Australian Politics Under the Second Howard Government

The Activist - Volume 9, Number 1, 1999

By Peter Boyle

[The general line of this report was adopted by the 18th DSP Congress, held in Sydney, January 5-10, 1999.]

At the time of our last decision-making conference we had less than a year of experience of the Howard Liberal-National government but already the main features of the period were clear. The Coalition government was seeking to escalate the attacks on the working class -- to accelerate the capitalist neo-liberal offensive -- and the conservative leadership of the trade union movement had shown that it was unwilling to lead a resistance to these attacks let alone contemplate going on the offensive to regain some of the ground conceded under the previous 13 years of Labor federal government.

The ruling class has been on the offensive for more than 22 years in this country and, for the last 15 of these, the trade union movement has not put up any serious resistance. Some had hoped that the end of the Accord would open a new stage of resistance but it did not.

In the face of this continued retreat of the organised working class, the far right managed to create a significant electoral vehicle in the space of a little over a year in the form of Pauline Hanson's One Nation party which obtained the third biggest primary vote in the recent federal election. What are the roots of the racist resurgence and what are its prospects?

There have also been significant developments in the objective situation. The "East Asian crisis", the first phase of a global recession, which has toppled three governments in the region, including the once seemingly invincible dictator, Suharto.

The Howard government claims that its neo-liberal economic "reforms" have fire-proofed the Australian economy from the growing global recession and recent media reports of bourgeois economists' forecasts appear optimistic. But have they got it right? If Australia joins the rest of the world in a recession in the coming months, what will this mean for the political situation? That's another of the assessments we need to make in this report.

This report will also open the discussion on the potential for resistance to the capitalist offensive in the second term of the Howard government, although this will be the real subject of more detailed reports on our different areas of intervention.

Economic and social conditions after two decades of capitalist neo-liberal offensive

The class struggle in Australia is being shaped by the cumulative impact of the last two decades of capitalist neo-liberal offensive.

While real wages are reported to have increased in the 1990s but the real unit cost of labour fell. If workers got paid a little more usually they had to work a lot harder for it. There was a massive 25% rise in productivity over the 1990s and the main benefit of this went to the bosses. Australia's economy is "booming" but it doesn't feel like it is to many people.

Unemployment continues to ratchet up. At the peak of this economic cycle official unemployment barely dipped below 8%. At the peak of the previous cycle, in 1989, it dipped below 6%. In the boom before that, it dipped to 5%. The flip-side is that during the last two recessions official unemployment shot up to nearly 12%.

The real jobs situation is much worse than the official unemployment figures suggest. According to the Australian Bureau of Statistics, when underemployment and discouraged jobseekers are taken into account the unemployment figure more than doubles to 19%.

And the same time, social services have been slashed and access to the welfare system has been tightened, although they remain in better shape than in large parts of the world. Attacks on welfare have a wide impact because 32% of the adult population, and 41% of children, are dependent on welfare payments of one sort or another. Nearly half of these welfare dependent children now belong to families considered working poor i.e. the low wages of their parents have to be supplemented by welfare.

Income inequality has increased and large sections of the working class and petty bourgeoisie now face increasing economic insecurity in the wake of the waves of privatisation and subcontracting. Work has been increasingly casualised and more and more of it is becoming part-time. (17-25% of all workers are casual or on contracts.)

There are growing differences between the incomes of workers in different industries and different skills but they have been far outpaced by the gaps between workers and capitalists.

A recent article in the Sydney Morning Herald's Good Weekend magazine gave a dramatic illustration:


* Stephen Jones, cleaner, earns $300 net a week, just over $20,000 a year gross.

* Angelika Davern, child-care worker earns $408 net a week, about $26,000 a year gross.

* John Howard, PM, gets $230,000 gross a year (more than ten times the cleaner) plus free luxury accommodation and other perks.

* George Trumbull, the chief executive of AMP has a remuneration package of between $5.7 million and $7 million a year -- and that's not counting the income from his private investments and certainly not the fat bonus he will receive for the takeover of the GIO.

Recently, even Liberal Victorian Premier Jeff Kennett was moved to speak up loudly about income inequality. He complained that the income gap between corporate CEOs and political leaders was getting to big, even though not long before he had said that wharfies on less than a third of Howard's salary (and this only with overtime) were grossly overpaid.

There are also differences in poverty and unemployment from state to state and between capital cities and a dramatic gap between capital cities and rural towns and regional cities.

