scenes from market life: neo-liberalism in australia

University of Tasmania, June 1993

 

It is a matter of historical record that virtually all industrial societies have entered the phase of 'late development' by radically violating free market principles. For most, the commitment to free market ideology is purely rhetorical, honoured more in the breach than the observance1. In a small number of cases, however, developed societies have taken their own 'free market' rhetoric seriously, and consciously failed to protect themselves from the destructive impact of unregulated trade and financial markets. Over the last decade Australia has become one of these societies - a case study in the voluntary re-application of economic principles long discredited in more mature and sophisticated sectors. The impact of these principles, known parochially by the term 'economic rationalism' - in its Orwellian sense - but more accurately as neo-liberalism, has been disastrous for the social fabric of what was earlier this century one of the more egalitarian and democratic states in the world.

The assault on Australia's national economic sovereignty by the newly globalised financial markets in the late 1970s and early 1980s was aided and abetted by bureaucrats and politicians who fell under the spell of neo-liberal economic nostrums. As has been discussed elsewhere, Australia's economic fortunes over the last ten years have been determined by an elite of 'true believers' - a "secular priesthood" to borrow Chomsky's term - who felt that capitulation to the international markets was either irresistible or actually desirable2. From playing the role of protecting society from the vicissitudes of market life, the decision making elites became partisan agents acting on behalf of the markets. At the time (late 1983), the key decisions to 'internationalise' the Australian economy were taken without any public consultation and with little or no knowledge of their impact on Australian society and polity. "I didn't realise the largeness of the decision", claims Senator Button, then the Minister for Industry, Technology and Commerce. After hearing the implications of the decision to float the dollar discussed by economic commentators on the radio a day later, Button admits that he "nearly freaked out"3. As a leading political analyst has remarked, "the era after de-regulation was akin to large-scale experimentation in a chemical laboratory where previously unmixed elements were combined"4. A decade after the reapplication of neo-liberal economic principles is therefore an appropriate juncture from which to assess the results of this experiment on Australian society.

willing hostages

Exposing Australia to the rigours of the international markets has been justified on the grounds that the economy needed to be substantially "restructured" if it was to become "internationally competitive". Australia, it was argued, could no longer afford the luxury of introspection, regulation and protection. The 'discipline' of the overseas markets would be needed to modernise the Australian economy and drag it into the late twentieth century. The last vestiges of Australia's economic sovereignty were therefore to be sacrificed in exchange for the beneficent judgement of the international financial community. Henceforth, the brokers on Wall Street and in Tokyo, the clients of the "screen jockeys" (traders) at the Westpac foreign exchange, and the auditors from Moody's and Standard and Poors, would pass daily judgements on the 'management' of the Australian economy. Their assessments were never to be questioned, nor were their values and assumptions to be critically evaluated: their decisions were final and almost reflexively endorsed by government. Without knowing it, or being asked if they agreed, the Australian community had become the willing hostages of the world markets, courtesy of its own government.

The impact of global market forces on social life in Australia has received surprisingly little media attention, or at least the connections between the surrender of economic sovereignty and social decline have been deliberately obscured. Over the last ten years we have become accustomed to receiving daily, and sometimes hourly, reports on the health of the Australian and world economy. Indices of market performance, in particular stock market trading, currency exchange rates, the market prices for gold and oil, and credit ratings, compete with the more familiar economic indicators of inflation, national debt, balance of payments, and GNP growth for our attention5. Questions such as 'are we in a technical recession?' and 'what are Treasury's growth forecasts?' dominate punditry, both on the electronic media and in the press. Frequently, unemployment figures are discussed, though only usually in the context of opinion polls, leadership speculation   or the anticipation of elections. With the exception of the jobless statistics, which until the recent federal election (held on March 13) were thought to be electorally sensitive, social indicators are rarely considered newsworthy in the de-regulatory era6.

