COVID-19: Workers should not be made to mortgage our future

Lisbeth Latham

As part of the Morrison Coalition government’s second COVID-19 stimulus package, treasurer Josh Frydenberg announced that workers would be able to draw on their superannuation savings by $10,000, this and next financial year, to meet immediate needs.

It highlights the Coalition’s inadequate response and its determination to shift the cost of its failure onto working people. At the same time, it is bailing out corporations.

Since its inception, Australia’s superannuation system reinforces and reproduces the inequality within the labour force and extends it into retirement.

The system shifts the responsibility of supporting retirees from government onto working people, via a system which defers and redirects wages into the superannuation system.

This deferral has allowed capital to inject billions of dollars into financial markets, predominantly the Australian one: Australian Superannuation Funds held $2.9 trillion in assets in July 2019.

It has allowed the government to justify its failure to provide adequate retirement pensions to workers because they are supposed to have enough superannuation to rely on in retirement.

As a result, Australia has the second highest rate of retirees living in poverty in the Organisation for Economic Co-operation and Development, with 35.5% of people over the age of 65 living in poverty, the overwhelming majority being women.

While the superannuation system is flawed, it is important that it does not become even worse. Forcing workers to draw on their superannuation to survive during the COVID-19 crisis will decimate the superannuation accounts of millions of workers.

Many of these people will already be among the most vulnerable and low-paid workers: they are unlikely to be able to rebuild their superannuation accounts. This will result in many workers living in poverty in their retirement.

If the crisis deepens for an extended period, there is a danger that workers will be pressured to to draw down even further on their savings. This will put workers at risk of losing the built-in insurance in superannuation funds that requires their balance be above $5000.

Age	Average balance: men	Average balance: women
20-24	$5,924	$5,022
25-29	$23,712	$19,107
30-34	$43,583	$33,748
35-39	$64,590	$48,874
40-44	$99,959	$61,922
45-49	$145,076	$87,543
50-54	$172,126	$99,520
55-59	$237,022	$123,642
60-64	$270,710	$157,049

Source: Association of Superannuation Funds of Australia

Beyond the short and long-term impacts on individual workers forced to draw on their superannuation savings, this proposal will potentially spark a liquidity crisis for the superannuation funds and thereby impact all workers.

The funds only hold so much cash at any one time which, in addition to being a form of investment, is used to reimburse funds to members.

If struggling workers start drawing down their superfunds, this will add pressure to those funds which may be forced to liquidate other assets, most likely shares. This will prompt superfunds to sell even more stocks, wiping out more of the value of shares and reducing the savings of all members.

Under these circumstances, speculators such as Gerry Harvey will be in a position to buy shares at much lower value and position themselves to profit handsomely from the COVID-19 crisis. This is in addition to the same profiteers receiving a direct government stimulus.

Many workers will not have any other option but to draw on their savings. But unions must demand that companies and the government guarantee workers’ wages during the COVID-19 crisis so workers do not need to draw on savings.

Moreover, we must demand that the aged pension, along with all other welfare payments, be lifted to at least the new level of the jobseeker benefit.

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[This article was originally published in Green Left Weekly #1258].

This article is posted under copyleft, verbatim copying and distribution of the entire article is permitted in any medium without royalty provided this notice is preserved. If you reprint this article please email me at revitalisinglabour@gmail.com to let me know.

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COVID-19 and why a rent strike is the wrong tactic

Lisbeth Latham

In the face of the economic havoc caused by the COVID-19 pandemic, it is not enough to call for a rent strike and moratorium on mortgage repayments. At best, it simply displaces the lack of income into other parts of the economy and, at worst, it could deepen the impact of the economic crisis on working people.

Despite widespread concern over housing affordability, as a stand-alone tactic such calls are insufficient. Instead, progressives should be campaigning for secure incomes for all working people, something that would not only allow them to pay rent and mortgages, but equally importantly it would allow them to eat.

