some groups, risk levels exceed 40%.

Germany’s rate of 15.5% may sit below the EU average of 19.3%, but that offers no comfort to a child with broken shoes and no breakfast. And compared to last year’s 14%, the increase is significant. Children whose parents have only a secondary school certificate and no vocational qualification face a 41.8% poverty risk. With vocational training or Abitur, it drops to 15.2%. With a master’s-level degree, it falls to 7.2%.

Children of parents with low educational attainment – through no fault of their own – must often do without a second pair of shoes, leisure activities, school trips, adequate living space, or even a one-week annual holiday. Many German workers enjoy six weeks’ leave; poor children stay home.

Child poverty affects every aspect of life. Such children are sick more often, face reduced educational opportunities, and of course endure bullying for not having the latest fashion, a phone, or a flashy school bag for €200.

And when you think it can’t get worse: it does. Over 60,000 children leave school each year without any degree – poverty essentially pre-programmed. They lack support from exhausted parents juggling insecure, underpaid jobs, from overburdened teachers, and from a state more concerned with neoliberal narratives about “welfare dependency” than with real children’s lives.

In short, the outlook for many children in Germany in 2025 is bleak. Many continue to fall behind in chances for a good start in life and any meaningful future prospects. Despite the rhetoric of opportunity, a large chunk of children in Germany have none.

More than one million children lack essential prerequisites for social participation or later professional success. Many do not even have a place to do homework, cannot afford a full meal or even a döner kebab, and rarely join leisure activities with friends.

There are three rather simple truths:

- Capitalism has never cared for all;

- The capitalist systems generate poverty.

- Poverty-free capitalism is impossible.

But instead of confronting the systemic roots, public debate frequently shifts blame onto families. The old trick: blame the victims so capitalism remains invisible. Meanwhile, media capitalism ensures endless talk about economic growth – as if it were infinite and inherently virtuous – while almost no one discusses how this growth is distributed or the structural causes of child poverty.

The resulting stress on children is enormous. Reports show sharp increases in physical and psychological complaints: 40% of young people  now report such issues.

Progress on child poverty has stagnated for years. Child poverty hovers around 15% – 14% in 2023. Today, 1.9 million children rely on allowances.

Health problems are rising: in 2022, 40% of 11- to 15-year-olds had headaches, stomach aches, or sleep problems multiple times a week – compared to 24% in 2014.

Worse: many children rate their own mental health and life satisfaction as low. Depending on gender and family income, scores range from 51% to 67%. Financially disadvantaged girls score 51, barely above the threshold indicating depression.

In other words, support from families and schools is insufficient – and internationally, Germany performs poorly. Only 54% of 15-year-old girls report high family support (Switzerland: 69%). Only 26% feel supported by teachers (Norway: 53%).

Overall, one gets the impression that – beyond using children as labour or as consumers – capitalism has little interest in them. Responsibility is conveniently offloaded onto parents, following the neoliberal creed of “individual responsibility” and the classic “blame the victim” strategy.

Germany must act decisively to give children better starting conditions and real prospects. That requires targeted investment in disadvantaged children and strengthened family resources – expanded school support programmes, improved day-care strategies, and a comprehensive plan to reduce child poverty.

Floods in Southeast Asia lead to over 130 deaths

Ben McGrath

More than 100 people have been killed in Southeast Asia during a week and a half of intense rains throughout the region. Most of the destruction has taken place in Vietnam and Thailand, though Malaysia has also been affected.

At least 98 people have been killed in Vietnam as of Wednesday, while another 10 remain missing, since heavy rains began on November 16. An 800-kilometer stretch in the central region of the country has been the most heavily affected, with rainfall last week exceeding 1,900 millimeters in some areas. This is approximately equal to the average rainfall for the entire year.

The worst-hit province is Dak Lak where 63 people have been killed. Many of the roads have been blocked, with rescue personnel dropping supplies to stranded survivors from helicopters. Shops and homes have been destroyed or are under mud. Damage to the region, including crops, is estimated at $US545 million. At least 186,000 homes have been damaged and 3.2 million livestock and poultry have been killed. “We’ve never experienced that much rain and such bad flooding,” 45-year-old Pham Thu Huyen, a resident of Khanh Hoa Province, told the media.

Rivers in the country surged to record-highs or near record-highs. The Ba River in Dak Lak Province surpassed its 1993 historic peak by 1.07 meters, while the Cai River in Khanh Hoa Province also reached a new high, according to Vietnam’s National Center for Hydrometeorological Forecasting.