Given the trends in so many social indicators over the last decade, this is perhaps not surprising. Late capitalism in Australia during the 1980s, following the pattern set by the Reagan and Thatcher administrations, was characterised by unprecedented disparities in wealth distribution and income, a massive transfer of wealth from the poor to the rich, mass unemployment, chronic underemployment, an attack on organised labour, and a record growth in family and child poverty. These are not the kinds of indicators that appear nightly on the TV news but they are a more accurate testament to the impact of neo-liberal dogma on Australian society7. In addition to this scorched earth approach to society, de-regulation and other free market experiments succeeded in reducing Australia's national income by over 5% a year by the end of the last decade and boosting foreign ownership of Australian businesses. Regrettably, though consciously, Australia's corporate and state elites embraced neo-liberalism with an enthusiasm rarely matched elsewhere. The costs have been high8.

all for the masters

Earlier this century Australians enjoyed the highest standard of living of any country. In 1913 Australia's GDP per capita placed it at the forefront of   the world. Though this has been declining steadily since the 1950s, there has been a very sharp deterioration in the 1980s. As a measure of GDP per capita, the figure for Australia in 1982 was 80. By 1987 the figure had fallen to 65, which placed Australia 17th out of the 25 OECD countries and 29th overall9.

More significantly, the acceleration of income disparities over the last decade has been staggering. The income of the top 1% of income earners has doubled compared with those at the bottom. Ten years ago it equalled the total earnings of the bottom 11%. By 1988-9 it equalled the bottom 21%. The wealthiest 1% of adults now hold 25% of the nation's private wealth, the top 5% hold 50% and the top 10% own 60% of Australia's private wealth. The pattern of wealth distribution in Australia is clearly one of growing inequality, a damning indictment of those who profess a commitment to social justice. The collective wealth of the richest two hundred Australians in 1983 was less than $5 billion. By 1992 that figure has more than quadrupled to $25 billion. "Moreover", say the Catholic bishops, "inequality of income has also increased considerably over the past ten years"10.

While most Australian workers have had no real wage increase since 1976, executive salaries have leapt by nearly 50%11. During the worst recession in sixty years, senior executives in 1990 awarded themselves an increase of 15% while workers received 6.9%. In 1991 they gave themselves a pay rise of 12.5% whilst they awarded workers only 3.1%. In 1992, at the very height of the recession, Australia's top executives   paid themselves a 10.2% increase in twelve months whilst simultaneously urging workers to show restraint. A survey of 18 of Australia's largest 23 companies showed that these pay rises above average weekly earnings had been awarded irrespective of their companies' performance12.

In summary, over the last decade, award wages (+ 58%) have failed to keep pace with an accumulated inflation rate of + 77%, while average weekly earners have done marginally better (+ 84%). Middle managers have done well (+ 100%) while Chief Executive Officers have received a massive 128% salary increase13. This figure doesn't, of course, include fringe benefits such as signing on fees, share option schemes and other 'golden hellos'. As IBIS Research's Phil Ruthven concedes, "Australia has got some of the most unequal distribution of income in the world"14. From being one of the more egalitarian societies on earth in the 1970s, Australia is now less equal than Sweden, Norway, the U.K., Canada and New Zealand, and only marginally more equal than Germany and the United States15.

Much of this can be explained by the success that 'economic rationalists' have had in attacking the role the state has traditionally played in redistributing wealth through taxation and welfare benefits. Their almost fanatical dislike of an interventionary state, combined with a religious-like devotion to market forces, has reorientated public policy away from the goal of social justice towards 'optimal outcomes' based on the criteria of economic efficiency alone. The victims of "trickle down economics", in practice an upward flood of wealth, have become the guinea pigs in cruel experiment normally reserved for the less fortunate in Latin America16.

Australia is still predominantly a wage earning society. Nevertheless, under the Hawke-Labor Government there has been a transfer of $30 billion from wages to profits17. According to Frank Stilwell, "effectively 10% of the national income was taken away from workers and given to the owners of capital between 1983 and 1989. This was a massive redistribution between social classes"18. One way in which this was achieved was through the destruction of the spirit, if not the structure, of the progressive taxation system. Reductions in marginal taxation rates for high income earners (from 60 to 47 cents in the dollar), the lowering of the company tax rate (to 39 cents in the dollar), tax relief for interest paid on foreign debts and borrowings, and dividend imputation, have all assisted in reversing one of key principles of liberal democratic societies in the post-war period19. Australia now has the second lowest taxation levels in the OECD. Just as important, however, in this process of regressive redistribution has been reduction in Government expenditure, particularly in the provision of welfare services. The number of people on social security payments has more than doubled over the last ten years. Nevertheless, welfare cuts (and a tightening of eligibility rules) were made at the same time as record company profits were being announced, and the top marginal tax rate was being slashed20. Reflecting the neo-liberal obsession with a minimalist state, Commonwealth budget outlays, which peaked at 30% of GDP in 1984-5 have been cut back to 23.5% (1973 levels) whilst total public-sector outlays have been reduced from a peak of 42.7% of GDP in 1985-6 to around 36.5% (1981 levels)21. In fact the reductions in welfare expenditure have been so dramatic, the Australian Catholic Welfare Commission warns that the free market model of welfare provision "will not adequately meet the increased welfare needs of families, long-term unemployed and many other disadvantaged people"22. The message to the Australian people from its corporate and state elites is therefore a simple one. While the rich need the carrot of higher after-tax income and lower marginal tax rates to induce them to save and invest, the poor need the stick of reduced government assistance to make them work harder. Australia has not only become a much less equal society, it has also become a much less compassionate one.

