Australian households’ cost of living soars above consumer price index

Margaret Rees

According to the official statistics, a big jump in petrol prices pushed the cost of living up by 0.6 percent in the second quarter of 2019, and up 1.6 percent from a year earlier. In reality, however, recent calculations have shown that the Consumer Price Index (CPI) severely understates the soaring living costs confronting working class households.

Over the past two decades, it is now undeniably clear that a large gap has emerged between the CPI and the standard of living, thanks to skyrocketing prices for essential goods and services, as opposed to prices for discretionary items.

Since 2000, the CPI has risen by 57 percent, but secondary education costs have increased 203 percent, and hospital and medical services by 195 percent. Primary education and preschool costs have risen 159 percent, and electricity by 194 percent. Childcare has increased by 97 percent and housing by 94 percent.

These price increases far outstrip average wages, which are counted as having risen by 78 percent. For working class households, the gap is even wider because the average wage figure is inflated by the rapid rise in incomes in the wealthiest layers of society.

Compiled by the Australian Bureau of Statistics, the CPI measures price changes for a “basket” of goods and services—food and non-alcoholic beverages, alcohol and tobacco, clothing and footwear, housing, furnishings and household goods and services, health, transport, communication, recreation and culture, education, insurance and financial services.

Asset manager Anthony Doyle, from Fidelity International, tracked the price movements in various CPI sub-categories. He documented a stark divergence in price movements between goods and services that most people must buy, and those that are more discretionary, such as clothes, cars, audio visual equipment, furniture and toys and games.

“It’s very much a difference between what households want and what households need to buy,” Doyle told ABC Radio National “Breakfast.” “The categories that have experienced rapid price inflation, like secondary-education school fees, you pay every quarter, childcare, you pay this week-in, week-out, housing—you can’t avoid that, you need shelter.”

From 2000, clothing and footwear prices fell by 10 percent, cars by 10 percent, games and toys by 16 percent and electronics, such as phones, TVs and computers, by 89 percent. “The average household, when they look at the CPI, I would agree that they probably think that it’s misrepresentative of their own personal cost of living,” Doyle commented.

The class content to these figures is that the biggest price increases affect the essentials that working people have to buy constantly, while the price falls cover goods that higher-income households can choose to purchase or frequently update.

One problem is that the CPI does not take into account the higher prices for more advanced audio visual and computing items. Instead, it compares them on a supposed “like for like” basis. But a technologically-advanced smart phone, for example, costs above $1,000—much more than an early 2000s handset.

Another defect in the CPI is that it does not include the cost of buying an existing home, only that of a newly-built one. Housing prices have risen far faster than wages since 2000, particularly for existing properties.

The decline in the cost of the discretionary goods is the result of the globalisation of production over the past four decades, based on advanced technologies, dominated by transnational corporations that take advantage of cheap labour on a global scale.

Workers in the most oppressed countries are producing these goods under slave-like conditions, while the purchasing power of workers’ wages is increasingly falling behind because of the skyrocketing costs of essential items. In other words, workers bear the burden on every front.

Moreover, although the figures show the trend, they do not explain why prices have soared for basic services. The privatisation of utilities, health services and education, transforming them into sources of corporate profit, has driven the massive increases in the costs that workers have to bear.

For instance, the establishment of a national electricity market, initiated by the Keating Labor government in the 1990s, has enabled speculators to cash in on high spot prices during peak periods. Successive governments, both Labor and Liberal-National, have ensured that the corporate operators have reaped substantial profits.

In health care, governments have expanded the profit-making activities of private hospitals, insurance corporations and pharmaceutical giants. As for education, the Rudd-Gillard Labor government’s “revolution” opened the door to private providers and edu-businesses to make fortunes from their increased role in schools and colleges.

Whether it be the privatisation of electricity, health care or education, the trade unions have suppressed workers’ opposition to the destruction of jobs and conditions and thus bear full responsibility for the enrichment of the corporate and financial elite at the expense of the working class.

During the 1980s, in response to globalised production, the Hawke and Keating Labor governments, with the full support of the unions, imposed economic “restructuring” to meet the demands of big business for “international competitiveness.”

As a consequence, there has been a continuing redistribution of wealth from the poorest to the richest layers. The latest Household, Income and Labour Dynamics in Australia (HILDA) survey, released this week, pointed to a decade-long decline in living standards, accompanied by worsening social inequality.

The HILDA report indicated that median household income has fallen in real terms, adjusted for inflation, since the 2008-09 global financial crisis by $542 a year to $80,595—an historic reversal. Average income, which is magnified by the highest income recipients, has grown by $3,156, or 3.5 percent, to near $95,000, thus widening the gap between the top and the bottom.

Because inflation is measured by the CPI, both rates are well below the actual cost of living, but lower-income households have been falling behind by far the most over the past decade, and are increasingly unable to make ends meet.

Unions step up sabotage of airline workers’ struggles in Europe

Robert Stevens 

British Airways (BA) lost a legal appeal Wednesday to prevent its pilots going on strike over pay. BA’s parent company International Consolidated Airlines Group (IAG) first went to court the previous week, but its initial application was dismissed.

Were the strike to proceed, it would involve 4,000 pilots at Heathrow and Gatwick but affect flights from all UK airports, including Stansted, Manchester, Belfast, Edinburgh and Glasgow. Up to 140,000 passengers a day would be affected by the action.

The dispute takes place amid a growing mood of militancy among airline workers across the continent. More than 4,000 security guards, fire fighters, engineers and passenger service staff at London Heathrow are involved in a pay dispute after rejecting an 18-month pay rise offer averaging just 2.7 percent. The Unite union called off two planned days of industrial action set for July 26-27 and is asking its members to vote on a new offer of just 7.3 percent over two-and-a-half years.

On Friday evening, Unite announced that 88 percent of its members had rejected the new offer and 2,500 workers were prepared to strike next week. In response, Heathrow Airport announced the “pre-emptive” cancellation of 172 flights for next Monday and Tuesday.

In another dispute, security workers at London’s Gatwick Airport are set to strike on August 10 for 48 hours in a pay dispute. The Unite members, employed by ICTS, scan passengers’ luggage. According to Unite, most of the 130 workers are paid less than £9 an hour.

The British Airline Pilots Association (BALPA), which represents 90 percent of British Airways’ 4,300 pilots, held a consultative ballot in June of its 4,000 members concerning BA’s offer of an 11.5 percent pay deal over three years. Ninety-six percent of members voted down the offer. Due to the huge opposition, a strike ballot was held this month, with 93 percent rejecting the pay offer on a turnout of 90 percent. The Unite and GMB unions representing other BA staff accepted the offer.

A strike would be the first by BA pilots in 40 years and their rejection of the deal in such numbers reveals a determination to end the constant lowering of pay along with productivity hikes imposed over the last decade.