As the pandemic deepens, many more industries and companies will close. That will mean many working people, although technically employed, will be without incomes.

Even with treasurer Josh Frydenberg’s announcement that job seekers will have their payments doubled for six months — a huge relief for the unemployed — for many this will fall far short of meeting their financial needs and obligations.

There are a number of immediate risks if people were to stop paying rent.

First, they risk being evicted from their home. While this may not happen immediately, it is a struggle that they may not be in a position to win.

Secondly, a rent strike runs a serious risk of displacing the income crisis to another part of the economy.

While many people will have limited sympathy for the plight of landlords, and many could wear a reduction in income, this is not going to be the case for all landlords, especially retirees, whose superannuation is tied up in a rental property and for whom the non-payment of rents could lead to their immiseration.

If there was to be a rent or mortgage strike, it should be limited to those whose incomes have been significantly reduced. Those who remain working, or whose employers continue to pay them during periods of shutdown, should continue to pay rent.

Doing so will help ensure the circulation of cash and allow those services that remain in operation to be paid for the goods and services being provided. Additionally, the payment of rents and mortgages will have a counter inflationary effect.

The key question should be how can we collectively maintain incomes in this unprecedented COVID-19 emergency. Governments should mandate employers to continue to pay the wages of all their employees, regardless of their contract status.

If this is no longer possible, the government should directly subsidise wages – rather than the Morrison government’s current plan to refund tax payments and underwrite loans.

By doing this, large corporations such as Qantas, should be partially or totally taken back either through formal nationalisation or via a share transfer. No worker should lose their job or income in the current crisis.

Right now, governments must fund jobs and incomes by creating more money to be released into the economy. By subsidising wages, the government would be able to position the economy not just for a more rapid recovery in the wake of the pandemic.

It would also be in a position to prioritise the expansion of sectors, such as manufacturing, which are necessary to boost sustainable energy to transform the country’s power supply to meet the equally vital challenge of climate change.

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Morrison’s COVID-19 stimulus measures: wrong diagnosis, wrong medicine

Lisbeth Latham

Prime Minister Scott Morrison announced a $17.6 billion stimulus package on March 12, aimed at combating the expected economic slowdown resulting from the growing COVID-19 pandemic.

This was followed four days with statements that his cabinet was considering future stimulus measures, particularly targeting the tourism and hospitality sector.

The federal government’s priority is to pump money into small and medium-size businesses to encourage them to buy small capital goods. It claims this will boost spending and thus slow or reverse the slowdown.

This appears extremely unlikely, however, because the stimulus package is insufficient and poorly conceived.

Stimulating what?
The Australia Institute (TAI) argues the package is the right size but wrong shape.

TAI senior economist Matt Grudnoff said only 25% of the package — the part aimed at welfare recipients — was well directed, as these individuals would likely spend the money directly.

He argued small businesses though were unlikely to spend in the current circumstances and that “instant asset write-off and accelerated depreciation initiatives are likely to be under-subscribed”.

People on welfare will most likely quickly spend the one-off $750 cash payment in the government’s stimulus package because these payments are already well below the poverty line.

Rather than giving out a one-off payment that is roughly equivalent to $15 a week across the year, the economy would be better off if all welfare payments were raised to at least the poverty line.

But the slowdown is not being primarily driven by a lack of domestic spending, nor is this likely to become the main driver. The key issue is the economy grinding to a halt as people become sick and are unable to work.

The stimulus is unlikely to stop a downturn as the need for social distancing and self-isolation over the course of the pandemic means a slowdown is most likely inevitable.

Protecting incomes
During this time, many businesses will close, and some may never reopen. This will be a tragedy for the owners and tens of thousands of workers who face a loss of income — and, potentially, their livelihood.

Keeping people in jobs must be a priority of the stimulus package.

This does not mean businesses must stay open during the pandemic. Many will need to temporarily close.

