Prime Minister Tiny Habit has indicated his government will provide some assistance to Victoria because of concern about significant job losses.
Mr Habit met with Victorian Premier Denis Naptime on Wednesday morning in Melbourne where they discussed the very real possibilty that the recent announced closures of Holden, Toyota and Alcoa could lead to significant job losses. In particular, Naptime was worried about his own job.
“We thought that the very least Mr Habit could do was fly down for a photo opportunity,” said a spokesman for Dr Naptime, “but we were absolutely delighted when he announced that there’d be a report into the Victorian economy going to the Prime Minister in ten days time.”
”So early in March we will have some announcements to make and then in the build up to the budget there will be further announcements to make,” Mr Habit said. “In particular, I’ll be announcing that I have, in fact, read the report, followed by announcements that Cabinet have all been given copies. Then we’ll announce that there’ll be a feasibility study into whether it’s worth releasing the report to the general public, or whether it will be enough to simply release a glossy brochure telling people how much we value Victoria and how terrible it would be to elect a Labor government.
”What we want to ensure is that the people of Victoria can face the future with confidence and sure there have been some shocks.
”Holden was a shock, Toyota was a shock, Alcoa was a shock. I mean, I know we said that the carbon tax would close down Whyalla and that everyone in the country would go broke, but who knew that the automobile industry would be part of that. As for Alcoa, how could anyone have predicted that a fall in the price of aluminium would lead to problems with their bottom line. However, in spite of what any of those companies say, we know that it’s because of the unions refusing to let workers negotiate their own conditions.”
Dr Napthine said the state government appreciated the work the Commonwealth was doing to help Victoria during its economic transition.
”We are an economy in transition but we are a strong, robust and diverse economy, not just Melbourne and Victoria but our regional areas,” Dr Naptime said.
After one reporter asked whether the transition was from people working to people not working, Dr Naptime, reminded everyone that there’d be some very exciting announcements from the Prime Minister in ten days time, and, in case, people hadn’t noticed, he wasn’t taking questions about Geoff Shaw. When it was pointed out that nobody had asked about Geoff Shaw, the Premier responded by telling everyone that if all they wanted to talk about was Shaw, then he wasn’t going to answer any more questions.
The press conference was interrupted by police who claimed that they were practising their soon to be aquired “move on” laws.
Can the automotive manufacturing industry in Australia be saved? “Yes”, writes Andreas Bimba, but only if the Abbott Government is defeated in the 2016 election.
The next federal general election will probably be in late 2016 and Labor will in all likelihood win. Ford announced that closure of their Australian automotive manufacturing operations will be in October 2016. Holden announced closure will be by the end of 2017.
Australians must continue to buy locally manufactured Fords (Falcon and Territory) and Holdens (Commodore and Cruze) till those announced dates to avoid early factory closures. Also please don’t forget ‘last man standing’ Toyota (Camry and Aurion) which is just hanging in there.
The dogmatic right wing of the LNP Coalition Government will probably follow the totally worthless advice of the Productivity Commission and cut currently scheduled Automotive Transformation Scheme (ATS) industry assistance so as to force an earlier closure.
Even with an early closure it is still perfectly feasible to save the manufacturing operations of Ford and Holden which are only slightly less productive than the more up to date facilities of Toyota (Toyota knows that both Ford and Holden are very tough competitors). These manufacturing facilities are worth billions of dollars and compared to other sectors of the Australian economy, like most service industries, are highly efficient and productive.
Other factors brought Ford and Holden into their loss making position such as the historically high Australian dollar, a poorly implemented export strategy (Detroit and Canberra are primarily to blame), a poorly thought out national industrial policy/support environment created by all Australian Federal Governments which made industry investment hard to justify, an excessively open new car market (refer to the Thailand car trade imbalance) and as a result of these factors, ever declining production volumes and worsening economies of scale.
If Ford and Holden, after the Labor victory, still choose to quit local manufacturing, their manufacturing facilities can still form an extremely valuable core of a new player into the Australian automotive manufacturing industry that could be local, foreign, or a consortium. A locally owned manufacturer would be the best solution as it would allow management for the first time in Australia’s automotive manufacturing history to control its own destiny and not defer to the colonial master for permission or guidance. All the skills and technological capacity required for the successful operation of this enterprise already exist in abundance.
Manufacturing is a value adding industry that provides much more employment per unit of economic activity than the bulk resources industry. It can also be a major foreign exchange earner or replace a substantial portion of our imports. As a foreign exchange earner the industry can drive average living standards higher and can support the service sector of the economy.
A second sizable local manufacturer will greatly assist the survivability of Toyota’s Australian manufacturing operations through healthy competition, greater political and public support for the industry and better economies of scale for components suppliers.
A doubling of Australia’s current automotive manufacturing capacity so as to meet at least 50 per cent of the local 1.1 million per annum automotive market plus exports should then be the medium term aim, again to improve economies of scale and model range.
One should also not forget the other benefits of an automotive manufacturing industry such as a technology and productivity driver in the economy, a source of national confidence, a large employer of unskilled, semi skilled and tertiary qualified personnel and as a industrial capacity and technology reserve during times of national emergency. Don’t ever think a few submarines will suffice.
