Vol. 74/No. 37      October 4, 2010

Homelessness and indebtedness are growing. The cost of living is rising and social services are being cut. Official unemployment is relatively low at 5 percent but long-term unemployment has grown by more than one-third in the past year. Unemployment for Aboriginals and all teenagers are both more than 18 percent.

The federal elections August 21 resulted in a deadlock in which no party won the needed majority of 76 seats in the 150-seat House of Representatives to form a government. Labor got 72 seats with the conservative Liberal and National coalition gaining 73. This is the first “hung parliament” at a national level since 1940, during the Second World War.

The economy here escaped the worst of the international economic crisis in 2009, buoyed by an ongoing mining boom. Increasing revenues from energy and mineral shipments, especially iron ore and coal to China and elsewhere in Asia, now make up more than one-third of the value of exports from Australia.

Labor’s support slumped as it carried out an anti-working-class course little different from policies under the 1996-2007 conservative coalition government. Only 4.7 million out of the national turnout of more than 13 million voted Labor as first choice under the country’s preferential voting system. Voting is compulsory in Australia. But abstention was higher than past elections, with well over 1 million not voting or casting a blank ballot.

The Labor loss of seats was heaviest in Queensland and New South Wales. Here state Labor governments have become increasingly unpopular due to the deterioration of public services like hospitals and transport.

For the first time, the Greens won the balance of power in the Senate, with nine seats. A Green candidate also won a formerly Labor-held lower house seat in middle class inner-city Melbourne. Elsewhere the ranked voting system meant that most Green votes flowed to Labor candidates. After the election, Gillard secured an agreement for Green support to a Labor government.

A few months ago the Labor party changed its leadership in an attempt to stem the loss of public support under then prime minister Kevin Rudd. On June 24 Gillard, the deputy leader, was backed to depose Rudd and become prime minister.

The new prime minister made a deal with key mining magnates from big corporations like BHP and Rio Tinto lowering Rudd’s controversial resources tax.

Gillard has also moved to match the opposition’s populist rhetoric against immigrants arriving by boats seeking political asylum. (See accompanying article on this page.)

The rating agency Standard & Poor’s recently warned, “A faltering global economic recovery or softening demand from China … could cause a sharp decline in the Australian economy.”

Some capitalist spokespeople have expressed concern that the new government may not be strong enough to increasingly foist more of the burden of the deepening crisis on the backs of working people. A September 11 Australian editorial said, “Complacency about continued prosperity is the biggest risk.” It warned that the new government would be “judged” by its success in delivering “services, economic stability and long-term reforms,” referring to the employers’ drive to depress wages and press “productivity” through speedup.
 
 
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