Not only has there been a massive shakeout in family farms over the last two decades but rural and regional Australia has also suffered disproportionately from government and corporate cutbacks. Closures of government offices, hospitals, schools, rail services, Telstra services and banks have ensured that in every state except Western Australia, the non-capital city unemployment rate is two to three percentage points higher. Non-metropolitan Australia now accounts for 35% of the workforce but 42% of the unemployed and 36 of the 40 poorest federal electorates are rural.

This is one factor that has contributed to the large support for One Nation in parts of rural Queensland and New South Wales.

Many people in rural and regional areas feel that they have borne more pain than the cities and they have turned against the traditional parties of government in recent elections.

The objective basis for the rise in racism

You will find heaps of articles in the newspapers that sum up the One Nation phenomenon as an angry, unthinking backlash by the chief victims of recent economic and social change. But this is not the whole truth. Rather, it is the combination of the continuing relative privilege of white workers, small farmers and small business people and their growing economic insecurity that underlies the racist resurgence.

The huge gap between indigenous Australians and the white working class has continued ever since colonisation. It's summed up in unemployment more than four times the national average, infant mortality two to three times higher and average life expectancy 18 to 20 years shorter than other Australians.

But more recent racial divides in the working class have also emerged.

The unemployment rate is dramatically higher also for migrants born in Lebanon (38.9%) and Vietnam (19%).

Recent studies have shown that there is a considerably lower proportion of Australian-born adults with weekly incomes of less than $300 than overseas born. Comparing adult males in these two categories, in Melbourne the respective proportions are 15.6% and 23.5%, in Sydney, 14% (for Australian-born) and 23.5% for overseas-born.

Overseas-born from English speaking backgrounds are less likely to be in low income categories. The biggest concentrations in these two cities in the under $300/week comprise those born in Lebanon, Vietnam, Korea, Turkey, Cambodia, Laos, China and the former Soviet Union.

When you combine the lowest income groups, according to background, and those for the poorest suburbs, the large Indochinese enclaves in Sydney and Melbourne stand out. Some academics say these are developing into ethnic enclaves or "ghettos" or "sites of a relatively permanent underclass".

This is still a contested analysis and it is a fact that newly arrived working class immigrants have tended to be shunted into a lowest paying and worst jobs for a long time. But generally groups of migrants have moved up the ladder in the next generation.

But the capitalist neo-liberal offensive has thinned out the middle layer of the working class and ended many of the conditions that have allowed some workers to climb out of the worst jobs over time. The previous "White Australia" immigration policy also ensured that most new migrants before the 1970s were from Europe, and less easily racially discriminated against. This change was also amplified by the proportionately large intake of refugees from Indochina and later China in the 1980s and 1990s. These two groups now comprise the majority of the Asian Australian section of the working class.

The myth of the fire-proofed Australian economy

The relative privilege of all Australian workers over workers in neighbouring Asia has been reinforced since the East Asian economic crisis struck.

The former Labor government had fostered an exaggerated impression among Australians that East Asia was about to overtake Australia economically so when the crisis hit, the Australian capitalist media indulged in an orgy of racist gloating.

The crisis was blamed on "Asian values", supposedly more corrupt than ordinary capitalist values. Never mind the fact that Australian corporations were happily participating in many of these corrupt dealings for years. One economist hailed "Anglo-Saxon virtues" as the reason why Asia, and not Australia, had been struck by the crisis.

The Howard government propagated its version of this line. The Australian economy had been "fireproofed" from the Asian crisis because it had been willing to take the necessary tough neo-liberal measures. The GST should be swallowed like more necessary economic tonic.

The fact that the Australian economy was still booming along at an annualised rate of 4 % between last March and September lends the government's line credibility for now and probably helped the Coalition get back into government with a reduced but still substantial House of Representatives majority.

But how long will the Australian economy continue to boom? Is it really fire-proofed from global recession?

After months of worried speculation, the bourgeois media exploded into optimism when some positive economic figures were released just over a month ago. While unemployment started to rise again in November, the treasury revised its 1999 forecasts for growth upwards from 2.75% to 3.25%, and a couple of survey's showed that Australian bosses were optimistic.

The first thing to note about the official forecast is that it anticipates a sharp slowing of growth next year. There is no debate between economists about whether a recession is impending, there are only arguments about when in the coming year it will hit and how serious it will be.

Secondly, while the government's spin is that Australian exporters cleverly shifted their markets to the US and Europe in the wake of the Asian crisis and on top of that, the falling Australian dollar made Australia's exports more competitive, the truth is not so simple or so happy.

