A delicate moment | Michael Roberts Blog … this is actually a big deal for the Australian election and its aftermath

IMF chief economist, Gita Gopinath reckoned the global economy had entered “a delicate moment”. She offered a decisive insight: “If the downside risks do not materialize and the policy support put in place is effective, global growth should rebound. If, however, any of the major risks materialize, then the expected recoveries in stressed economies, export-dependent economies, and highly-indebted economies may be derailed.” So, on the one hand or on the other….

Alongside the IMF view, the private Brookings Institution delivered its view on the global economy, concluding from its tracking index of economic activity that the world had entered a “synchronised slowdown” which may be difficult to reverse.  
— Read on thenextrecession.wordpress.com/2019/04/14/a-delicate-moment/

Note the reference to “export – dependent economies”. That’s Australia.

Given Morrison’s focus on the economic credentials, whatever they are, of an LNP government, the contest will include a battle over how to define responsibility for the downturn, even before it happens!

Under 3 different leaders the LNP neoliberal government, driven by its quasi religious faith in trickle down economics, a faith that defies the real world experience of 90% of Australians, must show that their economics for corporations and their system has not contributed to any downturn and is the best recipe for dealing with the next one.

The ALP, and also the Greens, will face the challenge of acknowledging that a downturn will probably happen soon, that is in the next term of the next government that they hope to form. The ALP wants this to happen on a stand alone basis but the electorate may not permit that. Hence, it’s a problem for the Greens also.

Labor might want to claim that the way it handled the last one, actually acknowledged as a crisis internationally, kept Australia out of recession. But, so far, Labor’s right wing controllers of economic policy don’t seem confident with that sort of quite mild Keynesianism. Fixed as they are in a laborist neoliberalism re economic policy they appear to believe 1) that the resources to do what they did in 2007-9 will not be there to repeat that, and 2) that their immediate commitments re tax revenues to fund health and education (etc) will do the job. Or, maybe, behind closed doors they are preparing to repeat what they did only with necessary lessons learned?

The prospective downturn problem is also real for “politics from below” driven along by unions (as in Change the Rules) and other people’s organisations some of whom have a “mass” character. I refer here to the disability and aged care movements whose programmes for reform require significant government intervention.

And above all there is the now multi dimensional “reverse climate change” movement. We all have until about 2030 to get the situation under control and momentum on reversal. That will also require massive government intervention.

And that government intervention must also enable more powerful intervention “from below”, by the unions and other people’s organisations, and in workplaces, industries and communities.

For workers and their unions, there is nothing yet in Labor’s stated changes to the industrial relations laws that will enable that.

In other words we have a political turning point centred on the interaction of economic downturn, possibly crisis, and ecological crisis.

For the broader politics engaged in by unions and other people’s organisations the challenge will be whether to retreat when the downturn hits or go on the offensive.

Historically, we have retreated. Our most recent experience was exactly in the period of the Rudd – Gillard Labor governments. The struggle over workers rights was pit to sleep and the environment organisations could not develop and lift a strategy from below to direct the Labor government and its erstwhile Greens allies to move forward. The scene was controlled by the fossil fuel corporations and its key front men like Tony Abbott.

There is precious little sign yet that the leading figures in both the union and environmental organisations have the economics to help their constituencies rise to the challenge.

How can we break out from that, and why is it necessary?

Fine Dining and Class Warfare … Australian Style

Sticking up for Big Hungry Profiteering

Over the past few days various media reports have highlighted the delicious connections between fine dining, wage theft and class warfare.

Starting in reverse order, we had the Financial Review reporting former BHP Chairman Don Argus railing against the ‘silly’ class war being waged by the ALP.

Putting aside for the moment just how much the Shorten ALP’s programme will NOT disturb class power, and how quickly Angus will push his non-retired corporate representatives into the cuddling up process with a possible new ALP government, we are left wondering what sort of ‘class warfare” would not be “silly” and therefore would meet our corporate warrior’s approval.  

Argus, reacting to a stump speech in regional Queensland (in which among other things Shorten chastised BHP for sacrificing 80 seafarers on good wages) is quoted thus:

“If that is the way they are going to go we will finish up with a divided nation,” … “If they take that path we will end up back where we had the recession we had to have,” ….

Merivale butter (see below) would not melt in his mouth!

In the same article, Argus is supported by the current head of the Australian Industry Group, Innes Willox, and his predecessor, Heather Ridout. Willox is busy cultivating a cuddled-up relationship with the parliamentary ALP in case they win the elections. From her lofty “retirement” perch Ms. Ridout derides the Shorten agenda as “populist”. She seeks to demean the positive elements of the Shorten reform agenda that include mild tax reforms that may well affect her personal investment strategy and, some overdue improvements to Labor’s own Fair Work Act 2009 … from the point of view of workers.  

