New Zealand socialists target bad banks and low wages

Representatives of New Zealand left organisations attended the Australian Socialist Alliance's recent national conference. In the following interviews, conducted by the Australian socialist newspaper Green Left Weekly, they explain the political situation in New Zealand and talk about the key campaigns they are involved in.

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By Paola Harvey

January 30, 2010 -- Although New Zealand, like Australia, has not been as badly affected by the global economic crisis as the US or Europe, workers are facing hardship. Bronwen Beechey, an activist from Socialist Worker New Zealand (SWNZ), told Green Left Weekly: “There have been a lot of redundancies, places have been closed down.”

Beechey and SWNZ activist Peter Hughes were in Sydney to attend the January 3-6 Socialist Alliance national conference. They spoke to GLW about the SWNZ’s “bad banks” campaign, which takes aim at the cause of the global financial crisis — neoliberal capitalism.

“For people on low incomes life’s just been getting tougher because [they are] losing their jobs and food prices and rents and all of it have not come down substantially”, Beechey said. “All the indicators, the social services, people asking for assistance, for food parcels, people losing their homes — they’ve all skyrocketed.”

Hughes said employers have used the crisis to justify attacking workers’ wages and conditions. “In the last 12 months, there have been no less than eight lockouts of workers. One of the most shameful examples was a service provider for the elderly that insisted that if the workers in that field did not accept the minimum wage [NZ$12.50 per hour] they’d be locked out. That’s quite a serious indication of how they [the bosses] see the crisis being resolved to their advantage and workers’ disadvantage.”

The New Zealand government’s response has been the same as capitalist governments around the world — bail out the banks and the big capitalists, and make the workers pay. But they are not getting it all their own way. The government’s attempt to impose an unofficial wage freeze in the public service was recently challenged. Support staff in the education sector won a small wage rise.

That win will set the tone for the coming nurses’ and general education unions’ wage negotiations. “No less than that, will be the call, I’m sure”, said Hughes. “So that’s a good sign."

“I heard at the [Socialist Alliance] conference, that [Australian Prime Minister Kevin Rudd] said that the recovery’s going to be worse than the recession. I’m quite sure that’s their intention for us in New Zealand as well, working people will be made to pay for the recovery — if there’s going to be one. But our assessment is that there can be no real recovery in the current market economy, not in the foreseeable future. That’s going to lead to all sorts of crises for them, which they will try to push on us. We have to organise people to resist that.”

The discussion about neoliberalism at the NZ Council of Trade Unions’ 2009 conference has opened up more space on the left to fight back against these future crises. At the conference, union activists talked about workers’ cooperatives, building and strengthening the union movement and not accepting the neoliberal capitalist model as the only option.

Beechey said: “It also talk[ed] about climate change and the need for an alternative economic strategy which is an implicit criticism of neoliberal capitalism.”

Hughes added: “While it’s not a policy position as such, it’s a discussion that’s been opened up within the trade union movement. It’s not an accepted policy, it could be watered down significantly and it’ll come down to how different unions interpret that for building a broader perspective in the membership. [But] when you think about how closely linked the trade union movement has been to the Labour Party … this is a departure.

“The fact that they’re daring to criticise publicly this position opens up a space on the left for us to work with trade union activists in a much more healthy and progressive way.”

Many people in New Zealand continue to struggle with little indication of their situation improving in the near future. There has been an increase in the number of houses sold due to people defaulting on their home loans. A large proportion of these have been people with one home — not property speculators.

Hughes said the defaulters “simply cannot pay because they’ve lost their job, they’ve been made redundant and they have reduced incomes. That’s pretty devastating for families and has shown no sign of abating at all.”

The actions of the banks have been completely shameful. Before the crisis, banks were advertising loans for 100% of the price of a house. But after the crisis, their ruthless approach to lending has meant many people who were lured into the property market by these loans have had their home repossessed.

“Our campaign around ‘bad banks’ is trying to make them pay really”, said Hughes. “Because they’re the ones that have played a big role [in the crisis] and they’re plundering the profits of working people.”

The bad banks campaign is focusing on demystifying what the banks actually do and how they caused the financial crisis. It is also calling for a financial transaction tax, as opposed to a goods and services tax. A GST is a regressive tax, that is it affects the poorest the most, because the poor are taxed the same as the rich for goods despite having less ability to pay. A financial transaction tax, on the other hand, would be a progressive tax. It would affect banks, corporations and the wealthy the most, because they account for the vast majority of financial transactions.

“We see the bad banks campaign as striking right to the heart of neo-liberalism”, Hughes said. “These banks have got their fingers in the lives of every working class person, whether it’s controlling their mortgage, their credit card, or their bank charges. They’re bloody pillaging basically. Their pockets are huge, they’re not paying their taxes. They’re not very popular with workers at the moment.”

