Where to start with an analysis of the mining boom in Australia?
Perhaps ironically, with the Independent Commission Against Corruption (ICAC). It is now holding an inquiry into the dealings of former NSW resource minister Ian Macdonald, his mate and Labor powerbroker Eddie Obeid, and another mate, John Maitland, former president of the Construction, Mining, Forestry and Energy Union (CFMEU), and part owner of the new coalmine in Doyle's Creek, to the tune of $9.8 million.
In his opening address to the ICAC hearing, the counsel assisting the commission, Geoffrey Watson, compared the level of corruption to the NSW rum corps in the early 19th century.
He also said: "The people of NSW had been robbed of tens of millions of dollars, that have passed to the ownership of third parties for a comparatively trivial return, during what was supposed to be Australia's mining boom.”
But Watson is not being completely honest. Ripping off the people of NSW is not what got Macdonald, Obeid, Maitland, and others into trouble. It's that in doing so, they also ripped off the “legitimate” robber barons of the industry, and tried to skim away the profits of some of the largest corporate scumbags in Australia and internationally. They tried to cut the big boys grass, and they got caught.
The mining boom has been built on a systematic fraud. Putting aside for a moment the devastating environmental costs, the trick is that the miners have privatised a massive public resource for their own financial benefit.
As the mining boom comes to an end, at least in mining infrastructure investment, the bosses are taking the opportunity to attack wages, conditions and living standards in the name of ensuring Australia's competitiveness and boosting productivity.
This brings us to the subject of inequality in Australia. Mining magnates are some of the richest people in Australia and internationally. They only stay there by continually ripping off the environment, their workers and the working class as a whole.
The rich in Australia have been getting rapidly richer, compared with the rest of us, especially since 1980. That was a momentous year for political historians — it marked the election of Ronald Reagan as US president, it was the year after Margaret Thatcher's election in Britain, and effectively the beginning of the neoliberal offensive against working people internationally. We saw a massive claw back of social wealth from us to them — a ruling-class campaign that is ongoing today.
The May 5 Sydney Morning Herald said: "From 1980, inequality began to rise. The income share of the richest 1% — those with incomes of more than $200,000 a year — doubled; while the share of the top 0.1% — with incomes above $700,000 a year — tripled." Wealth inequality has grown manifestly over the past 30 years, and it's only getting worse.
According to Mike Seccombe, who writes for the Global Mail, the top fifth of households in Australia have almost 62% of the total wealth, the next fifth 20%; the third almost 12%; the fourth just 5.4%; and the bottom 20% have just 0.9% of Australia's wealth. So the top fifth have far more than the rest put together.
The mining boom has increased inequality, as the wealthy accumulate more at the expense of the rest, particularly the poor.
There has also been a growing inequality among working people. Those in full time, secure jobs, have seen their wealth rise, while those in the casual, poorly paid sectors of the workforce have seen their wealth dwindle. And the wealth gap between men and women has also increased.
As inequality has grown, the response of the wealthiest has been to push harder against the poorest, to defend and extend their class gains.
In August this year, Australia's richest person and the richest woman in the world Gina Rinehart, warned us in a mining industry magazine: "Let us get through this class warfare smokescreen. We need to regain our roots and encourage people to invest and build. There's no monopoly on becoming a millionaire. If you're jealous of those with more money, don't just sit there and complain, do something to make more money yourself.
“Spend less time drinking, or smoking, or socialising, and more time working. Become one of those people who work hard, invest and build, and at the same time, create employment and opportunities for others. Australia needs such people.”
And to prove how little she cared about the class-struggle smokescreen as she put it, Rinehart called for a reduction in the minimum wage, and a week later warned Australian workers that African miners were willing to work for $2 a day.
The message? Australian workers needed to take wage cuts, cuts to conditions and lifestyles. That is, to become more flexible and increase productivity if we are to remain competitive in the global labour market.
But it's not just the mining magnates that are making mega-profits and are on the warpath against working people in Australia. Australian banks have, generally speaking, announced record profits — again.
Westpac announced record profits of $6.2 billion for 2011/12 — its third record profit in a row. NAB bucked the trend — its cash profit actually fell. But don't feel too sorry for them — it fell from $5.46 billion to $5.43 billion. The ANZ cash profit was $6.01 billion, yet another record profit, up from $5.66 billion. And the CBA, once a nationally owned bank, is on track for a $7.2 billion profit for 2012/13 which would be an increase on the $7.1 billion profit it made last financial year.
And yet, it's not enough. ANZ bank CEO Mike Smith is reportedly paid $10 million a year. This works out at over $27,000 each and every day. In August, Smith made headlines for saying the level of the dole — which is $34 a day — was too high, and needed to be cut to force unemployed people to travel to the mining boom states where labour was short.
Take a moment to consider these claims.
The richest person in Australia and the highest-paid banker in Australia jointly call for the slashing of the minimum wage and the dole. Big manufacturers demand fewer work rights, lower wages and conditions, and a return to WorkChoices.
If they are to increase their wealth, we, and particularly the poorest and most vulnerable — the unskilled, the unemployed, the young, women, migrants, and refugees — are the people who will pay. And to top it off, the bosses also want government spending cuts, so that business taxes do not have to rise.
The idea that taxation systems should be used to even out inequality, a mainstay of post-war social democracy, has simply been abandoned. The bosses are on the offensive and they want government to get out of their way, and decrease any remaining barriers in their drive for profit. A November 21 article in the SMH said: "ANZ chairman John Moreshell said governments in Australia could reduce their tax take if they were more frugal with taxpayers funds in the first place." This is despite the Gillard government's promise already to cut whatever is necessary to deliver a surplus in 2012/13.
Life is already difficult for many working-class households facing financial stress. The July 15 SMH reported that one in three households with a mortgage were in mortgage stress, defined as more than 30% of their income being used to meet the cost of the mortgage.
The implications can be devastating. An Urban Research Centre report showed the extremes to which people would go to keep paying the mortgage — missing meals, working long hours, putting the mortgage ahead of necessities of life.
On October 1, the SMH said fewer than half of Australians managed to save any part of their income. It said a further 43% of households are just able to make ends meet, but not to save anything, meaning that if their incomes fall it will have a devastating effect. And 10% of households are going backwards, unable to meet their monthly spend and being forced to increase their credit or draw down their assets.
Rental stress has also increased. The June 29 Age said Labor took office in 2007 with 49% of Australia's poorest households in rental stress. Three years later, despite Labor's rhetoric, the situation for poor households had gone backwards, with rental stress up to 61%.
So this is the situation facing the working class as the much vaunted mining boom — growing inequality and a concentration of wealth among the richest few; pressure to slash wages, smash welfare and savage work rights; and increasing financial pressure measured in high and rising mortgage and rental stress and low savings.
Socialist Alliance is calling for a redress. The wealth of the nation, built on the backs of working people, or stolen from the commonwealth and privatised by the wealthy few as with the mining boom, should be returned. This is the basis of Socialist Alliance's call to nationalise the mines and the banks under community control.
We — the workers, the poor, women, migrants, and Aboriginal people, among others — are the dispossessed. And we have a right to demand what is rightfully ours. Only once this massive wealth creating machine is placed under the control of working people as a whole will we have the resources to turn the economic madness of this society around and build a society based on equality of access and opportunity and basic human rights.
[This was a talk given to the "Towards a Socialist Australia" seminar in Sydney on December 2, 2012].