She is now on the board of the Australian Super and Sims Metal. And, back in 2007-9 she was a major player on behalf of employers in Labor’s Julia Gillard-guided tripartite process that created the “broken rules of the Fair Work Act 2009.

Just one look at Mr. Argus and you just know that he is a 1 percenter who really does “know” the daily long lunch and the fine dining that goes with it.  

So, the sort of ‘class warfare’ that is not silly?

Wage theft in the capital cities

Let’s start with “zombie” enterprise agreements.

Of course, Mr Argus would heartily approve, from his favourite table, of the “not silly” class warfare that he and his mates, including BHP, have engaged in using the “broken rules” of the Fair Work Act 2009. One of these “broken rules” enabled the continuation of “zombie” enterprise agreements negotiated under the notorious Workchoices laws of John Howard. These Agreements made possible terms and conditions that were worse than the minimum standards established in Awards.

You just know that the Merivale empire of up market restaurants, run by one Justin Hemmes, a well-known about Sydney “rich lister”, would be well known to Argus and his mates.

This week, after intervention by the union United Voice on behalf of two courageous employees, the Merivale empire was forced to agree to transfer its hundreds of workers from its “zombie” 2007 enterprise agreement to the Award.

The Financial Review reported this week:

Merivale is reviewing the viability of its business practices due to the axing of a WorkChoices-era enterprise agreement that gave it a significant commercial advantage in the industry.

The Fair Work Commission on Monday terminated Merivale’s long-expired 2007 EA that allowed the hospitality giant to pay some 3000 workers below the award – more than 20 per cent below in some cases – by not applying overtime or full penalty rates for almost a decade.

The Merivale workers’ union, United Voice, whose members made the big step forward possible, explained it better:

Nightclub empire Merivale owned by rich-lister Justin Hemmes will boost young workers’ pay rates – in some cases almost doubling them – after the company was forced to drop its outdated “zombie” WorkChoices agreement.

Under a 2007 agreement workers were trapped on a flat rate below award wages for most working hours, meaning they did not get extra pay for working weekends or night shifts.

Two brave young workers, represented by their union, took Merivale to the Fair Work Commission and the company agreed it would adopt award wages from March 4.

The commission was told that compared to Merivale’s existing pay structure, workers should have been receiving much higher rates under the award.

In the move to the current award, a casual worker will be entitled to an hourly rate of $27.48 for Monday to Friday evenings (up 14 per cent on the $24.40 flat rate), $30.33 on Saturdays (up 25 per cent), $35.39 on Sundays (up 46 per cent) and $50.55 on public holidays (up 98 per cent on a slightly higher rate of $25.50).

One of the applicants was out of pocket $3000 in a year – or missed out on getting an extra 20 per cent of his total salary – because the zombie agreement was so far below Award levels.

Wage theft outback

Given their silence on the matter, Angus, Ridout and Willox no doubt approve of the wage theft going on in First Nations communities, made possible this time in the “broken rules” of the Federal Government’s Community Development Programme.

As the ACTU points out

In the Milingimbi/Ramingining region of the Northern Territory, where the population is 99.8% Indigenous, the program distributed 15 penalties for each participant in 2017.

In the Western Tablelands of Queensland, where the population is 29.3% Indigenous, the program averaged 1.9 penalties per participant.

The CDP forces unemployed people in remote areas to work for free, sometimes for for-profit companies for 25 hours per week, without any basic workplace entitlements, the protection of OHS legislation, or federal worker’s compensation.

That’s not far away from the creation of a penal colony that most Australians will celebrate tomorrow as “our” national day, not the moment of invasion it became for the First Nations inhabitants who have been treated with such disrespect by most, especially corporate Australia, ever since.

Solving tax problems over lunch (and maybe other ‘entertainments’)

Almost finally, you just know that Argus will be watching closely as BHP’s senior executives grapple with how to protect their (and his greed) greed if Labor wins with its  “franking credits” policy. How to unravel all of that is another post entirely.

But to finish off, you have to wonder whether Argus ever crossed paths with these characters in his long lunches and, whether Merivale restaurants were in the mix for their corporate problem solving or “challenge meeting”, as it is called these days.

Yes, here we have confirmed, because we sort of knew anyway, just how big business goes about helping corporate regulators do their job well. And they “refuse to publicly disclose the largesse or potential conflicts of interest… “

What you might call “invisible capitalism” at work, to use the Treasurer’s new and artful defence of capitalism. Wining and dining can be hard work, why not make it more profitable?

Davos Forum 2019 – working out how to keep the 90% under control despite everything