The main impact of the East Asian crisis (particularly the Japanese recession) only began to show up dramatically after the revised economic forecasts were announced when new contracts for coal and iron began to be negotiated. Simply, the major Japanese buyers want to buy less and at much lower prices and Australian exporters are over a barrel on this issue because Japanese industry is the main customer. This has sent BHP shares into a downward spiral and other resource companies are heading that way too.

This delayed effect was predictable but for political reasons played down. Commodity prices, for coal, gold, oil, copper, aluminium and most other metals have been tumbling since 1997 but the terms of trade have yet to catch up. But as the Business Review Weekly's sober end-of-year outlook noted, the terms of trade can't defy gravity for much longer.

In the next few months we will see the line about the supposed clever switching of exports to the US and Europe put to the test. Even if it has more truth than appears, all this means is that the inevitable extension of the global recession to the US will close off this escape route from East Asia's crisis.

The devaluation of the Australian dollar has provided a bit of a buffer but with most of the world's currencies floating freely there is unlikely to be any long-term competitive advantage gained this way. Further a lower exchange rate also means that the cost of investing in new plant (usually imported in Australia's case) goes up.

Already there has been a blow out in the current account deficit, and the Treasury predicts it will hit $32 billion or 6% of GDP next year. This makes the bourgeois economists nervous that at some stage the Reserve Bank may have to put up interest rates, as it did in the late 1980s, triggering the "recession we had to have".

If interest rates are raised the economy could come crashing down quickly as the current boom is being carried by domestic growth fuelled by low interest rates. But a rise in interest rates will also hit workers pretty quickly and in more ways than one. Unemployment would shoot up and with households with record indebtedness the pain will be sharp.

Racism and the ideological offensive

While the privileged position of most white Australians provides an objective basis of the racist resurgence, we should not ignore the role of specific interventions on the ideological level of various political forces in Australia.

1. The Howard government has used more overt racism as part of its ideological offensive. Howard's attacks on anti-racism as "political correctness", his defence of Pauline Hanson's overt racism, all prepared the way from the attacks on native title, ATSIC funding and the attacks on the welfare rights of new migrants.

2. The Howard government, like its Labor predecessor, scapegoats recent immigrants for rising unemployment, even when this dramatic rise in unemployment since the mid-1970s has been accompanied by a proportional reduction in immigration. It does so even though Australian big business has an immediate interest in stepping up immigration at present and avoiding a resurgence of overt anti-Asian racism. This contradiction and the crude racism of Hanson's One Nation contributed to the unprecedented public criticism by a host of establishment figures (including the governor-general, former Labor and Liberal PMs, church leaders, etc.) of Howard's racist ideological interventions.

3. The trade union bureaucracy, based on the most privileged layers of the working class, refused to put up more than a token fight against the racist resurgence and what opposition it did mount was on the basis of the bourgeois opposition to One Nation, an opposition based on the myth of a common, multicultural, Australian national interest linked to the capitalist neo-liberal offensive which the union bureaucracy has sought to adapt to. There have even been several reported instances where union leaderships have urged immigration officials to raid workplaces because they suspected illegal immigrants were being employed purely on the basis of their Asian appearance. Such overt racism by trade union officials sits on top of a more typical refusal to contest racism in the workplace and promotion of implicitly racist economic rationalism.

4. There is a big generational divide in attitudes towards Aborigines and Asians and overt racist ideas. Surveys have shown that a big majority of young Australians oppose racism while older Australians tend to be almost equally divided on this question. This is reflected graphically in the attendance at One Nation meetings. One component of this is the ideological gains won in the 1960s and 1970s wave of radicalisation. Ideologically, the racists have been on the defensive ever since and liberal anti-racism has been partly integrated into the education system.

Clearly, the last two factors created the opening for this year's successful Resistance high-school campaign against racism. This campaign is covered by other reports in this conference and at the last National Committee plenum but we should underline here the fact that the political vacuum into which this campaign was inserted extended beyond the high school student sector. The campaign allowed our tendency to highlight the glaring abstention of those institutions that the working class and the progressive movements have traditionally looked for leadership in important struggles.

Multiculturalism and the bourgeois opposition to overt racism

The bourgeois opposition to the racist resurgence turns a blind eye to the racism of Coalition and Labor governments. It's silent on the bi-partisan attacks on Native Title, on refugee and new migrant rights. Silent on the fact that the Coalition and Labor agreed on 90% of Howard's bill to effectively extinguish native title and 100% on the attack on the legal rights of appeal for refugees and the two-year exclusion of new migrants from welfare rights.

The bourgeois opposition to the racist resurgence exclusively targets One Nation, the upstart party and their attack focuses on this party's opposition to "economic rationalisation" and "globalisation". It claims that the racist resurgence is the irrational response of ignorant losers in the market place. This reinforces One Nation's claim that it is not a racist but a nationalist response to "globalisation".