BALPA noted that so concerned is IGA with keeping pay down that it is digging in its heals under conditions where just one day of a strike might cost it £40 million in revenue. BALPA said that based on figures BA presented in court, a strike “will cost far more” than it would take to settle the dispute.

But despite the overwhelming mandate, BALPA has refused to call any industrial action. Under anti-strike laws, BALPA has until January to take action, but it must give two weeks’ notice. Despite headlines in the right-wing media that the union is attempting to bring BA to its knees during the height of the holiday season, BALPA has repeatedly declared that all it wants is a negotiated settlement.

As the Court of Appeal decision came through, BALPA General Secretary Brian Strutton said that BA taking the union to court “rather than deal with us across the negotiating table, has sadly wasted huge amounts of time and money that could have been put into finding a peaceful resolution.” He continued, “Now the window for negotiation and compromise is closing fast.”

BALPA called only for “a sensible improved offer” and a “small fraction” of BA’s profits.

Strutton insisted that “BALPA wants to resolve this matter through negotiation and so we are not announcing strike dates… Instead, we have called on BA to hold further talks today [July 31] and for the rest of this week for one last try to resolve this dispute by negotiation.”

On Friday, despite having secured no agreement after another three days of talks, the union tweeted, “Both sides have agreed to resume talks next week. In the meantime, BALPA will not announce any industrial action dates at this time…”

Even if a strike were announced by the union next Monday, action could not legally take place until August 20, with the summer holiday season virtually over.

The deteriorating pay and conditions facing BA pilots and other staff constitute an indictment of the role of the trade unions, which have worked as an arm of management for years. Within the space of a decade, BA went from reporting a £230 million operating loss in 2009 to pre-tax super-profits of almost £2 billion in 2018, up 8.7 percent from 2017. BA’s owner, IAG, which also owns Spain’s Iberia and Ireland’s Aer Lingus, reported an overall pre-tax profit of £2.8 billion, nearly 10 percent higher than in 2017. Investors were awarded a “special dividend” of €700 million as a result.

Three years ago, BALPA accepted a sell-out pay deal that it and the company deemed vital for BA’s “survival” and return to profitability. BALPA referred to its rotten record in a July 22 press release: “BA is making massive profits as a result of the hard work and dedication of staff, including because of sacrifices made during hard times. Thankfully BA is no longer in a fight for survival so, like the airline’s senior managers and directors, pilots deserve a small fraction of that profit via, for instance, a profit share scheme.”

The unions are working in concert to head off any united offensive of airline workers at the UK’s busiest airports.

Last month, Unite called off the first day of a planned 17 days of strikes over pay against Easyjet at Stansted Airport. The 43 staff members involved in the strike action are employed by Stobart and work the Easyjet check-in desk.

The union put forward another pay deal to the workers after it held “positive talks” with the firm and “signed a recognition agreement with Unite for trade union collective bargaining purposes…” Yesterday, the union called off the strike after workers voted for a one-year pay deal, while the company boasted of having ended the strike.

The unions play the same role everywhere. On July 25, the AFPA union called off a scheduled strike by workers at Italian national carrier Alitalia. Some 113 flights to and from Italy were expected to be cancelled. The strike was pushed back to September 6 after the union concluded talks with the Transport Ministry. Several sources said the September action would be cut from 24 hours to just four.

This week, the ALPA union organised a token boycott of company events by Air Malta pilots in protest at the courts upholding a legal injunction against the pilots banning them from taking industrial action in a dispute over conditions of work.

The airlines are responding to increased competition in a cutthroat industry by intensifying attacks on their global workforce. This week, Ryanair, Europe’s largest airline, reported a 19 percent fall in first-quarter profits over the same period a year ago, and a 21 percent increase in staff costs. In response, as revealed in a leaked video, the company said it expects to lay off hundreds of staff in the coming weeks. The firm had 500 too many pilots and 400 too many cabin crew and job losses were “unavoidable,” said chief executive Michael O’Leary.

As with other airlines, the prolonged grounding of Boeing’s unsafe 737 MAX 8 jet has forced Ryanair to reduce scheduled deliveries of the aircraft for next year, from 58 to 30. Ryanair said this will hit profits as any cost benefits from the aircraft it planned to accrue would be delayed until 2021.

Last summer, cabin crews and pilots from a number of European countries took part in a series of strikes against Ryanair’s low-wage regime.

The offensive by BA, Ryanair and all the other airlines poses the necessity for workers to begin to organise themselves independently of the nationalist unions and turn to a socialist, internationalist perspective that puts the interests of workers before the profit interests of the airline conglomerates.

US scrapping of INF treaty heightens threat of nuclear war

Bill Van Auken

Washington formally scrapped the Intermediate-range Nuclear Forces (INF) Treaty Friday, bringing the world a major step closer to nuclear war.

The treaty, signed over 30 years ago by US President Ronald Reagan and Soviet leader Mikhail Gorbachev, banned a whole class of weapons that had placed the world on a hair trigger for a nuclear conflict. Both countries agreed to end all use and production of ground-launched ballistic and cruise missiles with ranges of 500 to 5,500 kilometers (310 to 3,417 miles).

CNN reported that the Pentagon will test within weeks a new cruise missile designed for ranges previously banned by the INF accord. The US military has reportedly been working on the weapon for the last two years.

An unnamed US official told the television news network that Washington aims to deploy the weapon in areas of Europe where it could overpower Russian air defense systems and strike “the country’s ports, military bases or critical infrastructure.”

Short and medium-range surface-to-surface missiles, including the Pershing II and the MGM Lance, were deployed by the United States in Western Europe in the early 1980s, while the Soviet Union had deployed SS-20 mobile missile launchers in the western USSR. These weapons had the capability of striking most major cities in Western Europe and the Soviet Union within minutes. The threat of a nuclear conflict on the continent triggered mass demonstrations against the US missile deployment, particularly in West Germany.

The abrogation of the agreement is bound up with Washington’s turn toward “great power conflict” with Russia and China, in which US imperialism is seeking to leverage its military power as a means of containing Russia and countering the economic rise of China and its challenge to US global hegemony.

US Secretary of State Mike Pompeo issued the formal announcement of the US repudiation of the treaty, placing the full blame for its demise on Russia, even though it was the US that ripped up the agreement. “Russia failed to return to full and verified compliance through the destruction of its noncompliant missile system,” he said.

Moscow has repeatedly denied this claim, insisting that its SSC-8 ground-launched cruise missile, which Washington says is out of compliance with the treaty, is not in violation. While it has invited the US and other powers as well as foreign journalists to inspect the weapons system, Washington has rebuffed all appeals for negotiations, issuing ultimatums to Russia that it knows will not be accepted.

