Australia’s refugee problem has attracted global attention. This from the New York Times.
Rudd’s car plan is Labor at its worst
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Forget the greenwash, the key statement in today’s car package is this one from the Prime Minister.
There it sits in the press release, unadorned with any supporting evidence or justification of any kind. We’re just gonna have a car industry. The other prize example of question-begging is to be found in the Executive Summary of the policy launched this morning:
As St Augustine famously said about Hippo’s troubled chariot industry, Lord, make us self-sufficient, but not yet. What would most Australian businesses give to be told they had 12 years to become commercially viable, but that taxpayers and consumers would pick up the tab until then, thanks. Kevin Rudd this morning was emphasising the green aspects of the automotive package. You got the impression we were going to drive our way to a low-carbon future in an Australian-made green machine. And true, the second biggest item in the package is an additional $130m in 2009-10 to kick off the bigger, longer, faster, greener Green Car contestable grants program, which wasn’t scheduled to start until 2010. Now it will go for 10 years, at $130m a year, rather than five years at $50m pa. The Government didn’t specify the conditions for receiving grants under the program, but judging by the Toyota hybrid car announcement earlier this year, pretty much anything with the words “low emissions” in it will get a few million. By the end of the 10 years of the Green Car program, the industry will be nearing the end of the extended assistance program that is the big budget ticket in the package: an extra $100m a year from 2011-15 on top of the $200m it was scheduled to get, and a further $200m a year from 2016-20, when it wasn’t getting anything. Anyone who thinks 2020 will be the end of the taxpayer largesse to these multinationals and their tame unions is mad. This nonsense will keep going for decades unless someone with some guts calls time on the handouts. There are some small additional measures. LPG conversions get an immediate boost that will take a further $10.5m off this year’s surplus. There’ll be just over $6m a year to further encourage exports (quite why multinationals need help to export stuff is a complete mystery). The only faintly responsible part of the package is a $116.3m adjustment package intended to help the less viable parts of the components industry and its workers “adjust” — i.e. close. That’s another nearly $60m off this year’s surplus — if one is left. In total, we’re talking $2.4b and change in extra funding between now and 2020. The other element of the Government’s spin was its claim that this was somehow leveraged investment by taxpayers. “The governments expects this assistance to stimulate industry investment of at least $16b … It is about mutual obligation all round — a genuine partnership.” Doubtless the number crunchers in Detroit, currently working out what sort of three-into-two merger will save the US auto industry, will be breathing a little easier knowing that they’ll continue to get assistance in Australia from 2016. And the lack of actual announcements about new investments — strangely enough, given the turmoil besetting the world car industry — gives the game away. There’s no commitment to additional investment from the big car makers beyond what they’ve already announced. The Government has leveraged precisely nothing in its package. It’s not even clear Ford and General Motors will still be around in their current forms next year. This is ALP tradition at its very worst. Because of the financial generosity and strength of the manufacturing unions, because of John Button’s legacy, and because, almost certainly, of an absurd left-wing conviction that only the manufacture of physical objects is somehow a real economic activity, Australian consumers and taxpayers are condemned to continue paying too much for imported cars and subsidising 60,000 jobs. Other industries should be furious that this rort, this scam, this extended exercise in economic and fiscal vandalism, is being continued and exacerbated by a supposedly free market government. What’s the bet, though, that they’ll stay silent in the hope of attracting some assistance of their own? When it comes to rent-seeking, everyone is a strategic industry. The Government’s package is an exercise in keeping a brain-dead body ticking over. It’s brain-dead because it has failed to meet the changing needs of Australian consumers over the past decade and relied on assistance as its primary commercial strategy. And even with assistance, parts of the body have routinely died. It’s time to cut off the life support and let the car industry operate like the majority of Australian businesses. |
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28 Comments
Well gee Bernard you don’t think jobs in the vehicle industry are worth much when they actually produce something but somehow the people making the coffee and pulling the beer are better.
Get over this nonsense or drive a horse and cart mate.