The truth is that the resurgence of racism in Australia, as in all other imperialist countries is a product of the capitalist neo-liberal offensive. Racially oppressed minorities are facing greater attacks and racist immigration laws are being tightened.

Some bourgeois critics of One Nation hide behind vague slogans in defence of "cultural diversity" or "multiculturalism". So we should clarify some matters that have arisen in the pre-conference discussion about multiculturalism.

The DSP program states: "Insofar as the policy of multiculturalism reflects greater respect for the right of the ethnic communities to maintain their cultural traditions, the party supports it. The free interaction of different cultural traditions helps to breakdown narrow national-cultural exclusiveness. At the same time the party does not support the promotion of any particular national culture, and opposes those elements in every national culture that contradict democratic rights and humanistic values."

This is a correct position. We have an important critique of the policy of multiculturalism which was introduced under the Whitlam Labor government and has been substantially continued by every subsequent government, including the Howard Coalition government, even if Howard himself cannot bring himself to say the "M" word. It has served as an important pillar of the Australian capitalist class's attempt to bolster nationalist consciousness after the old British-based Australian nationalism became less tenable in the wake of the 1960s-70s radicalisation and changes in Australia's population makeup.

The Labor-Liberal policy of multiculturalism has been used to divert focus from the struggles for material rights by various oppressed layers into a more nebulous quest for cultural diversity.

But we also must be careful about how we explain our criticism of multiculturalism, because many people first come to anti-racist consciousness on a liberal basis. Superficially, racism can seem simply like cultural intolerance so multiculturalism is widely understood as anti-racism. We certainly do not want to be misunderstood as standing for "monoculturalism" because we criticise the Labor-Liberal policy of multiculturalism.

Secondly, multiculturalism has been made the official name for a wide range of government policies, which have encompassed some real gains won by earlier struggles, including some limited measures for positive discrimination in favour of indigenous Australians and migrants of non-English speaking background, anti-discrimination legislation and subsidies for migrant community organisations. These are real gains that we seek to defend and extend.

However, it is not useful for us help the ruling class confuse the masses more about the meaning of racism and anti-racism and what is really at stake today. Just because the old CPA, the Labor left and many of the migrant lefts fell in behind the official policy and ideology of multiculturalism, does not mean we should do the same. There is more to lose than gain in calling the defence of Aboriginal and migrant rights "defending multiculturalism".

Our anti-capitalist opposition to racism points to the real oppressive relations that racism seeks to rationalise and legitimise. It attacks all the capitalist parties for their racism and it is prepared to challenge the dictates of big business. It argues against the false road of economic nationalism which seeks to defend the privilege of some workers instead of the rights of all workers.

Prospects for One Nation

What are the prospects for Hanson's One Nation after the federal election? Pauline Hanson's loss of her seat in the House of Representatives and the fact that the party only won one Senate position signalled a turning point in the previously dizzying rise of this far-right populist party. Since then, Hanson's reportedly gone into depression, her media honeymoon seems to have ended, they've lost one of the 11 seats they won in the Queensland Parliament and the party seems to be wracked by internal disputes.

The bourgeois media has pronounced One Nation finished and the politicians from the major capitalist parties are scrambling to claim credit for its decline. In one sense the Labor and Liberal politicians can claim credit. One Nation failed to win more than one Senate position because these parties denied One Nation preferences. But One Nation received the largest primary vote after Labor and the Liberals, more than the Nationals and much more than the Democrats and the Greens combined.

One Nation's national average vote of slightly less than 10% also disguises larger support particularly in Queensland and New South Wales. While One Nation still gets twice and many votes in rural electorates (and its direct target has been National Party voters), it also won well over 10% in many city electorates. In the Newcastle by-election, in a traditional Labor stronghold, One Nation received 17% of the primary vote.

Even if One Nation fades as a parliamentary force, it has shown that there is a significant hearing in the population, including in the working class, for its racist economic nationalism. These voters feel cheated by the electoral system because two parties that attracted fewer votes, the Nationals and the Australian Democrats, won many more seats.

Even if One Nation falls apart, and the New South Wales elections could be decisive for them, the racist resurgence continues in other ways. The National Party has adopted most of One Nation's reactionary policies and the Liberals and the ALP have also taken on some of One Nation's demands, including attacks on ATSIC, the dismantling of Abstudy (the modest affirmative action education policy for indigenous Australians), Native Title extinguishment and attacks on new migrants and refugee rights.

