tip off

Gillard’s $215m ‘strategic 
investment’

It’s not a hand out, Julia Gillard said today about her, well, handout — and those of the Baillieu and Weatherill governments — to US multinational General Motors to keep making cars here until 2022.

A strategic investment” was the Prime Minister’s phrase for the $215 million package to support 55,500 jobs in the car industry and “around 200,000 additional jobs nationally” (those magic employment multipliers again).

Among those jobs will be several new ones. There’ll be an “Automotive Envoy” “to strengthen links with the global automotive market”. Let’s call him or her the ambassador for Detroit. There’ll also be an “Automotive Supplier Advocate to help identify new products and customers in automotive and non-automotive industries.” GM will also be establishing a “Suppliers’ Working Group to connect Australian suppliers to GM’s world-wide supply chains.” The golden opportunity to appoint a US-style “car Tsar” has, sadly, been missed.

There’s only so much terms like “co-investment” and  “developing new business opportunities” can hide before it becomes apparent that this is merely a $200 million plus bid by Australia in the international market established by multinational automotive manufacturers to determine where they can get the most handouts for establishing car plants.

There are few other industries like it, with the capacity to hypnotise politicians the world over, making them suspend their scepticism and start writing out cheques. The closest comparison is “major events”, in which sordid institutions like the IOC, FIFA and Formula 1 demand, and get, massive subsidies and legal protection from governments for the right to stage ludicrously costly events.

Although, seen from that point of view, the deal isn’t too bad: remember we blew $46 million just trying to bid for the soccer World Cup, and compare the $50m Victoria wastes every year on that noted supporter of gross human rights violators, Formula 1, for some momentary coverage and a minimal boost to tourism. The $200 million that might — time will tell — keep perhaps ten thousand workers in jobs for another decade suddenly doesn’t look so bad.

The only smart aspect of the package was a further $16m for training and support services for workers leaving the automotive industry. Its one flaw is that is should have been ten times that, to help exit a substantial chunk of the workforce.

That Gillard proudly stood next to the same vehicle as Ben Chifley did in 1948 speaks volumes: our industry policy hasn’t moved on in more than 60 years. At the ceremony not long before the “Holden 1” rolled off the production line, Chifley spoke about of exporting vehicles “beyond our borders to other people in the Pacific and South East Asia” and lauding it as an example of the Australian-American relationship.

Today there was no pro-American rhetoric, but the Prime Minister was still talking about accessing Asian markets.

Detroit would be only too happy to be here in 2076 with another PM talking of co-investments to enable Australian manufacturing to enjoy the benefits of “the Asian century”. And if they’re not, they’ll be in some other country lucky enough to have “won” the global auction that is car manufacturing.

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  • 1
    Ralph Becker
    Posted Thursday, 22 March 2012 at 1:59 pm | Permalink

    Strategic it may be, but for whom and why is clear… *sigh*

    Of course it’s strategic to invest $200,000,000 to cement our status on the world markets as ‘also rans’ and save jobs of card carrying members while quite happily letting other jobs go down the drain. Oops.

    Especially since there are no alternative industries that we could strategically invest $200M in - areas in which we have the natural resources and competence to be amongst the world leaders.

    Alas, that would require our card carrying members to do as the majority of us do - adapt and learn.

    *sigh*

  • 2
    Edward James
    Posted Thursday, 22 March 2012 at 2:18 pm | Permalink

    We are long over due to have our own fair dinkum Australian motor vehicle manufacturing industry. We have the resources and the skills. Why are we beholden to Germany Europe and USA. Platform cars have been around for decades! We are being taken for mugs and our elected reps are part of the on going problem! We are spending millions of dollars paying our politicians to act in our best interest and yet we are going broke. While inviting imports of stuff which will damage our own natural resources. Edward James

  • 3
    Damien
    Posted Thursday, 22 March 2012 at 3:21 pm | Permalink

    If it costs $20 mil per year to make cars in Australia - so what? It may be a rort but what’s the alternative? What will we ever be able to manufacture in this country if the market has its way without intervention? We’re already consumers of almost everything that uses fuel and lifts or carries any item. I think we need to be able to do more than service cars or fix them after prangs.

