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Nationalism really isn’t easy

By 2353NM

Fuelled by a number of world leaders and media outlets that should know better, the pandemic has generated considerable commentary about buying locally rather than imported products. In some ways, it does make sense as there is considerably less chance of the product made from material that is generated in the same country won’t be held up at customs or be used in strategic tit for tat actions to mitigate some real or imagined grievous insult to another country. There are also jobs for people in the production and distribution processes that generate economic activity and gainful employment for a number of local people.

So when we see social media telling us not to buy specific brands of milk because they are ‘owned’ by companies domiciled in France, Italy, Japan or China (and sometimes supermarket branded milk is included), it makes sense not to purchase the product — right? Actually, it’s not that easy. Every one of those milk producers purchases milk from local farmers, transports the milk back to the processing plant using Australian drivers in trucks owned and serviced by Australians. In the processing plant, Australians process and package the milk and then send it off to the shop (again staffed by Australians) where you buy it. Certainly the few cents in profit may end up in a French bank account, however at some point in time, a Federal politician in the role of Treasurer has approved the sale of the business overseas. If it is wrong, a Federal government sometime in the past is partly culpable for the foreign ownership ‘problem’.

Australians also invest overseas. If you use roads such as Citylink in Melbourne, WestLinkM7 in Sydney or the Gateway Motorway in Brisbane, the toll you pay goes to an Australian firm, Transurban. Transurban have either built the road or have a commercial arrangement with the builder of the roads to manage and maintain the roads for a considerable period in the future. Some of every dollar you pay after the cost of managing and maintaining the roads winds up in Transurban’s bank account. What you may not realise is that if your American relatives were to drive on a number of toll roads in Greater Washington (USA) or Montreal (Canada), a percentage of the dollar they pay also ends up in Transurban’s bank account.

Like it or not, we live in a global economy.

Australia and most other ’first world’ countries have made decisions that they are better at some things than others. For example, when Prime Minister Abbott determined that his government wouldn’t subsidise vehicle makers, Ford, Toyota and General Motors all subsequently announced that they would cease manufacturing in Australia. The Conversation fact checked the claim that Australia subsidies were excessive in 2013 and found

by international standards, annual assistance to the Australian automotive industry is relatively modest in raw dollar and per capita terms

While Abbott made the decision that all vehicles in Australia should be imported, he had no problem with the $18 billion in subsidies paid by Australian states to the mining industry between 2008 and 2014 as calculated by The Australia Institute. And if recent reports turn out to be correct, don’t write off the Australian vehicle industry just yet.

It seems pretty cynical that if the economy in Australia is not perceived to be doing well, there is a cry for greater local production of what is on our retailers’ shelving, hence the cries to buy ‘Australian’ milk or consumer goods. While not a bad idea in concept, we are the people that have supported the shift in ownership and manufacturing of consumer goods to foreign entities, then complain about it when we realise what we’ve done. A case in point is Kmart. Kmart and Target are both owned by the Wesfarmers conglomerate and 10 years ago Kmart had an image problem that, amongst other things, was returning far less profit that stablemate retailer Target.

In 2010, the company’s earnings were just under $200 million and parent company Wesfarmers was looking at ways to grow topline sales. It had embarked on a new ‘Expect Change’ campaign, desperately trying to convince shoppers the low-end retailer had changed its stripes.

This was under the leadership of turnaround king Guy Russo, who eventually succeeded in flipping the script for the discount retailer, focusing on lowering prices, simplifying product ranges, and bringing in more on-trend pieces.

However, recently

Kmart shoppers around the country have been confronted with empty shelves, as the retailer — among others — struggles with sluggish international supply lines, thanks to the coronavirus.

Shoppers have bemoaned not being able to get their hands on furniture, bedding, clothing, kitchenware — just about everything.

Kmart explained

“Some of the countries where we manufacture our physical products were also put into lockdown at this time, putting production of some of our goods on hold for a period of time,”

Many of Kmart’s items are designed in Melbourne, but sent overseas to countries like China, Bangladesh, India and Indonesia for manufacturing.

It appears that shoppers are now used to picking up inexpensive pseudo-designer fashion and decorations for their home, only to be thrown out and replaced when the ‘next season’ products arrive. There were the inevitable calls for boycotts and similar action until Kmart arranges for local manufacture of their products. Of course, local sourcing and production would be possible however it’s also possible that the cost of production and cost to the consumer would substantially increase as well, which plays havoc with consumer expectations and the business model.

