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"Alliance Voices -- Socialist Alliance Discussion Bulletin and National Newsletter" - 5 new articles

  1. Socialist Alliance trade union perspectives—preamble and resolution
  2. Pay Equity
  3. On Occupational Health and Safety law ‘harmonisation’
  4. How to survive a recruitment campaign by making it routine
  5. Climate sustainability: What cost? How to pay?
  6. More Recent Articles
  7. Search Alliance Voices -- Socialist Alliance Discussion Bulletin and National Newsletter

Socialist Alliance trade union perspectives—preamble and resolution



Preamble

Role of trade unions

The role of the trade unions is to defend the basic interest of the workers, such as working conditions and wages. Unions have come into being with capitalism itself as working class organisation of resistance to the exploitation workers faced by the bourgeoisie. The existence of unions also highlights a fundamental conflict of class interests inherit in the capitalist mode of production that strives forever for increasing profits at the expense of workers.

Regarding industrial issues, the main tasks facing union militants in the movement are:

  1. To achieve legislative change in favor of worker’s rights through mass campaigns
  1. To fight attacks taking place at individual workplaces
The Rudd government and Industrial Relations
The election of the Rudd Labor government in 2007 on the back of the “Your Rights at Work” campaign and with the promise to rip up the Coalition government’s infamous WorkChoices legislation (2005) has not brought any significant change in favour of workers and trade unions.

The ALP’s new industrial relations regime “Fair Work Australia” (FWA) is a continuation of Work Choices with the aim to make unions redundant as representatives and bargaining agents for workers. FWA contains strict limitations on the right to organise, bargain and strike and has failed to restore unfair dismissal provisions to those prevailing before WorkChoices. FWA still outlaws industry wide (pattern bargaining). 

Under FWA’s process of award modernisation, many awards are being stripped of hard-won conditions and entitlements, clearly putting many employees, especially women, at a disadvantage. All awards must include a ‘flexibility clause’ that allows for individual contracts.

FWA is designed to atomise the work force and isolate trade unions through secondary boycott legislation; is very costly to members and criminalises industrial action through the Australian Building and Construction Commission (ABCC).

To date, the Australian Council of Trade Unions (ACTU) has supported FWA.

The notorious Australian Building and Construction Commission (ABCC) continues to exist and persecute building workers like Ark Tribe for refusing to answer questions about industrial action. In 2010 the ABCC will be replaced by a new building industry inspectorate, which will essentially retain many of the coercive powers of the ABCC.

Labor’s plans to harmonise all Occupational Health and Safety (OHS) laws into one set of new laws poses a serious threat to current OHS legalisation in Victoria and New South Wales in particular. The new set of laws is designed to take away some hard-fought-for rights and minimise the power of OHS representatives to make important and potentially life-saving decisions. At the same time negligent bosses get away with murder because of the absence of industrial manslaughter legislation

Global Economic Crisis

The Global Economic Crisis (GEC) has been very effectively used for a range of anti-worker measures by employers and the government. Pressure has been put on individual workers and unions to accept wage restraint, reduce their working days (“down days”) and annual leave—at their own expense. The ACTU has supported the “down-day” model “to save jobs” when in fact this short-sighted measure helps save businesses, not jobs.

There has been minimal resistance to this pressure by most union leaderships due to a combination of their inability to counter the boss’s arguments; their class collaborationist position; their fear of job cuts and their inability to envisage how a militant campaign could win.

Wages and Equal Pay, parental leave

According to the Australian Bureau of Statistics (ABS) in 1999-2000, the richest 20% of income units received 48.5% per cent of total income. The poorest 20% of income units received less than 4% of total income.

The situation for women is even worse. In May 2009, the Australian Bureau of Statistics calculated that women earn 7.4% less then men for full time employment; in industry sectors this gap can be as large as 30%. Taking into account part-time and casual work, the total gap is actually 35%.

Australia is one of only two OECD countries without some form of paid maternity leave. We have witnessed a back pedalling by the Rudd government on the question of parental leave (citing the Global Economic Crisis), leaving Australian women and parents with a highly inadequate scheme

Minimum wage

The current minimum wage is set at $543.78 a week before tax. On July 7, the Australian Fair Pay Commission (FPC) ruled out a pay increase citing the Global Economic Crisis as the key factor. Adjusting for inflation and a rise in living costs, the “wage freeze” imposed by Harper amounts to a pay cut in real terms for workers. 

In its submission to the FPC, the federal government did not advocate an increase in dollar terms but warned that a higher minimum wage increase is likely to encourage higher wage claims and outcomes in workplace bargaining negotiations, and hence flow-on to a greater number of employees.  

The Federal government was referring to a number of large certified agreements due to expire in 2009 in car manufacturing, construction and the retail sector. It is highly likely that a decent minimum wage increase would also increase the bargaining power of these workers and lead to a better wage outcome.

Unions and the ALP
The Your Rights at Work campaign was rapidly demobilised after Rudd’s election victory in 2007, which weakened the ability to fight Labor’s unfair FWA. Sections of the union movement thought that Labor would get rid of Work Choices. It is only now that Labor’s Fair Work Act is in place that the union movement is beginning to realise how inadequate it is. 

Trade unions’ traditional links and affiliations to the ALP have undermined and compromise union leaderships ability and willingness to fight for workers interests. The election of a federal Labor government has put this into a new light. 