  • 4
    Holden Back
    Posted Thursday, 22 March 2012 at 3:28 pm | Permalink

    So, I assume you can write the story to go under the headline for the alternative outcome:

    GILLARD GOVERNMENT REFUSES TO SUPPORT AUSSIE MOTOR INDUSTRY.

    Yeah, right.

  • 5
    Edward James
    Posted Thursday, 22 March 2012 at 3:39 pm | Permalink

    @ Damien, It seems we have been led into believing we need to import everything on offer from the rest of the world. Well no we dont Damien! We once had two east coast steel mills Wollongong and Newcastle where we made world class steel. Australia has resourses inn raw materials and energy, more than enough to serve us as a nation independantly of the rest of the world. We also have natural produce growing all over the place, most of which is not yet contaminated with oversears blights and desiese. All we need to do is learn how to defend ourselves! Our dead wood elected reps are not going to help us do that! Dont you know! Edward James

  • 6
    Tim nash
    Posted Thursday, 22 March 2012 at 3:57 pm | Permalink

    @Damien maybe we don’t need to manufacture things here, why do we need too if we are only going to make a loss like this?

    Everybody seems to just accept that Australia ‘should’ be making stuff like that’s the rightful state of things.

    Listen to this podcast on rear vision from radio national that was on just recently:

    http://www.abc.net.au/radionational/programs/rearvision/making-it3b-manufacturing-in-the-west/3865626

    Australia has never made stuff very well, it’s just not our thing.

    This bailout is atrocious, it’s just delaying the inevitable.

  • 7
    Edward James
    Posted Thursday, 22 March 2012 at 4:08 pm | Permalink

    @ Holden Back
    Posted Thursday, 22 March 2012 at 3:28 pm | Permalink
    I believe I have already postulated an alternate for the Australian peoples. It dose not include importing cars, trucks and stuff from overseas. Bcauser I have no doubt Australians can and will given the opportunity build cars and trucks better than anything available from lessor producers worldwide! I am not sucked in by the myth Holden is an Australian ICON. I see a chopped and chaneled Dodge . That was back then in the early fifties. This is now2012. We have resourses, skills , and energy. All we need to stand alone is leadership! Edward James 0243419140

  • 8
    John64
    Posted Thursday, 22 March 2012 at 4:18 pm | Permalink

    The next “under threat” industry is already lining up to ask for its hand-out now.

    Those poor multi-nationals. Whatever will they do? Meanwhile I note General Motors’ International Operations made $1.9 Billion profit last year. I wonder, is that with or without hand-outs?

  • 9
    ggm
    Posted Thursday, 22 March 2012 at 4:20 pm | Permalink

    I have been told the reason we pumped money into the automotive industry post WW-II was to ensure there was a manufacturing capability onshore, capable of making WAR PLANES.

    Ie, the strategic justifier wasn’t the cars, or the jobs: its the risk assessment of needing to either bomb somebody, or defend against being bombed.

    Since that threat has gone away, a car making lobby has emerged which has found other reasons to keep the lips stuck on the teat of mammon.

    Personally, I’m happy for some of my tax dollars to go towards jobs in Geelong. But lets not kid ourselves there is some other overarching reason we want cars made here: lots of other economies are perfectly happy assembling cars coming in at the docks, or even just driving them off ships..

    -G

  • 10
    eric
    Posted Thursday, 22 March 2012 at 4:37 pm | Permalink

    A pretty smart move I would suggest.

    The government over the next 12 years will get way more than the $250.000,000 back in taxes and not having thousands more ex car workers on the dole.

    The trick for all three car makers is to try and ramp up export orders.

  • 11
    Posted Thursday, 22 March 2012 at 4:38 pm | Permalink

    Is it sexist to call Julia Gillard a drunken sailor?

  • 12
    Edward James
    Posted Thursday, 22 March 2012 at 4:38 pm | Permalink

    @GGM Mate. If you are expecting Australians to be able to make “war planes” in a time when wars are fought by so called terrosist using dirty bombs. We are in trouble. If you live in Australia . Why would you be happy to import “stuff” which we are able to produce here in Australia ? Edward James

  • 13
    Edward James
    Posted Thursday, 22 March 2012 at 5:01 pm | Permalink

    I live in a country which seems intent on destroying itself ! Edward James 02434419140

  • 14
    Tim nash
    Posted Thursday, 22 March 2012 at 5:18 pm | Permalink

    @Edward why are you and others so hell bent on producing cars here in Australia?

