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Jobs come at a high price for little benefit

I know the government is desperate to find jobs for regional Queenslanders since it is obvious coal mines can’t find private funding.  I know the government sees national security as one of its strong suits.  But this is getting ridiculous.

Today, Malcolm Turnbull, with his defence doo wop chorus, announced the largest purchase in the Australian Army’s history – 211 light armoured vehicles to be built by a German company at a new facility in Ipswich, west of Brisbane.

Defence Minister Payne said this would provide the “mobility, the lethality and the protection that will support the men and women of the ADF in doing the job that we ask them to do every day.”

Which might be necessary if we are planning on invading someone again but I question the emphasis on “lethality” when you are tring to sell the line that they will be used for peacekeeping.

Malcolm Turnbull said it was “about ensuring that we have, for the first time, a fully integrated national sovereign defence industry.”

Except this is not us designing and creating a new product to sell.  It is us paying a fortune to buy some bad-ass trucks.

Christopher Pyne said “it means jobs supporting our steel industry here and growing the capabilities of the workforce here and the skills.”

Isn’t that what the car industry used to do?

Buying and maintaining the vehicles is expected to cost $15.7 billion.

The Federal Government estimates the acquisition will create 330 jobs in Queensland, along with 170 roles in Victoria and 140 in New South Wales.

Queensland’s State Development Minister, Cameron Dick, said he was “delighted that we’ll now be able to deliver over 600 jobs for Queenslanders over a decade.”

They then said it would create 1,450 jobs across Australia – I didn’t catch the explanation for this figure.

Even if we accept the higher number, that equates to over $10 million per job.  To produce what?  Armoured vehicles that will likely only ever be used in war games in the outback.

If we want to encourage manufacturing, we could be producing electric cars, solar panels and wind turbines.  We could be building small-scale pumped hydro systems.  We could be at the forefront of innovation in water management, energy efficiency, sustainable building design.  We could be building public transport, schools and hospitals.  We could be training people for all the emerging jobs we will need in health, childcare, aged care, the NDIS, and information technology.  We could provide more services in regional Australia.

Buying really expensive weapons from foreign companies does not count as having a defence industry, it does not provide sufficient jobs to justify the immense cost, and it does not make a productive improvement for our society.

This is not about defence.  No-one has the slightest interest in invading us.  Our common wealth is up for sale.  Why risk a war when you can buy whatever you want for a fraction of the price?

We are building up strike force capability at the behest of the US for the profit of foreign armaments manufacturers but at our own great expense.

There is a thing called “opportunity cost” which basically means the benefit that would have accrued from alternative courses of action.

Now let me think…how could $15.7 billion be better spent?


26 comments

  1. Kaye Lee

    Oh geez,

    In another example of the ridiculous thinking of the business sector that dictates this government’s agenda, “in an extraordinary submission to the workplace umpire, the National Retail Association – one of the nation’s major retail industry organisations – has called for a 0 per cent increase to the minimum wage on July 1.”

    Their reasoning?

    “Retail is currently undergoing a challenging period throughout the country,” the group’s submission says. “Recent data from the Australian Bureau of Statistics show that the sector suffered a 0.5 per cent fall during the traditionally busy month of December and the figures for January 2018 again highlighted poor sales growth. During environments such as these, it is vital that retail businesses do not have conditions imposed on them that make it more difficult to operate.”

    Did it ever occur to them that their sales are falling because their employees/customers have less disposable income?

    https://www.smh.com.au/politics/federal/retailers-demand-zero-pay-rise-for-australia-s-lowest-paid-workers-20180313-p4z45g.html

    Truly, I sometimes wonder about the decision makers in this country. They can’t see any sort of big picture.

  2. Bronte ALLAN

    Agree with your comments Kaye! Sadly this lying incompetent mob of flat earth believers in power think that everything revolves around making money for all their wealthy industrialists, pastoralists, mining barons etc etc. With naturally the poor long suffering workers who are desperate for some sort of pay rise not getting one. This mob all still think that any “help” (?) they give to their mate will “trickle down” to the workers, which everyone but them knows just never happens! And yes, without a pay rise, & with ever increasing living expenses, there is just not any money left for consumers to go out & buy TV’s, ‘fridges etc. And this inept mob in power cannot see this? WTF??

  3. diannaart

    Kaye Lee

    I will return to read your article in full when I am feeling better – like you I got stuck at “lethality” sure a word part of the lexicon of “Offence” rather than “Defence”?

  4. John O'Callaghan

    Good article, and i also read that statement from those retail people about how their sales were down, so their solution was to deny a wage rise to the very people who buy all the stuff they are selling, i mean you could’nt make this stuff up if you tried.

    These so called "leaders" and captains of industry have been educated at the finest august learning institutions that money can buy, and they come up with this sort of shit...... and dont get me started on bloody Turnbull and his goon squad!

  5. James Cook

    Now I’m depressed. These bastards, with the help of a venal Murdoch press and compliant/colluding MSM will sell this as the way to “make Australia great”. This is truly sickening!!