This is a list of the things the economic rationalists including Keane, Henry, Burgh, Moran, and last but not least the Rooster Man Fisher et al, say we are not allowed to make because we are no good at them. Cars, computer chips, clothing, white goods, communications equipment, industrial electronics, heavy industrial equipment such as transformers, turbines and generators, in fact anything that requires scientists and engineers and sophisticated production equipment. What will they let us do? Dig holes using imported machinery and technologies so we can sell the stuff overseas and buy it back as elaborately transformed goods, plant and equipment. We are also allowed to farm except of course that we have absolutely stuffed large parts of the environment doing it. Once again with other peoples machinery. We can also run banks which borrow $1 billion per week to cover our current account deficit and oh yes we have sh..t loads of accountants to tell us how big our current account deficit is. We are also allowed to have lots of right wing economists to tell us that we should employ lots of accountants, lawyers and economists in the so called “service industries” The ones that create the large private debt and negative and growing current account deficit. Can Keane tell us what we are allowed to do and why this is an immutable truth with no possibility of change. We once rode on the sheeps back. Was this because we were only slightly smarter that the sheep? What do we ride on now. Other peoples money. Problem is they are a lot smarter than the sheep and a lot smarter than us.
Another brainless statement of the obviously wrong Bernard. Here’s what western economies are understanding - that if you let your economy decay to the point where it’s just services, rents and finance, then you can basically fold up and blow away in an instant. hence the current scramble across the west to try and retain some manufacturing industries . Who still believes in the ‘weightless economy’ of post-industrial production and comparitive advantage (you build cars, and we’ll um sell each other pedicures)? neoclassical economists and Keating-era public servants. Sorry, you were wrong. we’re doing something else now.
Yes Bernard - a very poor decision. Not policy on the run this time , but still very bad policy. $600million dollars a year for 60000 jobs. With ABC Learning it is $22million for 20000 jobs for two months. This is nonsense!
Never one to advocate Govt owning businesses, the fact remains that if we taxpayers are to pay this much to prop up failing businesses, then we should at least own some part of these businesses. Not just subsidise poor management!
With ABC, the Govt could actually start owning the real estate preparatory to handing over management to community groups -the aim of Govt and many others. With car Companies, Govt could also own the real estate rather than pouring millions into pipe dreams as this Rudd announcement seems to indicate.
Let’s face it neither car-making nor childcare is ever going to make real profits or repay loans, so let’s build up assets.
Bernard, I see what you are saying, but would the the Libs have done anything different? To me there is too much haste in the decision making process without extended consultation with all industries. I guess time will tell whether this is a poor decision.
As I have little interest in cars-I drive an eighteen year old, third or fourth- hand Nissan- I would, however, like to know, and in the light of all cars appearing to be made by foreign companies, if in fact any element of a car is designed by Australians? Someone mentioned research/projects/design. All of this goes into a Nissan, Toyota, Daihatsu, Renault etc? I’ve always thought the Oz car industry was merely there to create jobs for the less intelligent members of the community.
Rudd is becoming an insufferable, committee-mad, spendthrift of the tax-payers money, dictator. Also, I’m sick of the permanent mantra by all governments in Oz, about the need to import skilled workers. As these skilled people are almost certainly headed for the great grinding machine called the car industry I fail to get the point about having an auto-industry to begin with. Why can’t we get out of the rut of 19th and 20th centuries, quit manufacturing altogether and create new technologies appropriate for the 21st century? No that wouldn’t work because first of all we would need to be a nation of thinkers. And that would never do.
Nor do I believe the Liberals, with their running-dog partners, would be any better.
Labor at its worst or simply government on the take - as you say, from the taxpayer to the fat and lazy and pollution emitting car industry in Australia - which Mr Rudd is nothing to be proud of and quite another thing from advanced and uncorrupted car industries abroad, which through necessity are moving away from mindless freeways to ‘transport planning’, ‘urban planning’ and embracing low emmission technology.
That after 12 months budgetary excise on petroleum has been left untouched, Fuelwatch is put forward laughingly as ‘policy’ and $100 million gifted to Toyota to build a hybrid (money that was not expected by Toyota) and money that would have been better spent on upgraded infrastructure.
Its a terrible shame for Australia that we are blindly going where the corporations tell our goverment to go, and all opportunity to improve the long term lot of Australia and this thing we worship called an ‘economy’ which seems to be screwing up more as a result of the knee jerk policy from the board-rooms, that has become an indictment of this government and more evidence that we are being led astray and into deeper waters.
In economic terms what we are seeing is madness and in environmental terms a crime and making a mockery of all rhetoric advanced in the Climate Change cause, something all governments talk about but have little incentive, from their corporate masters, in managing…more cars, more freeways, trucks and dirty stinky Cruise Ships.
None of it makes any sense but then who would have expected differently from the Manchurian Candidate.
This is a sellout of Australia and a major and untimely investment into the dark ages of the automobile world….all very BORING!!!
Supporting the vehicle industry
What we are doing is subsidizing jobs, not creating a new vibrant industry. The whole vehicle industry is in Australia is a basket case.