Russia, meanwhile, has insisted that the US is out of compliance with the accord, having deployed missile defense systems in Poland and Romania that are equipped with launchers identical to those used by US warships capable of firing medium-range Tomahawk cruise missiles. It has also charged that the US deployment of armed drones on the continent is a further violation of the accord.

The US government’s determination to upend the treaty and its restrictions on the development of medium-range missiles is aimed not just at escalating its military siege against Russia, but more fundamentally at preparing for “great power” conflict with China.

In response to the US encirclement of China and the deployment of massive naval and air power in the Pacific region as part of the “pivot to Asia” begun under the Obama administration, Beijing, which is not a signatory of the INF treaty, developed its own medium-range missiles.

The Pentagon wants to answer this development by deploying offensive missile systems of its own in the region aimed at China’s major cities. It is no accident that the termination of the treaty prohibiting such a deployment coincides with the sharp escalation of US trade war measures against China.

While the decision to abrogate the treaty was announced by the Trump administration last February, the formal repudiation of the accord provoked condemnations from both Moscow and Beijing.

“On the famous symbolic clock that shows the time left until nuclear conflict, we have unfortunately passed yet another minute towards midnight,” Russian Deputy Foreign Minister Sergei Ryabkov said in an English-language interview with RT. He added that “even though President Trump is saying that there is no point in an arms race and investment in military equipment, this will continue.”

Chinese Foreign Ministry spokesperson Hua Chunying said, “China opposes such actions,” adding, “We call on the United States to abide by its obligations.”

She went on to accuse Washington of seeking “superiority in strategic weaponry” and warning that this would “seriously affect stability and undermine the global balance of power,” threatening “security in many regions.”

While most Western European governments and NATO echoed Washington’s claims that Russia was responsible for the treaty’s demise, there were nonetheless expressions of concern. German Foreign Minister Maas stated that “With the end of the INF treaty, Europe is losing part of its security.” He added, “I am convinced that today we must again succeed in agreeing [to] rules on disarmament and arms control in order to prevent a new nuclear arms race.”

Belgian Foreign Minister Didier Reynders wrote on Twitter: “I regret the ending of the INF Treaty, which has served our security for over 30 years. Belgium reaffirms its commitment to nuclear arms control and disarmament and calls upon the US and Russia to conduct a constructive dialogue and agree on stabilizing measures.”

Belgium, along with the Netherlands, Germany, Italy and Turkey, is one of the countries where US nuclear bombs are deployed.

None of Washington’s Western European allies have given any indication that they are prepared to accept the deployment of medium-range missiles on their territory. Moscow has made clear that any such missile installations would immediately become targets.

Behind the statements about the abrogation of the INF Treaty undermining Europe’s security lies a turn toward escalation by the major European powers, in particular Germany, of remilitarization independently of the US.

The ripping up of the INF Treaty is widely expected to be followed by the ending of the even more significant New START (Strategic Arms Reduction Treaty) agreement. If not renewed, New START will expire in 2021. The pact caps the number of deployed strategic nuclear warheads by both Russia and the US to 1,550, and places similar limits on the two countries’ intercontinental ballistic missiles.

Trump has described the pact as “one of several bad deals negotiated by the Obama administration,” while his national security adviser, John Bolton, has been telling the media that it will likely not be renewed. This would mean no remaining treaties restricting the buildup toward nuclear war.

The Pentagon is openly preparing for such a conflict. A “joint doctrine” on nuclear operations briefly posted on the internet in mid-June states that “nuclear weapons could create conditions for decisive results and the restoration of strategic stability." It continues: "Specifically, the use of nuclear weapons will fundamentally change the scope of a battle and develop situations that call for commanders to win.”

The Pentagon is working to develop an arsenal of “usable,” low-yield “tactical” nuclear weapons to be utilized to turn the tide of battle in confrontations with US imperialism’s “great power” rivals. The underlying and highly unlikely scenario is that such weapons could be used without provoking a full-scale nuclear exchange, putting an end to life on the planet.

The immense dangers posed by the Trump administration’s abrogation of the INF Treaty and the significant step closer to nuclear war provoked no response from Trump's ostensible political rival, the Democratic Party.

Having voted overwhelmingly in both the House and Senate for a record $738 billion US military budget, the Democrats are fully committed to the march toward a nuclear conflagration. Neither House Speaker Nancy Pelosi, who negotiated the budget deal with the Trump White House, nor Senate Minority Leader Chuck Schumer said anything about the scrapping of the INF treaty.

For his part, Democratic presidential front-runner Joe Biden tweeted that the US “must lead the free world.” This was accompanied by anti-Chinese comments. Similarly, Elizabeth Warren kept silent about the treaty’s abrogation while tweeting that the US had “to get tough on China”, while Bernie Sanders said nothing.

There is no antiwar faction within the US ruling establishment, nor any interest on the part of the Democrats or the corporate media in alerting the American people to the growing threat of a global nuclear conflagration. This threat can be answered only through the construction of a mass antiwar movement based on the unification of the international working class in the struggle against capitalism.

Big business parties preside over a social catastrophe in 21st century America

Kate Randall

The second Democratic Party debate held on Tuesday and Wednesday in Detroit featured the four “frontrunners”—former Vice President Joe Biden and Senators Kamala Harris, Elizabeth Warren and Bernie Sanders—and 16 others engaging in the standard mixture of demagogy and lies.

The content of the debate could be divided into three categories: (1) promises made that none of the 20 will ever make good on, (2) chastising each other for their right-wing policies, and (3) depicting right-wing policies they have championed as progressive.

Left off the debate stage was any serious discussion of the unprecedented social catastrophe gripping 21st century America, for which both parties are responsible: falling working class living standards, declining indices of health, the assault on immigrants, police killings, mass incarceration, the US prosecution of endless war around the globe.

These omissions are by design: The Democrats have no more intention than the Republicans of addressing the burning social questions confronting the working class. Just what is the horrific state of affairs that they seek to cover up and make worse for workers and their families?

Social inequality

The wealth of the ruling elite is soaring to new heights. Amazon’s Jeff Bezos has the world’s highest net worth: $131.4 billion. The average annual income among US households in the top 1 percent stands at about $1.8 million, while average income among the lowest fifth of households is a paltry $21,000. The average hoard of the 10 highest net worth individuals is 222,530 times the annual income of a worker earning a $15 “living wage,” who works 40 hours per week.

There are about 40 million people living in poverty, based on the absurdly low official poverty threshold of $25,000 for a family of four. This includes 15 million children. While struggling to pay for housing, transportation, food and other necessities, 40 percent of Americans say they would have trouble coming up with $400 for an unexpected expense, like a medical bill.

Working families are drowning in debt, including for credit card payments. Student debt reached an astronomical $1.5 trillion last year, while auto debt is up nearly 40 percent in the last decade, adjusting for inflation, to $1.3 trillion. Household debt increased by nearly $9 trillion between 1989 and 2018, with 74 percent of that issued to the bottom 90 percent of households by net worth.

