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Is Australia in Danger of Becoming Greece? Austerity and Blackmail Down Under

It might have escaped your notice, but apparently a Mediterranean climate and robust olive oil are not the only things Australia has in common with Greece. This week, prominent Australian banker David Murray told the ABC’s 7:30 report that it is “easily possible” that Australia could experience a similar downturn to Greece, sparking a flurry of controversy.

On the surface, these comments undoubtedly seem fairly absurd to the average Australian. The global financial crisis has barely touched the Australian shores over the past four years, with the country maintaining a steady growth. Nevertheless, Tony Abbott, the centre-right leader of Australia’s opposition Liberal-National coalition, endorsed the comments as “a timely warning,” saying that:

The lesson of Europe is that countries can go very quickly from a strong position to a parlous position if things aren’t well managed.

At the moment, we’ve got a Government which has completely mishandled the mining sector which is the one sector which above all else has kept Australia going. With its endless taxes, this Government is putting the economic future of our country at risk.

Australia’s centre-left Prime Minister Julia Gillard responded strongly to Abbott’s comments this morning, pointing out that the condition of the Australian economy is fairly healthy:

It is absurd to be saying that our economy is in the same circumstances as the economies of Europe or Greece. From the Leader of the Opposition, that’s a grossly irresponsible thing to say. I mean, markets listen to what political leaders say, this can have repercussions in the real world that matter for the Australian economy.

Our economy is growing – it’s going to grow at around 3 per cent this year, we’ve got unemployment just over 5 per cent, we’ve got low inflation, low interest rates, strong public finances – AAA-rated by every major credit agency for the first time in our nation’s history.

Abbott’s response makes reference to the Gillard government’s controversial mining tax, which significantly increased taxes to the booming sector.

More importantly, Abbott’s comments specifically echo those of Australia’s notorious mining magnate Gina Rinehart, the world’s richest woman, who in late August told Australian workers to “spend less time drinking and smoking and socialising, and more time working.” Rinehart too warned that the Gillard government’s “socialist” policies would lead to Australia becoming like Greece.

It is not enough to respond to this ongoing rhetoric about Australia’s supposed calamitous future by pointing out, as Ms Gillard correctly did, that these comparisons are ridiculous given the state of European periphery countries. Yet the ideological blackmail is strangely telling, precisely because the financial sector in the form of the troika (the International Monetary Fund, the European Commission and the European Central Bank) has held Greece’s politicians hostage, forcing a slashing of the government in exchange for “bail-out” loans. As Mother Jones’ Kevin Drum recently pointed out, Greece faces a financial Armageddon with its most recent budget imposing radical cuts to the public sector, with a whole 10% cut of the overall budget.

At the same time, the Greek economy is currently predicted by the Greek government to contract by 6.5% this year and 3.8 next year, much more severely than the troika’s earlier estimates. As government contracts, the popularity of the neo-nazi group Golden Dawn continues to grow at a disturbing rate. The austerity medicine, it seems, is not working for Greece.

The discarding of the Keynesian common sense in how to respond to a depression coincides with the discarding of another post-war consensus–the need for the social welfare state to provide basic human services like health, education, unemployment benefits and so on.

And it is here that Australia shares a future with Greece, Spain, the United Kingdom and United States, in the steady cuts of citizen’s rights to public services, in the continual diminishing of our expectations for government to foster the conditions that promote a good life for its people. Greece is notorious for the tax avoidance of its wealthiest citizens. If the Australian model is less blatant than the Greek “fakelaki” (white envelope) system of bribes, the public tantrums by the likes of the billionaire Rinehart at facing fair tax rates only serve to underscore how strongly government has worked over the past decades to promote the interests of the super rich, even at the cost of no longer funding vital services.

For indeed Mister Abbott is far from the only conservative Australian leader to be making political mileage from Europe’s ongoing financial woes. Earlier this year, Campbell Newman, the LNP centre-right Premier of Queensland, invoked the spectre of Spain’s financial woes to justify unfunding disability services, calling the state the “Spain of Australia” – never mind that Queensland’s unemployment was less than a quarter of Spain’s at the time. Newman followed this up with further savage cuts to the Queensland public sector. New South Wales followed Queensland with cuts, while in Victoria, the conservative Baillieu government plans to cut the higher education TAFE funding – while increasing prison funding. Talk about planning for the future.

Cultural theorist Lauren Berlant recently summed up the European and American situation up nicely, in words that apply equally to the farcical spectacle of the prosperous Australian financial sector and opportunistic political allies:

The Euro-American state is a cowardly lion, a weeping bully, a plaintive lover to finance capital. It cannot bear to admit that, having grown its own administrative limbs to serve at the pleasure of the new sovereign of privatized wealth, that the wealthy feel no obligation to feed the state. So the state bails out banks and tells the polis to tighten up, claiming that the people are too expensive to be borne through their state, which can no longer afford their appetite for risk. They are told that they should feel shame for having wanted more than they could bear responsibility for and are told that they should take satisfaction in ratcheting down their image of the good life and the pleasures to be had in the process of its production. The affective orchestration of the crisis has required blaming the vulnerable for feeling vulnerable; not due only to a general precarity but also to the political fact that there is no longer an infrastructure for holding the public as a public.

Australians, it is time to admit that financial capital does not have our interests at heart, that the super rich make use of a constant blackmail to push an ideological agenda that prioritised tax cuts and government subsidies for industry while dismantling the public sector, attacking unions, and privatising everything that can possibly be sold off. In the process, we the vast body of Australian citizenry lose, in every possible way, as inequality increases and our ability to make a good life disappears. Austerity politics have failed. Trickle down economics have failed. And yet, we still hear the same siren-song from our rich and powerful, because it serves their interests… but not ours.

And if we do not push back against it, then yes, we really will become like Greece.

4 thoughts on “Is Australia in Danger of Becoming Greece? Austerity and Blackmail Down Under

  1. 100 % right we should be very worried .
    Problem is can brain dead Labor voters read this artical ?

  2. If you want a glimpse of just how corrupt the intersection of big mining & our neoliberal government is (both major parties), I’d recommend you read some of these articles…

    John Helmer is a Moscow based correspondant that spends a lot of his time following the not so wonderful world of the oligarchs & their dealings.
    Apparently some of them have found a lot of fellow travellers down under, & have been doing quite a bit of business:

    From Anna Bligh, Queenland’s Premier/chief of mining sales, & her dealings with Rusal’s not so pleasant CEO Oleg Deripaska, with the saga of Queenslands bauxite mining & Rio Tinto in the background:


    Onto the Green’s Senator Bob Brown, who seems shockingly upstanding in the dodgy world of modern Australian politics, & his call for an investigation into Deripaska’s dealings with the Australian Government & mining giants:


    To dodgy Australian business partners in the mining industry, giving you a solid glimpse into some of the corruption that pervades this world:


    Onto the Australian Government trying to play blackmail to get privileged access for Australian mining giants into the Russian mining sector:



    And finally a little look at some political games in the background:


    Just the tip of the iceberg, unfortunately, with a little look at only one country’s dodgy mining sector dealing with our dodgy mining sector/government partnerships.
    Most of our deals are with either with China, or a collection of even dodgier circumstances from Africa to Asia.

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