the barbaric society

Mass unemployment (officially 11.5% - 1 million - but probably closer to 14%) includes over 400,000 people who have become unemployed since 1990 (when the official rate was 6%), with more than one in three unemployed people having spent more than a year without work. The figure for youth unemployment is put at an extraordinary 35%, while chronic underemployment (including the unemployed) has been estimated at over 20%23. More than two million Australians who want to work are without a job, though the number of discouraged jobseekers - those who have given up hope of ever finding work - is increasing24. Not surprisingly, the burden of unemployment has been disproportionately shared by the less educated, and in particular, newly arrived migrants25. These figures represent the most savage attack on the fabric of Australian society since the Great Depression, though in the spirit and rhetoric of liberal economic determinism, this is either a "soft landing" or "the recession we had to have": take your pick. The consequent loss of self-esteem, the psychological devastation, social alienation and feelings of hopelessness amongst unemployed people are   much more difficult to measure26.

The culprit is said to be "the recession" as if this was something entirely outside the province of government, when it was in fact the effects of an economic downturn engineered by a government which raised interest rates too high for too long in a vulgar and costly attempt to correct an imbalance in the nation's current account. Effectively over 1,000,000 Australians have been "adjusted into unemployment" to discourage the rich from importing, a policy which has failed its own criteria of success27. The fiscal and monetary policy settings which produced this social catastrophe   sprang directly from liberal economic assumptions held by the bureaucratic elites in the Treasury and the Industry Commission - the high priests of neo-liberalism, which have consistently privileged the role of the market in social and economic life. In addition, their obsession with a minimalist state has meant reductions in protection for Australia's manufacturing sector. Not only are skills and technology being abandoned, and de-industrialisation accelerated, but up to 100,000 jobs have been lost as a direct consequence of the Government's drive to cut tariff protection to local industry, a policy which the vast majority of Australians strongly oppose28.

In 1992 well over 2 million Australians fell below the Henderson Poverty Line, with between 80,000 and 100,000 "living in dire poverty or homelessness"29. According to the OECD a higher proportion of Australian children are born into poverty than British children. This assessment is consistent with the analysis of the director of the Victorian Council of Social Service who claims that the numbers of children and families living in poverty has doubled since the Hawke Government assumed power (1983), making Australia second only to the United States in child poverty levels among OECD countries30. The Human Rights Commissioner agrees and warns that more than one million children are at risk of becoming homeless in Australia because of family breakdown and unemployment31. This is perhaps not surprising given that by the middle of the year almost 700,000 children (or an extraordinary 25% of Australian families) were living in homes without an adult in employment32. In retrospect, Prime Minister Hawke's promise during the 1987 election campaign that "by 1990 no Australian child will be living in poverty", was a particularly cruel, if not vicious hoax.

The poor, together with the homeless, the young, the unemployed, aboriginals, many farmers, newly arrived migrants and single parents, comprise a growing underclass produced by the wilful neglect of what the Human Rights Commissioner has accurately labelled "a barbaric society"33. How else could one characterise a nation which allows 75,000 of its children to remain homeless and consigns 50% of its sole parent families headed by women to live in poverty34? Or where suicide is the most likely form of death in young males with little or no prospect of full-time employment35? This group of Australians will tend to suffer from a higher incidence of heart, respiratory, digestive and nervous diseases, mental disorders and will usually die younger36. In addition, a correlation has now been clearly established between poverty and violent crime. According to another recent study, violence against women in Australia has reached the levels of an "epidemic". The circle of poverty, crime and disease is complete37.  