Declining life expectancy & “deaths of despair”

Life expectancy, a key indicator of a society’s well-being, has declined each of the last three years. “Deaths of despair”—premature deaths from suicide, alcohol abuse or drug overdose—continue to rise in nearly every state. According to the Centers for Disease Control and Prevention (CDC), in 2017 there were more than 70,000 deaths due to drug overdoses, with opioids involved in more than 47,000 of these.

Paradoxically, the high cost and/or lack of health care is contributing to Americans’ deteriorating health, as health is subordinated to the profit of the health care industry. As of the end of 2018, 30 million adults remained uninsured; 44 percent of the population had insurance but were considered “underinsured” due to high out-of-pocket costs.

Deteriorating working conditions

Wages have remained basically stagnant over the last two decades. Over the last year, average hourly wages have grown by only about 3.2 percent, which, when accounting for inflation, amounts to a mere 1 percent increase. In July, average weekly hours edged lower to 34.3, as increasing numbers of workers are pushed into part-time work involuntarily.

Plant closures are slamming the auto industry as the contract expiration for General Motors, Ford and Fiat-Chrysler workers approaches. As the debate took place in Detroit, GM closed its 78-year-old transmission plant in Warren, Michigan. The plant is one of five in North America the company has slated for closure by early 2020, at a total cost of 14,000 production and white-collar jobs.

The US industrial slaughterhouse claimed 5,147 workers’ lives in 2017. Workers are killed daily in manufacturing, steel plants, on the road, in construction, in retail and other service industries, and in myriad other occupations.

Unintentional overdoses due to alcohol or nonmedical use of drugs at work increased from 210 in 2016 to 272 in 2017, the fifth consecutive year in which unintentional workplace overdose deaths have increased by at least 25 percent. Workers are increasingly bringing their personal problems, particularly their financial troubles, to work in the form of drug and alcohol abuse, with deadly results.

Violence “Made in the USA”

There were a staggering 39,773 gun deaths in 2017 in the US, up by more than 1,000 from the year before. This was the largest yearly total on record in the CDC’s electronic database, which goes back 50 years. Nearly two-thirds of these deaths were suicides; 37 percent were homicides.

According to the Washington Post, 519 people have been killed in police shootings so far in 2019; 992 were killed in 2018.

The US prison system holds almost 2.3 million people, the highest number and the highest rate of incarceration of any country on record. The American gulag comprises 1,719 state prisons, 109 federal prisons, 1,772 juvenile correctional facilities, 3,163 local jails, and 80 Indian Country jails, as well as military prisons, immigration detention facilities, civil commitment centers, state psychiatric hospitals, and prisons in the US territories.

About one in 143 people in America is incarcerated. Two-and-a-half thousand languish on death rows across the country. Despite growing popular opposition to capital punishment, it is still practiced. Since 1973, 1,500 people have been sent to their deaths; 25 were executed in five states in 2018.

The war on immigrants

On any given day, 40,000 immigrants are incarcerated in the US. Immigration and Customs Enforcement (ICE) concedes that half of those imprisoned pose no criminal threat, and that another 35 percent are held for traffic tickets and other nominal infractions. The biggest complaints of immigrants in custody are related to inferior medical care or lack thereof, poor food and prolonged detention.

Since 2018, the Trump administration has carried out 2,300 separations of children from their parents. Children and families have been caged, held under overpasses and in tents, and exposed to the heat. Children and adults have been forced to sleep on the bare floor and have been denied access to proper sanitation and showers.

Since last year, three Guatemalan children in US custody have died from influenza and its complications. Due to a lack of any systematic health care, immigrants have been found to suffer from tuberculosis, pneumonia, scabies, lice, the mumps and other preventable communicable diseases.

Earlier this year the Trump administration threatened a dragnet to round up some 2,000 immigrants. While this has yet to materialize in these numbers, the aim has been to terrorize the population. The threat has garnered opposition from wide layers of the population, with demonstrations taking place in cities and towns across the country and internationally. In one instance last month, a working class neighborhood in Nashville rallied to support a man and his son threatened by ICE with deportation and prevented it.

A government of war, violence and austerity

The indices of social crisis detailed above are an indictment, not only of the Trump administration, but of the Democratic Party. In the wake of this week’s Democratic debate there has been a backlash in the Democratic-supporting media and among Obama supporters against the attacks made against his administration in the course of the debate.

Their concern is that in the hypocritical criticisms of Obama, more is said than intended. The basic reality is that the policies of the Trump administration were prepared by his predecessor, and that the Democrats are currently functioning as Trump’s enablers.

The US Senate, with overwhelming Democratic support, just passed a budget for the fiscal year beginning October 1 that includes a record $738 billion for the military and $638 billion for everything else, a gap of more than $100 billion. The House passed the bill earlier, also with the support of the Democrats.

Any action against the deplorable state of US society will not come through the maneuvers of either big business party. Both support the exploitation of the mass of workers by a tiny minority of bloated millionaires.

The massive social crisis in the United States—repeated in different forms internationally—cannot be addressed outside of a fundamental transformation in social and economic relations. The unimaginable wealth of the ruling elite must be expropriated and the giant banks and corporations transformed into public utilities. The endless diversion of resources toward war and plunder must be redirected to meet basic social needs.

The social catastrophe in America is a product of capitalism. It must be overturned through socialist revolution.

Slump deepens in Australian residential construction industry

Paul Bartizan & Richard Phillips

Australia’s construction industry, plagued by revelations about faulty and unsafe apartment blocks, confronts an escalating crisis.

The Ralan Group, a large property developer, this week went into voluntary administration, owing creditors up to $500 million and jeopardising the future of at least 3,000 apartments. The administrators declared “it is uncertain how much, if any, of your deposit [on a planned apartment] you may receive back.”

On the same day, Adelaide Brighton, a cement manufacturer, announced a major fall in profits. The company’s shares fell over 18 percent, pulling down the share prices of other cement-making companies.

Both announcements came a day after the Australian Bureau of Statistics revealed that new dwelling approvals dropped 25.6 percent over the last financial year, with 14.8 percent fall in new houses and a 39.3 percent drop for apartments. Apartment blocks over four storeys suffered the largest decline.

The Housing Industry Association reported that there had been just 56,357 new homes sold nationwide during the year, the lowest figure since the 1991 recession, despite record low interest rates.

A JP Morgan property analyst described the drop in approvals as “ugly.” A UBS senior economist predicted that construction investment could fall by 10 percent, with up to 100,000 jobs axed in the industry.

The inflated cost of houses and apartments has put them out of reach of many working-class families. Another key factor in the slump is reports that thousands of apartments erected during a debt-fueled property bubble are faulty, unsafe and require expensive repairs.