A moderate tariff of 10 – 15 per cent plus export credits would allow local manufacturers to pay Australian award wages and still make a profit. Such a tariff is a means of providing a level playing field with low cost and high technology manufacturers like Korea, Thailand and China.
The current alternative to tariffs of direct grants by governments is too unpredictable, making investment decisions by manufacturers hard to justify.
The current foolish federal government sees such grants as a subsidy for an inefficient industry rather than as a good investment giving a net rate of return of about five times the size of the subsidy. The current high profitability of Toyota Japan shows that the automotive manufacturing industry is a dynamic and valuable industry for countries with relatively high wages. Not just low wage countries as foolishly suggested by the Productivity Commission.
(Reference: the Productivity Commission).
The Coalition’s slash and burn economic philosophy is extremely unpopular with the Australian people and ultimately it is the views of the Australian people which will prevail and not those of ill-informed special interest groups such as the reckless financial services industry or the mining/resources industry. These sectors, apart from the superannuation industry, are the biggest recipients of government aid and extraordinary tax concessions, estimated to be valued at over $4.5 billion per annum for the mining/resources industry and about $1 billion per annum for the financial services industry.
(For further information refer to the Trade and Assistance Review 2011-12).
With a well thought out national industrial policy environment manufacturing can again thrive in this country. Will Labor get it right this time?
The best model is the Japanese METI model where government and industry work together as a partnership. Moderate government funding is provided but it is returned many times over to the tax payer through general taxation of the manufacturing industry and its employees.
It is a profitable investment by the Japanese tax payer into their manufacturing industry and it is the core of Japan’s large, productive and successful economy.
The METI model provides a level playing field that allows Japanese businesses to pay Japanese labour and other business costs (which are higher than Australia’s) and to still compete successfully with low cost and high technology competitors like Korea, Thailand and China.
For those of you who don’t know who Tim Wilson is, here’s a quick summary from the IPA website.
Director of Climate Change Policy and the Intellectual Property and Free Trade Unit
Tim Wilson has worked with the Institute of Public Affairs since 2007.
Tim also serves on the Department of Foreign Affairs and Trade’s IP industry consultative group as well
being a Senior Fellow at New York’s Center for
Medicine in the Public Interest.
He can be seen and heard being outspoken, challenging and thought provoking on 3AW, Sky News and the ABC and pens columns in the The Australian and Australian Financial Review.
And here’s some quotes from recent articles by Tim Wilson
From “Free speech does not discriminate”
“But the solution is more speech, not less. We should preserve the right to speak out, mock them and ridicule them for the stupidity of their comments or the hate in their heart. And that also applies for incorrect statements. Free speech isn’t limited to factual accuracy. If it were, we’d never have a contest of ideas where ideas are proposed, exposed and corrected. The argument behind 18C is to afford some people higher legal standing than others for factors outside their control. It’s the antithesis of equality before the law.”
(Word Cloud of this Article)
From “Paternalism An Unhealthy Threat To Freedom”
“But public policy is not driven by evidence, it is informed by evidence. Public policy is driven by the political values of those elected to govern. Those values determine what issues the government believes needs to be tackled, how they then approach it, how they weigh evidence, and the policy solutions ultimately proposed.
An “evidence-based approach” amounts to discarding the choice of democracy for government by technocratic bureaucracy, particularly when much of the evidence is financed by government to justify their decisions.”
Now, the IPA you may recall frequently endorses free speech, while calling for the ABC to be privatised. The ABC, it seems, is biased. And while as Tim says, free speech doesn’t have to include “factual accuracy” apparently “bias” is a no-no.
Early in John Howard’s reign, there was an interesting article in the Australia Financial Review. (Chomsky is right – if you want to know what’s really going on read the Business Section) It basically suggested that Howard’s aim was to set things up so that future Liberal governments would have less trouble. This meant removing various “watchdogs” or, if removing them was constitutionally or politically impossible, then appoint as many sympathetic people as possible.
Perhaps this explains the reluctance to do anything to help Holden and the PM’s recent insistence that there’s no more money for Toyota. If we just get rid of unions then we’ll be able to knock off a few more watchdogs like Fair Work Australia, and Labor will have less money. But surely that couldn’t be it, could it? Surely our PM couldn’t be hoping that unemployment goes through the roof so we have an excuse to introduce Workchoices and Gina can get her workers for the $2 a day she aspires to!
Ok, that may going too far. But it certainly explains reducing the advisory group on asylum seekers from twelve to one, the removal of the Climate Commission and one or two other things.
So, how does Brandis reconcile appointing Tim Wilson to the Human Rights Commission?
‘He was at the forefront in thwarting recent attempts to erode freedom of speech, freedom of the press and artistic freedom – rights and freedoms Australians have always held precious,” Senator Brandis said.
”The appointment of Mr Wilson to this important position will help to restore balance to the Australian Human Rights Commission which, during the period of the Labor government, had become increasingly narrow and selective in its view of human rights.”
Restore the balance? To human rights? Surely things that are “rights” are just that. Sure sometimes they have to be balanced against each other. How do you balance a gay person’s right to marry against someone who thinks this will destroy society? (Quite easily, i’d argue)
So, exactly what was “narrow” about the Labor Government’s view? I’d like that one drawn out.
PS And for those who think I’m quoting him out of context.