It seems that nationalism has a price. It also seems we aren’t necessarily ready to accept the price. To demonstrate the point, consider this

This week, Treasurer Josh Frydenberg called on industry and retail superannuation funds to invest more in Australian businesses, saying he “would like to see them both put to work on domestic infrastructure assets more than they have been”.

With most super funds carrying about 20 to 25 per cent of their investments in Australian companies, the Future Fund’s latest report on March 31 has it looking decidedly lean with only 6.1 per cent, or $9.87 billion, held in Australian shares.

One senior investment analyst — who asked not to be named — told The New Daily Mr Frydenberg should be asking Mr Costello “when is the Future Fund going to join Team Australia?”

The Future Fund holds more than $44 billion in global and emerging markets, while holding a cash balance of $15.59 billion or 9.6 per cent, and a similar amount in easily converted debt securities.

Its assets are designed to provide long-term investment in infrastructure, education, disability services, medical research and Indigenous services.

The Future Fund is Australia’s sovereign investment fund. Former Coalition Treasurer Peter Costello is the current Chairperson.

What do you think?

This article was originally published on The Political Sword

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  1. Matters Not

    No sure that choosing Transurban was the best option to make your point re ‘living in a global economy’.

    CityLink toll road operator Transurban paid no company tax to the Australian government for three years despite revenues of nearly $6 billion. … Drivers who pay to use the road deserved to know where their money is going, Shadow Treasurer Michael O’Brien said, accusing the Andrews government of handing over billions of dollars of “free money” to the roads operator through the new West Gate Tunnel deal.

    One of the really big problems facing Australia is – that while we generate ‘wealth’ for TNCs, such conglomerates transfer that ‘wealth’ to other places when it comes to the (non) paying of taxes. And the list is long as Michael West has demonstrated.

  2. Jack Cade

    When the UK joined the EU, it signalled the death of many UK industries. The EU dictated that buoyant UK industries should be transferred to Eastern Europe where jobs were scarce.
    The potteries, shipbuilding, steel manufacturing. All went to depressed Eastern Europe.
    That’s why the Red Wall of Labour constituencies voted Brexit. Plus many many migrants came from Eastern Europe and ‘took our jobs.’ Estimated 1,000,000 Poles came to Britain. Good workers, too, but competition for Brits who didn’t work real hard and were paid too well. I know it’s oversimplification, but the working class Briton wanted his identity back.

  3. Phil

    ‘ Good workers, too, but competition for Brits who didn’t work real hard and were paid too well. I know it’s oversimplification, but the working class Briton wanted his identity back.’

    So you reckon You are such an ugly man Boris Johnson isn’t serious about taking in 3.5 million Chinese from Honkers then?

  4. Jack Cade

    I’m actually terrific-looking. Me mam used to tell me all the time.
    I worked in a factory in England in the 60s and the work ethic was zero.
    Boris talks bullshit. 3,600,000 Chinese From Honkers will not come to the UK because Brexit will cause its economy to crash and if their faux desire for ‘democracy’, stirred up by the USA,
    brought them to Britain they would actually lower their standard of living and they would not be welcomed by the British people anyway.
    I had two relatives visiting before Christmas and they both voted to Brexit, citing ‘immigration’ mainly, even though they each had good jobs and were in no way affected by immigrants. I have no opinion on that and couldn’t tell me what was wrong with immigration but each of them felt it was ‘too much’.

  5. totaram

    “The Future Fund is Australia’s sovereign investment fund. Former Coalition Treasurer Peter Costello is the current Chairperson.”
    Read all about that Costello scam here:

  6. phil

    The Ugly man quip was from the Comedy Company Boris the news reader. I was being tongue in cheek they let 3.5 million Chinese into the UK they will hang Johnson from a light pole. Brexit was a referendum on immigration.

  7. Jack Cade


    I know. My comment about my looks and my mother was a Trumpism – a terminological inexactitude…
    George Galloway talked a lot about the 3,600,000 Chinese citizens this morning, pointing out that for 150 years there was actually no ‘democracy’ in HongKong, and that the nowadays ubiquitous ‘rubber bullets’ were actually developed in HongKong by the British to keep the unruly natives in check.
    The British animosity toward immigration was due to the uncontrolled migration into borderless Britain, the consequent reducing of wages and the pressures it put on housing and the NHS. In fact, one of the catch cries of the Brexiteers was ‘We will decide who comes to live here’, a phrase familiar to Australians, usually attributed to our very own scumbag Howard. They will therefore not cop 3600000 Chinese nationals coming in at the express invitation of the ludicrous Boris. After all, They ARE Chinese – not British passport holders. Britain has neither
    The right nor indeed the will to absorb them.

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