A July 27 report in the New Daily revealed that 97 percent of all new buildings in the state of New South Wales (NSW) have at least one defect, 71 percent in Queensland and 74 percent in Victoria. The average number of defect types per building is 16 in NSW, 12 in Queensland and 11 in Victoria.

The tip of an iceberg of poorly constructed apartments emerged in 2014 when the external covering of the high-rise Lacrosse apartment block caught fire in Melbourne. It was covered with the same highly flammable cladding as London’s Grenfell Tower.

Investigations by Australian authorities following the Grenfell Tower disaster, which claimed the lives of 72 people in 2017, revealed that the use of flammable cladding was rampant. Hundreds of buildings are covered with the dangerous material.

Promises by state governments to rectify the problem came to nothing. The flammable cladding issue, however, was just one of many problems blighting the industry.

Opal Tower

On Christmas Eve last year, hundreds of residents were evacuated from western Sydney’s 26-storey Opal Tower, following structural movement and damage to the recently completed $165 million building.

In June this year, residents from 120 apartments in Sydney’s Mascot Tower were ordered out of their homes because of foundation problems.

Last month, the media reported that the 109 owners of the Sugarcube apartment complex in Sydney’s Erskineville had been banned from entering the building since its completion in May 2018. The developer had not remediated the former industrial site, which had dangerous levels of heavy metals, hydrocarbons and asbestos.

Residents of nearby Garland Lofts, a nine-year-old set of inner-city apartments, in Zetland, were evacuated last November because of chronic water leaks and fire safety problems.

And the list goes on. Regular reports have appeared of badly built and unsafe properties in Melbourne, Brisbane and other cities.

Apartment owners in faulty buildings are struggling with their mortgages, legal costs, skyrocketing insurance premiums and temporary accommodation costs.

Seven months after being evacuated, many Opal Tower residents remain in rental properties and face a twenty-fold increase, to $2 million, in the annual insurance bill for the entire building, or more than $5,000 per apartment due this month. If the bill is not paid, the building will need to be evacuated again.

This week, Opal Tower owners launched legal action against the NSW government, and the Sydney Olympic Park Authority, which owns the land on which the complex was built, for repair costs and other compensation.

Fearing the impact on profits, stamp duties and property taxes, the state and federal governments, insurance companies and construction lobby groups are desperately attempting to contain the cascading crisis.

This led to a July 18 state and federal Building Ministers Forum (BMF), which promised to introduce regulatory measures recommended in last year’s Shergold-Weir “Building Confidence” report.

A day after the meeting, an Australian Financial Review editorial demanded the BMF and the construction industry “come to grips—quickly—with the scale of problems in the sector, before uncertainty cripples both public confidence and the industry.”

The BMF pledges and other government posturing will change little in the multi-billion dollar industry. Nothing will be introduced that undermines the deregulatory processes introduced by all governments over the past three decades to boost profits by eliminating “red tape.”

Even if adopted, the proposed measures would apply only to future construction, without alleviating the plight of current victims. Those who purchased houses or apartments built on contaminated or unstable land, or with cracking foundations, flooding, faulty plumbing or electrical wiring, or covered in flammable cladding will have to pay.

There is virtually no building insurance safety net for owners. No Australian government—state or federal—has taken responsibility for funding the repair costs facing existing home owners, a disaster that they have helped create.

Before the BMF meeting, the Victorian state Labor government said it would fund $600 million worth of flammable cladding replacement—half through increased levies on new high-rise residential developments. In other words, the financial burden will be passed onto purchasers, while the developers who installed the cladding retain their windfall profits.

Last week, the Owners Corporation Network, a peak body for apartment strata groups, representing thousands of people, denounced the BMF proposals, describing them as an attempt by governments to “buy time.”

Referring to the 2008–09 global financial crisis (GFC), the organisation warned: “This is a GFC-style situation, where credit ratings and the risk for financial products came into question. In that case loss of confidence in the financial system became a contagion.”

UK: Over 1,300 homeless people penalised last year under the 1824 Vagrancy Act

Joe Mount

Thousands of people are being prosecuted every year in the UK under the draconian Georgian-era Vagrancy Act 1824. This outlaws begging and rough sleeping “in any deserted or unoccupied building, or in the open air, or under a tent, or in any cart or waggon, not having any visible means of subsistence.”

Although sections of it were modified or repealed in some parts of the UK, much of the Act remains in force today in England and Wales and can see rough sleepers moved on, fined up to £1,000 or arrested.

The law was enacted when the Napoleonic Wars ended in 1815 and many destitute discharged soldiers returned home, compounding the overcrowding problem in the booming industrial cities that attracted toilers from the countryside, Ireland and Scotland. It allowed punishments such as whipping and hard labour to be used to clear the streets. A 1906 government committee characterised it as a “measure simply of repression.”

The Act was used to prosecute 1,320 people during 2018 and is most commonly employed by police as a threat to force rough sleepers to relocate. Fines levied under the Act are often deducted from weekly benefit payments.

A homeless man from Blackpool named Pudsey, who grew up in care, told homelessness charity Crisis: “The [Business Improvement District] team and the police were on me straight away when I got here. It was them who first served me the Vagrancy Act papers…”

“Since coming to Blackpool I’ve now had thirteen charges under the Vagrancy Act, and I’ve also been taken to court twice for it. Getting the papers just made me angry. They just come up and tell you to move, but I don’t know where they expect you to go? Five of those warnings I was even asleep when they gave them to me, so how could that have been for begging? I just woke up to find it on my sleeping bag. ‘Sitting in a public place gathering money for alms,’ they called it.”

“Half the homeless in town have been given Vagrancy Act papers now, and most of them have been fined about £100 and then given a banning order from the town centre. If they get caught coming back, they get done again and could go to jail, but that means all those people can’t get into town to use the few local services there are for rough sleepers.”

A 24-year-old man was fined £150 after being found outside a supermarket in the bitter cold last December, according to Middlesbrough based Teesside Live. The news site also reported cases of men, after being found in tips and scrapyards, charged under the act for “being in enclosed premises for an unlawful purpose.”

This shocking social reality has prompted a campaign—with the social media hashtag #ScrapTheAct—for its repeal backed by charities, some cross-party Members of Parliament and the Labour Party.

Labour leader Jeremy Corbyn promises to repeal the Act and provide extensive support to eliminate homelessness within five years of coming to power. These pledges are belied by instructions from Corbyn and his shadow chancellor, John McDonnell, for local councils to continue enforcing “legal budgets.” Labour authorities run most of the urban working class areas and work hand-in-glove with the Tory governments to implement austerity, while their affluent, well-connected local leaderships regularly make a killing in privatization and property development deals associated with gentrification.