One Nation may be in trouble but the racist resurgence has not been defeated by the bourgeois parties. Racism extends beyond the numbers of people who voted for that party in the last federal election. It's entrenched in many institutions of government, the police and immigration authorities, in particular, as several of our international guests at this conference experienced for themselves. Further, racism and protectionist remain relatively unchallenged in the working class and could grow as economic insecurity increases.

Pauline Hanson mobilised several thousands through her speaking tours and she did a better job of using parliament as a platform for mass agitation than any Labor left or Green parliamentarian has done. But One Nation remains a parliamentary party. The far right hasn't yet mobilised mass extraparliamentary force, though in its ranks there are quite a few people who would love to do so. But could this change in the future? The answer lies in an accurate reading of the stage of the working class retreat because the success of far-right populism in this country is built on the failure of organised working class to fight the capitalist offensive for a decade and a half.

The continuing retreat of the organised working class

The union movement today is much weaker than it has been post World War II. The overall level of unionisation has fallen from a 1960s high of 55% to 28% and in the private sector, which employs most workers it is even lower, 21%.

Unions still remain relatively strong in some industries -- power, transport, communications, coal mining and the public sector -- but is declining very fast in the service, finance, property and agricultural sectors. However, according to these latest ABS statistics, there was a decline in membership over the last year in every sector.

In percentage terms this is still a much higher level of unionisation than in the United States and even higher than in France (though France has a legislated system of workplace delegates that the levels of membership of unions does not reflect). But this is not the only indicator of union strength.

Under the former Labor federal government, the union movement in Australia sacrificed its greatest asset, solidarity. The union leaderships did this by policing wage restraint for the Labor government and by allowing the introduction of enterprise bargaining. In the 1980s the union officials described enterprise bargaining correctly as the antithesis of collective bargaining and a reactionary objective of the "New Right" but by the 1990s most of them were welcoming enterprise bargaining.

Since Howard's Coalition government came in 1996, enterprise bargains have been generalised and supplemented with AWAs (individual employment contacts), solidarity with other workers has been made illegal, and award conditions have been simplified. All this got through without serious opposition.

Not bad for a John Howard who had to promise he had changed for the softer on industrial relations, in the lead up to the March 1996 elections! After August 19, 1996 -- when the union bureaucrats publicly abandoned mass action against Howard;'s attacks -- the ruling class could see that the unions were not going to put up a serious fight and they began to pressure Howard to get tough. In 1997, Howard signalled he was willing to go on the offensive by announcing he would take the GST to the next election even after promising in 1996 that he would "never ever" introduce one.

Frankly, the bosses are laughing and crowing about how successful Howard has been in weakening the union movement, since then. They count the MUA dispute as a significant if partial victory.

It's important that we understand what was won and loss in the MUA dispute.

This report is not going to go into any detail about that important struggle. Comrades should read the riveting PCD contributions by Michael Bull and Ana Kailis to get a blow by blow account of the two most militant picket lines, in Melbourne and in Fremantle. The trade union work report will also go into the wash-up of the dirty deal in the coming MUA elections. Here we just want to get our general analysis clear.

If you look at the dispute purely in terms of an industrial relations conflict on the wharves it was clearly a substantial victory for the bosses. Patrick got the dramatic job cuts and destruction of hard-won conditions and other stevedoring companies, like P&O have got a free ride.

Anyone who says otherwise, including the Stalinist CPA leadership, is lying and the wharfies and every informed union militant around the country is not buying their lies.

But the Howard government did not succeed in decisively smashing the MUA -- which it appeared to be going for. If anything, Howard, Reith, Corrigan and the rest of the ruling class discovered that there is still fight left in union movement and potential broader community support for unions, even if, as also became clear, the ACTU and most union leaders are not prepared to lead such a fight.

Howard and Reith were very crude in their conspiracy to break the MUA. It was a PR mess from Dubai to Webb Dock. The training of former army personnel in Dubai Port, the balaclava-clad strike-breakers arriving in the night with Alsatian dogs made the government and Patrick's look sinister and undemocratic.

But the bosses have had success with breaking union shops when it has used less unsubtle tactics. In the Gordonstone coal mine dispute, the bosses now appear to have got away with a variation of the same tactic that Patrick's attempted. The full bench of the High Court has accepted management's right to sack a unionised workforce, and through a series of elaborate moves reopen the mine with new non-union labour. The CFMEU is hoping to take this fight to the High Court but there is no mass campaign on this important issue.


