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Year End 2006   

Interview: The Terminator
Unions NSW secretary John Robertson looks back on the highs and lows of a year when the battle lines were drawn.

Industrial: Vive La Resistance
Jim Marr glances back through a year of news and discovers plenty of reason for optimism�

Unions: Breaking News
The web offered new ways of covering unions issues. Here�s ten ways Workers Online tried to do things differently.

History: Seven Deadly Sins
Looking back on our annual year-ender editorials gives a nice overview of the journey we have taken.

Economics: Back to the Future
Political economist Frank Stilwell looks back at a year that saw the passing of the drivers of two strains of economic thought.

Politics: Organising and Organisations
Organising for unionists can mean overcoming the �union�. The �rolling of the right� by the BLF rank and file shows the power of workers united to defeat the power of bosses and certain union bosses.

International: Web Retrospective
Unions and the web � What's changed in the last seven years? The short answer is � everything and nothing, wrties Eric Lee

Review: Shock Therapy
Unreconstructed Kazakhi journalist Borat is unleashed on the �US and A� offending everyone � except the bigots.


The Future
So Where to Now?
Amanda Tattersall outlines her plans for Working NSW and the challenge of connecting research, communications and campaigning.

Gone But Not Forgotten
Augusto Pinochet Ugarte (1915-2006). His memory is still being honoured, writes Jim Marr

The Westie Wing
Our favourite politician bids adieu and hangs up his chestnuts.


The End
In vintage Workers Online fashion we have detected a minor, but telling, factual error in last week�s missive/suicide note. It�s not a seven year itch � this is, in fact, the end of an eight year project.


 High Flyers Go For Gold

 Hospital Staff Prescribe Radical Surgery

 Holland Goes Dutch on Safety

 New Thinking to Transport Sydney

 Check Mate - Track Your Personal Info

 WorkChoices on a Trolley

 See No Evil, OEA

 Feltex Carpets PM's Fibs

 Workers Blood on the Walls

 Lift For Unfair Dismissal Campaign

 No Discrimination on Choice

 Vanstone Opens New Meat Market

 Activists' Notebook

 Hit For Six
 Kind Words
 Sorely Missed
 All the Best
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Back to the Future

Political economist Frank Stilwell looks back at a year that saw the passing of the drivers of two strains of economic thought.

J. K. Galbraith and Milton Friedman died this year. Both were highly influential economists. Friedman's ideas underpinned many of the neoliberal policies we have experienced - assault on union power, individual work contracts, privatisation and lower tax rates for the wealthy. But the more progressive alternative that Galbraith advocated is still on the political economic menu for the future.

From an economist's perspective, 2006 marks another milestone - 50 years since the death of J. M. Keynes, the most famous economist of the first half of the twentieth century. Keynes thought that economic ideas are important. As he said 'The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else!'

Certainly, his own views had considerable influence from the 1940s to the mid 1970s. Governments formally committed themselves to the full employment policies that Keynes showed were necessary and feasible. They also asserted more control over the process of 'nation-building' and the direction of economic development. That was during the years of the 'long boom'.

The emergence of a strong inflationary tendency in the 1970s, alongside the re-emergence of unemployment, changed all that. Keynesian economic ideas were set aside in favour of the monetarist alternative proposed by Milton Friedman. We moved into the era in which neo-liberalism became the new economic orthodoxy. Friedman's time had come, and Malcolm Fraser, Margaret Thatcher and Ronald Reagan become the vehicles for the policies he prescribed, albeit modified in various ways by political pragmatism.

The last year has shown that, even a quarter of a century later, the full neoliberal program is still being vigorously pursued. Perhaps the most obvious aspect of that in 2006 has been the Australian government's Workchoices 'reforms'. (In the earlier Keynesian' era reform meant change for the better, but even the language now has a different meaning - as George Orwell famously foreshadowed). WorkChoices doesn't create more 'market freedoms': indeed it is the most prescriptive set of industrial relations laws we've ever had. What it does do is severely restrict trade union power.

Politically, the main goal of WorkChoices is to reduce the role of unions in the wage-determination process. The assault on what modest union power remains undercuts the base of the ALP. But unionists have shown that they won't take it lying down: massive rallies were held during the year and a continuing, highly effective campaign has been coordinated by the ACTU. The issue could contribute substantially to the downfall of the Liberal government.

Other aspects of the neoliberal agenda that have also been evident in 2006 include more privatisation - the further sell-off of Telstra in particular. Of course, a lot of 'mum and dad' shareholders got badly burned after they bought the previous tranche of Telstra shares (T3), so it remains to be seen how this further sale will turn out. Quite why it is necessary to sell off strategic assets in which we all have a collective long-term interest remains a mystery for those of us who do not see the world as Friedman did.