New Zealand: Unite takes on minimum wage

By Marcela Escauriaza

February 5, 2010 -- Unite is the fastest growing private sector union in New Zealand. Since being formed in 2004, it has grown to 8000 members. Its latest campaign, which calls for a referendum on the minimum wage, has the potential to improve the lives of the half a million workers in New Zealand who struggle to make ends meet on wages of less than NZ$15 per hour.

Unite organises largely in areas abandoned by the traditional unions, such as the fast food industry, security work, hospitality, call centres and English language schools. The union is open to any worker, regardless of occupation.

In New Zealand, 100,000 workers live on the minimum wage of $12.50 per hour, which is just 51% of the average wage. Unite’s “campaign for a living wage” calls for the minimum wage to be immediately raised to $15 per hour. Then, it would be further increased in stages and set at two thirds of the average wage.

The union is organising a petition drive, aiming for 300,000 signatures calling for a referendum by May 2010. If this is achieved, the government would be required to call a referendum on the demands within a year.

Unite national director of organising Mike Treen was a guest at the January 2-5 Socialist Alliance national conference in Sydney. He told Green Left Weekly: “We’ve had some success ... but to achieve our goal requires some of the big unions and other organisations to come on board between now and May.”

The New Zealand Council of Unions (NZCU) , the Green Party and the Maori Party have given official support, and radical left groups like Socialist Worker New Zealand and Socialist Aotearoa are actively involved in petitioning.

A poll conducted by the New Zealand Herald in January found that 61% of those polled supported a minimum wage increase to $15. Unite organiser Joe Carolan said in a January 19 post on that he believed this figure underestimated public support for the campaign from the indications he has had at workplaces and campaign stalls. He said there were 10,000 signatures collected from three festivals alone in January, bringing the total number of signatures collected so far to 100,000.

The campaign has been a useful organising tool for Unite and a good way to raise workers' consciousness.

Treen told GLW: “We’ve been able to use the petition campaign to have a broader political discussion in society as to who caused the [financial] crisis and who will pay for the crisis.” He said Unite had distributed a lot of information focusing on the inequalities that exist in income and share of GDP — and why an increase in the minimum wage should occur, even while the bosses say it can’t happen.

On January 27, the New Zealand government announced an increase to the minimum wage of 25 cents to take effect on April 1.

Carolan said: “The government throwing 25 cents to minimum wage workers is a cheap shot. This is barely 2% of nothing, and will be well below real inflation when this government raises GST in the budget. What workers need is a living wage.”

NZCU president Helen Kelly said on on January 27: “The [New Zealand Institute of Economic Research] forecast for the increase in private sector wages to March 2010 is 3.5 percent. If this turns out to be correct the minimum wage will actually fall as a percentage of the average wage. This means low paid workers are going backwards not forwards.”

Unite’s previous “supersize my wages” campaign was instrumental in building a broader young workers’ movement. It campaigned against youth payment rates (80% of the adult rate) and succeeded in forcing major employers in the fast food industries, including McDonalds, KFC and Pizza Hut to end the practice.

With often only a minority of workers in a workplace being Unite members, the union was not strong enough to win demands through industrial muscle alone. Winning public support was important.

Unite ran campaigns targeting the particular companies, for example staging small strikes outside busy McDonald’s stores to embarrass the fast food giant into signing collective agreements.

Treen said: “McDonald’s were more ideological and resisted longer ... before they signed a collective agreement. But in the end they just realised we were never ever going to give up, we were going to keep coming at them.”

Unite used different styles of organising as a way of reaching out to young people. It staged concerts, marches, community events and even had a New Zealand Idol winner, who had worked at KFC, sing at one of their events.

“We tried to keep it youthful and exciting and dynamic ... with the knowledge that it had to be sustained over quite a long period of time... Prior to the latest [financial] crisis, we had almost a decade of uninterrupted economic growth. So part of the reason we were confident that we’d be successful when we set up Unite was that workers, including young workers, were more confident", Treen said.

“It didn’t matter with a minimum wage job if you got sacked ... you could go down the road and get a another one. My experience as a worker during the late 1980s and early ’90s, when there was high unemployment [is that] people do stick their heads down.

"But this time, we’ve got an organised presence in a lot of these industries, we’ve got a bit more confidence that workers would join unions and take part in the struggles if they are given the opportunity. Now, we’ve got the problem of the crisis and the pressure that puts on people, but it also has the other side that people are actually seeing the value of unions and the need for them — even young workers.

So [workers say] yes, I’ve got to keep my head down, I don’t want to lose the job. But I need the union with me as well. Because who else is going to protect me?”

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[These articles first appeared in Green Left Weekly.]