Only workplaces providing food, power, water, health and other vital services should remain open. All energy must be directed to ensuring this is possible.

All other workers, including casuals, should be paid leave during periods of self-isolation, sickness and shutdown. Large businesses should wear the cost of temporary closure or reduced services, while those small and medium-sized businesses that are unable to should be supported to ensure they can pay workers and meet other essential costs.

This support should extend to sole traders, such as many tradespeople, artists, gig economy workers, musicians, performers and sex workers. Failure to do so will mean any resulting financial crisis will be much larger, and more deeply and longer felt than need be.

There have been calls for a moratorium on rent and mortgage payment. While such a move has understandable appeal, there are some issues with it.

For one, it would simply shift the problem to another part of the economy and create the possibility of a contagion of bad loans in the financial system.

Moreover, most Australians do not have savings and are already reliant on short-term credit to cover not just rent and mortgages but food and basic services. As such the priority has to be on maintaining incomes, rather than attempting to offset the consequences of their collapse.

Who pays?
The federal government has made much of the fact its initial stimulus package was a consequence of its “sound economic management”. The reality is the budget surplus only ever existed on paper and was primarily premised on huge underspending on the National Disability Insurance Scheme.

However, we should avoid some of the gloating that has crept into public discourse around the evaporation of the “surplus”, as it accepts the notion that a surplus is an inherently positive thing or represents “good economic management”. It risks celebrating the government’s attempt to provide certainty to global lenders over the provision of vital social services. Funding large-scale subsidisation of incomes across the economy will cost a small fortune.

In the short-term, it will need to be paid for from government revenue and borrowing, which is relatively cheap in the circumstances. Covering the cost in the medium-to-long-term, will require raising government revenue.

As the economy restarts, the focus will have to be on ensuring the rich pay taxes, not just by cracking down on tax minimisation and avoidance schemes, but by raising corporate taxes.

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[Originally published in Green Left Weekly #1257. It should be read in conjunction with my article Working communities must not be made to pay for COVID-19 crisis]

This article is posted under copyleft, verbatim copying and distribution of the entire article is permitted in any medium without royalty provided this notice is preserved. If you reprint this article please email me at revitalisinglabour@gmail.com to let me know.

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Working communities must not be made to pay for COVID-19 crisis

Lisbeth Latham

As COVID-19 spreads globally, and the threat of widespread community transmission becomes more real, it has become clear the new coronavirus poses not only a major health risk but a significant threat to the livelihoods of millions of workers.

The unfolding crisis has led to rising pressure from companies to protect profits at the expense of working people and their communities. In the face of this pressure, it is important progressive forces raise demands that place the welfare of workers first.

Sickness benefits and leave
In announcing the government’s response to COVID-19 on March 11, Prime Minister Scott Morison indicated workers without leave entitlements might be able to access Sickness Allowance. This is not a real answer to the challenges facing working people.

Sickness benefits are also wholly inadequate and would cast thousands of people into poverty. The government’s proposal highlights the need for all welfare payments to be dramatically raised.

The most vulnerable section of the workforce are the 3.3 million casual workers who do not receive sick or other paid leave.

This lack of leave pay poses a major health risk to the community: experiences internationally show that if we are to avoid the hospital system being overwhelmed it is vital that individuals who are potentially infected or have had their infection confirmed, self-isolate.

However, casuals face an impossible choice of either not working for weeks, and being ruined financially or working, and potentially infecting workmates and other individuals who they come into contact with.

Industrial relations minister Christian Porter's comment on March 10, that "many people would have already made provisions for that because, of course, the purpose of casual employment is that you’re paid extra in-lieu of the types of entitlements" reflects the government’s total indifference to the real misery casual workers and their families will face as COVID-19 spreads.

It also exposes the government’s desire to appear to be addressing the challenge while doing nothing.