    Our western salaries will never suit a profitable factory, isn’t that obvious?

    Factor also in the cost of the vast distances between capital cities in Australia and our distance to other supply chains and parts in the world.

    Also there are real problems with quality of manufactured goods in Australia, that is we just don’t make them as well as somewhere like Korea.

    These are all facts, many of them (in particular the quality issue) do not want to be dealt with by a majority of Australians.

    Removing something which is unprofitable and unproductive and Unnecessary is obvious.

    We have a booming mining, and services industry.

  • 15
    Suzanne Blake
    Posted Thursday, 22 March 2012 at 6:18 pm | Permalink

    More waste, the auto industry cannot survive. Its pork barrelling for Union members

    We need need winning industries like more intensive agriculture in non farmable lands, that we make farmable. We have a competitive advantage there, we don’t when we sell our farmland to offshore gougers.

  • 16
    Suzanne Blake
    Posted Thursday, 22 March 2012 at 6:18 pm | Permalink

    More waste, the auto industry cannot survive. Its pork barrelling for Union members

    We need need winning industries like more intensive agriculture in non farmable lands, that we make farmable. We have a competitive advantage there, we don’t when we sell our farmland to offshore interests.

  • 17
    seriously?
    Posted Thursday, 22 March 2012 at 7:15 pm | Permalink

    $250m to a company so that it can keep making cars that an ever diminishing number of people want to buy…..so that it can stay in business and therefore keep people employed…….employed in manufacturing jobs, which have been deemed to be more important than other types of jobs. If I set up a business and I am unable to successfully design and manufacture a product that people want to buy can I please receive a subsidy from the government to stay in business and that I too can keep people employed? I promise they will be manufacturing jobs.

  • 18
    Fauzi Rahman
    Posted Thursday, 22 March 2012 at 7:16 pm | Permalink

    Maybe if we’ve left the import tariffs of the past as it was, we wouldn’t have to prop up our Auto industry this way and left the Holden, Ford, and Toyota (and possibly Mitsubishi) of today to produce a bigger range of locally made cars. Jobs will be preserved too.

    Either we do it that way or left it all the way off like New Zealand did.

  • 19
    AR
    Posted Thursday, 22 March 2012 at 7:48 pm | Permalink

    A small historical point - anyone recall Hawkeating given some motza to Kodak in the 80s, I forget how much, possibly $200M but pissed up against the wall as that dinosaur is now defunct.
    Unusually I agree with EdJ on one point - Oz should be making a real Oz car. Not a Opel Kadett or some other fudge but a car that can be repaired with a hammer, or large rock, built on a standard chassis, featuring a big radiator or (Heaven forfend) an air coolled flat four, manual, 4WD able to run on gaz, petrol, ethanol or, like the old side valves of WWII, charcoal/wood gas.
    TimN - Oz may not MAKE things, due to myopic financiers and brain dead pollies, but it certainly innovates.
    In the late 40s/early 50s, Oz created both a fax and electronic PABX but too far ahead of the times. Black box, lasers, PhV, the cochlear ear implant, stomach ulcer cure, the list is as long as it is depressing in that, without exception these developments were eagerly taken up o/s because of the pusillanimous ruling class, Uriah Heaps everyone on them.

  • 20
    zut alors
    Posted Thursday, 22 March 2012 at 8:18 pm | Permalink

    What a lost opportunity that $275M wasn’t directed into research and development of a renewable energy powered vehicle instead of being frittered away on the dinosaur petrol variety.

    It’s incongruent that successive governments haven’t subsidised button-up boot manufacturers due to fear of getting offside with Big Button corporations.

    Neither of our two major parties appear to value innovation. Same old, same old…

  • 21
    drsmithy
    Posted Thursday, 22 March 2012 at 8:34 pm | Permalink

    Our western salaries will never suit a profitable factory, isn’t that obvious?

    The Germans would disagree.

  • 22
    GeeWizz
    Posted Thursday, 22 March 2012 at 8:37 pm | Permalink

    What annoys me is that once again these are open-ended government handouts from us… the little Aussie taxpayer.