Vietnam is one of the world’s most flood-prone countries and has been particularly hard-hit this year, with major storms striking the country in September and October. This includes Typhoon Kalmeagi, which tore through the region in early November, striking the same central region of Vietnam, killing five.

At the end of October, parts of Vietnam’s central region also experienced heavy rainfall, including 1,739mm of rain in a 24-hour period, the second-highest amount on record globally. This also led to widespread flooding and the deaths of 50 people. From January through October alone, at least 279 people have been killed in floods and landslides throughout the country.

More rain is expected at the end of this week as Typhoon Koto, the 15th storm to form in the South China Sea, approaches Vietnam. While its path is currently unpredictable, heavy rains in the central region are expected from November 28 to 30.

While natural disasters like intense rains and typhoons cannot be prevented, they can be planned for. Yet under capitalism, the drive for profits takes priority over all else, including the safety and well-being of a population living in a flood-prone region.

Following its embrace of pro-capitalist reforms in 1986 under its Doi Moi program, the Stalinist regime in Hanoi carried out widespread construction with little regard for the impact on the environment. According to Kyoto University’s Center for Southeast Asian Studies, by 1996 Vietnam’s four major urban districts had lost nearly two-thirds of water bodies, which are important for managing floods.

Furthermore, Vietnam’s system of 7,300 reservoirs and dams throughout the country are outdated and poorly run, making flood management difficult and more dangerous. Many of these reservoirs and dams were built decades ago.

According to the Department of Hydraulic Works Construction Management, only 19 percent of reservoirs have specialized monitoring equipment while just 30 percent have emergency plans in place. Just 9 percent are certified for safety. Flood warnings often rely on phone calls or sending official memos. All of this creates delays, which can lead to deaths when people are caught unawares.

On top of this, many of the reservoirs are operated individually rather than as part of a single, planned system. Operational procedures are also based on outdated information, without taking into account the new conditions that have developed as a result of climate change. This means flood planning, including the discharge of water, may be carried out without consideration for broader conditions. Uncontrolled spillways are also particularly vulnerable.

Environmental scientists have also pointed to the role of climate change in increasing the intensity of storms and their impact. “Climate change is already shaping Vietnam’s exposure in several important ways,” Nguyen Phuong Loan, a climate scientist at the University of New South Wales, stated in October. “That means a higher chance of flash floods, especially in densely populated urban areas,” she said.

Seas in the region have increased in temperature by almost one degree Celsius since the preindustrial era. As the atmosphere also warms, this increases the amount of moisture it can hold. According to NASA, for every degree Celsius that the atmospheric temperature rises, the amount of water vapor in the air increases by 7 percent. This leads to more intense rainfalls becoming more common.

Cars and houses are submerged in floodwaters in Songkhla province, southern Thailand, Wednesday, Nov. 26, 2025. [AP Photo/Arnun Chonmahatrakool]

The latest rains have also impacted neighboring countries including Thailand. While large sections of the country have been impacted, flash floods hit nine of Thailand’s southern provinces, severely affecting 2.78 million people. Hundreds of thousands of homes have been flooded. The city of Hat Yai in Songkhla Province, where the government has declared a state of emergency, experienced 335mm of rain in a 24-hour period last Friday, the highest rainfall in 300 years.

At least 33 people have been killed in Thailand so far, as well as one person in Malaysia, which has also been hit by floods. The Thai government has come under fire from survivors, who accused officials of inaction. They have pointed out that the government issued unclear evacuation notices and location of shelters.

Siripong Angkasakulkiat, a spokesman for the government, responded by callously shifting blame onto the victims, claiming, “Evacuation alerts were issued, but residents in several communities refused to relocate to temporary shelters.”

As in Vietnam, poor disaster management is rampant in Thailand, where floods are also common. The Thailand Development Research Institute (TDRI), a Bangkok-based think tank, wrote in an article published in January: “Thailand’s flood problems stem from three main issues: centralized policies with poor coordination on the ground, outdated early warning systems, and insufficient funding with misplaced priorities.”

TDRI explained that flood forecasts are typically only 33 percent accurate a day in advance due to poor weather monitoring equipment, while the SMS alert system is underdeveloped, meaning many residents do not receive warnings in time. While TDRI does not draw the conclusion, this mismanagement and lack of resources, as in Vietnam, is the result of prioritizing profit over social needs under capitalism.

Tyson eliminates 3,200 jobs with closure of Nebraska beef plant

George Gallanis

A sign sits in front of the Tyson Foods pork plant, April 22, 2020, in Perry, Iowa. [AP Photo/Charlie Neibergall]

Last week, Tyson Foods announced it will close its massive beef plant in Lexington, Nebraska, a facility that directly employs roughly 3,000–3,200 workers in a town of about 11,000 people.