The Australian Council of Trade Unions (ACTU) has called on the federal government to legislate that casual workers who have to self-isolate receive two-weeks’ pay. This represents the time period that, in mild cases, is seen to be necessary to allow the virus to develop and those infected to recover.

While this is an important demand, it is most likely an insufficient amount of leave, at least for some workers.

Some workers will contract more serious cases of COVID-19 and potentially be hospitalised with severe respiratory problems, leaving them faced with a lack of income after the two-week period to pay their rent or mortgages and feed their families.

Moreover, it is unclear how long the recovery time really is, with studies in China suggesting people who have recovered from COVID-19 symptoms can remain infectious for days.

Casual workers, like other workers, may also need to be carers for family members in self-isolation or those unable to attend school due to closures and require more than two-weeks leave.

No job shedding
Economies globally have started to slow. This is most notable in China, but the slowdown is expected to continue, particularly if widespread community transmission occurs in more countries.

The slowdown cannot be simply blamed on COVID-19; it is an exacerbation of underlying weaknesses in the global economy, which has seen ongoing periods of slow growth in the wake of the 2007-08 Global Financial Crisis.

While the impact of COVID-19 on the economy has primarily been in education and tourism, its effect can be expected to spread to other sectors.

The impact of this slowdown can be seen in QANTAS’s March 10 announcement that it will be reducing flights by 25% and moving to use smaller planes on a number of routes, with the aim of lower costs and reducing excess capacity.

While reducing capacity in the face of an expected decline in demand makes sense, QANTAS is also saying it has about 2000 workers who are “surplus to requirements”. This raises the spectre of workers being asked to take unpaid leave and, potentially, mass layoffs — and not only at QANTAS.

Any such mass layoffs are an attempt to bolster profits at the expense of the lives of thousands of workers. They are not only thoroughly immoral, but risk exacerbating and deepening the downturn.

Profitable companies should be legally prevented from sacking workers — this should be the case anyway, but this measure is particularly vital in the face of a widespread downturn.

Any reduction in the need for labour hours must be addressed via the introduction of a sliding hours-wages scale, where the working hours of all workers at a company are reduced equally to meet the lower work requirements and the hourly wage rate is raised to ensure no worker is left worse off.

Companies that argue they face bankruptcy should have to open their books to unions and the government, with aid provided to enable them to keep operating where deemed necessary.

The government’s response of COVID-19 must be guided by the principle that workers’ lives are worth more than company profits.

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[This article was originally published in Green Left Weekly #1257. Lisbeth Latham is a union activist and trans feminist writer. She is a contributing writer with Irish Broad Left.]

This article is posted under copyleft, verbatim copying and distribution of the entire article is permitted in any medium without royalty provided this notice is preserved. If you reprint this article please email me at revitalisinglabour@gmail.com to let me know.

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France: Philippe Government Guillotines Parliamentary Debate to Force Through Pension Attacks

Lisbeth Latham

On February 29, French prime minister Edouard Philippe announced that the government would use clause 49.3 of the French Constitution, which allows the government to pass legislation without a parliamentary vote, to enable the government to expedite the passing the government’s controversial pension reforms. The exercise of Guillotine was primarily aimed at blunting efforts by left parties to hold up the passage of the legislation through parliament. However, the government also hopes that the passage of the legislation will undermine the current movement to defend the pensions.

Pensions Legislation
Despite the government announcing it would push through the legislation, it remains unclear exactly what form the legislation will take, with France24 reporting that the pension age will remain at 62, however, the “Pivot Age” when workers can access their full pension will be extended to 64 – which reflects concessions to the opponents of the counter-reforms.


This is the first time since 2015, that a government has activated clause 49.3 to push through legislation. The clause allows the government to pass legislation without a parliamentary vote, with parliamentary opponents of legislation only able to block it if they can pass a motion of “no confidence” in the government. During the passing of the El Khomri attacks on France’s Labour Law, when Macron was the finance minister in the Parti Socialiste (PS) government. On that occasion, clause 49.3 was enacted because opposition within the PS put at risk the government’s majority and the government correctly assessed that they would be less at risk of a no-confidence vote.