    What requirements has this money got on Union reforms(aka, reducing costs to car manufacturers to be competitive with countries like Japan?)?

    What requirements has this money got on the car makers to make a product that can’t be sourced elsewhere?(I actually agree with the Greens on this one requiring electrical vehicles which are an early market and not much competition at the moment)

    What requirements has this money got that the car companies will reform themselves to become profitible the same way the Obama Administration forced GM and other bailed out companies to change their ways?

    Nope it’s the same old game… with the same old taxpayer bailout. And when the money runs out it won’t be a self sustaining industry again… oh no… it’ll be the little aussie taxpayer back out with yet another hand out.

  • 23
    GeeWizz
    Posted Thursday, 22 March 2012 at 8:40 pm | Permalink

    Oh yes and just another thing about the manufacturing unions…. it’s time they are asked the question:

    Do you want world class pay, holiday, super and NO jobs.

    Or are you willing to accept cuts and wage reforms and KEEP jobs here in Australia.

    Those are your two options… you can not ask for both. You either allow reforms in manufacturing industrial laws, or you give the jobs to China. These are your choices.

  • 24
    Sascha
    Posted Thursday, 22 March 2012 at 8:50 pm | Permalink

    This is not a partisan issue. Governments from both side invest in industry to keep it going.

    Personally I can’t wait until gillard goes the way of anna bligh but they are doing the right thing here.

    There are very few Automotive industries around the world that are not subsidised by the government.

    If this country continues to disregard its industries like manufacturing and agriculture and seeks to hobble industries like resources we, will be left with nothing.

    We can’t all sit around and shuffle paper. Besides its cheaper to get indians and pakistanis to that overseas

  • 25
    GeeWizz
    Posted Thursday, 22 March 2012 at 9:10 pm | Permalink

    There are very few Automotive industries around the world that are not subsidised by the government.”

    Yes but the problem is no one is buying Aussie made cars because they are wanting fuel effecient cars at a cheaper price.

    A Mazda 3 which is now Australia’s largest selling vehicle is $22K driveaway and has a fuel effeciency of 8.2L/100km versus say a Falcon which costs $35K drive away and does 9.9L/100km

    There is nothing wrong with selling larger cars and there will probably always be a market there for it(getting smaller though), but the local car manufacturers have to back up their factory production with a high volume mid-sizer/small car.

    Holden once revealed a “Torana” concept a few years back(no not the 70’s Torana, i’m talking 2006ish) which looked to be an epic mid/small-size car with rear wheel drive, before other manufacturers such as BMW started using rear wheel on their smaller models. Unfortunately… as usual… oppurtunity missed on what would have been a great seller in my opinion.

    Holden and Ford should have seen the writing on the wall when fuel prices creeped over $1.20 many many moons ago but they seemed to have stuck their heads in the sand instead.

  • 26
    GeeWizz
    Posted Thursday, 22 March 2012 at 9:11 pm | Permalink

    Just found it… Holden Torona Concept 2004:
    www .drive.com.au/Editorial/ArticleDetail.aspx?ArticleID=19354

    Oppurtunity missed anyone? $250 Mill could have engineered this car easily from concept to reality.

  • 27
    Edward James
    Posted Thursday, 22 March 2012 at 9:35 pm | Permalink

    @ Tim Nash We have a nice range of war vehicles being made here for use in someons elses way in the middle east. When we had more different brands of vehicles being manufactured here we were making components for the various assemblers. I am not convinced Australia needs to play on the world stage. We can build cars and trucks for use here, they should all run on gas because we have a glut of gas right now! Selling it to China for something silly like $2 a tonne because they will take it off our hands in bulk. Moving toward the so called world car is about leaving control with the big manufacturers who do not have Australias best interest at heart. Everything being manufactured on the world stage cost more to produce that the majority of the worlds population can afford. That disparity is numbered in the billions subsiding GM America to build Holden cars in Australia is not in our best long term interest. I pay tax and I support myself but I can’t afford to pay cash for a fifty thousand dollar car or a thirty thousand dollar car for that matter. And I would be surprised if many workers in the failing car industry can afford to pay cash either. Australia from the Federal government all the way down to people in uni getting degrees are running on borrowed money to such an extent even the interest payments are being borrowed. We are in trouble, we need to become self sufficent first! We have the skills the raw materials and the energy. Edward James

  • 28
    drsmithy
    Posted Thursday, 22 March 2012 at 9:48 pm | Permalink

    There is nothing wrong with selling larger cars and there will probably always be a market there for it(getting smaller though), but the local car manufacturers have to back up their factory production with a high volume mid-sizer/small car.