The Green Party also supports the campaign, with former Green Party leader Caroline Lucas and their sole MP tweeting: “Criminalising homeless people for begging or sleeping rough is Dickensian.” This is a party that speaks for a section of the ruling elite and is amongst the most vocal supporters of the European Union, which has imposed devastating budget cuts across the continent that have impoverished millions, driving many into homelessness. Closer to home, the Greens have worked with Tory and Labour councillors in Brighton and Hove and in coalition government with Fianna Fail in Ireland to push through spending cuts.

In response to the campaign, Tory Housing Minister Heather Wheeler declared: “No one in this day and age should be criminalised for having nowhere to live. I’m committed to ending rough sleeping for good and our rough sleeping initiative is providing an estimated 2,600 additional beds and 750 more support staff this year.”

This from a representative of a government that has slashed the annual homeless services budget by one quarter, approximately £590 million per year, since 2008, or a total of £5 billion since 2009, according to homelessness charities.

Their real attitude is shown by Wheeler’s earlier remarks, revealed this month, describing the homeless in her Derbyshire constituency as “the traditional type, old tinkers, knife-cutters wandering through,” a pejorative reference to Irish, Gypsy, Roma and other traveller communities.

Due to opposition from the wider public, who see growing numbers of homeless in every town and city centre, the government has made token gestures in recent years including a promise to “end rough sleeping by 2027” and funding that is dwarfed by austerity measures imposed in recent years.

Labour, as much as the Tories, are complicit in creating the social conditions that give rise to rampant homelessness and the encouraging of state repression of its casualties, rather than providing the support required to rebuild their lives.

Demands for the Vagrancy Act to be repealed are not new. Last year, a petition received 20,549 signatures, prompting a mealy-mouthed response from the government asserting that “enforcement can form part of moving someone away from the streets but it should also come with an offer of meaningful support.”

The routine use of such anti-social legislation was escalated under the class-war policies of the 1980s Tory government of Prime Minister Margaret Thatcher. This began the period of social counter-revolution that continues today, including the wholesale destruction of social housing provision.

This anachronistic legislation is a symbol of the repressive character of the British ruling class, which upholds the failed capitalist system by using the most brutal means to maintain its centuries-long rule. It is naïve to believe that its repeal would alleviate the problem, let alone strike at its root causes.

While many people are still prosecuted under the Vagrancy Act, its use since 2010 has fallen overall as the police have other, more modern, weapons in their arsenal. These include the so-called Community Protection Notices (carrying a maximum £20,000 penalty), Public Space Protection Orders (involving £100 fines, escalating to prosecutions) and Anti-Social Behaviour Orders that are available for use under civil, rather than criminal, law. Some rough sleepers have even been searched under anti-Terrorism legislation, underscoring how all such laws are ultimately targeted against the working class.

The persecution of homeless people across the country is being stepped up in myriad ways. The clearing of encampments, otherwise known as “tent cities,” by local councils has steadily risen from 72 in 2014 to 254 in 2018, with some authorities seizing tents and charging for their return.

Beyond policing, this punitive approach characterises the welfare and justice systems, which criminalise the victims of societal problems, by stigmatising the poor and shifting the blame onto the supposed moral failings of the individual.

The plight of the homeless is now a tragically familiar sight on the streets of Britain. There are approximately 320,000 people homeless in the UK, with the numbers shooting up over the last decade due to rising rents, cuts to housing benefits and the scarcity of social housing. In the capital rough sleeping soared by 18 percent to 8,855 people between April 2018 and March 2019.

The homelessness crisis is not a temporary problem but a permanent part of life in capitalist society. The existence of thousands who cannot find work or meet their other basic social needs, amid an advanced technological society approaching the third decade of the twenty-first century is a profound indictment of the social and political order dominated by a narrow, parasitic oligarchy.

Senate Democrats approve Trump war budget

Patrick Martin 

The US Senate passed a budget for the fiscal year beginning October 1 that includes a record $738 billion for the military. The budget was the product of an agreement between House Speaker Nancy Pelosi and the Trump White House, reflecting bipartisan support for the American war machine.

Senate Democrats gave far more support to the Trump-Pelosi budget than Republicans, voting for it by 38-5, with four absent. Republicans divided much more closely, 30 for, 23 against, and one absent. Republicans were not opposed to the record spending on the military but objected to the level of spending for domestic social programs and the overall deficit.

If the Democrats had voted against the budget by any significant margin, it would have been defeated.

Of the seven Democratic senators running for president, four were absent from the vote, including Bernie Sanders, who declared during the Tuesday Democratic debate in Detroit that he would vote against the record military budget, but did not bother to return to Washington to cast his vote on Thursday. Elizabeth Warren, Kamala Harris and Cory Booker were also absent.

Among the three Democratic presidential candidates who did return to the capital to vote, Kirsten Gillibrand backed the war budget, while Michael Bennet and Amy Klobuchar voted against.

The Senate result mirrored that in the House, where Democrats provided a huge majority for the budget deal, 219-16, while most Republicans actually voted against the budget backed by Trump, 132-65. Among the House Democrats voting for the record war budget were Alexandria Ocasio-Cortez and Rashida Tlaib, both members of the Democratic Socialists of America.

The bipartisan legislation now goes to the White House for Trump’s signature. In a series of tweets over the past week, Trump has hailed the budget deal with Pelosi, singling out the record funding for the military as the principal gain made by the administration negotiating team, which was headed by Treasury Secretary Steven Mnuchin.

In their final statements before the vote, both Senate Majority Leader Mitch McConnell and Minority Leader Chuck Schumer endorsed the budget, but the Democrat was far more enthusiastic, while McConnell off-loaded responsibility for the deal onto the White House.

“In recent weeks, key officials on President Trump's team engaged in extensive negotiations with Speaker Pelosi and the Democratic House,” McConnell said. “Given the exigencies of divided government, we knew that any bipartisan agreement on funding levels would not appear perfect to either side. But the administration negotiated a strong deal.”

Schumer hailed the budget deal, saying, “It will strengthen our national security and provide our troops with the resources they need to do a very difficult and often dangerous job,” adding, “For too long the arbitrary, draconian limits of sequester have prevented us [from maintaining] military readiness. This deal ends the threat of sequester permanently.”

Speaking for the Trump administration, acting White House chief of staff Mick Mulvaney, a professed “deficit hawk” or opponent of higher spending, said on Fox News Sunday, “When the Democrats won the House, everybody knew that we would end up spending more money. So what did we get in exchange? We got more money for defense, which we think that we need. We got more money for the V.A., which we think that we needed.”

The budget deal sets a top-line spending number of $1.37 trillion for fiscal year 2020, which begins in two months, and $1.375 trillion for the following year. This refers only to discretionary spending, the sums authorized by Congress each year. Interest payments on the federal debt and entitlement programs like Social Security and Medicare are legal obligations of the Treasury and do not require specific year-by-year authorization.