The closure is scheduled to take effect on or around January 20, 2026, according to the company’s WARN notice to the Nebraska Department of Labor. Workers have been told that they have no guaranteed transfers, meaning these are essentially permanent job losses.

Built in 1990 and later acquired by Tyson, the plant has been an economic backbone of the city, employing a significant portion of the local workforce. Its ability to slaughter up to 5,000 heads of cattle per day—about 5 percent of total US capacity—turned Lexington into a crucial node in the beef supply chain.

The impact will have devastating consequences for workers and for the community of Lexington, creating a chain reaction in which other small businesses depending on these workers will suffer as well. Workers and their families will be forced to uproot themselves in search of new jobs.

The layoffs come on the heels of a massive jobs slaughter that has seen hundreds of thousands of jobs destroyed at UPS, Amazon and more.

Slaughterhouses and meatpacking plants are among the most dangerous and deadliest workplaces in the United States. A study published this year by the U.S. Department of Agriculture found that 81 percent of poultry workers were at high risk of developing musculoskeletal injuries. In 2023, the Economic Policy Institute reported an average of 27 workers a day suffer amputation or hospitalization, according to new OSHA data from 29 states.

In addition, many workers are often immigrants—in some cases, undocumented—because these are the only jobs available to them. They face the dual threat of injuries inside the plant and the danger of being kidnapped and disappeared by ICE on the outside.

Tyson has been carrying out a series of plant closures and mass layoffs across the country. In 2024, the company announced the closure of its pork plant in Perry, Iowa—a small town on the outskirts of Des Moines—resulting in the loss of over 1,200 jobs, one-eighth of Perry’s population of approximately 8,000. In 2023, Tyson Foods announced it would close four chicken plants across the country between late 2023 and early 2024, cutting 3,000 jobs.

Despite claiming its beef division is under financial pressure, Tyson Foods is still one of the biggest and most profitable meat companies in the world. In 2025, the company brought in $54.4 billion in sales and made more than $2.2 billion in operating income, mostly from its chicken and prepared-foods businesses.

The announcement is inseparable from broader political and economic forces. Although Tyson has not pointed to Trump’s nationalist tariff policy as the cause of the Lexington shutdown, recent shifts in federal trade posture, including moves that would expand access for cheaper imported beef from countries, such as Brazil and Argentina, intersect with a domestic market straining under soaring beef production costs. Retail beef prices have risen sharply, with prices up over 13 percent for ground beef and 16 percent for steaks over the past year.

The plant is non-unionized. However, the United Food and Commercial Workers International Union (UFCW), whose members include thousands of meatpacking workers, sought to blame foreign workers by declaring: “This decision also raises serious questions about our national priorities. The Administration and Congress should be working to strengthen these workers and their communities by boosting production here at home. Instead, our leaders are flirting with importing beef from Argentina and unleashing tariffs that cut off foreign markets to American beef, pork, and chicken. Meatpacking workers across this country deserve better.”

The unions have long promoted nationalism, which seeks to tie workers to this or that country and this or that ruling class, and the UFCW’s comment fundamentally reflects this. The issue is not native-born workers versus foreign-born, but the working class versus the capitalist ruling class. That is, workers confronting the dictatorship of capital, which decides at will to destroy jobs, communities and livelihoods across the United States and the world.

Elevated Australian inflation rules out further interest rate cuts

Nick Beams

Australian home buyers battling to pay off mortgages have no possibility of even any limited relief through a cut in interest rates for the foreseeable future. The latest inflation numbers released on Wednesday have taken that prospect off the agenda and made it likely that the next move will be up rather than down.

A man walks past the Reserve Bank of Australia building in Sydney, Australia on Oct. 7, 2021. [AP Photo/Mark Baker]

The annual inflation rate in the year to October jumped to 3.8 percent, up from 3.6 percent in September, well above the Reserve Bank of Australia’s (RBA) target range, with a major factor being the 37.1 percent increase in electricity prices following the withdrawal of subsidies by state governments.

The biggest increase in the index was housing, up by 5.9 percent, which includes the cost of electricity as well as rent and building costs. But this figure is a vast understatement because it does not include the cost of mortgage payments. They are excluded because the cost of buying a home, putting a roof over the head of one’s family, is considered a capital expenditure item, not a current expense.