    Like the Cruze, you mean ?

    Holden once revealed a “Torana” concept a few years back(no not the 70’s Torana, i’m talking 2006ish) which looked to be an epic mid/small-size car with rear wheel drive, before other manufacturers such as BMW started using rear wheel on their smaller models.

    Both BMW’s 1 and 3 series have been rear-wheel drive since the day they were released. In fact, I don’t think BMW has _ever_ sold a FWD car. Similarly for Audi’s A4 and Mercedes’s C-class.

    I think the premise that any meaningful proportion of buyers would base a purchasing decision on whether a car is FWD or RWD is _very_ shaky.

  • 29
    Schnappi
    Posted Thursday, 22 March 2012 at 10:08 pm | Permalink

    I am all for the NBN,and and so is anyone else who is can see the value ,although it will cost billions,in keeping all those jobs for an outlay of just millions has to be a good investment,cannot bother working out how much gst comes from car sales a year or the paye tax paid by all the employees jobs that are saved,whatever it is multiply it x10 years,seems excellent value to me.

  • 30
    the man on the clapham omnibus
    Posted Thursday, 22 March 2012 at 10:33 pm | Permalink

    Just defers the hard decisions the car industry needs to make to produce a car to sell to the Australian public. Handouts and tin rattling to keep the old clunkers rolling off the line, rather than the move to retool the workforce and go lean and customer focused

  • 31
    Anthony Grace
    Posted Thursday, 22 March 2012 at 10:36 pm | Permalink

    @DR Smithy, “In fact, I don’t think BMW has _ever_ sold a FWD car”, not with a BMW Badge, but realistically the new MINI is a front Wheel drive BMW.

    @zut alors, I would love it cars could be would run on renewable energy, but they just can’t compete with cars that run on petroleum products, yet, they are still too expensive to build and their sale price reflects it. Also give cars that run on fuel a bit of a break, they are not exactly dinosaurs, they are getting cleaner and more efficient every year :)

    In general I think it is important that we try and preserve our manufacturing base. However the reality is both the ALP and the Coalition have reduced tariffs to the point where that is difficult. Tariff reduction has sent a lot of manufacturers out of business or off shore. Yet for some reason, the Motor Industry is special and gets assistance. Why didn’t they offer Bonds assistance to keep manufacturing clothing here or Heinz to process food?

  • 32
    botswana bob
    Posted Thursday, 22 March 2012 at 10:37 pm | Permalink

    I recall Swanie telling us a few weeks ago that the nefarious Kevin Rudd lacked Labor values. Looks like Labor values include a massive handout to the branch plant of an American multinational, cutting government services and sacking public servants due to Swanie’s deficit fetishism and throwing back more costs, especially in health, to the average bloke and telling blatant lies in a government report about the cost of electricity. Were I Mr Rudd, I would be glad I lacked these values.

  • 33
    Anthony Grace
    Posted Thursday, 22 March 2012 at 10:56 pm | Permalink

    @ the man on the clapham omnibus, “to keep the old clunkers rolling off the line”,

    Dude, I think I may have to take you for a drive in my 2010 Falcon XR6 Turbo Ute, it is about as far from and old clunker as you can get and regularly gets 500 km out of a tank around town :) It’s build quality is as good as the any BMW & VW or Audi I have driven in Europe.

    You said “retool the workforce and go lean”,

    Auto manufacturing in Australia is already highly automated and as efficient as factories found in Europe or Japan.

    There will be a 4 Cylinder Falcon with direct injection at the end of the year that will h economy similar to a standard Camry.

    A Territory Diesel, this is just a guess, would most likely do 700 to 800 kilometers on a tank.

    There are Commodores with SIDI and AFM, a diesel Cruze, not mention Hybrid Camry’s.