  6. Wun Farlung

    I thought that they would have had Cash out of her kennel spruiking the jobs but I doubt turnbullshit has the balls to hang onto Cash’s leash when she’s not wearing a muzzle.

  7. Florence nee Fedup

    How many job have been lost by states now building our trains in such places as South Korea? I am under the impression that this govt will not award procurement & state infrastructure contracts with any Australian business that has a unionise workforce.

  8. Frank Smith

    Kaye Lee,
    You raise many excellent points – Thank You! So here in my home State of Queensland we are going to save the world (and “our boys” with it) by building (is that “manufacturing” or just “assembling”) German light armored vehicles out at Ipswich. That is the same Ipswich that had a very large workforce employed in the manufacture and maintenance of Queensland’s trains and rolling stock at the sprawling Railway Workshops in north Ipswich. The Workshops are now defunct and just a museum piece whilst many of its former workforce have been unemployed. The other major manufacturer of trains and rolling stock for Queensland (and elsewhere) was Walkers of Maryborough – now part of Downer. So, plenty of expertise and facilities in southern Quensland for the manufacture and maintenance of rail equipment.

    BUT, when the “Can Do” Newman LNP Government came into power in 2011 and decided that Brisbane needed to upgrade its suburban electric train fleet, they didn’t opt to use these local manufacturers but let the contract to build 18 New Generation Rail (NGR) trains to an Indian Company. Thankfully the abhorrent Newman Government was thrown out after just one term. The trains were years late in being delivered and, once delivered, were found to have significant major problems that prevented them from running on the network. These problems are still being sorted through by the Labor Palaszczuk Government who are unjustly copping the blame for Newman’s folly. With the Commonwealth Games on the Gold Coast just two weeks away there has been a major push to get some of these trains up and running to cope with the expected crowd, even though they still do not meet requirements for disabled access.

    Now, rather than deploy this local workforce into building machines of war, why weren’t their jobs protected by manufacturing the NGR trains here locally where the obvious design and manufacturing problems would have had a far better chance of being identified and rectified much earlier?

    Down with tanks! Build user friendly public transport rail facilities instead and do something useful for the people you are supposed to serve.

    http://www.abc.net.au/news/2017-11-09/labor-promises-150-million-fix-trains/9134574

  9. Kaye Lee

    Frank,

    The government announced in late January “incentives aimed at boosting local manufacturers in the defense industry…..more than $3.079 billion will be allocated to help local manufacturers expand their businesses, as well as to set up a new Defense Export Office for military equipment, among other measures.”

    We don’t want to build cars, we don’t want to build trains, we don’t want to build white goods, we don’t want to build a decent NBN, we don’t want to build high speed rail…..but we have endless money to spend on the weapons industry. Pyne is probably out there right now making another of those great deals like we did with the jet fighters where we contribute billions for the development of a dud.

  10. babyjewels10

    It just makes me want to cry. Thanks Kaye, great article as always.

  11. johno

    Thanks again Kaye. Spot on as usual. More war toys for Fizza’s sandpit. Opportunity lost, as you say 15.7 billion could go such a long way to help with closing the gap, social services, renewables etc.

  12. helvityni

    “We don’t want to build cars, we don’t want to build trains, we don’t want to build white goods, we don’t want to build a decent NBN, we don’t want to build high speed rail…..but we have endless money to spend on the weapons industry. Pyne is probably out there right now making another of those great deals like we did with the jet fighters where we contribute billions for the development of a dud.”

    Most of our family members and friends live in Sydney; for us to visit them takes an hour by car and by train TWO hours…. when are we getting the second airport…?Why this obsession about defence, who is threatening us…Do we just like the idea of wars…

    No worries, Big Brother Trump will protect us and will come to our defence…

  13. Pierre Wilkinson

    Regrettably, the government announced that in an offset to the creation of over 600 jobs in the defense industry, they will have to downsize the funding to hospitals and schools by an equivalent amount, resulting in a net loss of over 1600 jobs in those industries.

  14. diannaart

    Pierre

    Are you serious?

    Talk about “lethal”.

  15. Kaye Lee

    “The Turnbull government has refused to take a position on whether the minimum wage should rise but has warned the workplace umpire an increase could pose “employment risks” for the young, low skilled and long-term jobless.”

    https://www.smh.com.au/politics/federal/government-fails-to-back-minimum-wage-increase-as-labor-calls-for-rise-20180314-p4z4az.html

    On one hand they are counting on wage rises in all their budget projections while on the other resisting them at every turn.

    They fight fiercely to protect the income of wealthy retirees whilst campaigning to cut penalty rates.

    They have $400 billion to spend on defence materiel over the next two decades but cannot afford to increase Newstart or pensions.

    These people give me a headache.

  16. David Evans

    Kaye,… .”These people give me a headache”….you really are getting off very lightly then!….. They give the ‘WHOOPS’ to the rest of the country…..Btw., yet another excellent article, thank you for this and all others.

  17. Glenn Barry

    We could be so much better than this

  18. Andreas Bimba

    The ABC indicated a purchase cost of $5 billion for 211 Rheinmetall Boxer 8 wheeled light armoured vehicles which gives a unit cost of $24 million.