Most trade union officials are reluctant to criticise the federal ALP and therefore also to mobilise against its industrial relations regime. They do not want to embarrass the party (although this is not always the case at the state level). With some notable exceptions, unions have focused their energy on lobbying politicians with little positive outcome for their members.

In the meantime attacks have continued and intensified, such as against the Construction, Forestry, Mining and Energy Union (CFMEU) and the Australian Manufacturing Workers Union (AMWU) in Victoria. These attacks not only come from the bosses but also government officials and agencies and also other unions.

This union orientation to the ALP, combined with the leaderships’ lack of a strategic view on the way forward, has led to some demoralisation among the more militant officials and union members.

The ACTU has been increasingly exposed as a simple mouthpiece for the ALP.
Union resistance/responses to Rudd
However, tensions between the union movement and Labor governments have grown over the last two years with Rudd’s refusal to break with Howard’s’ anti worker regime.

At a state level, the NSW and Queensland government’s attempts to privatise public assets has met with some resistance from the union movement. The campaign in Queensland, which has been led by the Electrical Trades Union, has been more broad-based than that in NSW, where it led to a compromise supported by much of the union movement. The decline in the organising strength of unions is being exploited by Labor machines.

We have also seen important struggles take place, such as the National Tertiary Education Union’s fight against federal government attempts to further casualise and privatise the higher education sector. The Victorian CFMEU and AMWU took on construction giant Holland during the “Westgate Bridge’ dispute over critical employment standards and the right for those two unions to organise on Holland’s site. The Victorian branch of the AMWU has also successfully fought employer attempts to use Labor’s mandatory “flexibility” arrangements to introduce individual contracts through the back door. The national campaign to abolish the ABCC and drop charges against Ark Tribe is also still continuin.


Militant unionism and independence from ALP

Most workers would today question the value and the point of being affiliated to the ALP if given the chance by their unions. Some unions have cried foul in NSW over government selections of cabinet members etc, and have announced they will not pay party fees. The ETU in Victoria has already started to fund election candidates other than ALP picks. But these moves still fall short of even the limited steps made by some British unions to break with Labor and re-establish a political voice for workers.

Workers are still prepared to take action and follow their union leadership when it leads. Two recent examples in Geelong where workers took action were over the sacking of council workers and at the Geelong Hospital where 24 workers were to be sacked before Christmas. In both case workers walked off the job in wild cat strikes and won their demands within a day or two. It is not always as simple as this but it does demonstrate that where unions lead and train their members action is possible and victory for workers is more often than not the result.

Unionists and climate change

A CSIRO study indicated that 2.7 million jobs could be created in Australia over the next 15 years in any switch to a low-carbon economy and the deployment of renewable energy; and this is a conservative estimate. The majority of union leaderships have, in general, not taken up climate change in a serious way with its members. 

Australian Workers Union secretary Paul Howes and CFMEU mining and energy division president Tony Maher are outspoken in their support for the bosses’ and the government’s go-slow agenda on climate change. Howes’s push for a nuclear option as a solution to climate change might well get a hearing amongst many workers.

Yet, while the ACTU as given uncritical support to the Rudd government’s carbon trading scheme (CPRS), many individual union leaders unofficially support green jobs and a transition to renewable energy. 

RESOLUTION

Socialists in the union movement 

The Socialist Alliance recognises the important role socialists play in the trade union movement to defend and extend workers interests and is committed help build resistance in a range of unions.
  • The Socialist Alliance recognises the limitations of trade unions vis-a-vis building a working class alternative beyond capitalism. Socialist Alliance is committed to fight alongside fellow workers for industrial and immediate economic rights plus engage in the political struggle to build consciousness beyond reformism.
  • As part of this political struggle Socialist Alliance members commit to introduce and support non-industrial issues, such as indigenous rights, climate change, women’s rights and anti war – building solidarity with broader sections of the community and also internationally
  • The Socialist Alliance recognises that the balance of power within the trade union movement favours ALP politics, class-collaboration and narrow national interests. At the same time we recognise that a substantial section of trade union activists either feel betrayed by Labor or are opposed to Labor. Socialist Alliance is committed to keep working with and strengthening the militant class struggle wing of the union movement.
  • The Socialist Alliance will actively promote and support actions that contest the legitimacy of the FWA and support and participate in individual workplace struggles and union campaigns.
  • The Socialist Alliance recognises the crucial importance of building the climate change movement within unions, both at a policy level, but also at a grass-roots activist level. Our task is to win workers and union leaderships to understand the necessity of taking action on climate change to help this movement win its demands for public ownership, green jobs and sustainable renewable energy.

Building Socialist Alliance

  • The Socialist Alliance will continue with its task to build rank-and-file bases in unions to draw rank-and-file activists towards class struggle activism and socialism. We also project to work within unions as officials and to win leadership positions where strategically useful.
  • The Socialist Alliance is committed to eencourage members to get jobs were we can do effective trade union work and help build a class struggle wing, (e.g. education sector)
  • The Socialist Alliance is committed to continue organising on a union sectoral basis and coordinate our activity in a national level
  • The Socialist Alliance pledges to use Green Left Weekly in the trade union movement as a tool to reflect government industrial relations policy, workplace and unions struggles and promote Socialist Alliance solutions
 


Pay Equity


By Margaret Gleeson (Brisbane Branch)
 
The Gender Gap: International and Australian Context

The Global Gender Gap Report 2009 (World Economic Forum) rated Australia 20 on an international index. behind the Scandinavian countries who came in at 1 to 4, New Zealand 5, Ireland 8 and “developing” countries Lesotho 10 and Sri Lanka 15. 