    When will Australians wake up to the fact we are actually making very good quality and efficient cars that would have not trouble being sold in the US or Europe if their parent companies would only allow it …..

  • 34
    johnson
    Posted Friday, 23 March 2012 at 12:05 am | Permalink

    If you can’t build cars, you can’t build tanks.

    It is that bloody simple.

    In the event of a disaster every country needs the potential to be able respond quickly and stand alone. We can’t expect the world to remain peaceful and calm forever. Who is to say a major war, natural disaster or economic collapse won’t happen in the next five or ten years? Australia has to keep at least a skeleton of heavy manufacturing going so we can quickly re-tool if needed and car manufacturing covers most of the skills and equipment needed.

    So Australia subsidises car manufacturing, China subsidises mining, Japan subsidises rice farming etc etc.

    Blind adherance to free trade ideology would leave us unable to look after ourselves in the breakdown of free trade.

  • 35
    paul walter
    Posted Friday, 23 March 2012 at 3:04 am | Permalink

    I despise and reject the mean spirited rubbish that begrudges tens of thousands of fellow Australians and their families employment and a life through employment in the auto and associated industries.
    It reeks of the miserable litany of US shock jock Rush Limbaugh recently in the ‘States, calling law student Sandra Fluke a “slut” for expecting, “taxpayers to fund her sex life” through access to contraception on their version of a national health scheme, or the other verbiage from neolibs about rejecting taxation because “some else’s kids might get educated with their money”.
    I mean really, this is out of the very worst of Dickens: of Ralph Nickleby, or Malthusian Gradgrind and Bounderby, or Ebenezer Scrooge. How much do some of you want make people retch?
    For the rest, Johnson’s post sums it perfectly.

  • 36
    Edward James
    Posted Friday, 23 March 2012 at 3:33 am | Permalink

    We were building Bushmaster vehicles for use in war, and probably still do. I recall it was an Australian who invented a breaking system which runs in an oil bath for heavy haulage trucks used in the coal industry. I certainly believe Australians are more than capable of self sufficiency, but all too often dodgy politics gets in the way! Edward James

  • 37
    Mike Flanagan
    Posted Friday, 23 March 2012 at 7:34 am | Permalink

    Edward James;
    We assemble Bushmasters on another companies engineered platform. To manufacture such a vehicle does require, throughout the world, government support.

  • 38
    Suzanne Blake
    Posted Friday, 23 March 2012 at 8:12 am | Permalink

    Well said @botswana bob

  • 39
    Suzanne Blake
    Posted Friday, 23 March 2012 at 8:54 am | Permalink

    Bring back honest Tanner and dismiss dishinest Gillard

    Lindsay Tanner slams politics of spending

    FORMER finance minister Lindsay Tanner has attacked politicians, including his own former Labor colleagues, arguing that they are ignoring the national interest and handing out infrastructure funding “irrespective of merit” for political and not economic gain.

    In comments critical of the Rudd and Gillard governments, as well as the Howard government, Mr Tanner declared the political milking of government spending had become worse over the past decade.

    He told an Infrastructure Australia forum in Melbourne yesterday that government spending was inevitably compromised by having to dole out projects around the states on the basis of political expediency rather than providing infrastructure where it would generate the biggest economic returns.

    If you are financing national infrastructure, it’s actually pretty hard to say: ‘Well, the most nationally needed projects just happen to be in Queensland and Western Australia,’ ” he said.
    Top 50 Tech Rec Coverage

    You are increasingly within a construct that says you have to spread the gravy around irrespective of merit, otherwise you (will) suffer politically … That’s been there forever but is intensifying.”

    The federal government has often ignored the recommendations of it advisory body, Infrastructure Australia, sometimes giving the green light to projects the body had warned against.

    In 2010, an Australian National Audit Office report found Labor handed $2.2 billion in taxpayer funds to eight infrastructure projects that its own adviser had questioned as economically unviable or “not ready” to proceed.

    The report said six rail, road and port infrastructure projects announced in the 2009-10 budget, as well as two rail projects funded in the 2010-11 budget, had not made Infrastructure Australia’s shortlist of priority projects.

    Mr Tanner’s comments came a day after eight Labor ministers, including cabinet members Anthony Albanese and Jenny Macklin, were reported to have awarded more than $8.2 million in grants in their own electorates without properly reporting them.