The annihilation of Aboriginal culture and the dispossession of Aboriginal people is now more widely known to non-Aboriginal Australians, though responsibility has only recently and belatedly been accepted by government38. However, this has not changed the fact that Aboriginal Australians are some of the more prominent members of the growing underclass. They 'enjoy' the highest death rates, the lowest educational standards, the highest infant mortality rates and the worst health and housing conditions of the Australian community. Unemployment amongst Aboriginals is four times worse than other Australians, they receive only 35% of average income, their life expectancy is 20 years below the rest of the population, and they have a disproportionately high chance of incarceration (29 times the rate of white Australians) and dying in custody. One Queensland estimate places 48% of Aborigines below the poverty line39. By any international comparison and any historical standards, Australia's appalling treatment of its indigenous people deserves the condemnation of the world community40. And yet those who dare to raise these issues or highlight the historical crimes perpetrated against Aboriginal people are said to be responsible for creating a "guilt industry' which threatens to undermine the "national interest" as defined by the state and corporate elites. So much for the benefits of 'being discovered'. Cultural genocide by malign neglect is completing the task begun by European settlers over two hundred years ago41.

The immiseration of rural life has been stimulated by a number of factors outside the control of Government. Drought, depressed commodity markets, subsidised agricultural exports from Europe and the United States, and a deteriorating terms of trade have all played their part. But so too has the volatility of the exchange rate, a product of the floating Australian dollar,   and imprudent bank lending by financial institutions which were hopelessly unprepared for the deregulatory era. The combination of these external and internal factors has been devastating for a community which has traditionally provided the bulk of our foreign exchange earnings. Current analyses estimates that between 50% and 70% of Australian farmers are technically bankrupt. This is not surprising when one considers that between 1980 and 1990 the total rural debt of the country increased from $3.7 billion to $11.7 billion, growing at around $3 billion every year in interest charges and penalties. And despite being some of the most efficient farmers in the world (farm productivity has improved by 40% since 1970), the net value of farm production in Australia has fallen by over 75% since 198842. The market has a rather brutal way of culling the number of Australian farmers.

One response to Australia's foreign debt crisis (currently standing at $163 billion or 42% of GNP43) has been to "sell off the farm". Consequently, foreign ownership of Australian companies has reached 35%, making Australia, next to Canada, the most foreign owned country in the OECD44. Most importantly, control of Australia's daily press has passed almost entirely into the hands of North Americans, facilitated by enabling legislation. The deregulatory formula - the policy of privitisation, a relaxation in foreign investment regulations, the abolition of exchange rate controls, foreign bank entry into the country, and the deregulation of interest rates - have all   accelerated this process by making it considerably easier for foreigners to buy up Australian companies and other assets. Interestingly, the size of the bequest of Australia's economic sovereignty to the international markets can be measured by the reluctance of the Government to assist locally owned companies defend themselves against multinational takeovers. Apparently the question of national interest simply doesn't arise unless, of course, it is the transnationals themselves which require, or more accurately demand, assistance45.

unilateral disarmament

It would be churlish to argue that the internationalisation of the Australian economy can fully explain the present crisis when it was itself, at least in part, a response to an historical downturn and a loss of confidence in the Keynesian formula. Australia's over reliance on primary commodity exports (mining and agriculture), its heavy dependence on foreign investment, a failure to share in the massive post-war expansion of international trade, and the decline in Australia's manufacturing sector are structural weaknesses in the economy which have been obvious for many years46. Nevertheless, a strong case can be mounted which argues that the process of de-regulation has only exacerbated these difficulties by leaving the economy even more vulnerable to external forces. The Australian economy is now highly exposed to changes in world commodity prices, movements of foreign capital and alterations in exchange rates. It is also more dependent on the economic health of its major overseas   investors and trading partners. More than ever Australia is forced to maintain the confidence of the international markets.

The impact of market hagiography for the vulnerable and disadvantaged in the era of deregulation forms a striking contrast with the affluence of the nouveau riche. Prior to the stock market collapse in 1987, the number of millionaires and their wealth had grown exponentially under the Labor Government. Stockmarket and property speculation, encouraged and facilitated by deregulatory policies and financed from overseas borrowings, became their primary modus operandi. Conspicuous consumption, on the other hand, became their most obvious cultural expression. Following their role models in the United States and United Kingdom, Australia's plutocracy embarked on a orgy of greed and avarice on a scale never before seen in the country. The Labor Government threw a party for the rich, with financial de-regulation creating an economic milleu conducive to such behaviour. The effects of redistributing wealth from the poor to the rich not only consigned the underclass to further misery, it also allowed a mendicant business class to defray the costs of their own greed and incompetence.

