The Guardian June 13, 2001


Editorial:
Not so rosy for workers' families

Much has been made in the mass media to suggest that the economy has 
"bounced back" from the edge of a recession in the March quarter. Treasurer 
Peter Costello claimed the economy had "roared back" since its slide into 
negative territory in the December quarter. Prime Minister Howard used the 
results to claim that the economy, and he hopes the voters, have put the 
consequences of the GST in the past.

A longer-term view shows signs of instability with rapid fluctuations in 
some of the main economic indicators. Furthermore, as the "Financial 
Review" pointed out, if the last two quarter are added together the 
increase in GDP amounts to only 0.2 per cent for the last six months.

According to the figures issued by the Bureau of Statistics the increase of 
1.1 per cent in the GDP figure for the March quarter came about principally 
because of consumer spending and increased government spending (up 3.2 per 
cent) in the period. Spending on services was up by four per cent, much of 
it on higher insurance premiums.

What is not mentioned is that much of the consumer spending has been made 
on credit cards while savings in banks have reached a record low. There is 
now a total of about $18 billion worth of debts on credit cards. That 
amounts to almost $1,000 for every man, woman and child in Australia.

While middle and high-income earners have benefited from the tax cuts 
associated with the introduction of the GST, low-income earners

and pensioners are out of pocket from steadily rising prices. The GST on 
many articles of daily consumption, on energy, fares, telephones, water, 
insurance, school books and much else is taking its toll.

It is because so many lower people are worse off that the Federal 
Government, in what is also a blatant attempt to win votes in an election 
year, has voted a $300 lump sum payment to aged pensioners. When the GST 
was first introduced the Government made a lump sum payment to pensioners, 
"to compensate for the GST", but this was followed by a claw back of two 
per cent of the initial four percent increase in pension rates. This 
unpopular and dishonest move caused widespread resentment among pensioners, 
hence the current attempt at a "sweetener".

Another aspect of the GST is the 30 per cent increase in the number of 
bankruptcies. This is going to be added to by the collapse of One.Tel and 
HIH insurance with more smaller, dependent businesses being dragged down by 
these bankruptcies.

Unemployment has also increased. Despite all the efforts of the Government 
to force people off the lists of the unemployed, there are now officially 
6.9 per cent unemployed. The greatest proportion remains young workers  
up by 0.8 per cent in the last six months.

The economic figures also show that while per capita income rose by only 
0.8 per cent, corporate profits rose by a substantial 7.8 per cent. It is 
easy to see who is really benefiting by the present economic policies of 
the Government.

More and more of the resources of the State are being used to prop up the 
economic system. As social welfare is tightened, there is no shortage of 
money for corporate welfare. Enormous benefits are being extended to 
various capitalist enterprises in the form of tax concessions, provision of 
infrastructure and direct handouts. The most recent example is the millions 
of dollars of taxpayers' money being paid out by the state to the victims 
of the HIH collapse. It remains to be seen whether the real reasons for the 
collapse are ever revealed, let alone the culprits made to pay-up out their 
hoarded wealth or be prosecuted for their criminal behaviour.

While government propagandists often claim that Australia's economy is 
doing better than those of other developed countries or is even "the best 
in the world", a more real comparison could be made by comparing the 
economic growth of the capitalist world with that of socialist countries.

China's economy has averaged an 8-10 per cent increase in GDP each year for 
the last 20 years while Vietnam's GDP doubled between 1990 and 2000.
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