Thursday, 1 January 2009
Speech to Wellington Public Meeting 9 August 2009 Hardly a month goes by, it seems, without John Key announcing some bold new plan to tackle the economic crisis. Even before they won the election, National had signed up to a scheme to guarantee bank deposits to head off a potential credit crunch. In February they held the high profile Jobs Summit. In March the government announced a national cycleway and their "9 day fortnight" plan. The Budget in May cancelled the tax cuts planned to 2010 and 2011 as the government deficit worsened. Last month it was a subsidy scheme for McDonalds to take on unemployed workers. And now they're talking about getting young people off the dole by creating jobs or training places for every 16 to 18 year-old in the country. Even these few examples underscore the seriousness of today's economic crisis. Some commentators have started talking about the "green shoots" of economic recovery. These are often the same people who failed to see the recession coming in the first place. And their talk is based largely on a recovery of some US share prices. Stock markets go up and down. There was a similar rally in 1930. A year after the great Wall Street Crash of 1929, commentators were also talking about the worst being over. The Great Depression, of course, got much deeper and lasted another decade. The International Monetary Fund said in April that the world economy will shrink this year for the first time since 1945, by 1.3 percent. And it keeps getting worse. Two months later, the World Bank revised that figure and predicted a 3 percent contraction of the world economy. Even after the worst is over, they say, there won't a recovery to anything like the growth we've seen over the last ten years. The world is in for a long period of economic stagnation. So what's been the result so far of National's flagship schemes to tackle the crisis? The "Big Four" banks, now underwritten by the taxpayer, made a record $4.5 billion profit in the last year. Excluding bad debt provisions, their profitability is still rising today. Meanwhile – thanks to the government refusal to attach conditions to its bank guarantee scheme – home owners are suffering high interest rates, while those who don't own their own home struggle to get a loan. Despite the Jobs Summit and the 9 day fortnight, 24,000 people lost their jobs in the three months to June – the sharpest rise in unemployment over 20 years. The government itself has led the way, cutting 2,000 public sector jobs since the election. Those still working in the public sector – a quarter of a million people, including nurses, doctors and teachers – are facing a pay freeze from next year. In the private sector, pay rises are also rapidly falling to below inflation. Prices for basics like food and power, meanwhile, are rising faster than ever. No sooner had Bill English cancelled the tax cuts for 2010 and 2011 than he said he'd like to cut taxes for businesses and top income earners "in the medium term". Even if John Key's rosy predictions for youth training schemes pan out – and they won't – they would provide just 2,000 free places at polytechs and wananga and 4,000 paying jobs for the 17,000 young people already on the dole. The main effect will be to scrap the unemployment benefit for all under-18s. Meanwhile, National is pushing ahead with the free trade deals that fuel an international race to the bottom in pay and environmental protection. They're talking of more privatisation – including the likely sell-off of Auckland assets under the new super-city. So behind the smiling face of John Key, the reality is clear. National, as a party, stands for the market and market forces. The government is determined to protect the rich and powerful who are most responsible for the economic crisis and push the cost of the recession onto the people at the grassroots. If we don't get organised and take action, the grassroots majority are going to be steam-rollered. Who is fighting all this? Labour under Phil Goff are dutifully making their muted criticisms in parliament. But they are directing most of their fire at the moment onto personal bad behaviour of individual National MPs. This is because while they may quibble with the details, they agree with the basic thrust of National's market-driven approach. Of course they won't be organising ordinary people to take action, for the simple reason they can't. The Greens, who many hope will come out against National's agenda, have just tied one hand behind their back by signing a deal to cooperate with the government on areas of common interest. The long term effects of this are unknown. But the signs don't look good. Already they're supporting National's downsizing of the national cycleway to a few local bike tracks. Sadly, even the Council of Trade Unions has so far clung in practice to its policy of partnership with the government of the day. While there are some signs of possible change, the union movement so far hasn't mobilised its members into action. It is not actively supporting our $15 minimum wage petition. This is why the petition initiated by Unite Union is so important. It represents one plank of an alternative approach to combatting the recession – an approach that shifts the burden off the backs of grassroots people. As Unite's national secretary, Matt McCarten, has said: "The economic crisis facing the world is the toxic product of insatiable greed at the top and the free-market policies of governments that removed all controls. The end result is a skewing of income and wealth so that the rich got richer and the poor fell off the edge. “Restoring the minimum wage would be an important step towards replacing the greed and inequality of the past three decades with policies that protect jobs by enhancing the purchasing power of those at the bottom of the economic ladder. Those who have missed out on the prosperity that those at the top enjoyed deserve their fair share now that the wealthy elite and their political servants have brought us to the state we are in.” The petition can do even more. It can bring together left and grassroots activists – like those of us in this room – and build connections for joint action and cooperation in other areas as well. Because it's not just the economic crisis bearing down on grassroots people. Human-induced climate change is threatening every living thing on the planet. The Greens and mainstream environmental groups are opposing National's back-tracking on climate change targets. But their solution – relying on market mechanisms like Emissions Trading Schemes – won't save our planet. John Key is edging closer to plunging New Zealand into an escalating war in Afghanistan. The government's erosion of civil rights and democratic freedoms in recent years looks set to continue. I think it's fair to say that most grassroots people in New Zealand today are without a political voice. Small parties like RAM, the Alliance and the Workers Party have stood in elections and campaigned against the market-driven policies of National and Labour. But what we urgently need is a bigger, broader, more united left that can take the fight to National across the board and become a credible alternative for all those without a voice. For those who share this perspective, the petition for a Citizens Initiated Referendum on raising the minimum wage is a great opportunity to connect with a broad cross-section of people. The petition is overwhelmingly popular. In Wellington hospital where I work, for instance, 160+ staff signed it in the first two weeks. Just three people opted not to sign. It appeals to everyone from cleaners and orderlies to charge nurse managers. Some sign because $15 is more than they're earning now. Others have children on the minimum wage, or remember what it was like when they were earning that themselves. Some see the health impacts of low pay, poor housing and nutrition. I've been involved with many petitions over the years. This level and breadth of support is extraordinarily high. But it's not just the numbers. When staff see the petition, it's as if a floodgate opens in their minds. Out come all sorts of views on the government, the kind of society New Zealand has become and how that needs to change. RAM and the Alliance have started holding street stalls on Saturdays in Lower Hutt and Newtown. We'd like to extend these, if more people are willing to help, and broaden out the organising if other groups would like to take ownership as well. Before you leave the room today, I would like you to think about how you can get involved in spreading this petition and gathering signatures – in your community, sports club, church, workplace, tertiary institution, or wherever – and join the movement that starts with the push for a $15 minimum wage.