Productive investment in export industries starved of funds for research and development was supplanted by paper shuffling, currency speculation, corporate takeovers financed by high-risk loans from banks desperate to maintain their market shares, and asset stripping47. Entrepreneurial high fliers from 'the big end of town', were praised by senior members of the Government for their corporate spirit and eulogised in the business press48. For a political party which had championed the egalitarian ethos since its foundation, and pioneered the welfare state with the basic minimum wage, pensions and benefits, female emancipation and the eight hour day, and only forty years before had proposed bank nationalisation, the Labor Party in the 1980s gave up any claims, or pretence, of being democratically socialist. From being the progenitors of a progressive social laboratory earlier in the century, in the 1990s the Labor Party presided over the most inequitable distribution of wealth in post-war Australia. The party of social justice and the working class has become the agency of the markets, the sponsor of the newly enriched, and the promoters of social Darwinism.

Internationally, the idea of a free and liberal global trading regime, never even a realistic possibility, continues to inspire the architects of policy to clearly establish their neo-liberal credentials in the naive view that one day the rest of the world will follow Australia's example. When the unilateral disarmament of tariff barriers fails to elicit an equivalent response from the nation's major trading partners, the state elites are undeterred. Purity is virtue: eventually the rest of the world will see the error of their ways. Meanwhile, those who depend for work on Australia's once productive manufacturing sector, are cut adrift without hope or compensation. They continue to live in quiet desperation while their masters look on with bewildering indifference.

In the most recent election (13 March, 1993), both major political parties sought to continue these trends by offering alternative tax bribes to the business community. The unsuccessful conservative Opposition favoured a 15% broad- based Goods and Services Tax (GST) which would have transferred the tax burden from income to the point of consumption, thus penalising those whose spent a higher proportion of their disposable income on everyday necessities. The effect of these policies (including the abolition of the sales tax) would also have been to have lowered the price of luxury items for high income earners. This was the preferred choice of an Economics Professor turned politician, who through a complex tax minimisation scheme available only to the rich, had artificially lowered his own marginal tax rate to a mere 15%. This revelation did not deter Dr Hewson from continuing to chant the neo-liberal mantra of "restraint", "belt tightening" and opposition to wage increases for ordinary working people. Such is the way of the class conscious and the deeply indoctrinated49.

Prime Minister Keating, who in a moment of excitement during the 1980s   failed even to file a tax return, continued his class treachery by dispensing with even a pretense of concern for social justice. The ruling Labor Party opted for a more straightforward gift to the business sector. By lowering the company tax rate from 39 to 33 cents in the dollar in the next financial year, the business community can expect to enjoy a $2 billion annual windfall. This largesse was not immediately appreciated by its beneficiaries. The money markets and the business community campaigned openly against the Labor Government and in favour of the Liberal-National Coalition for the first time in a number of years, confident they were backing a sure winner. In fact the money markets, which had sold off the Australian dollar to record depths in 1986 on unfounded rumours of Mr Keating's resignation, voted early by bidding up the dollar, as well as the stock and the bond markets, on the expectation of a conservative victory50. To their initial disappointment and fear of retribution, Labor won a record fifth term in office. The Chief Executive of one of the leading business organisations could barely conceal his distaste for democracy, warning that the Government and the electorate would have to accept the business agenda or else51. However, upon realising its actual   circumstances, the business community soon celebrated its post-election good fortune by raising the stock market index to its bullish pre-election levels52. Not surprisingly, as the despair and devastation of 'the recession' continued after the election, corporate profits reached record levels53.

conclusion

A walk through any major Australian urban centre will give human form to the statistics on poverty, wealth distribution, unemployment and social decline. Abandoned factories and warehouses, squalor and homelessness, decaying public services and gangland crime dominate the landscape. In rural Australia farmers are leaving the land in significant numbers, driven to bankruptcy by high interest rates and low commodity prices, and heading back to the cities. It's a pattern more familiar to those who live in Europe and North America, but the "internationalisation" of the Australian economy will   ensure that Australia is not left behind as de-industrialisation takes hold. This is what interdependence means for Australia. The prognosis is not a promising one.