Perhaps part of the government's objective with its "unsubtle" attack on the MUA was to test out the broader political will to fight in the union movement. The bosses got a surprise, especially in Melbourne and thousands of militant workers and their supporters had a taste of the potential of proletarian power.

The bosses and their government didn't get a full victory on the docks but they were applauded pretty unanimously, if discretely, by the ruling class for trying. Reith had to be shelved for a while he was rehabilitated in the election campaign, when he was given the chance to cockily announce a second-wave of anti-union laws.

Our party's opinion is that MUA-Patrick deal was a sell out and that much more could have been won. The struggle on the wharves temporarily unleashed powerful forces. Thousands joined the picket lines and the issue stirred up a long quiescent working class. The rapidly broadening support for the pickets was inspiring to all of us and many others. But this mass militant response was only triggered because a certain section of the trade union leadership primarily outside the MUA, was prepared to temporarily take leadership of the campaign and turn impotent "peaceful assemblies" on the docks into militant mass pickets.

However, that section of the trade union leadership pulled back after a while and allowed the ACTU and the MUA leadership to "normalise" the dispute after a particular crafty decision by the courts to allow the locked out MUA members back to work (albeit, temporarily and initially for no pay!).

That section of the union leadership also failed in providing continuing political leadership with their back-to-Labor approach during the last federal election campaign.

Stage 2 of Howard's offensive and the parliamentary `opposition'

When you list the big gains of the Howard government has made against the working class, what stands out is how little opposition it has met.

* The unions copped out on fighting the Workplace Relations Act after the August 19, 1996, saying that the Democrats would save the day in the Senate. The Democrats, under Cheryl Kernot, did a dirty deal with Howard and there was not a whimper from the unions. Indeed a year later Kernot was welcomed into Labor's ranks as a new star leader.

* As it became clear that the new industrial regime severely limited the unions' right to take industrial action the union leaders said we have to work within the law. "Clever legal tactics" would save the day, said the leaders of some of the most militant unions.

* Howard managed to destroy 86,000 federal public service jobs but the CPSU leadership failed to lead a serious fight, demoralising activists and weakening this potentially powerful union.

* The WRA's draconian award-stripping measures came into play in the middle of 1998 and again only a token protest.

* During the federal campaign the unions failed to mount an independent campaign to even put pressure on the ALP to promise a total repeal of the WRA, should they have been elected. Indeed, industrial relations completely dropped off the agenda because of lack of opposition from the ALP or union chiefs -- and this is despite the fact that Howard unshelved Reith to announce plans for a second-wave of anti-union legislation which would (among other things yet to be announced):

1. Simplify individual work contracts and enterprise agreements.

2. Require secret ballots and earlier notice from unions for strike action.

3. Allow bosses to suspend legal bargaining periods (the only time when industrial action is allowed).

4. Further the gutting of award conditions.

5. Restructure the Industrial Relations Commission to make it more pro-employer.

6. Allow for the IRC to be bypassed more easily.

7. Cut back the rights of union officials to visit workplaces.

8. Further outlaw union shops.

Since the election, Howard has by-passed Parliament and given smaller employees exemption from the Unfair Dismissals Act, forced more young unemployed to work for the dole and is threatening to lower already low "youth wages". The government line is that greater employer powers to sack workers and lowering wages, particularly for young workers will solve unemployment!

What are the unions doing about unemployment? The ACTU still has the demand for a 35-hour work week on the books and it knows that the real average working week has climbed to 42 hours a week but it offers nothing more than a vague "campaign" on working hours. All they have done so far, according to ACTU assistant Greg Combet, is to go "back to the 1850s... to have a look at the campaign that was conducted for the eight-hour day". What a graphic illustration of retreat! Well, after this inspiring description of this new campaign, it is no surprise that the ACTU national council came up with no slogan, no plan of action and no funds for this "ACTU priority for 1999".

With the current leadership, the union movement is doomed to continue the retreat of the last decade and a half. Sure, in the midst of this slow general retreat there have been a few successful rearguard actions but only where there were favourable objective and subjective conditions.

These include successful wage campaigns by South Australian and New South Wales teachers, the NTEU, the Cobar miners successful defence of their right to pay owed to them, and a few others. We can also include the unions successful campaign to force the Carr ALP government of New South Wales to back down from privatising the electricity system. But these are the exceptions to the general pattern of retreat.

Meanwhile, federal Labor "opposition" leader Kim Beazley tries to satisfy demands for Labor to serve its traditional working class constituency by making a few protectionist gestures and carrying on about the heaps of humble pie he's eaten, but basically he's making as few promises as he can and waiting his turn to serve the bosses. That's why we had the narrow GST federal election campaign.