The push to replace public provision of infrastructure and services by so-called public-private partnerships (PPPs) is another distinctive part of the current neoliberal policies. Organisations like Macquarie Bank have become very rich by managing these processes - together with its 'satellite funds' Macquarie Bank is now the third largest Australian business. It is massively profitable, its profits growing by 13% to $916 million before tax in the financial year 2005-6. The 2006-7 financial year will surely see its profits top the billion dollar mark.

PPPs have not usually been in the public interest. The fiasco of Sydney's cross-city tunnel during 2006 is the most obvious example of that. Proponents of PPPs say that the risk of infrastructure and service provision is shifted from the public to the private sector. However, in practice, projects like roads, airports and hospitals cannot be allowed to fail, so governments always end up bearing the risk anyway.

The 2006 Federal budget showed the continuing influence of neoliberalism on fiscal policy. It had markedly inegalitarian effects, benefitting the wealthy much more than the poor. One study, looking at the combined effects of the tax changes in 2005 and 2006, showed that the richest 10% of individuals got 43% of the tax cuts, while the poorest 50% of taxpayers got just 19% of the cuts.

The changes to the taxation of superannuation will be probably the most significant legacy of the government's fiscal policy in 2006. The 'privatisation of pensions' through the extension of occupational superannuation has already had the effect of extending into old age the economic inequalities in retirees' previous working lives. Now the removal of all tax on the receipt of the superannuation further accentuates that tendency.

Becoming the 'deputy sheriff' for the USA is not formally part of neoliberalism. Milton Friedman's advocacy of the 'free market' was ostensibly based on claims about how it would produce more political freedoms. In practice what we've got is political economic subservience. The USA-Australia 'Free Trade Agreement' is a case in point. All economic researchers agree that its main beneficiary has been the USA, not Australia. In the first eight months of its first year of operation our exports to the USA grew by 2.1% while US exports to Australia grew by 10.7%. Evidently, our political subservience to the USA has turned out to be a bad economic deal, as well as leading us into a catastrophic intervention in Iraq.

Meanwhile, the other costs of the extended neoliberal experiment are all too obvious - growing economic and social inequality, environmental crisis and inadequate public infrastructure and services. The neoliberal policies, based on Friedman's economic philosophy, have had enormous social costs. They haven't been consistently applied anyway, because the market-oriented economic policies operate alongside conservative social policies relating to issues of gender, sexuality, educational curriculum. And the decision of the High Court in November, dismissing the States' case against WorkChoices, extends the power of the Federal government to exert yet more central control over policy areas in which the State governments have traditionally held sway.

Markets dominated by corporate interests and strong centralisation of governmental authority are what neoliberalism delivers in practice - not the 'free market' and 'small government' of Friedman's rhetoric.

So where is the shadow of J. K. Galbraith in all this? The Friedmanite support for neoliberalism runs directly counter to the policies that Galbraith always felt were necessary for creating 'the good society'. Galbraith advocated reining in the growing imbalance between private affluence and public squalor, providing good quality public infrastructure and services, challenging the abuse of corporate power in the media and elsewhere in the economy, and reducing economic and social inequality.

There is some evidence of a growing public yearning for the Galbraithian alternative. Surveys regularly show the majority of the Australian people saying that society has become too unequal; that public services need to be improved even if that means paying for them through higher taxes; and the environmental crisis needs to be addressed even if that means some reduction in the material standard of living.

The Greens have been vigorously advocating this alternative political economic agenda. The ALP, more timidly, has been toying with elements of it. Perhaps 2007 will be the year in which the progressive alternative that Galbraith advocated will get the political support it warrants.

Of course, lots of other events took place in 2006 - some memorable, some best forgotten. The Australian Wheat Board scandal unfolded to show corruption at the highest level of politics and public administration. Still, the capacity of the federal government to ride out such scandals has been remarkable. Evidently, it is John Howard who decides which ministers are required to resign and the circumstances in which they are allowed to do so. But it will be the Australian people who decide eventually on the fate of his government.

George Bush's administration in the USA got electorally punished in the Congressional and Senate elections in November. Latin American nations, particularly Venezuela and Paraguay are taking a strongly anti-imperialist stance, with Uraguay and Chile also having turned to more progressive political leaderships. Would it be too much to expect that we in Australia could demand a government committed to a more equitable, humane and ecologically sustainable set of policies?

Frank Stilwell is Professor of Political Economy at the University of Sydney. He is coordinating editor of the Journal of Australian Political Economy. His next book 'Who Gets What? Analysing Economic Inequality in Australia', will be published in May 2007.


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