A decade after the de-regulation of the finance sector, which included the float of the Australian dollar on the international money market, the abolition of exchange controls on capital moving in and out of the country, the introduction of foreign banks and the de-regulation of interest rates, Australia is a very different country. It is now said to be "open" and "outward looking". However, ten years of self-imposed neo-liberalism has taken an enormous toll on the fabric of Australian society. Unfortunately for those with democratic instincts, the ideological convergence of the major political parties has left the notion of economic choice virtually meaningless in contemporary political life. Bipartisan support for neo-liberalism over the last decade consigned Australia to an inevitable period of social decline. On the one hand there were the Labor incumbents, offering 'old wine in new bottles'; on the other their conservative rivals, prescribing 'larger doses of the same medicine'. "We need an ecumenical spirit on the big issues", claims one of the high priests of neo-liberalism, because "there are certain things that have to be done". Ideological uniformity and the absence of meaningful political choice are "a good thing", since democracy can't be allowed to hold up reform. 54 The prospects for a return to substantive political choice are therefore bleak. As Prime Minister Keating warned, "let's not take this democracy stuff too far"55.  

Few societies have surrendered their economic sovereignty as quickly and enthusiastically as Australia. A literal belief in, and commitment to, reciprocal free trade, almost unknown elsewhere, continues to be an article of faith within decision making circles. Australia has voluntarily embraced austerity measures normally features of IMF fundamentalism, but which are usually reserved for the victims of North-South exploitation.   By unilaterally adopting the principles of neo-liberal economics, Australia's contemporary   decision-making elites have betrayed the interests of their community and presented succeeding generations with the daunting task of providing some hope of deliverance from the deprivations of market life.

Notes

1. See Chomsky, N., Year 501 (Boston 1993), ch.4. The abandonment of laissez-faire and the significance of state intervention in economic development has been demonstrated in a number of seminal texts, including Polanyi, K., The Great Transformation (Boston 1957), Gerschenkron, A., Economic Backwardness in Historical Perspective (Boston 1962) and Pollock, F., 'State Capitalism: Its Possibilities and Limitations', in Bronner, S.E. & Kellner, D.M. (eds), Critical Theory and Society: A Reader (New York 1989). For further suggestions see Chomsky, N., Deterring Democracy (rev ed New York 1992), note 19, p.65. More recent discussions include Lazonick, W., Business Organisation and the Myth of the Market Economy (Cambridge 1991) and Wade, R., Governing the Market (Princeton 1990).

2. See Pusey, M., Economic Rationalism in Canberra (Melbourne 1991), and other analyses, including   Carroll, J. & Manne, R. (eds), Shutdown (Melbourne 1992) and Rees, S., Rodley, G. & Stilwell, F. (eds), Beyond the Market (Leichardt 1993). For a brilliant summary of the period from the perspective of class relations see the final chapter of Connell, R.W. & Irving, T.H., Class Structure in Australian History (2nd ed Melbourne 1992).

3. 'Labor in Power', ABC TV, 8.6.93.

4. Kelly, P., The End of Certainty (Melbourne 1992), p.77.

5. The control which foreign investors can wield over the comparitive value of the Australian currency, and the importance given to U.S. credit ratings agencies are graphic illustrations of the extent to which Australia has become hostage to the international markets. At the end of 1986 the two major international credit ratings agencies, Moody's and Standard and Poor, both reduced Australia's overseas credit rating from the highest level, AAA to AA+. This was said to be a response to Australia's growing foreign debt and it demonstrated the degree to which the financial administration of the country was expected to conform to international (or more accurately externally imposed) practice. See Emy, H.V. & Hughes, O.E., Australian Politics: Realities in Conflict (Melbourne 1988), p.6.

6. The reification of 'the economy' on behalf of the business elite is neatly expressed in the newspaper headlines 'Economy on the Brink of Recovery but Jobs Remain Grim' (from the business section of The Age, late December 1991 quoted by B. Probert in Horne, D. (ed), The Trouble with Economic Rationalism (Melbourne 1992), pp.25-6) and 'Shares on roll despite job woe', (the Business Section of The Age, 11.12.92). The unemployed make no positive contribution to 'the economy' so they are excluded from it. Unemployment is a 'social indicator' and therefore of little concern to the business press. Thus it is possible for economic commentator Max Walsh to claim that "1992 was a good year for the economy" (AM, ABC Metropolitan Radio, 28.12.92). For a brief discussion of some of the problems with economic indicators see the essays in Horne 1992.

7. It is currently argued that the impact of the recession needs to be separated from the results of liberal economic policies. This is sophistry. The recession in Australia was domestically induced by the Hawke Government following neo-liberal strictures, ie a contractionary monetary policy.