    Auditor-General Ian McPhee on Wednesday released details of 33 cases over 2 1/2 years in which ministers violated Labor’s anti-pork barrelling rules.

    Mr Tanner, who retired from his seat of Melbourne before it was won by the Greens’ Adam Bandt at the 2010 election, said politicians had to develop the courage to allocate costs, not just benefits: “Unfortunately, the principle on which our contemporary politics operates is that free lunches are the only thing … what it ultimately consists of is an endless process of pretending you are solving problems … because you don’t want to upset anybody.

    You want to make sure every child gets a prize.”

    Mr Tanner laid some of the blame for Australia’s infrastructure deficit at the feet of a public spoilt by long-term prosperity. “Prolonged prosperity ironically has reduced public willingness to accept hard decisions by government,” he said. “There is less willingness to pay the cost of infrastructure through charges or taxes. We tend to take the view that if it ain’t broke, don’t fix it.”

    He said politicians were increasingly loath to spend money without asking how it would benefit them at the ballot box. “The tendency of politicians to milk the political benefits of government spending has intensified substantially over the past decade or so. That had led more and more to sub-optimal approaches to investment in infrastructure so anything that might actually be in the long-term national interest but doesn’t produce substantial and serious short-term political benefits is always going to struggle,” he said.

    Increasingly, the pressure is on for any substantial spend by government to deliver a big political dividend. By definition, that tilts the playing field towards consumer-based projects. Freight rail will be tricky, ports will be tricky.”

    During the height of the 2010 election campaign, Julia Gillard promised to fund the $2.1bn Epping-to-Parramatta railway line in Sydney, a project not then recommended by Infrastructure Australia and which did not rank highly on the state’s infrastructure priorities. Mr Tanner said an increasingly white-collar workforce trying to live in ever more sprawling cities was another hard-to-reconcile infrastructure issue.

    Major cities are bumping up against the limits of supply for large monocentric cities,” he said. “As urban sprawl has spread, the nexus between residence and employment has diminished.

    The transformation between blue collar to white collar has meant more jobs in the centre, but people need to live further and further out, which has exacerbated the transport problem, but that’s by no means the only infrastructure issue.”

    He said he favoured a pay-for-availability model, as used to deliver the Peninsula Link road south of Melbourne, rather than making the private sector bear all the risk.

    Mr Tanner said infrastructure bonds could be a good way to fund infrastructure in a way that was less sensitive to marginal seats, taking away the pressure from politicians to pork barrel.

    Developing public private partnerships was a hard sell.

    PPPs have an image problem with the public,” he said. “Which is unfortunate because they are a useful tool.”“

  • 40
    CML
    Posted Friday, 23 March 2012 at 9:27 am | Permalink

    @ PAUL WALTER - Great post, right on the money!
    The mere thought of 50,000 direct car manufacturing jobs, and around 200,000 associated jobs just being tossed on the scrapheap is obscene. And that is without taking into account the loss of potential to make vehicles of whatever variety in times of threat to Australia. In that statement, I also agree with Johnson.
    It is alright to say that those workers made redundant from the car industry can do something else, but until all you gurus have worked out the “something else”, how are the workers and their families supposed to exist? It would cost the taxpayer more to support the 250,000 families affected, than to pay the bloody subsidy (co-investment). I suppose in economic terms none of this is exemplary, but as has been pointed out, all car manufacturing countries support their industry, so why should we be any different?

  • 41
    Suzanne Blake
    Posted Friday, 23 March 2012 at 11:32 am | Permalink

    Gillard and Co have spent half a billion (500 million) on Consultants since they took office.