    The locally manufactured Bushmaster 4 wheeled light armoured vehicle costs about $500,000.

    No way is the Boxer worth 48 Bushmasters. Our department of defence and this federal government have lost the plot.

  19. New England Cocky

    Why is there no comment about the South Australian state elections pointing out that the Federal NLP government collapsed the automotive manufacturing industry creating about 200,000 unemployed?

  20. Christopher

    We had companies here that could have done this for a fraction of the cost. Hockey said no to (what was it?) 500m and then we spend 300bn on subs and this shit.

    The lost car industry cost us 250,000 wages packets for the economy, ffs, good ones at that. And our capacity to make things is very diminished too.

    At least those auto workers can retrain as barristers – until none of us can afford a latte

  21. OPPOSE THE MAJOR PARTIES

    211 light armoured vehicles will only take a couple of years at most to build. Then the estimated jobs and new skills will amount to naught and another empty and rusting factory will litter the landscape

  22. Max Gross

    Just another example of the LNP’s utter incompetence. The next federal election cannot come soon enough.

  23. Kyran

    You have to wonder about this mob. Within hours of them announcing a ‘policy decision’, it becomes apparent that they didn’t look at the ‘maths’, so much as the political benefit.

    https://www.theguardian.com/australia-news/2018/mar/14/daniel-andrews-blasts-turnbull-after-losing-5bn-defence-contract

    This wouldn’t come as a surprise to anyone when you have a history of making decisions based on political expediency rather than facts.

    https://www.theguardian.com/world/2018/jan/29/buyers-remorse-australias-sorry-record-on-defence-hardware

    There was an article written about the oversight on our defence spending back in 2014, which advocated for more, not less, scrutiny of how these decisions are being made.

    https://quadrant.org.au/magazine/2014/07-08/better-defence-value-money/

    The Australian National Audit Office (ANAO) has produced many reports on this shambolic process and one of the recent one’s shows how entrenched this removal of oversight is.

    https://www.governmentnews.com.au/2018/03/governments-80000-procurement-contract-threshold-in-focus/

    Ah well, nothing to see here. Our defence department has really important roles to play in defending our country and making sure that we only support countries with similar values.

    https://www.theguardian.com/australia-news/2018/mar/06/australia-to-train-myanmar-military-despite-ethnic-cleansing-accusations

    At least we are building up a new industry. Who doesn’t love a good industry?

    https://www.sbs.com.au/news/defence-exports-turnbull-unveils-3-8b-fund-to-boost-foreign-sales-of-australian-arms

    We now have the template. We invite a foreign company to build stuff here without oversight and even export a few trinkets to overseas markets. The good ethical ones, like the Saudi’s.
    High price? Nah, jobs are never at too high a price (except when they are). Little benefit? These geniuses will probably start tendering for reconstruction builds in those countries we are currently ‘engaged’ in. That means we have jobs AND growth.
    Thank you Ms Lee and commenters. Take care.

  24. Judith

    Recently in a year 11 class I put the case for spending on education (to tackle inequality & engage youth) as being preferable to defense spending as a better way to protect the Australian public from terrorism – these year 11 boys didn’t take long to grasp my logic.
    Oh, and dare I ask how many of the “hundreds of jobs” this move will create are positions for women?

  25. Andreas Bimba

    Yes we lost our car industry because Abbott and Hockey in late 2013 refused to provide an additional $80 million per annum for ten years ($160 million total p.a.) to Holden to make the case for a major investment by GM Holden to modernise their plants and to replace the Commodore and Cruze. I suspect the Cruze was to be replaced by the plug-in hybrid Volt.

    Holden’s exit forced Toyota’s exit even though they were still profitable with the small $85 million per annum subsidy. I suspect Toyota were planning to locally manufacture the plug-in hybrid Prius or at some stage the hydrogen fuel cell powered Mirai locally. Ford had already committed to leaving by then but with a 15% tariff and a plan for industry expansion could possibly have been retained.

    Realistically what the industry really needed was a 15% import tariff, a plan to make half of the 1 million local passenger vehicle market locally plus exports and a plan to transition to New Energy Vehicles and say 10% conventional IC engine vehicles that would use renewably produced liquid or gaseous fuels. Such an industry could provide about 200,000 long term stable jobs directly and indirectly.

    The concept of totally free trade and open markets as espoused constantly by Goldman Sachs golden boy Malcolm Turnbull is naive and counter productive for Australia’s circumstances. The Liberals are just agents for international capital and the top few percent.

    Weatherill, Xenophon and the Greens are indeed losing a major opportunity for not attacking the Liberals very hard over the automotive industry and defence industry economic disaster even though it is a federal issue in the main.

  26. diannaart

    Andreas

    The LNP bends over backwards for the Coal industry, but appears allergic to manufacturing in Australia – then when does the LNP make any logical sense, apart from obviously dancing to the tune of big mining.

    What we are not hearing enough is the vital importance of our environment, without a sustainable environment there is no economy.

    @Judith

    Another thing we never hear is how many jobs are for women or school leavers or other marginalised people.

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