On the critical measure of labour force participation, Australia has fallen from 40 to 50, with the female-to-male ratio stagnating at 0.84.

And on the measure of wage equality for similar work, Australia ranks  only 60th in the world.

In November 2009 the Report of the Parliamentary Committee on Employment and Workplace Relations was tabled. It noted the 17% gap between men and women’s pay, as well as a widening gap in workforce participation and access to higher paid positions. ACTU President Sharon Burrows welcomed the report:

“Equity on pay and workforce participation for women will be a top priority for Australian unions over the next 12 months. Unions are undertaking a major industrial campaign with a test case in Fair Work Australia that could lift the pay of workers in the female-dominated social and community services sector by more than $100 a week.
 “The committee's recommendation for gender and equal remuneration principles to be considered when industrial awards are upgraded by Fair Work Australia, including the federal minimum wage case, is a positive step.
“Positive also is the proposal for a pay equity unit within Fair Work Australia to gather data, monitor and investigate equity in pay, conditions and benefits.
"It's 40 years since the first equal pay test case, yet women still lag well behind men in the Australian workforce,” Ms Burrow said.

Australian Services Union Pay Equity Campaign

In May 2009, Australian Services Union (ASU) members in the Social and Community Services (SACS) Division in Queensland won an historic victory. The successful campaign resulted in a decision being handed down in the Queensland Industrial Commission awarding pay increases of 19% to almost 40% based on the undervaluation of the work in the SACS industry. The Commissioner found that this undervaluing resulted from the perception of the work being an extension of domestic/caring work of women. Women represent over 80% of the workforce in the industry. 

A new Federal Award is now being introduced under “Award Modernisation” and the ASU National has entered into a Memorandum of Understanding with the Commonwealth Government to pursue a pay equity case under Fair Work Australia based on the Queenslandd Rates of Pay. AS the ASU stated in a media release on the issue:

The Australian Services Union (ASU) and the Australian Government have reached an historic agreement which will see the social and community services sector as the test case for pay equity in the new Federal Industrial Relations system.

This agreement means that the very first national equal remuneration case under the new Fair Work Act will be run by ASU with the support and co-operation of the Australian Government

This landmark agreement helps to pave the way for the ASU's successful Queensland pay equity case to flow on to SACS workers across Australia. The case will seek pay rises based on pay equity and work value to support retention of staff and address a chronic skills shortage in the sector by delivering substantial wage rise for the predominately female workforce - 87% of SACS workers are women.

"If the remuneration case is successful, a phase-in of enhanced wages and conditions will provide welcome relief to both employees and employers in the sector. Many organisations are struggling with wage rates failing to attract and retain staff.”

Early indications are that this test case will be bitterly fought by Chamber of Commerce and other interests as they see it as setting the scene for a wages breakout by other sectors of low-paid women workers.

  The ASU is working towards a National Day of Action in May in support of the claim. Campaign Committees are being set up around the country to prepare for the NDA and maximise participation of workers in the industry.



On Occupational Health and Safety law ‘harmonisation’

Proposed addendum to Trade Union
Perspectives Resolution


By Jody Betzien (Melbourne North-East)


The Socialist Alliance believes that the process of Occupational Health and Safety (OHS) Legislation “harmonization” initiated by the ALP government is likely to lead to a substantial reduction in health and safety protections for thousands of Australian workers. The review is intended to develop a single “optimal structure and content of a model OHS act” that is capable of being adopted in all jurisdictions, thereby replacing existing state and territory OHS Acts. 


The draft model legislation released in November 2009, undermines key aspects of some existing state and territory legislation. 

The Socialist Alliance believes that all Australian workers should have the same level of OHS protection regardless of the industry and state or territory they work in. However the harmonised of OHS system should not leave any worker worse off and must deliver Australian workers the highest standards. 

The draft model leglisation attacks health and safety rights in the following areas”:
    a) It complicates and frustrates the rights of occupational health and safety representatives on the job. Their legal liabilities will be increased and there is no guarantee of paid training. Despite the fact that they are volunteers and workplace representatives, bosses will have the right to apply for their removal, and in certain circumstances they may have to front court to pursue OH&S claims. The capacity for on the job delegates to identify issues, seek remedy and order a stop work where safety is compromised, is fundamental to ensuring a safe workplace.
    b) The onus of proof—which at present falls on the employer—is to be reversed in the proposed legislation. It will be up to prosecutors from Safe Work Australia to prove that employers failed to take reasonable action to prevent a workplace injury or death, rather than the responsibility of bosses to show that they did. By reversing the onus of proof, the draft legislation encourages bosses to frustrate investigations, cover up accidents and stay silent. 
    c) Unions are critical in enforcing health and safety standards. The proposed regime for Right of Entry under the Model OHS Laws will serve to frustrate site entry by union representatives by creating complicated processes, which will undermine the capacity for union officials to address OHS concerns quickly. In high-risk industries this will cost lives. The 24 hours’ notice will have to be given before inspecting sites or documents related to an OH&S breach. This could allow time for a boss to cover up the evidence. 
    d) Union and Victims’ ability to initiate litigation. The draft legislation means that the power to prosecute breaches of the law rests solely with the regulator. The capacity for unions and victims to prosecute is essential because regulators have proven to rarely pursue prosecutions in “near misses” or breaches that result in non-catastrophic injuries.  The NSW and ACT legislation currently allows for private prosecutions. Removal of this right is also inconsistent with the criminal law in most jurisdictions where citizens can prosecute criminal offences. It also serves to handcuff unions from bringing proceedings for breaches under workplace laws.
The capacity for unions to prosecute where the regulator has failed to do so, is essential in deterring employers ignoring OHS considerations.


