Austerity - what it is and how to fight it

Since the 2008 economic depression began and the election of the John Key’s National Government began its programme of attacks one word has hung ominously in the air at all times – austerity.

As Wikipedia tells us, ‘In economics, austerity refers to a policy of deficit-cutting by lowering spending often via a reduction in the amount of benefits and public services provided. Austerity policies are often used by governments to try to reduce their deficit spending and are sometimes coupled with increases in taxes to demonstrate long-term fiscal solvency to creditors.’

The John Key-led Coalition since 2008 has embarked upon an austerity programme although they seldom use the phrase austerity. Instead Key and his sidekick, Bill English, refer time and time again to ‘Balancing the Books’. The other phrase on repeat in the last four years has been ‘Getting back into surplus’, referring to a notional goal of reducing the government’s debt.

Austerity measures, we have been repeatedly told in the media and by our politicians, are about improving economic growth and improving the financial situation of our Government.

In the first term of the National Coalition we saw an initial wave of austerity measures that targeted those on the margins of society. Most people will remember some of the first round of cuts.

The main planks were,

• A rise in GST from 12.5% to 15% and massive tax cuts for the rich. • 2500 public sector jobs lost.
• $400 million in cuts to early childhood education affecting 93,000 children enrolled in 2000 early childhood services.
• Removal of funding for Adult and Community Education – night classes.
• Cuts to home help for the elderly.
• Pay freezes throughout the public sector.
• Funding and staff cuts for Radio New Zealand and TVNZ.
• Funding cuts that saw the only four sign language teachers for school age deaf children made redundant. • $700,000 in funding cuts to women’s refuges.
• Removal of the training and incentive allowance for people on the DPB. 

Yet although National spent three years cutting deep into the public sector and underfunding health and education there is no evidence it helped to ‘balance the books’. Phil Goff, leader of the Labour Party in the 2011 election campaign set out National’s failures over those three years,

• Unemployment increased by 50 per cent, leaving 157,000 people out of work.
• 100,000 Kiwis left for Australia • Prices up nearly four times faster than incomes.
• First credit rating downgrade in 13 years. • 60,000 more on benefits costing $1b
• Wage gap with Australia increased by $32 a week.
• 55,200 people aged 15 to 24 not in education, employment or training.
• Economy grown by just 0.4 per cent
• Tax cuts actually cost an extra $1.1b in their first nine months.
• Underclass grown with 32000 more children living on benefit dependent households. 

2012 – the new wave of cuts 

2012 has seen a whole new wave of cuts unleashed and the centre piece of Key’s second term austerity programme is in the works - the partial privatisation of electricity companies, Solid Energy and Air New Zealand. The cuts unleashed since the re-election of John Key continue the policy directions of the first term. Prescription charges are up, health boards are underfunded and there are cuts to benefits for the unemployed and superannuation for the elderly. TVNZ7, our public service broadcaster lost all of its funding.


The 2012/2013 ‘zero budget’ released in May saw post-graduate and medical students facing cuts to student allowances. The budget also planned for a cut in primary and secondary teacher numbers and an increase in school class sizes.

Resistance
But National quickly reversed its plans to increase class sizes after a backlash and deep resentment from parents, threats of strike action from teachers and as the party began to lose support in the polls. It was a major victory for working class people fighting austerity but it has not been the only victory.

In 2010 the National Coaliton reversed cuts to ACC funded counselling for victims of sexual abuse after street protest led by rape justice campaigner Louise Nicholas.

In 2011 a government taskforce recommended massive cuts to Playcentre funding but backed away when parents organised for protests across the country.

When confronted in the streets, the people can beat austerity. Socialist Aotearoa has been involved in all of these campaigns and today we are working as unionists, students and social justice campaigners to fight the Government’s austerity agenda.

We want to stop the theft of the assets, the charter schools and prison selloffs and encourage everyone to get involved in the Aotearoa is Not for Sale campaign to fight the privatisations. We are deeply involved in Glen Innes, supporting a community fightback against the privatisation of state housing and the evictions of a working class residents.

We are with the students organising to ensure the cuts to allowances and the neo-liberalisation of education is reversed. We are with teachers fighting cuts to special needs education. We stand with the community law centres fighting cuts to funding. We want to fight against the cuts to our public services – health, education and local government today and tomorrow.

Until we get rid of National at the next election we have to fight in the workplaces, campuses and on the streets using protest and direct action. We know defeating the right in 2014 is going to be important, so we are building and supporting the Mana Movement and its programme for taxing the rich and rebuilding social services – economic justice.

Alongside the fight against austerity is the struggle against the corporations and government departments who have used the crisis as an excuse to offshore jobs, cut wages, attack unions and casualise conditions. This struggle has been seen most prominently at the Ports of Auckland and in the AFFCO meatworks but it is a struggle which affects millions of people on a day to day level. No to little pay rises, attacks on working conditions and job losses are all realities for New Zealand workers.

The fight against austerity in the workplace requires unions rebuilding their strength and going on the offensive, targeting companies that pay less than a living wage or that employ workers with no job security. The bosses have passed a whole series of laws that cut workers’ rights and make it harder for unions to organise. The fight against these laws and the fight against the corporations are connected. Workers must go on the offensive both politically against National and industrially for higher wages and better conditions.

An upsurge in workers organising in their workplace, student activism, more co-ordinated protest against the austerity agenda and sharper criticism of the rhetoric of “Balancing the budget” will help pave the way to defeating National in the streets today, and in the elections in 2014.

We also need to build an anti-capitalist, revolutionary organisation at the heart of the movements of anti-austerity rebellion. Labour and the Green’s have both called for the retirement age to be lifted to 67. Their calls for retirement age changes dovetail neatly with the Nats call for a ‘return to surplus’. We should be under no illusions – as long as the crisis continues, the 2014 government whether National or Labour/Green will be an austerity government.

The only solution to this crisis is a massive redistribution of wealth in our deeply unequal economy from rich to poor. Mana and Socialist Aotearoa are the only two forces advocating for this alternative. If you want to help defend Aotearoa. Organise to fight the cuts, build the Mana Movement and join Socialist Aotearoa.

-Socialist Aotearoa