Despite Schumer’s claim that the budget provides $10 billion more in budget authority for domestic social spending than for the military, reestablishing parity between defense and nondefense items, the figures for fiscal year 2020 are $738 billion for the military and only $632 billion for everything else, a gap of more than $100 billion.

The budget legislation also extends the federal debt ceiling until July 1, 2021, removing any possibility of a “fiscal cliff” in which federal debt payments are placed into question, potentially disrupting financial markets. This was Treasury Secretary Mnuchin’s principal concern in the talks with Pelosi, given that the Treasury was projected to reach the current debt ceiling sometime in August, during the congressional recess.

The Democratic leadership made one more huge concession to the White House. Pelosi and Schumer agreed that for the next two years there will be no attempt to use “must pass” legislation, such as appropriations bills for the various federal agencies, to push for Democratic policy preferences like ending the Hyde Amendment, which bans the use of federal funds to pay for abortions, or forbidding the use of federal funds to build Trump’s wall along the US-Mexico border.

The result of this capitulation, combined with the Supreme Court ruling last week allowing Trump to divert funds appropriated for the Pentagon to the wall construction program, is that the White House can proceed with the building of the wall as fast as contracts can be approved for construction companies that enlist in the highly profitable effort. White House officials boasted that at least 100 miles of new wall would be in place in the coming year.

The final passage of a two-year budget for the federal government, with more Democrats than Republicans supporting the deal in both the Senate and the House, demonstrates in the starkest terms the political reality confronting the working class. Workers face, not a “divided government,” as the corporate media endlessly claims, but a unity government of two right-wing capitalist parties, equally opposed to the social and economic interests of working people.

The budget deal exposes the utter fakery of the Democratic presidential debates, in which right-wing candidates posture as friends of working people and opponents of Trump, while in their day jobs as senators, members of the House, governors and mayors, they empower the Trump White House and collaborate with its vicious attacks on the working class.

This de facto coalition government, with a fascistic president enabled by his Democratic partners, offers working people no prospect but military aggression overseas, attacks on jobs, living standards and social benefits at home, and a frontal assault on democratic rights, with immigrants playing the role of guinea pigs for the treatment of the entire population.

Mass protests erupt after Sudan’s military junta guns down school children

Jean Shaoul

Tens of thousands of students and youth took to the streets this week after Sudan’s armed forces opened fire on a youth rally Monday over bread and fuel shortages in El-Obeid, the regional capital of North Kordofan. Six people were killed, including four school children, and more than 60 injured. The military junta has now closed down all the nation’s schools.

Videos on social media show security forces in El-Obeid firing a truck-mounted machine gun against protesters from close range. The truck is marked with a skull and crossed swords insignia and a windscreen sticker reading, “Playing with the big guys is tough.” It has rocket-propelled grenades hanging on the side. According to the Sudanese Doctors Committee, some of the protesters were shot by snipers.

Demonstrators accused the Rapid Support Forces (RSF), the paramilitary group led by one of the leading members of Sudan’s military junta, Mohammed Hamdan Dagolo, also known as Hemeti, of the killings.

The governor of Northern Kordofan ordered a statewide closure of schools and a 9 p.m. to 6 a.m. curfew in four towns and cities in a bid to quell the unrest. But outrage provoked by the killings could not be contained. One of the main protest groups, the Sudanese Professionals Association (SPA), called for nationwide demonstrations “to denounce the El-Obeid massacre and demand the perpetrators be brought to justice.”

Tens of thousands of students and youth responded in the capital Khartoum on Tuesday and in El-Obeid on Wednesday in a rising tide of opposition to the Transitional Military Council (TMC), which ousted long-term dictator President Omar al-Bashir in April to prevent the overthrow of the entire regime. Some protesters in Khartoum wore school uniforms and chanted, “Killing a student is killing a nation.” Security forces used tear gas and live ammunition to disperse the crowds. As the unrest continued, the nationwide shutdown of schools was ordered.

The Forces for Freedom and Change (FFC), an umbrella opposition front including the Sudanese Communist Party, once the strongest in the Middle East, and armed rebel groups from the conflicts in Darfur, South Kordofan and Blue Nile, said they would not be taking part in the planned talks with the TMC on Tuesday.

These layers are hostile to the workers' and rural poor’s basic demands: social equality, better living standards and political freedom. The FFC agreed on July 17 to a “Political Declaration” that would establish a joint civilian-military transitional ruling body to supposedly oversee the formation of a civilian administration and prepare for elections after three years. The power-sharing agreement gave free rein to the military and is an attempt to sell out the months-long protest movement that brought cities across the country to a virtual standstill.

A civilian-led transitional government in alliance with the military, while giving the social layers represented by the FFC a greater share in Sudan’s national cake, would continue to represent the interests of the country’s capitalist elite and its enforcers. This venal clique presides over a country where at least 80 percent of the 40 million population live on less than US$1 per day, with some 5.5 million in need of humanitarian assistance in 2018, an increase of 700,000 compared to 2017, and where some 2.47 million children suffer from acute malnutrition.

The power-sharing agreement was met with widespread scepticism and smaller protests continued. The very next day, security forces fired tear gas on demonstrators in Khartoum, who were commemorating those killed since the start of the demonstrations in December last year, calling for “Civilian rule, civilian rule!” and “Freedom, peace, justice!”

According to the Sudanese Doctors Committee, at least 250 people have been killed by the security forces and 400 wounded since the start of the protests in December, with at least half killed on June 3 as the military and paramilitary forces cleared the sit-in outside the military’s headquarters in the capital.

On July 20, angry protesters again took to the streets of Khartoum after an official investigation into the June 3 crackdown cleared the TMC of all responsibility for the bloodshed. Fath al-Rahman Saeed, who headed the investigation, claimed that just 87 had died and 148 had been wounded and that those officers responsible did so without authorisation from the TMC. He said eight army officers had been charged and could face the death penalty, but did not name them. Saeed denied that there was any evidence of rape, despite widespread reporting by local medics of rape, a means of war and repression widely used by Diagalo’s RSF in Darfur.

According to protest organisers, at least 11 people have been killed in the biggest demonstrations since June 3.

The murderous assault on the school children in El-Obeid took place as Dagalo, the deputy leader of the TMC, was meeting with the Egyptian butcher President Abdel Fattah el-Sisi in Cairo. El-Sisi, along with Saudi Arabia and the United Arab Emirates (UAE), has backed the TMC since it ousted Omar al-Bashir in April.

It was el-Sisi, the chair of the African Union (AU), who brokered the deal between the TMC and opposition leaders at the behest of US imperialism, which is determined to ensure that the uprising does not spread to its regional allies: Saudi Arabia, the United Arab Emirates and Egypt. These dictatorial regimes, fearing their own working class and poor peasants, backed the junta, ordered the crackdown on protesters and dictated the terms of the “deal” with the opposition forces that would provide a civilian cover for the continued rule of the Sudanese elite.