How to survive a recruitment campaign by making it routine




By Dave Riley (Brisbane Branch)

A key element of Socialist Alliance projections for the year ahead is going to be a recruitment campaign. Much as I appreciate the energy generated by campaign modes, I think it is a mistake to go forth with a lot of rah-rahing and the best of intentions and expect that will sustain us.

The Recruitment Conundrum

Our problem, it seems to me, is that we see recruitment and chasing renewals as adjuncts to a moment of political or organisational surge. And inasmuch as we delegate, generating and sustaining momentum is left to the capacity of individual comrades to remain engaged and focused.

Inevitably with all our other activities, recruitment and chasing renewals are so far down the to-do list on a day-to-day basis that they soon fall off the political radar.

This unfortunate situation is complicated and worsened by the level of rigour we have to invest in processing members and running a membership data base in line with Electoral Commission standards. If there is an impediment in Socialist Alliance momentum, recruitment protocol is surely it.

This is borne out by the fact that this situation has more or less persisted since Day One of the Socialist Alliance despite any number of initiatives, data base reforms, or recruitment paraphernalia generated.

Routinising Recruitment

The self evident response to this conundrum is to take measures to ensure recruitment and chasing renewals becomes routine. But how do we do that?
  1. Local Membership Secretary. Each branch or each state needs to appoint a Membership Secretary whose one role is to process memberships. Someone has to run the databases, and always be familiar with the membership accounts—who’s financial and who’s not; who hasn’t filled in the membership form or has not been voted in by the branch,etc. I’m talking about a purely clerical role that aspires to have membership data always up to date and correct. If we cannot attain that base level of functionality we cannot proceed further with any confidence.
  2. National Membership Secretary. In the Socialist Alliance national practices tend to be replicated at the local level and since we have always administered memberships through the one national convenor, as one task juggled among many others. That’s the way the whole Alliance treats membership issues. Let’s break the circle and appoint a National Membership Secretary.
  3. National Recruitment Committee. Since we don’t run membership nationally we have the perennial complication of having to deal with federal electoral registration as an ad hoc task. While I would prefer that we ran all membership as a national task I doubt we are at that stage where we can consider doing that so we have to establish measures that go some way toward a creating a level of efficiency and ongoing verve in way of active recruitment and administration. So I’m suggesting that the key task of the National Membership Secretary should be the convening of a National Recruitment Committee.
  4. Separate Recruitment from Membership Administration. In my mind, the National Recruitment Committee is the Socialist Alliance’s SWAT team. We don’t engineer it just for the sake of administering memberships, but for pulling together recruiters who drive the recruitment momentum. I guess each state area can contribute personnel to this committee. But while such a committee can act as a catalyst for recruitment campaigning and sustain its momentum, its members could be located anywhere.
  5. The Mumbai Twist. NGOs that I know of actively recruit donations and the like by deploying a call centre approach and savagely working the phones. Our problem in the Alliance is that we cannot so easily generate an energetic ring-around routine at the local level. This impacts especially on chasing renewals. So why can’t we do it nationally and draw into the one national body any number of comrades (from anywhere) who are prepared to work the phones for the sake of driving up the Socialist Aliance membership -- our own version of Mumbai Calling?
  6. Recruiting and Renewing from Home. This is easy to do by paying for a few Skype Out computer phone accounts so that comrades working from home (or at the local office) can cheaply ring members no matter where they are located in Australia. These recruiters could be comrades who have retired, at large or who are often house bound through illness or family responsibilities. But they will be fulfilling a crucial role in the Alliance. This role is not sustainable unless we draw them into a highly focused national team. We’d begin to make the business of chasing up memberships a routine, driven by comrades who will routinise it so that it will become an activity we can rely on (in the way we cannot rely on it now).
  I haven’t worked all this out fully as I’m more or less chasing my nose, but the key elements I was interested in were:
  • Separating recruitment from membership administration
  • Appointing a national membership secretary and creating a national recruitment committee
  • Utilising comrades as a recruiting resource no matter where they may be located.
  • Making use of computer phone technology.
I could be accused of trying to let the local branches off the hook—and to that I plead guilty. I think local branches and caucuses main role should be to talk to, phone up, work and relate with their membership about branch campaigns and activities. But reminding people that they need to renew or chasing up anyone who has expressed interest in the Alliance should be a routine administrative task that anyone can do no matter where they are located.

Obviously there is going to be a lot of overlap but I think that as we get going and begin to establish protocols we can iron out and improve our procedures.
Nonetheless branches should fulfill the following base recruitment tasks:
  1. Always have publicly available on the web—such as on a locality blog—a full calendar of upcoming branch activities (including branch meetings time/place and caucus gatherings), reports on past events and local joining/renewal information. This is so anyone can refer to it and everyone knows where the information is at.
  2. A recruitment focus on all street stalls and stumps.


Climate sustainability: What cost? How to pay?


By Dick Nichols (National Co-convener)

Introduction
At our Sixth National Conference, in December 2008, the Socialist Alliance adopted a resolution on a framework for energy policy which rejected “carbon trading and the ‘cap-and-trade’ model as they are incapable of reducing carbon emission levels adequately, socially inequitable within countries and between the First and Third Worlds, and open to massive abuses.”
It also adopted a general approach to financing the transition to energy sustainability through:
  • “A shift in budget priorities away from war (‘defence’) expenditure, and subsidies to polluting industries
  • “A sharp increase in taxation of polluting industries if they do not meet pollution reduction targets
  • “A general increase in tax rates on the wealthy and in company tax rates.”
 