We have the retail vehicle sector asking for help, but there will be fewer buyers, with the current economic down turn in progress. The Australian industry wants further support, but the vehicles we produce are not at the lower end of the fuel efficient variety; those are imported from any ware, and then marketed under national brands.
This of course is the Globalization in full swing, we cannot subsidize Agriculture, city people do not really care about their rural brother as they purchase the cheapest commodities grown else ware from around our world. So why keep supporting our vehicle manufacturing industry.
No easy solutions and many double standards at play.
Could it be that big fat over fed, Globalized chook, coming home to roost?
While there might be no direct economic benefit, and might be motivated by all the wrong reasons, there is in fact a long-term systematic reason why we need to keep an intact automotive supply chain in place. And this is simply that it is the most sophisticated manufacturing industry sector left in this country, from R&D through to production, delivery and business practices. We have to hang onto it because if we lose it there’s no hope of ever developing any new manufacturing sectors since we will have broken the inherent expertise to do so. And I think we need the capability of developing new manufacturing sectors (most likely in emerging sectors) since it might be very hopeful to forever fully rely on resources, agriculture and tourism
I thought “a fairly argued case” until the mindless union bashing started and brought the whole thing into context. Remember: the job of unions is to look after the interest of their members - usually they do this quite well.
As to the snide comment about “absurd left-wing conviction”: the weird belief that shuffling play money about a suit & tie casino (aka stock exchange) is real economic activity has led us to the brink of a depression. Which has the better credentials - absurd or weird? I’d go with money for actually producing something tangible as the other stuff has a habit if disappearing in a puff of smoke and a few crooked CEOs’ bank accounts when the forbidden question is asked: what have you actually achieved?
It’s sad how often potentially excellent contributions to a wider understanding of what is going on in the world is blown apart by the inclusion of a bit of good old ideological prejudice. Credibility is so easily damaged. If one bit is nonsense maybe the rest of the argument is too.
The article probably did have a point to make but it needed to cover a very complex situation in a way that was not so unnecessarily simplistic.
Labor is missing its corporate memory in the form of Button and Beasley.
Rudd is seemingly making poor decisions a habit.
Subsidising incompetence in the hope that greener outcomes will result? This initiative is retrogressive madness. I work in the bicycle industry (we sell more units than car dealers) and advocate for better cycling facilities, and so I know that the reason most able bodied people don’t cycle is perceived safety issues. Can we get this sort of money spent on addressing such basic barriers to a truly green transport choice? As soon as a “best practice”, dedicated bicycle facility is proposed (perhaps a few hundred thousand dollars) the accountants put the kybosh on it as prohibitively expensive… I am so sick of being ignored and overlooked when green outcomes are being financed. After all, bikes have been around for longer than cars, and will continue to delight travellers long after the internal combustion engine is retired for good.
VB you don’t have to move to Central Qld for a job. Just don’t expect us to subsidise your preferred job in Victoria.
VB: Can’t you understand that for people not interested in the motorcar industry this same industry looks as passé as gasometres or child labour. Why this passé industry has to be propped up with our money, for the benefit of the less intelligent members of our society, is a mystery. Why are we employing the almost unemployable in an industry that we are forced to pay for? It beggars belief for us to support the working population PLUS paying for the so*ding companies to function. If nothing else can point out the scenario it is the fact that our money has gone to a Japanese car manufacturer, Toyota, (who have more money than our national debt) to produce a, as yet , supposedly ‘green’ car which, because of the global population explosion, will be out of date before it has been built. Just like the turkey being delivered to the Victorian voter at the moment. John Brumby’s desalination plant.
Why you would wish your grandchildren to inherit the auto industry is beyond me. What have they done to merit such a ghastly future? If one’s grandkids are so stupid they can’t raise themselves any higher than to be drones, they don’t deserve to inherit the future.
Expect the Hollowmen scriptwriters are sharpening their pens.
Service jobs are real jobs Bernard, but the word is service. They are not the main game. As the French president has pointed out, the financial service industry isn’t an end in it’s own right. It is there to service the real economy which is the one that gives us houses, cars electricty, communications entertainement, and health. Some of us arenot interested in being bank tellers, economists and journalists we want to make things and provide sophisticated technological services. The US FTA was supposed to open up the US technology service industries to Australians so that Aussy engineers and other technical types could get work in the US, but somehow there are still all of thes old barriers put there by their state governments. So if I want to do engineering work do I have to move to China, or Germany or what?
