Australia is experiencing the impact of runaway inflation which is a product of poor economic management by the Liberal Party.
Because the pandemic shut down supply lines for a period of time, a government with an even a semblance of economic understanding would have foreseen that once the world came out of lockdowns, demand would exceed supply because production had either been shut down totally or not producing at its pre-pandemic rates, therefore inflation would not just increase, it would run out the gates (in layman’s terms). This inflationary pressure could have been avoided if action was taken by the Federal Government even twelve months ago to address the foreseeable danger of inflation. This is a simple point of Keynesian macroeconomic principle which even a market economist like Milton Friedman would have to agree with.
The unemployment data going below 4% is a sign there is a problem with labour demand across the economy, because employers will not increase wages. This fact adds to the economic crisis we are now witnessing in relation to inflation, as the Liberals have allowed wages to stagnate for the past nine years. Nevertheless, there is more to this sad story of economic mismanagement than just wages.
Mr Morrison in his usual bullying style has previously accused Mr Albanese of being more left-wing than Gough Whitlam, whatever that inarticulate and illogical statement is meant to mean, a statement which by the way has been made by a man dismissed from Tourism Australia and reported to have caused problems which were reviewed at New Zealand Tourism before he backstabbed his way into the seat of Cook. Along with his distasteful behaviour over the past week of trying to weaponise Senator Kitching’s death, Mr Morrison’s slur against both Mr Albanese and the late Mr Whitlam is just another desperate statement made by a Prime Minister who has no future economic plan for this country, and whose only electoral plan is to try and pork barrel his way through an election, again.
The Australian Labor Party (‘Labor’) and Mr Albanese have an economic plan, a plan which will address this unnecessary inflationary pressure. Mr Albanese wants to rebuild Australian manufacturing, like we used to manufacture and sell, which will address our supply line problems and the now skyrocketing inflation, because amongst other matters we will not be so reliant for our tertiary level of purchasing of goods manufactured in China or India, as they are reaping the benefits of secondary good manufacturing made from Australian primary materials.
As an example, during the pandemic crisis we ran out of PPE; a product which we were not manufacturing in Australia, and which we should have been manufacturing had it not been for this misconceived economic practice of market economics which has been so feverishly embraced by the Liberal Party over the past 70 or so years. There is no sound business or economic case for PPE not being manufactured/produced in this country, and it astonishes the minds of sound economists such a simple product which every hospital, doctors’ surgeries, dental surgeries, and any other medically aligned undertaking in Australia required for their daily use prior to the pandemic.
Indeed, the poor economic management cuts deeper than just PPE. Our car industry was destroyed by the Liberal Party’s application of market-based economics. Mr Albanese wishes to restart the manufacturing of electric cars by this country, and once again there is no sound business or economic case to refute this sound economic plan. In Australia we mine every single element which is used to manufacture electric cars and batteries. You may recall Ms Cash and Mr Morrison saying during the 2019 Federal Election electric cars will be the end of the weekend and tradies. That statement was nothing more than an economic naivety which was untrue, and more importantly, has wasted three years of building Australian electric car manufacturing, so that we would be by now world leaders in that field.
It makes no economic sense whatsoever for Australia to export its primary resources to other countries for them to manufacture that primary resource at the secondary level of electric car production, and then for that country to reap the benefits of exporting that product back to Australia to be sold to us at the tertiary economic level. We should already be phasing out fossil fuel-based technology for transportation. Instead, we are left in this vulnerable economic conundrum of being at the mercy of the supply of fossil fuels; a cost which is skyrocketing and causing economic hardship to most Australian families.
The Liberals try to argue paying proper wages for workers would inhibit the production of electric cars in this country, but that is a baseless argument in the scheme of economics because when you have the primary resource to call upon within your own country for secondary production, the costs of production are insignificant when you make quality secondary goods which will be within the means of purchase at the tertiary economic level of not just the local market, but also the international market. Once again, this macroeconomic policy which Mr Albanese has referred to as being a Labor initiative will address the supply problem of inflation which the Liberals have unnecessarily caused with their decades-long blind devotion to market economics.
Another example of the Liberal Party’s economic mismanagement may be found in the history of solar panels, the manufacturing of which now occurs in China. The primary resources for solar panels are now exported by us to China for secondary level manufacturing to then sell back to us as a tertiary-level good. This should never have happened as solar panels were originally developed and manufactured in Australia.
Regarding the issue of quality, let us just cast our minds back in time to the 1960s when Australia used to manufacture most of the clothing worn by Australians. The quality of Australian menswear was of such a standard people from overseas would compliment us about the quality of our manufacturing of clothing because buttons didn’t fall off shirts and zippers didn’t malfunction on trousers. That is not long ago in the scheme of history to demonstrate we as a country are able to produce quality secondary goods to sell at the tertiary level to the local and international markets.
We should not, as a country rich with a variety of primary resources, be now left in this supply chain crisis of relying upon other countries to manufacture most of our products and sell them back to us as tertiary goods. The irony of this poor economic management by the Liberals is gobsmacking as it is a basic principle of economic theory.
The cynical mindset of the application of market economics by the Liberals caused this inflationary crisis and many other economic problems, as they purely focussed on short-term economic costs rather than the long-term economic benefits of producing from our primary resources at a secondary level such products as the examples referred to herein of solar panels and electric cars. The pursuit of cheap labour by the Liberal Party and vested interests has only resulted in Australia missing out on the full economic benefit of all three layers of economic production, including renewable energy modes of transportation which are not subjected to the costs of operation of the fossil fuel market.
It has been flagged by some banking commentators that monetary policy should be implemented to address the runaway inflation problem. That is an economically unsound step to take as the use of monetary policy is like striking the economy with a blunt sword. The economic proposal put forward by Mr Albanese is the sensible economic approach to addressing our inflationary problems, as the adoption of local manufacturing and renewable resources, including renewable transportation, will reduce the cost of goods from the farmgate to the table, to coin a phrase.
It’s time for an economic change, whilst we still have time.
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