In the eyes of many workers and most older activists the ALP is still seriously tainted by Labor's record in federal government and its record in states where it governs. Labor's implicit racism is hard to miss, its weakness on Native Title and migrant rights in federal Parliament are glaring. In Queensland, the new Beattie Labor government was the first state government to complement Howard's racist Native Title Amendment Act and in New South Wales its blatantly racist law and order campaigning expose it before progressive people. Carr also supports the GST.

Earlier, the Labor politicians may have though that they would be able to win some popularity through a pro-minimalist republic stance. But Howard's Constitutional Convention neutralised this play, forcing the two major capitalist parties to line up on the same side against the proposal for a popularly elected head of state. As a consequence we will go into a referendum this year amidst public indifference, and the monarchist lobby might have a victory over the minimalist republicans.

There has been quite a lot of bourgeois media attention on Labor's Young-Turk-with-the-Sulks-in-the-Backbench, Mark Latham. Does his "Third Way" offer the ALP a chance of rehabilitation as a Blairite "New Labour"? It is unlikely. There's little resonance in the Labor Party or in any of the social movements for this "Third Way". And why should there be. We've been there, Keating's done that, Tony Blair's New Labour is a second-hand, right-wing act in Australia which the public has already booed off the stage.

Still the capitalist press keeps talking about the "Third Way", and the Financial ReviewAFR and the Australian have given him regular columns to preach his pro-free market sermons. The capitalists are using this exercise to try to figure out a way to repackage the neo-liberal offensive whether its for the Coalition or for a future Labor federal government.

With Howard clearly set to go on the offensive this year, we can expect the union bureaucrats once again to tell us to leave the fight to the Senate, where the Coalition will have a reduced minority from the middle of next year. The Australian Democrats will have the balance of power but can we expect much of a fight from them on critical class issues considering their record on the WRA?

There is no indication that the Democrats have moved left-wards, indeed in the federal election campaign we saw how they helped Howard sell the anti-working class GST as a necessary tax "reform". If anything the Democrats have moved further to the right.

Any significant resistance they do put up will be a result of them coming under considerable mass pressure. But will there be mass movements of resistance against the next rounds of the ruling class offensive?

Prospects for new mass movements

The workers' side of the class struggle in Australia is being held back by the subjective factor, the crisis of leadership of the working class. As we have noted before, the change of balance of forces in the left since the collapse of the old Communist Party of Australia (CPA) has had negative and positive impact on the progressive social movements. Negative because the weight of the left has been weakened and it has become harder to pull together broader forces for sustained mass campaigns. But positive because our relative weight in the movements has increased.

The Greens still command most of the progressive vote during elections, and they have moved to the left on some issues, like immigration, and have generally taken the right stance on most major issues in Parliament. But from June, there will only be Bob Brown in the Senate for the Greens, and in the social movements the Greens are still not an organised force.

There is a heightened willingness to fight among certain vanguard layers in the union movement, including new union leaderships ( such as the Workers First leadership of the Victorian AMWU and the Victorian ETU leadership) and new forces contesting for union leadership (Western Australia MUA opposition). These are still small pockets of resistance and they have many tests and challenges ahead of them but these are significant new developments, especially after the right's domination of the movement during the Accord era. The detail discussion of these new forces and our relations with them will be covered in the trade-union work report.

But the big difference between now and before the demise of the old CPA, is our greater influence among these new militant trade union vanguards. Wherever possible our comrades are working with these new vanguards, winning their trust and respect and giving them all the support we can.

But a biggest break may not come initially in the trade union movement. It may come in the student movement next year. By announcing it intends to introduce Voluntary Student Union legislation the Howard government has signalled that it wants to break the back of student protests and decisively change the political terrain in what has long been the most important training ground for left-wing political leaders. The campus work report will take up this question.

It may be a reinvigorated and re-directed anti-nuclear movement that sets the lead next year for a fightback. Certainly Howard has indicated that its keen to go ahead soon not just with Jabiluka uranium mine but with Beverley and Honeymoon mines in South Australia. Then there are many more possible uranium mines in Western Australia and even the proposal of a nuclear waste dump. We have won important struggles in this movement last year and a report later today will go into detail perspectives for this movement.

The capitalist offensive against women's gains carries on, largely through the austerity drive and is supplemented by a spate of attacks on abortion rights in several states. Important struggles could break out here too.

New struggles may come up against the racist offensive, whether focused on Howard's moves or on some further development with One Nation. Or there may be an upsurge in the solidarity movement with the growing popular struggles in Indonesia and East Timor. The developments in these neighbouring countries are momentous, as we have heard, but so far the response here, even in traditionally advanced sectors, like the student movement, is disproportionately small. This is a result of the objective developments in Australian politics discussed above, but a breakthrough here could feedback and help turn around the racist resurgence.