The resolution asked the National Environment Committee to “investigate, via a discussion involving all interested members and carried in Alliance Voices and on our wiki site, whether the Socialist Alliance should support a carbon tax and, if so, to propose a specific formula for consideration by the incoming National Executive.”

Unfortunately, time to do this work could never be found, largely because of the growing responsibilities that the Socialist Alliance and its National Environment Committee has had in building the grassroots climate action movement.

Now, after the fiasco of the Copenhagen “Conference of the Parties 15”, the defeat of the Rudd government’s Carbon Pollution Reduction Scheme and the seizure of the Coalition leadership by a gaggle of climate skeptics, we face the near-certainty of a climate change federal election some time in 2010. Like all political trends the Socialist Alliance and its candidates will be called upon to put forward an adequate policy for climate sustainability, including its financing. 

The Alliance urgently needs to carry out the policy projections from our Sixth National Conference resolution as rapidly as possible. In this context comrade Ben Courtice has done us all a service by proposing that the Alliance adopt a carbon tax as an essential part of our policy for a transition to climate sustainability. Ben’s proposal forces Socialist Alliance members and conference delegates to focus on some very important realities.

This contribution aims to provide some information which can hopefully help delegates decide whether or not to vote in favour of such a tax, or whether to continue the discussion post-conference and leave the eventual decision to the incoming National Executive.

Scope of contribution

The contribution starts by trying to arrive at some sort of rough figure for a climate sustainability budget, one that could fund the measures that would meet the absolutely minimum necessary goal of reaching 350ppm of atmospheric carbon dioxide by 2050 at very latest (as spelled out by James Hansen and others), but also enabling an even more rapid response to global warming if this becomes necessary.

Is a carbon tax necessary to achieve that funding, or would our general policy of increasing tax on big capital and the rich, combined with cuts to war spending, subsidies to polluters and other pernicious or useless expenditure, provide enough funds “pay for the war”? Can an environmentally  effective carbon tax be designed that can be guaranteed not to worsen the life of working people and people on welfare, especially the two million who live below the poverty line?

(Of course, even if our existing “tax the rich, cut the submarines” approach to taxation could provide sufficient funds for the climate sustainability transition, there may still be other arguments in favour of adding a carbon tax to our “tax mix”. More on this later.)

Highly rubbery cost-benefit scenarios

It is no easy business to develop even a very rough “ballpark” costing for the transition to climate sustainability. This is because:
    1. Research into the cost of funding a transition to climate sustainability has overwhelmingly been carried out, at a global level and in Australia, on the basis of econometric models. These assume that adjustment will take place via the market (with a rising price of carbon driving the shift to sustainability) rather than by adding up item by item the cost of all the concrete projects needed to make that transition real and solid, and building a budget on that basis;
    2. Most of these models assume a maximum feasible goal of 450ppm CO2 and do not model the cost of reaching the “Hansen minimum” goal of 350ppm CO2 by 2050, let alone any zero emissions goal involving carbon drawdown from the atmosphere;
    3. Many of the models simply assume a basic self-funding mechanism for climate change action, mainly through cap-and-trade schemes that provide the necessary income to government via a rising price for carbon. The perspective is that as subsidies and exemptions for polluters are phased out and the carbon price increases, sufficient funds for necessary public climate mitigation spending will accumulate without government having to look for other sources; and
    4. All these models are very sensitive to assumptions about vital parameters such as the rate of overall technical change, rate of uptake of renewable technologies,the existence or not of international climate agreements,  and the impact of beneficial side-effects that reduce expenditure on such items as health (“positive externalities” in the economists’ lingo).
As a result modeling of the cost of the transition to climate sustainability ranges from 5.4% of Gross Domestic Product (GDP) to a negative figure in some of the most optimistic scenarios. (To get a feel for this variety read “The Economics of 350: the Benefits and Costs of Climate Stabilisation, by Frank Ackerman and other authors.)

Already in 2006, Chapter 10 of the Stern Review noted (emphasis added):

    Broader behavioural modelling exercises suggest a wide range of costs of climate-change mitigation and abatement, mostly lying in the range –2 to +5% of annual GDP by 2050 for a variety of stabilisation paths. These capture a range of factors, including the shift away from carbon-intensive goods and services throughout economies as carbon prices rise, but differ widely in their assumptions about technologies and costs.
    Overall, the expected annual cost of achieving emissions reductions, consistent with an emissions trajectory leading to stabilisation at around 500-550ppm CO2e, is likely to be around 1% of GDP by 2050, with a range of +/- 3%, reflecting uncertainties over the scale of mitigation required, the pace of technological innovation and the degree of policy flexibility.
    Costs are likely to rise significantly as mitigation efforts become more ambitious or sudden, suggesting that efforts to reduce emissions rapidly are likely to be very costly.
The Stern Review looked at the impact of varying model assumptions on Gross World Product in 2030 for stabilisation at 450ppm CO2 and showed (see table below) that by 2030 a worst-case assumptions mitigation cost of 3.4% for climate change could become a 3.9% benefit to GWP.


