The Big Four Australian owned banks (ANZ National, BNZ, Westpac and ASB) are hated for their tax dodging, interest gouging, fee charging and profit taking. The Bad Banks campaign initiated by Socialist Worker-New Zealand aims to connect with this popular “bank hatred” and begin to expose one of the main drivers of late capitalism.
The leaflets that we’ve put out so far have mixed exposure of the banks, analysis of the global economic crisis, and pointed towards possible campaign demands. The reception to these leaflets by a cross-section of people has been largely positive. The following comments are representative of the feedback we’ve heard on the streets:
- “Yes, I know the banks are bad.”
- “The banks are ripping us off big time.”
- “The banks don’t care about people like us.”
- “The banks want to turn us all into debt slaves.”
- “The politicians should be on our side, but they’re not.”
In connecting with people’s anger towards the banks we can begin to raise political solutions to the various crises that are impacting on people’s lives, from their own personal financial worries to the pressures coming on the NZ capitalist state following the Great Implosion of 2008.
One of the big issues facing the NZ government, which has right-wing Treasury officials all heat up, is the rapid decrease in government revenue from taxation as a result of economic recession. This is forcing the government to borrow huge amounts from overseas banks to maintain current levels of government spending. According to a recent statement by Finance Minister Bill English the government is borrowing $250 million a week.
This ballooning debt is placing increasing pressure on the government to cut spending, while at the same time increase taxes. A tax working group (which includes Treasury officials and corporate bosses) is recommending increasing GST, which is a flat tax on the price of all goods and services. Increasing GST would shift the tax burden further on to low and middle income earners.
The Bad Banks campaign can intervene in this site of political struggle. So we’re promoting a Financial Transaction Tax (FTT) that targets the big banks and other “fat cat” financial speculators. And instead of raising GST, we support removing GST from food, a demand which has already proved very popular with people.
Because the banks are a dynamic and powerful force within late capitalism their hand is in everything. Banking interests are at the heart of neo-liberalism, the free market ideology that has driven government policy in NZ and around the world for three decades. For instance, their “invisible hand” is at work in the design of emissions trading schemes, or “pollution markets” as they should be called. The Bad Banks campaign has put out a leaflet that links the banking class with this neo-liberal “non-solution” to climate change.
So a campaign against the banks has the seeds within it of other struggles, which are about resisting the attempts of the ruling elite to force the cost of the economic meltdown onto the rest of us.
If we can lift the Bad Banks campaign to the level of mass consciousness in NZ, which will require sustained on-the-ground campaigning by broad forces and a media profile, then the more political influence the promoters of the campaign can have around a range of issues.
Given the seriousness of the crises besetting global capitalism, which Grant Morgan has referred to as capitalism’s quartet of contradictions (the profitability crisis, the resource crisis, the ecological crisis, and legitimacy crisis), the rulers of the world economy will be unable to stabilise the system for any length of time. The systemic contradictions of capitalism will continue to burst through.
It’s clear, however, that a powerful section of the ruling elite in NZ will continue with the neo-liberal agenda, which will be given weight by the global banking and financier class. Hence NZ governments will face immense pressure to slash public spending; shift the tax burden further off big business and onto low and middle income people; privatise public services; maintain deregulated financial markets; and so on. (See NZ Herald article on Treasury's proposed new round of neo-liberalism, Tax reform needed to jump-start economy.)
The National government has not yet moved decisively to launch a renewed neo-liberal offensive, which would be politically polarising. They’ve sustained their “honeymoon period” not because of John Key’s likeability but because of their willingness to dramatically increase government borrowing.
But the pressure is building and a number of neo-liberal policy settings around tax, ACC, government spending, public service cuts, wage levels, privatisation, trade and investment, are on the agenda. The logic for business, as it always is, will be to extract more wealth and toil from working class New Zealanders and other people of modest means. The National Party, being a party that represents corporate interests, will have to facilitate this, at the risk of their current popularity levels.
The contradiction inherent to neo-liberalism, is that it’s precisely the constant drive towards more wealth extraction from the grassroots (to make up for the general decline in capitalism’s profitability since the 1970s) that has produced a global economic meltdown of such magnitude in the first place. A renewed neo-liberal offensive, including attempts to pump up the economy through the further expansion of credit, will only lead to the intensification of the global crisis in the near future. Unable to restore capitalist profitability the last gasps of neo-liberalism will continue to polarise and impoverish, eroding further capitalism's legitimacy.
The certain scenario of unpopular government attacks on grassroots people combined with a floundering economy, of which one important measure will be high unemployment, will create political instability in NZ, as it will in other countries. A popular Bad Banks campaign, if we can achieve it, would enable leftists with a public voice and profile to give leadership that can move people towards an alternative political vision.
This can be done by advocating “common sense” demands like a Financial Transaction Tax, or other policy solutions which eco-leftists in NZ have collectively generated over many years, and will continue to do so. An exciting initiative in this regard, and one which has the potential to be popularised, is the New Zealand Council of Trade Union’s Alternative Economic Strategy. The CTU’s Alternative Economic Strategy has lots in common with The RAM Plan written in 2008. A broad political challenge to neo-liberalism, which these documents represent, is both desperately needed and possible.
The challenge is to achieve the campaigning profile that enables a community of eco-leftists to connect with masses of people. In recognising the public mood and targeting the Bad Banks we may be able to reach a position where we can seriously target neo-liberalism starting to crack. By waging a successful war on one front, against the banks, we can open up other fronts in the mass struggle for a humane, equitable and ecologically sustainable future. We start that collective political journey that we all know is so necessary.
The Bad Banks campaign was initiated by Socialist Worker-New Zealand. We invite contributions to campaign material produced by us, and we encourage others to generate their own material and strategies to target the banks. We’d love to hear people’s ideas about how the campaign can broaden its appeal and participation by individuals and organisations in NZ. Contact Vaughan Gunson svpl@xtra.co.nz or 021-0415 082.
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