These are some of the possible openings for new movements that we can discern today but the coming recession could spawn others. New movements against unemployment perhaps?

The next two years will be challenging and exciting ones for our party but the biggest challenge will be to look beyond this or that struggle. We simply haven't the forces to fill the growing leadership vacuum in the movements today. So our biggest challenge is to win more people to the need to replace the capitalist system and not just fight this or that of its ills, to win more people to socialist politics. If we don't manage this, successive waves of resistance to the capitalist offensive will founder.

So is this task going to be easier or harder in the period ahead?

The conservative historian Geoffrey Blainey predicted last year that socialist movements would see a resurgence. That's Blainey why acted al the ideological spearhead of the racist offensive before Pauline Hanson left her fish and chip shop. Blainey has a point.

The major capitalist parties face unprecedented disaffection -- 66% of Australians are dissatisfied with the major parties, according to one survey -- after forcing two decades of austerity.

Further, the rise of Hanson's One Nation has opened up political discussion among the masses, if only by raising here reactionary platform. It has also made it easier to expose the conservative, protectionist, economic nationalism of the old left as the racist defence of privilege that it is.

So we can see that socialism has a new stage in the period ahead and the objective situation of the working class demands a serious and aggressive socialist party in Australia today.

Reporter's summary

First, it was good that there was a lot of discussion about our election campaigns but I am not going to take up any of the specific questions raised because this was not a subject that this report sought to address directly. We may schedule a report on our election work at the next NC and the general approach to the New South Wales elections in March was covered in the party-building report.

This political situation report addressed the dynamics of politics after a decade and a half of working class retreat without a decisive defeat. This includes the new political vacuum that has opened up, the emergence of new and old political vanguards, and the challenge to defend the material and ideological gains of past struggles.

In the MUA struggle it was definitely mainly parts of an older vanguard that were brought into action. there were not that many younger workers leading the picket lines. The young activists who joined in solidarity were brought along by us. It proved that the Accord hadn't put them permanently out of action. In the future we could see them in action again but linking them up politically with other vanguards, in other movements will help secure more fighters to spearhead future struggles.

We can expect more worker militants to step forward politically. The leading union bureaucrats are sounding less and less convincing to militant workers. Bill Kelty's line at the recent ACTU national council was that the ACTU had "borrowed power" from the unions during the Accord years and now it was "handing it back". What an excuse for not leading the fight today! Not only has this emperor no clothes but he has been walking around like this for years!

That's not the end of the grossness of politics today. After the March 1996 federal election there was a new racist bi-partisan consensus. If you read the little booklet on the ALP politicians assessments of their defeat in that election you will see that they basically conceded that they would play to a growing public perception that things had gone wrong because a minority, multicultural "elite" had received too many privileges. The ALP politicians said this was a "perception", implying that it wasn't true, but they didn't plan to fight it. Indeed they followed it up with practical consensus with the Coalition on the attacks on native title, refugees and new migrants, and the use of "unAustralian" to intimidate their opponents.

One Nation grew on the back of this racist Liberal-Labor consensus.

But there is a broader context for our discussion on multiculturalism. The ideological gains of the last period of radicalisation and working class offensive in the 1960s and 1970s now often survives in government policies and in movement positions in mixed and confused form. The real concessions that the working class won were manipulated even by the governments that made them. Hence the Whitlam Labor government, which sought to use the reforms to bolster liberal-nationalism.

The gains grouped under the official "multiculturalism" label are not exceptional in being treated this way.

It is confused further by the army of academics, journalists and sociologists which is jumbling and rewriting history in order to justify the reversal of some of these gains or to divide the working class around these issues. They've come up with all sorts of theories of generational privilege, new elites, middle class welfare, post-feminism, Generation X, etc., but the basic liberal-nationalist outlook is still relied as the main means of diverting the masses from class consciousness.

Their ideological crap permeates the retreating social movements so our job is to struggle to keep the focus of the movements on the real attacks by the capitalists whether implemented by a Coalition or Labor government and to point to anti-capitalist solutions and away from liberal-nationalist platitudes and class-collaborationist paths. We understand that most of the working class is imbued with bourgeois ideology in "normal", non-revolutionary times but we have to challenge this ideology in all our fights against capitalist offensive.

The enthusiasm of the delegates for a more aggressive, socialist style of election campaigning confirms this as the main challenge in the coming two years.

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