      COST OF CLIMATE CHANGE MITIGATION
      Assumptions in model
      Worst case assumptions



      % of GWP

      -3.4

      Active revenue recycling to pro-climate ends
      1.9

      Use of Computational General Equilibrium model
      1.5

      Impact of induced technological change
      1.3

      Impact of climate benefits (initial round)
      1.0

      Impact of agreed international mechanisms
      0.7

      Pace of introduction of clean ‘backstop’ technologies
      0.6

      Further impact of climate benefits
      0.2

      Total change from extra assumptions
      7.3

      Best-case assumptions
      3.9


Applied to Australia these figures would translate into an annual cost of climate change mitigation of anywhere between negative $40.8 billion and $46.8 billion dollars! Moreover, this approach to climate change costs gives no breakdown--nor can it--of how those costs are to be shared between private capital, government budgets, working people and consumers. That only comes later, when detailed proposals like Australia’s Carbon Pollution Reduction Scheme are developed.


Even more damning, as already stated, very few of the models attempt to find the cost of reaching the “Hansen minimum” of 350ppm by 2050. A rare exception is the October 2009 work of Ackermann et al, which gives the “extreme” figure of 3.6% of GDP in 2050 as the cost of the climate change mitigation Hansen and his team judge indispensible.

Costing plans needed to reach climate sustainability

Partially in reaction to these “rubbery scenarios” and especially over the past year, concerned economists and environmentalists have begun to develop increasing detailed plans for a climate transition. Greenpeace Australia’s Plan B was the first cab of the rank in July, but contained no detailed costings for its proposals.

By contrast, in Great Britain, the Sustainable Development Commission’s 2009 Sustainable New Deal calls for the UK government to spend £30 billion ($A 54.5 billion a year, just under 2% of Gross Domestic Product) on an emergency sustainability conversion push. A similar effort in Australia would amount to around $24 billion a year—$264 billion if repeated every year to 2020.
To date the most advanced Australian plan for climate sustainability to see the light is the Zero Carbon Australia 2020 plan for 100% renewables for stationary energy by 2020. This plan is costed at $300 billion (soon to be updated to $350 billion.

The other detailed research done by the Zero Carbon Australia 2020 project covers making housing stock climate-sustainable. Total costs to 2020 are $42.56 billion. That figure omits the cost of double-glazing the housing stock, estimated at $40.9 billion, and assumes that consumers themselves will pay for conversion to energy-efficient lighting and also learn not to keep electrical appliances in stand-by mode.

The published work of Zero Carbon Australia takes the climate sustainability budget for these two areas alone to $392 56 billion, or $36.69 billion annually to 2020, already above 3% of Australian GDP.

Add in the other areas where radical restructuring is needed and it seems clear that even the highest model-based figures of mitigations costs (like the 5.4% of GDP in the Stern Review survey of models) drastically understate the real costs of implementing any adequate safe climate plan.

Such a plan would have to include conversion of commercial and industrial building stock to sustainability; conversion of government and public areas to sustainability; construction of adequate public transport infrastructure in cities; conversion of vehicle industry to electric and hybrid; conversion of farming to sustainability; adequate reafforestation funding; comprehensive program of retraining of workers in carbon polluting industries; and compensation to workers and people on welfare for any increases in energy prices.

I have not had time to even begin to look into costs in these areas, many of which are also presently being worked on by Zero Carbon Australia 2020 and the Safe Climate Institute.

While it is true that, on a longer timescale, the benefits of such massive investment will increasingly approach and then outstrip their costs and that we may also be pleasantly surprised by waves of unforeseen “positive externalities” along the way, there is no dodging the fact that some vastly costly investment is needed in the short run.

Some idea of the size of the spending needed can be got from the estimated cost of Infrastructure Australia’s actual national priorities in public transport—$37.9 billion (2008 dollars) for projects which, while a step forward compared to our present public transport shambles, still fall vastly behind sustainability needs in this area.

Take, as an example of what is needed, the cost of building, running and maintaining a High Speed Rail (HSR) link between Australia’s capital cities, essential to reduce car, truck and aviation use. A recent Spanish study gives the total cost for constructing, maintaining and running a 500km HSR link at between €6.724 billion and €20.724 billion ($A 11 billion to $A 33.76 billion). On the assumption that the same costs would apply in Australia (the project might be cheaper because of lower property resumption costs), an HSR system that linked Perth, Adelaide, Melbourne, Canberra and Brisbane (approximately 5500 kilometres), would cost in total between $121 billion and $371.36 billion.

If such a system was to be built by 2020 the annual cost would be between $11 billion and $33.76 billion.

What about Australia’s obligations to an international fund for climate sustainability in the Third World? If we accept that:
  1. The 3.6% of Gross World Product arrived at in Ackerman et al as the cost of reaching the “Hansen minimum” of 350ppm CO2 by 2050 is feasible;
  2. That this cost should overwhelmingly be met by the historic carbon polluters of the advanced capitalist world, and;
  3. That Australia should pay its share (2.4% of the GDP of the advanced capitalist countries) of an adequate international sustainability transition fund to finance technology transfer, re-afforestation etc to the developing countries;
Then the annual cost of Australia’s contribution to an international climate transition fund would at least be roughly $US17.28 billion (or $A19.2 billion). That is $US20 trillion (GDP of the developing countries in 2008) x 0.036 (percentage of GDP needed to achieve “Hansen goals”) x 0.024 (Australian percentage of advanced capitalist countries’ GDP)

(Note here that in addition to the 3.6% total cost assumption there is also the quite unrealistic one that all countries, rich and poor alike, will have to devote 3.6% of GDP to reach the Hansen target—I.e. that global warming damage affects all nations equally. Obviously, a Bangla Desh or even a Brazil—and the Third World as a whole—will have to find more than 3.6% of their own GDP to counter the unequal global warming impacts on their countries.)