8. See Chomsky 1992, p.4.

9. Emy & Hughes 1991 ed., pp.12-13.

10. See Ellingsen, P., 'The Recession Not Everyone Had to Have' in The Age, 14.11.92 and the Australian Catholic Bishop's Conference (ACBC) 1992, pp.45-59. There is a parallel disparity of wealth between the sexes. More than 1.7 million Australian men (or 60%) earn better than average wages ($A510.20), whilst 70% of females are paid at less than average levels. Women are paid 27.4% less on average for doing the same work as men, see The Australian, 28.4.93. See also Raskall, P., 'Widening Income Disparities in Australia', in Rees, Rodley & Stilwell 1993. See also the important essays in O'Leary, J. & Sharp, R. (eds), Inequality in Australia (Melbourne 1991), especially the chapter by R.W. Connell.

11. Average earning have actually declined by almost 2% since 1984. See Mike Costello, Secretary of Department of Industrial Relations, quoted in Ellingsen 1992.

12. In fact, in some notable cases the size of the salary package paid to senior executives has been inversely proportional to company performance. Pioneer International recently increased the salary of its CEO by 9% to $1.5 million, as its share price slumped. The State Bank of NSW, which suffered a $90 million loss over the last six months, has just increased the salary of its most senior executive from $180,000 to $440,000 over three years. Perhaps the most astonishing case, however, is the AMP Society, whose income has fallen by 50% and whose assets have recently been slashed by more than $1.3 billion. The Society's Managing Director has recently received a pay increase of 19.5% to $800,000 per year. See 'Lateline', ABC TV, 16.6.93. Other companies which have either gone into receivership or might do, and which have awarded their CEO extraordinary salaries, include Qintex, Bond Corporation, the Hooker Corporation, Fairfax, Elders IXL, Westpac, and the Adelaide Steamship Company. See The Age, 21.6.91, 8.4.92 and Ellingsen 1992.

13. 'Lateline', ABC TV, 16.6.93.

14. Ellingsen 1992.

15. ACBC 1992, p.59.

16. See Chomsky, N., 'Mandate for Change or Business as Usual', Z Magazine, February 1993.

17. Pilger, J., Distant Voices (Melbourne 1992), p.339.

18. Quoted in ACBC 1992, p.58.

19. Tax avoidance became an enormous growth industry during this period with many companies and individuals employing schemes and havens in order to pay less tax than the official corporate rate.

20. For a summary of welfare cuts, targetting, and the tightening of eligibility rules under the Hawke Government see Emy & Hughes 1991, pp.155-9. Though relatively constant over the last decade, government spending on social security as a percentage of GDP in Australia falls well below the OECD average. See Emy & Hughes 1991, pp.395-7.

21. Emy, H.V., 'Michael Pusey's Economic Rationalism in Canberra', in Quadrant, July-August 1992, p.57.

22. From Market Principles and Welfare - the Dilemmas of Privitising Australia's Welfare Services, quoted in The Australian, 2.6.93.

23. See Access Economics Monitor, November/December 1992.

24.The Age, 23.2.93.

25.The Sunday Age, 16.5.93.

26.The Australian, 13.4.93.

27. Ralph Willis quoted in The Age, 2.6.93. Infused with the lexicon of neo-liberalism, the Finance Minister simply couldn't bring himself to say the word "sacked". On the most recent figures, the trade deficit, which the recession was engineered to correct, is worse than ever.

28.The Age, 23.4.93 & The Sunday Herald-Sun, 28.2.93.   For a further discussion of the impact of tariff reductions, see The Age, 18.5.93. There are now fewer people employed in manufacturing in Australia than at any time in the last 30 years.

29. ACBC 1992, pp.69-70. The quote is from Professor Gruen.

30. Emy & Hughes 1991, p.158.

31.The Age, 19.3.93.

32. See Pilger 1992, p.338 and ACBC 1992, p.vii.

33. Brian Burdekin quoted in Ellingsen 1992.

34. Although the 1989 Burdekin Report on child homelessness estimated Australia had at least 25,000 children who are homeless or at the risk of being homeless, other studies have more than trebled that figure. See ACBC 1992, p.73. For the figure on sole parent poverty see Ibid. p.78.

35. Australia has the second highest youth suicide rates in the world after Hungary. See ABC 4 Corners, ABC TV 8.2.93. Overall, suicide now exceeds motor vehicle accidents as the likely cause of death .

36.The Age, 1.2.93, 23.2.93.