Parliamentary Response
The Philippe government’s use of clause 49.3 is not a response to a concern of an inability to pass legislation, despite some defections, the ruling Le REM (République en Marche - Republic on the March) government has a comfortable parliamentary majority. Instead, the government is seeking to truncate debate over more than 40, 000 amendments which have been moved by the opposition, primarily the parties of the left. After 119 hours of debate, there are still more than 29 000 amendments that are yet to be discussed. Philippe in parliamentary debate described the step of cutting debate as “not to put an end to debate but to end this period of non-debate”. Motions of no confidence have been flagged by both MPs of the Parti Communiste Francais and France Insoumise (France Untamed - FI) and by the far-right Rassemblement National (National Rally). FI leader, Jean-Luc Mélenchon denounced the use of clause 49.3 as an “extraordinarily violent” methods of the government.

The movement continues
Since the start of the mobilisations and strikes against the pensions reforms on December 5, France’s union movement has been highly divided. With left-wing trade unions and student organisations calling ongoing mobilisations, strikes, and blockades aimed at the total withdrawal the counter-reforms, also linked to local and sectorial struggles – including the longest transport strike in France in the last 50 years. On the other hand, the more conservative unions, particularly the Confédération française démocratique du travail (French Democratic Confederation of Labour - CFDT), have sought to focus on lobbying the government for amendments to mitigate against the worst aspects of the counter-reforms. With the leadership CFDT actively making statements against the mobilisations of more left unions, including tweets from the CFDT denouncing strikes as a method of struggle for unions. This conservatism and limited participation in the mobilisations have led to significant tensions between the CFDT and the memberships of more militant unions, tensions which have come to protests by militants from Solidaires and Confédération Générale du Travail (General Confederation of Labour - CGT) at the CFDT national headquarters, including the cutting off of electricity to CFDT building by CGT power workers. Protests which have been denounced by the CFDT leadership as an attempt at intimidation.

"There are alternative ways to pursue claims. A strike is not the necessary means of unionization. In Nantes, faced with the refusal to wear shorts in summer, the bus drivers had come in skirts for example".

In response, the leaderships of the CGT, Force Ouvriere (Workers Force), Fédération Syndicale Unitaire (Unitary Trade Union Federation), and Solidaires have denounced the activation of clause 49.3 and called for new mobilisations from March 5-8 as well as calling for amplifying the mobilisations which had already called for March 31. The struggle against the pension reforms will also be a feature of the International Women’s Day mobilisations and Women’s Strike on March 8 and 9.

In contrast, the CFDT and Confédération française des travailleurs chrétiens (French Confederation of Christian Workers) have announced that they are hopeful the government will still include amendments which they have lobbied for in the final legislation. The government will be hoping that the pushing through of the legislation will help demobilise the movement against the counter-reforms, which is what has happened with previous movements over the last decade. However, a major difference between the current movement and those previous ones, is that the conservative unions have played almost no role in the current mobilisations, and so they will not be able to have the same demobilisation effect on the movement as they did in the past.

In addition to the coming mobilisations, the municipal elections, scheduled for March 15 and March 22, are expected to be a significant test of public opinions towards the government. Indeed, it is thought that the pushing through of the legislation prior to elections was aimed at reducing the extent to which the elections would be used to protest against Le REM candidates.
Whilst the government appears confident that it has successfully passed its counter-reforms, it remains to be seen if this will signal the end of the movement or its intensification.

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Lisbeth Latham is a contributing editor with the Irish Broad Left.
This article is posted under copyleft, verbatim copying and distribution of the entire article is permitted in any medium without royalty provided this notice is preserved. If you reprint this article please email me at revitalisinglabour@gmail.com to let me know.

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