When we add up these very rough and incomplete costings, it comes out as in the table below. Clearly, once the gaps have been filled in, an adequate sustainability plan will involve spending at the very least 150% of the partial running total, and maybe as high as 250%.


SOME ELEMENTS OF A SAFE CLIMATE BUDGET
Item
Annual minimum cost ($A billions)
Annual maximum cost ($A billions)
100% renewables for stationary energy  by 2020
$27.27
$31.81
Climate-sustainable housing
$3.87
$7.59 (with double glazing)
HSR link (Perth-Adelaide-Melbourne-Canberra-Sydney-Brisbane)
$11
$33.76
Australian contribution to international climate sustainability fund
$19.2
$30
Running total
$61.34
$103.16
Uncosted


Conversion of commercial and industrial building stock to sustainability
?
?
Conversion of government and public areas to sustainability
?
?
Construction of adequate public transport infrastructure in cities
?
?
Conversion of vehicle industry to electric and hybrid
?
?
Conversion of farming to sustainability
?
?
Reafforestation funding
?
?
A comprehensive program of retraining of workers in carbon polluting industries
?
?
Compensation to workers and people on welfare for increases in energy prices
?
?
POSSIBLE TOTALS
(between 150 and 250% of running total)

$92.01 B TO $153.35 B
$154.74 B
TO $257.9 B

These figures amount to annual expenditure of between 7.67% and 21.49% of GDP. They represent from 19.92% to 55.84% of projected spending by all levels of government for 2009-10. Such figures also confirm the perception of works like Climate Code Red and Plan B 4.0, which compare an adequate response to climate change to the war mobilization of the US economy in the 1940s, involving defence spending of over 40% of GDP.

Clearly a climate transition plan similarly implies a very big increase in the public sector. Clearly too they confirm Stern’s intuition that “costs are likely to rise significantly as mitigation efforts become more ambitious or sudden, suggesting that efforts to reduce emissions rapidly are likely to be very costly.”

How to fund?

To what degree could these huge sums be offset by eliminating useless, polluting and wasteful expenditure? To what extent could they be funded by increasing the taxing of capital and the rich?

Updating and slightly extending our 2004 federal election Manifesto for financial year 2009-10 for the federal budget we get the following indicative figures:


FEDERAL BUDGET OPTIONS
Potential savings
Eliminate aid to private schools        $6.8 billion
Halve spending on “defence”        $15 billion
Other            $10-$20 billion
Total       $31.8-billion-$41.8 billion (2.65%-3.48% GDP)
Extra income
Increase company tax rate from 30% to 49%      $20-$30 billion
Increase top marginal income tax rates as follows:
$100,000-$150,000 (from 38% to 45%)             $1.51 billion
$150,000-$200,000 (from 38% to 60%)             $2.7 billion
$200,000-$500,000 (from 45% to 70%)             $5.22 billion
$500,000-$1,000,000 (from 45% to 80%)          $3.81 billion
Over $1,000,000 (from 45% to 90%)                 $11.94 billion

Eliminate the main tax shelters and loopholes      $30 billion
Total      $75.2 billion-$85.2 billion (6.3%-7.1% GDP)
NOTE: This amounts to a 21-25% increase in the size of the budget (from 28% to 34-35% of GDP.
NET GAIN      $107 billion-$127 billion (8.9%-10.6% GDP)
 
Note: Billions of dollars of savings could be gleaned from a detailed examination of government budgets, and would also arise from other policy measures, such as renationalising the Commonwealth Serum Laboratories and reducing dependence on Pharmaceutical Benefits Scheme payments to private providers. However, such gains would be unlikely to exceed $20 billion annually.

At the same time we must bear in mind that if Australia’s miserable “welfare” system is to be powered up to help two million people out of poverty the social security component of the budget has to be increased by around 3-4% of GDP ($36-$48 billion). Also, tens of billions will also be needed to end public housing waiting lists, boost funding to Aboriginal health, education and housing, and support environmental programs not directly associated with climate change.

The Socialist Alliance still needs to work out the detail of such spending and its cost before the coming federal election, but it is hard to see it coming at less than $70 billion, based on the proposals contained in our last two federal election campaigns.

That would roughly leave between $37 billion and $57 billion (3.1% and  4.8% of GDP) to be devoted to the annual funding of a climate stabilization plan—clearly insufficient.

A carbon tax?