Marilyn the point is that yes, the jobs of those making the coffee or pulling the beer are better because they exist without a never ending stream of handouts from the tax payer. I would imagine if you compared the total corporate tax receipts from the car industry to the total amount of hand outs they have received over the years the industry has been a net drain on the taxpayer. If the Australian car industry can stand on its own feet then I am all for it but the reality is that we certainly can’t realistically support four manufacturers in this country. In fact by letting one or two of the manufacturers leave it may leave a viable, albeit smaller, industry behind it.
The economic rationalists quoting from their textbooks think that it is ok to lose billions of $$ investment, state of the art technology, skilled jobs and the skills and ability to make things - because there is a need for jobs in mining ??? are clearly delusional. Auto exports are the only top 10 export from this country that are elaborately transformed and not mined or a form of primary production. When commodity prices tumble or we run out of stuff to dig what are you going to leave your grandkids? What if i dont want to move to central queensland for a job? You think investment in this industry will come back once its gone? no way - it will be gone forever. China has openly planned its economic groth on the automotive industry - understanding as most countries around the world do that the industry generates an enormous economic contribution. It is a fact that the auto industry will probably need support for a long time . It gets it just about everywhere else, so why not here? Its either in the form of tariffs, other non tariff barriers or direct financial assistance. Take your pick. Given that we have one of the most open (if not THE MOST open ) auto markets in the world (even the US, the capitalist beacon, has higher tariffs), our consumers are really not that badly placed. If you dont have the investment, some other country will. I am glad that this government understands that its not just the 200000 direct & indirect jobs that are at risk..it is an entire skillbase and cornerstone of manufacturing…I dont think our other/ non-primary production industries are developed enough to let go of this one just yet.
The car industry pumps out built cars with no market in mind. The highly paid execs have no idea who will buy them. My flipside is why do we send the iron ore and energy elsewhere when our natural benefit would be to have the steel mills on the coast where there is access to water. In effect, create vWhyalla a couple of times over. Then let the cars be made in China ?.
Trying to get back to Bernard’s central point, ie. that there is no reciprocity in this handout, it is worth noting how little a major company and its directors/managers are required to do in return for squillions by comparison to how much an individual on a relatively trivial amount of welfare has to do in terms of ‘reciprocal obligation’. Not that I think there shouldn’t be such an obligation but it never ceases to amaze that, like paying all their tax, it is never expected of the largest companies or the wealthiest people.
It is an appalling decision. The money would have been better off spent on re-educating auto workers into the defence and mining industries. Rember we dont have enough workers in these two areas and they are touted to save us. Certainly here in SA - governments state and federal should be looking to spend tax dollars on the people who will need the money the most. The multinats will move at a moments notice and they continue to pay their execs multi million dollar salaries. It is a disgraceful - ill thought decision and it will come to haunt them and hurt us.
I feel like I’ve started talking to myself.
All those millions of Australians working in service industries will be appalled to learn they haven’t got real jobs.
I agree with Max. Once the auto manufacturing industry is gone, its going to be gone for good, and all the potential research/projects and benefits that go with it. We are already set to loose the last engine manufacturing plant in Geelong, I support not exporting this one to China and making our overall balance of payments even worse.
on a side note, We should use Natural gas to power our cars down here. We wouldn’t need to import any oil then. Our busses in Canberra run on it and they go fine, no stinky Diesel fumes either.
It may well be bad policy, but we should remember that we get the politicians, and the policies, we deserve. In the current state of public opinion it is hard to see any major party presiding over the death of the Australian auto industry. It is easy to be economic purists from the sideline, but we don’t have to respond to the pressures the pollies are under. So perhaps, Bernard, you can suggest an economically responsible smart policy that the Government could actually sell to the electorate?
Cameron: Thank you for a lucid, and brief, comment. (I wish I had your economy with words.) It’s a great shame that she won’t listen to you.
Cheers
V.
I own, drive and love my 1971 Holden Kingswood and have done so for 20 years. I don’t give a bugger about the politics of this. We need an Aussie auto industry aqnd if it costs a little more in tax or whatever, so be it!
Whether we like it or not there are tens of thousands of people who rely on the jobs to keep their heads above water and in the long term the amount of money is pissant.
Will you people just get over yourselves or stand for bloody parliament because the media in Australia are just as big a rent seekers as anyone else when they scream out Moi, moi.
Like it or not people in Australia drive and don’t want to go back to horse and cart.
And do not rant at me about public transport because that is the only sort I have ever used and it takes years to develop.
Something that did not happen while the pundits raved greedily about screwing the Chinese for bigger and bigger prices or our ore.
Venal, grubby lot all of them.
You paraphrase Augustine, correct quote is ” Give me chastity and continence, but not quite yet. “