The last thing the US—and Europe—wants is instability in Sudan, strategically located in the Horn of Africa alongside the Red Sea and the entrance to the Suez Canal, through which much of the region’s oil passes. Imperialism also fears a new wave of refugees heading for Europe.

The AU, in its former guise as the Organisation for African Unity, once espoused Pan-African Socialism, whose origins lie in the efforts by the Stalinist bureaucracy to subordinate the workers and poor peasants to an emerging bourgeoisie based on advocacy of “two-stage revolution”—first a unified movement for national liberation and only much later a struggle for socialism.

Trotsky’s theory of Permanent Revolution explained that the emerging bourgeoisie in countries with a belated capitalist development could not carry out national revolutions against imperialist domination because it feared any challenge by the working class to efforts to establish its own rule.

In the immediate post-war period, Soviet backing initially gave such movements room to manoeuvre and advance limited reforms and economic policies of “import substitution.” But following the dissolution of the Soviet Union in 1991 and the restoration of capitalism, nationalist regimes throughout Africa embraced the free market and established themselves as local enforcers of the exploitation of the region by the major powers and transnational corporations.

It is the working class, in alliance with the rural poor, that must now play the decisive role in the struggle for democratic rights, jobs and all of life’s essentials in a struggle against the national bourgeoisie and the imperialist powers. This struggle cannot succeed if confined to the national soil.

Sudan’s struggle takes place amid a growing wave of working class militancy, as evidenced by the strikes and demonstrations by workers in Algeria, Tunisia and Morocco. Workers in Sudan must seek consciously to unify their fight with their brothers and sisters throughout Africa and with workers in the imperialist centres, based upon the programme of world socialist revolution.

Early peak in Australia influenza season causes concern

John Mackay

With the Australian winter influenza season striking earlier this year, indications are that it will be severe. To date, at least 306 predominately elderly people have died nationally. Two children as young as two and a 13-year-old also died of the disease.

There were over 138,322 laboratory-confirmed cases from January 1 to July 10, with the highest numbers in the most populous states of New South Wales (NSW) and Victoria. This is almost eight times the five-year average of 17,349 cases at this point of the year. Last month saw at least 40,000 confirmed cases in NSW, the highest ever recorded for June.

There have been 35,000 notified cases of influenza in Victoria this year, but clinicians said the true number was likely many times that. This time last year, there were fewer than 3,000 reported cases and 5,000 at the same point in 2017.

The 2017 season, the worst on record, resulted in 1,165 deaths nationwide according to the Australian Bureau of Statistics, with approximately 250,000 laboratory-confirmed cases. In the milder 2018 season, 486 deaths occurred.

The influenza virus develops rapidly, with fever, chills, muscle aches, fatigue and coughs worsening during the initial few days. Most sufferers will improve without medical care, but some are at higher risk of severe complications, such as pneumonia or sepsis. Sepsis occurs when the body’s response to an infection injures its own tissues and organs, leading to shock, multi-organ failure and death.

Influenza can affect anyone, but the most at risk groups, where the notification rates are higher, and severe complications more prevalent, are children and those aged over 65 years. Pregnant women and Aboriginal and Torres Strait Islander people are at higher risk also.

Influenza is a global problem. The virus strains are internationally monitored by scientists to predict the strains for the winter seasons in both the northern and southern hemispheres. In Australia, flu incidences typically peak in August, with the season running from May to September, so a full assessment cannot be made until the flu season ends. Health experts are still urging people to be vaccinated, in order to minimise the severity of the outbreak.

Nursing homes and aged care facilities are particularly vulnerable. As of early July, there had been more than 360 influenza outbreaks at residential aged care facilities across Australia. In NSW, there had been 112 outbreaks at aged care facilities, a mental health facility and hospital, resulting in 66 confirmed deaths.

Early this month, five residents were hospitalised and three died in a single nursing home, south of Wollongong, near Sydney. Twenty staff also contracted the flu, requiring the nursing home to be quarantined.

South Australia is experiencing a very bad early season, with 82 deaths and the number of reported cases surpassing 20,000. This compares to the whole 2017 flu season, which saw 124 deaths and 28,486 cases.

Doctors in South Australia have raised concerns over the lack of uniform and evidence-based standards for vaccination and containment of virus outbreaks in aged care. There are about 250 aged care facilities in the state.

Dr Rod Pearce, a member of the Immunisation Coalition, told newsGP, a website of the Royal Australian College of General Practitioners: “At the moment there’s no predictable response from [residential aged care facilities] that satisfies GPs that their patients are being looked after properly.”

The flu vaccine, while not affording complete protection, is the best-known defence against the virus. The vaccine is only provided free of charge to children, people over 65 years of age and Aboriginal and Torres Strait Islanders. Other people must pay a GP or a chemist to be vaccinated.

There is ongoing scientific research into a universal vaccine that could target a part of the virus that is not susceptible to mutation. Mutations of the virus mean that yearly vaccines, targeting specific strains, can be ineffective or have reduced protection.

A universal vaccination would permit a one-off vaccination against the flu. However the development of such a vaccine by the giant pharmaceutical companies would require profitable returns. Fears have been expressed on financial markets that universal vaccinations would not be profitable enough, and would disrupt the existing vaccine market.

A recent National Australia Bank report on the stock price of Commonwealth Serum Laboratories, which produced vaccines, stated: “If a universal vaccine was developed, the seasonal vaccine would be obsolete. Switching a yearly shot to a once or twice in a lifetime vaccine would cause a huge decline in sales.”

The report warned that the company developing a universal vaccine would not see a return on its investment unless the price of the vaccine was raised substantially above the existing levels.

This year’s outbreak is putting increased pressure on a healthcare system suffering from years of funding cuts. The Australian Institute of Health and Welfare, a government-funded body, published a report in May showing that the number of people presenting to hospital emergency departments increased by 11 percent between 2013–14 and 2017–18, to more than 8 million patients, or an average of 22,000 per day. The report said this was greater than expected, considering the average population growth over the same period.

Earlier this year, the Australian Medical Association (AMA)’s pre-federal budget assessment stated the allocated healthcare funding over the next four years was inadequate and would provoke a healthcare crisis. The submission stated: “Despite their importance and despite our reliance on our hospitals to save lives, and improve quality of life, they have been chronically underfunded for too long.”

AMA president Dr Tony Bartone stated: “Wait times in emergency departments, as well as elective surgery wait times, especially for non-urgent categories, have remained significantly under target.”

The flu season is an annual and predictable event whose severity could be minimised with global free access to vaccination, and the development of a universal vaccine. Instead, chronically-underfunded public health systems strain under the weight of influenza outbreaks.