37. On the links between poverty and violent crime, see P. Raskall interviewed on AM, ABC Metropolitan Radio, 24.5.93 and The Australian, 25.5.93. On the epidemic of violence against women, see The Age, 3.6.93, 4.6.93 and subsequent editions.

38. While the High Court (the Mabo case - June 1992) has belatedly recognised the notion of native title and the Federal Government has more explicitly acknowledged the crimes perpetrated against Aboriginal people (PM Keating's 'Redfern speech' - December 1992), the conservatively controlled State Governments have not displayed a similar bout of honesty or generosity of spirit. Tasmanian Premier Ray Groom, for example, continues to publicly deny the historical record of genocidal policies practiced by European settlers, or more accurately occupiers, against Tasmanian aboriginals last century. See The Mercury, 18.6.93.

39. See ACBC 1992, pp.74-5 and the Royal Commission into Aboriginal Deaths in Custody: overview and recommendations by Commissioner Elliott, 1992.

40.The Australian, 27.4.93.

41. For a brief statistical comparison of Aboriginal and non-Aboriginal Australians, see The Sunday Age, 2.5.93.

42. ACBC 1992, p.78.   According to Michael Barnard, "Average farm business profit as measured by the Australian Bureau of Agriculture and Resource Economics fell from $6405 in 1989-90 to a loss of $29,100 in 1991-92, the lowest "return" recorded. In 1990-91 farmers spent about 40% of their gross cash income on interest payments - up from 25% in 1989-90", The Age, 20.1.93.

43. The largest feature of Australia's balance of payments problem is the interest bill paid on the foreign debt, primarily incurred by the private sector during the speculation binge of the 1980s. In 1980 Australia's foreign debt stood at $7 billion (5% of annual GNP). It is now at $163 billion (42% of GNP). Government debt as a ratio of GDP, however, is at 15.6%, the lowest of any western nation.

44. The figures, perhaps rather surprisingly, are the U.K. 12%, U.S. 9%, Japan 3% and New Zealand 2%.

45. The reluctance of the Treasurer to use his powers under the Foreign Investment Review Board (FIRB) in the Arnotts-Campbells bid is just one recent illustration. This behaviour is in sharp contrast to the provision of government assistance to foreign owned multinationals such as Kodak and DuPont, who threatened the country with disinvestment. FIRB approval of foreign takeovers of Australian businesses is virtually routine (averaging 97%). According to Pilger, "since Keating abandoned exchange controls, more than $7000 million has fled Australia every year" (Pilger 1989, p.203).

46. See Emy & Hughes 1991, ch.1.

47. Westpac, The State Bank of Victoria, the State Bank of South Australia, and the ANZ have incurred extraordinary levels of bad debts due to their mishandling of de-regulation in the 1980s. Expenditure on R & D by Australian business is "abysmally low", about 0.25% of GDP, and well below the level in comparable countries. See Emy & Hughes 1991, p.19.

48. Mr Hawke's public praise for Mr Bond, Mr Packer, Mr Murdoch and Sir Peter Abeles reinforced his already impressive credentials with the super rich. During the 1980s BRW magazine, in particular,   became well known for surrounding a number of corporate high-fliers, now subsequently bankrupt, with almost a cult of personality.   The publication of the magazine's 'rich list' became an annual celebration of corporate greed.

49. See Wallace, C., Hewson, (Sydney 1993), p.165.

50.The Age, 13.3.93. On the 1986 sell off, see The Age, The Australian and The Australian Financial Review, 4.7.86.

51. Ian Spicer, CEO of the Australian Chamber of Commerce and Industry on ABC Metropolitan Radio, 14.3.93.

52. The most open campaigners for the Liberal-National coalition were the Housing Industry Association And the Australian Chamber of Commerce and Industry. See, The Australian Financial Review, 16.3.93, 19.3.93.

53.The Age, 28.5.93.

54. Ross Garnaut on 'Late Night Live', ABC Radio National, 24.11.92. Garnaut, a passionate free marketeer, held considerable influence over the Hawke Labor Government. As a senior advisor in the Prime Minister's department recalls, "Hawke never took my advice on a singular issue unless it coincided with that of Ross Garnaut" (Ed Visbord quoted in Kelly 1992, p.58).

55. 'Sunday', Nine Network, 6.12.92. Disillusionment with the political system is, not surprisingly, at record levels. See Collins, C., 'Backlash mounts against ideology-driven politics', in The Australian, 12.1.93.