    More Labor waste Jimmy. Or do you have the spin on that

    smh.com.au/national/yes-please-minister — labor-spends-billions-on-advice-20120319-1vg4v.html

  • 42
    Suzanne Blake
    Posted Friday, 23 March 2012 at 11:35 am | Permalink

    The Canberra Times examined every consultancy deal published on the AusTender website in the four years since 2008 - 17,736 contracts worth $2,170,180,096.

    smh.com.au/national/yes-please-minister — labor-spends-billions-on-advice-20120319-1vg4v.html#ixzz1ptb2kw9z

  • 43
    Lord Barry Bonkton
    Posted Friday, 23 March 2012 at 1:20 pm | Permalink

    S,B /gewizz/truffie wonder why they didn’t do a 1996- 2006-07 audit as well to compare with the dark years of the Howard govt waste ??????????????? Wonder how the Adelaide to Darwin Railway is going ? or the new super jets , navy helicopters that cannot fly over water etc etc etc Go do a audit on Howards advertising costs ? Didn’t hear you whining then ? Didn’t hear you whining about Howard’s 6 Levies ( Taxes ) and being the Largest Taxing Australian Govt EVER ?

  • 44
    Suzanne Blake
    Posted Friday, 23 March 2012 at 1:27 pm | Permalink

    @ Lord Bonkers

    Was not on crickey then. As I have said, taken up NSW government on two waste / incompetence issues in the last 8 months, one I and others were successful in, the other is pending

  • 45
    gdt
    Posted Friday, 23 March 2012 at 2:26 pm | Permalink

    What equity stake did the government take in GM Holden or what interest payment does it expect to receive? Oh, it’s 0% equity and 0% return. Well, it ain’t no “investment” then, let alone a “strategic co-investment”.

  • 46
    Edward James
    Posted Friday, 23 March 2012 at 2:27 pm | Permalink

    When my taxes are being used to pay for something our local community want and we have fought to get, I am very pleased. TodayFriday 23 March 2012 a few hundred senior citizens were surprised to be graced with the presence of our Australian Prime Minister at the Ettalong Senior Citizens Hall. She had turned up to make several presentations before leaving to attend the funeral of Margaret Whitlam in Sydney. For me the most important presentation went to our Chairmen of the Woy Woy Public Hospital Alliance. We were reminded again the Federal Government has over 20 million in place to fund the return of our Woy Woy Public Hospital rehabiltation ward. I know first hand the value in making a safe seats unsafe! It is cheaper and more fun to do that, than take a political arguement into a law court. Edward James

  • 47
    Alfonse
    Posted Friday, 23 March 2012 at 10:02 pm | Permalink

    The precedent has now been set. Taxpayers to bail out multinational corporations here in Australia to sustain what is quickly becoming a laughable labour market. Thankyou Julia. Your incompetence, smugness and lack of common sense is only overshadowed by your strings attached to the union movement. If anyone thinks Gillard has any integrity left as Prime Minister, then give yourselves a solid upper-cut. Bring on a bloody election !!

  • 48
    Suzanne Blake
    Posted Saturday, 24 March 2012 at 7:36 am | Permalink

    @ Alfonse

    Well said

    Australians have tuned dishonest Gillard out. The polls will swing around, but when everyone focuses on her in 2013 at the polling booth, it will be a landslide.

    I happen to believe the ALP will go for rump protection first and dump her for someone else, probably in the silly season dead zone either before Christmas or NY.

  • 49
    Tim nash
    Posted Saturday, 24 March 2012 at 3:44 pm | Permalink

    How many people actually work in the Holden factory? What 1000 or 2000?

    Just fund 20 million for a relocation scheme and move these workers to areas where they are needed and for those who don’t want to move set up an intensive education plan to move them on in their career.

    Why spend 200 million that is essentially going to end up im GM’S pockets

    There are plenty of jobs in the Australian economy, just not in manufacturing.

    This idea that we should be manufactured up in case of a war is pretty loony, we import nearly all our military equipment from the US anyway.

    It’s not 1942 and if there really was a war and it included a major superpower like China then I don’t think our measly military force is going to stand up very long without support from somewhere else Making our own dodgy tank isn’t going to stop a Chinese nuclear weapon.

    I do see the sense in some agree manufactured goods domestically, I after all do work in an Australian factory producing trains for the domestic market.

    However there are already Chinese trains on the market and I can clearly see a time when my job and others will be forced to move to other sectors.

    Also in the case of Germany many of their factories are in eastern European states because of the cheaper wages.

    Cheaper wages and low education will always rule when it comes to manufacturing

  • 50
    Edward James
    Posted Saturday, 24 March 2012 at 5:21 pm | Permalink

    What happened to the Crikey.Com election coverage? Edward James

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