In the three years since 2022 when interest rates by the Reserve Bank started to be lifted—some 13 times in all—the median mortgage payment on a $750,000 loan has increased by $1550 month, that is, equivalent to a wage cut of almost $400 per week. Limited marginal relief has come with the three rate cuts by the RBA this year but that is now over.

The strain on home buyers is indicated by the fact that in 2021, 24 percent were paying more than 30 percent of their income—regarded as the stress level—whereas by 2024 this had risen to more than 40 percent.

And as working families have had to take on more employment to make ends meet, they have been hit by an 11 percent increase in childcare costs over the year.

The increase in the headline rate was also reflected in the lower so-called “trimmed rate” which the RBA uses to make its decisions. This came in at 3.3 percent for the year to October, above the central bank’s forecast of 3.2 percent for the December quarter and appears to be rising.

According to a report in the Australian Financial Review (AFR), it has been “running at an annualised rate of 3.5 percent over the past three months, and at an annualised rate of 4 percent based on October’s numbers.”

“There is simply no chance the RBA is cutting in December, or any time in the immediate future, given the central bank’s concerns are now playing out,” the AFR said.

In fact, two investments banks, Barrenjoey and UBS, are predicting that interest rates will be lifted next year. Barrenjoey’s chief economist Jo Masters said the RBA could lift rates as early as May next year followed by another rise in August and UBS has said rates will rise next year.

Its chief economist for Australia, George Tharenou, said in a note to clients: “There is now more of a ‘trend’ to higher inflation, which is becoming concerning.”

The response from financial circles to the inflation spike, reflected in the main media outlets, has been that the Labor government must undertake significant cuts in spending and initiate measures to lift productivity—the scrapping of regulations on business activity and measures to facilitate the extraction of greater output and profit from the workforce.

An article in the business section of the Murdoch-owned Australian began: “The Albanese government is under intensifying pressure to make serious spending cuts to stop resurgent inflation, after prices jumped by more than expected.”

It pointed to a speech by the head of the RBA’s international department Penelope Smith which, while advanced in technical language, made clear that unless government spending is reduced the bank may push rates up.

She told the Australian Securitisation Conference that the so-called neutral rate, which supposedly keeps growth at its highest potential and contains inflation, can be influenced by the government’s budget.

“Factors that could push neutral rates higher include growing fiscal deficits,” she said.

In other words, unless the government starts cutting spending the RBA will keep rates higher.

Echoing the recent call by the International Monetary Fund for greater fiscal discipline and advancing the demand for social spending cuts, an Australian editorial said that “reliance on taxpayers to pay for everything from childcare to more HECS debts, health, aged care and National Disability Insurance Scheme services comes at a price—inflation, higher interest rates and higher tax.”

As with all such calls, it did not even mention the major increases in government spending on the military as the Labor government integrates itself more deeply into the war preparations by the US against China.

There are indications that the government is responding to the demand for major cuts. This week the AFR reported that the government was seeking 5 percent savings across the public service amounting to as much as $5.6 billion a year.

Finance Minister Katy Gallagher has confirmed the veracity of the report but has claimed it did not signify major job cuts but involved “reprioritisation.” “The budget is in deficit. We have lot of pressures on it. We just can’t keep adding on to everything,” she said.

But according to economist Chris Richardson, major job cuts of around 7000 a year are contained in the government’s own forecasts. In its budget papers the public service wages bill falls from $30.5 billion in 2025–26 to $29.6 billion in 2026–27 and remains flat for the next three years, even as the estimates include annual pay rises for its employees.

“If your wage bill isn’t changing, but wages are going up, then jobs have to go down. Follow the money: that is quite a large cut in public service numbers,” he said.

The Labor government has worked to keep its agenda of cost cutting, which goes well beyond the public service, under wraps because the claim by then Liberal leader Peter Dutton at the last election that he would reduce public service jobs by 41,000 was a factor in his party’s demise.

Major employers have already made their position clear. With the publication of the September results, which showed an upturn in inflation, the head of the Australian Industry Group, Innes Willox, said they were part of a “dangerous cocktail” creating an elevated risk of stagflation—rising prices combined with increased unemployment.

He hammered away on what has become a central theme of all business organisations and economic think tanks—the need for increased productivity, that is sweeping away what are considered restrictive regulations and intensifying the extraction of profit, along with a push against wage rises.

Outlining the position of sections of business, Willox said: “Recent high wage rises [he did not detail where they were] that have been disconnected from productivity growth have stoked inflation, particularly in wage-exposed services sectors.”

That view and the implications for workers which flow from it will only have been strengthened by the data released this week.