It is in this context that the Seventh National Conference has to tackle comrade Ben Courtice’s proposal for a carbon tax. I believe the proposal has to be given serious consideration for the following reasons:
  1. A carbon tax can raise a lot of income from the carbon polluters. This is one of the reasons why decisive, but not all, sections of big capital in the most carbon-intensive economies (like Australia) have tended to favour cap-and-trade systems. They are  easier to subvert, as shown by the disastrous example of the European Union system. If, for example, Australia’s 2007 non-residential greenhouse gas emissions of 542,869,000 tonnes of CO2 equivalent were taxed at $100 a tonne it would raise $54.3 billion (4.5% of GDP). When combined with the other tax measures the Socialist Alliance proposes it would greatly facilitate proper funding of a climate sustainability package.
  2. A carbon tax would allow a government dedicated to climate stability to “make the polluters pay” by giving carbon-intensive industries tight deadlines to meet emission reduction targets or face a rising tax rate.
  3. A carbon tax won’t fuel the finance sector, which is drooling at the prospects of its expanding “financial instruments” derived from carbon trading.
  4. A carbon tax helps get around the fraudulence of “carbon offsets”, especially as this is practiced at the expense of Third World economies and peoples.
  5. A carbon tax would also make possible generous compensation schemes for working people and people on welfare faced with rising fuel and electricity prices. Indeed, when combined with the increases to the welfare payments that the Socialist Alliance proposes plus cuts to income tax for the low-paid, it is possible to develop a “tax mix” that puts people and environment ahead at the expense of the polluters and the rich. That is, a carbon tax can be an important component in a “red-green” package to boost both social and environmental justice.
  6. If sufficient support for a carbon tax could be built it would increase the tensions between the heavy carbon polluting sections of big capital and the rest, weakening the overall position of the Australian corporate elite.

Properly designed, presented and publicised a carbon tax could therefore be a strong part of a Socialist Alliance social and environmental justice proposal at the coming federal election. The fact that the general run of carbon taxes that have been designed to date are premised on making the mass of consumers pay and on nudging big polluting capital ever so gently away from its worst practices shouldn’t dissuade us from investigating the proposal thoroughly.

The Socialist Alliance should look carefully at how our socialist orientation can craft a carbon tax proposal in the interests of the environment and the working majority.


Such a carbon tax scheme would:
  1. Exclude ordinary workers and consumers, place them on a lower rate or fully compensate them.
  2. Be part of an overall tax package that boosts lower incomes as part of our “war on poverty”
  3. Demonstrate that, unlike the Rudd government (and even the Greens’ approach of an Emissions Trading Scheme with higher targets) the Socialist Alliance is rposing a weapon that really would make the polluters pay.

That approach would win support from many in the grassroots climate action movement and among people more broadly concerned about climate change and cynical about any form of ETS, at the same time as countering Tony Abbot and Barnaby Joyce in their anti-climate action populism towards working class communities.

In short, it would help the Socialist Alliance build and solidify both its “red” and “green” support base.


Sources
Ackerman, Franck and Elizabeth A, Stanton, Stephen J. DeCanio, Eban Goodstein, Richard B. Howarth, Richard B. Norgaard, Catherin S. Norman, Kristen A. Sheeran. The Economics of 350: The Benefits and Costs of Climate Stabilisation. Economics for Equity and Environment, October 2009.
ACOSS. Progressive tax reform: Reform of the personal income tax system. November 2009
Australian Bureau of Statistics, Australian National Accounts (Series 5206) and Government Finance Statistics (Series 5519), at www.abs.gov.au
Australian Tax Office. Taxation Statistics 2006-07. March 2009
Australian Treasury, Federal Budget 2009-10, at www.budget.gov.au.
Baer Paul, Tom Athanasiou  and Sivan Kartha. A 350ppm emergency pathway. Greenhouse Development Rights brief, October 2009.
Berger, Charles. “Towards an ecologically sound Australian tax system”. National Environmental Law Review. Number 2, 2009
Brown, Lester R. Plan B. 4.0. Mobilizing to Save Civilization. Earth Policy Institute, October 2009
Council of Australian Governments, National Strategy for Energy Efficiency. July 2009
Denby, Richard. Transition to Sustainable Housing Zero Carbon Australia 2020, at beyondzeroemissions.org/zero-carbon-australia-2020
Doughney, Jamie. Income tax variables calculation program (Excel). December 2009
Ginés de Rus (ed). Economic Analysis of High Speed Rail in Europe, Economía y Sociedad report, BBVA Foundation, 2009.

Global Utmaning (“Challenge”). Climate taxation—a forgotten climate policy tool? December 2009
Greenpeace International, Energy [R]evolution, October 2008
Greenpeace Australia, Plan B: An Agenda for Immediate Climate Action, June 2009
Hansen, James, Makiko Sato, Pushker Kharecha, David Beerling, Valerie Masson-Delmotte, Mark Pagani, Maureen Raymo, Dana L. Royer, James C. Zachos. “Target CO2: Where Should Humanity Aim?” The Open Atmospheric Science Journal, 2008.
Infrastructure Australia, National Infrastructure Priorities, at www.infrastructureaustralia.gov.au/publications.aspx, 2009
McKibbin, Warwick J, and Peter J. Wilcoxen. "The Role of Economics in Climate Change Policy", Journal of Economic Perspectives, Spring 2002.
Nichols, Dick. “Can green taxes save the environment?”. In Environment, Capitalism and Socialism, New Course Publications, June 1999.

Safe Climate Australia, “Developing the Safe Climate Transition Plan. Strategic Plan—Installment 1, Strategic Imperatives”. Draft for comment, November 2009. At www.safeclimateaustralia.org
Socialist Alliance. Climate Change Charter second draft, at http://socialist-alliance.wikispaces.com/Policy+Area
Socialist Alliance, Another Australia is Possible, Federal Election Manifesto. 2004
The Greens, Safe Climate Bill, at www.safeclimatebill.org.au
Yarra Valley Climate Action Group. “Experts: Carbon Tax needed and NOT Cap-and-Trade Emissions Trading System. At http://sites.google.com/site/yarravalleyclimateactiongroup/.
Zero Carbon Australia 2020, Stationary Energy: A plan for repowering Australia with 100% renewable energy in ten years, at beyondzeroemissions.org/zero-carbon-australia-2020


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