Rudd tells Cameron his economic policies are wrong

Leader of the Labor Party, Kevin Rudd has attacked the leader of the Australian Manufacturing Workers Union (AMWU), Doug Cameron after he suggested that Labor should impose a new ‘super-tax’ on mining company profits.

Rudd said that “When Doug talks about muscling up to Australia’s resources companies; his approach is absolutely wrong and belongs to a bygone industrial age”.

“Doug needs to realise we now live in a modern market economy, and international taxation competitiveness is important. The Government needs to work on a co-operative basis with the resources industry on critical challenges such as climate change.”

“Doug does a great job in speaking up for the interests of workers, and I respect his view. But on this one he is absolutely wrong.” Rudd said

The Socialist Party agrees with Rudd that Cameron is wrong, but for different reasons. Cameron is currently leading a charge of five left wing unions within the Labor Party who want the ALP to oppose the signing of free trade agreements with other nations and to limit partnerships between governments and private enterprise on infrastructure projects.

Cameron, who is seeking pre-selection for Labor’s NSW Senate ticket, said that it was time for Labor to muscle up to mining companies and ensure more of their profits were contributed to a better society. Cameron proposed a special “super profits tax” and said mining companies should be required to develop communities around remote mines rather than flying workers in and out.

Whilst the Socialist Party would support many of the reforms that Cameron has proposed, the questions need to asked, would they fix the problems of capitalism, how would they work in a globalised capitalist market and how would they be acheived?

Cameron and the leadership of the AMWU oppose free trade as the Socialist Party does. However Cameron’s alternative to free trade is ‘fair trade’ which in reality is a return to multilateral trade agreements like the WTO. His economic views include a form of protectionism for world trade and the implementation of import controls or tariffs, in reality it is a form of economic nationalism.

Leaving aside that the WTO has dominated international economic relations in the past period and this has led to a legacy of 1.2 billion people living on less that US$1 a day, capitalism in a period of globalisation would not allow for such measures. If a super tax was put on mining companies they would inevitably attempt to maintain their profit levels by squeezing workers somewhere else. The nature of the system means that what bosses give with one hand they take with the other.

The current economic period is unlike the unique period that capitalism went through during the post WW2 boom. In this era some of Cameron’s policies would have been supported by sections of the bosses. Today however, in a more ‘normal’ period for capitalism, where profits have a tendency to fall, most sections of the ruling class and all the major parties support neo-liberalism, which means cuts, privatisations, free trade and workplace deregulation. In Australia Howard’s industrial laws are part and parcel of this package.

Cameron and others put forward the increased use of import controls as a solution to economic crisis. In recent years, however, there has been an about face as the idea of ‘free trade’ and ‘level playing fields’ has been embraced, even by the ALP and many union leaders. Tariffs are an indication of the weakness of local capitalism that it has needed the high tariffs of the past just to get where it is now.

Tariffs lead to reduced competition for local industry, allowing it to pump up the price of its goods. Realising they could never compete with imperialist giants of Japan, USA, and Germany, rather than reinvesting their profits and creating more jobs, Australian industry bosses over the years have merely pocketed and squandered the profits they were able to reap.

To increase or introduce new tariffs now, would inevitably mean workers bearing the cost through increased prices for goods, and attempting to export unemployment to overseas workers. Inevitably, such a course would eventually also result in retaliatory tactics from other countries, thus hitting the jobs of those Australians currently involved in production for export.

Nevertheless further cutting tariffs and introducing ‘free trade’ is equally no solution. Thousands of jobs in the clothing, textile and manufacturing industries have been lost as a result of tariff cuts. The Socialist Party calls for the inspection by the workers and their unions of the financial accounts of those companies seeking to cut jobs due to tariff reductions. Workers should be shown how employers have wasted the profits they have made over the last period.

Neither import controls nor ‘free trade’ can solve the problems of the Australian economy or the working class. The nationalisation of the banks, finance houses and insurance companies, and the establishment of a state monopoly of foreign trade, as part of a programme for taking over the commanding heights of the economy, is the only answer to the capitalist alternatives of ‘free trade’ or import controls.

The Socialist Party believes international trade has to be planned. Natural resources and productive forces should be developed on the basis of international co-operation and planning. On this basis we could protect the environment and eliminate the gross inequalities that exist whilst maximising the benefits to the world’s workers and poor.

There are really only two options for working people the world over. Either we can accept the neo-liberal agenda of all the major parties – the cuts, the privatisations, the attacks on working conditions and the job losses that go with free trade agreements or the labour movement can develop genuine alternative economic and political polices along socialist lines. There is no middle road. It is either neo-liberalism or socialism.

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