The RBA hiked interest rates 10 times in a row to ensure that “inflation returns to target”, the Victorian state budget is set to make “difficult choices”, while the federal budget is reportedly a “difficult balancing act”. All these weasel words, weather from the Governor, the Premier, or the Treasurer, amount to the same thing. Cuts and pain for ordinary people to protect the profitability and stability of the market.
The truth in the statements above is that it is about choice, it is about finding a balance, it is about targets. The decisions made reveal the character of those choosing.
Money talks. Keep this in mind when the details of the state and federal budgets are released. Will the budget set aside billions of dollars for nuclear submarines or provide adequate funding to address climate change? Will there be increases in unemployment benefits to lift people out of poverty? Will the stage 3 tax cuts remain in place while restraint is ‘necessary’ for the NDIS?
The federal budget due to be handed down by the Labor government will be an exercise in doublespeak. On the $34 billion ‘wishlist’ from the economic inclusion committee report Chalmers will continue to bemoan that they “can’t fund every good idea”. The reality of these “good idea[s]” is that they are about choices between paying your electricity bill or buying groceries. Meanwhile the budget apparently can afford $370 billion for nuclear submarines. Apparently it can afford another $300 billion for the stage 3 tax cuts.
In Victoria the state Labor government is laying the groundwork for a cuts budget. The budget will reportedly include cuts that the public sector union estimates will result in 6,000 job losses. This is a state with a Labor government that has a wage policy of 1.5% while inflation is at 7.4%. However, Labor has committed to delivering on its election promises. Analysis found that 80% of promised spending will benefit Labor electorates. Cuts to wages, cuts to services, and pork barrelling.
Writing on rate rises by the RBA in The Saturday Paper Richard Denniss, Australia Institute Executive Director, put it simply that “The logic is that if billions of dollars a week are diverted from spending on groceries, clothes and holidays, then the firms selling those things will have to stop lifting prices. And if shops lay-off staff because customers are buying less stuff, then that lowers consumer spending as well. In formal economic language, that brutal calculus is known as “the monetary policy transmission mechanism””.
The actions of the RBA benefit Australia’s largest companies and billionaires who have reaped obscene profits over the last few years while the rest of us watch our incomes go backwards. The whole point of rate raises is to inflict pain on ordinary people. But what does the RBA have to say on corporate profiteering? Crickets. This, remember, is at a time where profits are at record highs while wages languish at record lows, as a percentage of GDP.
In the coming period we can expect the cost of living crisis to deepen as the parties of capitalism look to protect markets and provide stability to their system. Socialists, activists, and those on the left must commence the task of building a new workers’ party that can provide an alternative poll of attraction and offer real socialist solutions to the many crises facing us today.