tip off

Mostly harmless industry policy fits Labor’s broader narrative

The government’s manufacturing policy is better than it might have been. Our man in Canberra reckons it reflects a coherent mix of economic policy and political strategy.

The government’s industry statement released yesterday defies expectations in being, probably, the least worst possible statement of industry policy reform that we could expect from a Labor government — and a Labor government that finds itself under threat of being out-protectioned by an opposition apparently determined to be crassly populist on the issue.

There are three strands to the policy: more red tape and bureaucracy to encourage operators of large projects to consider using Australian content; establishing “Industry Innovation Precincts” to encourage innovation and commercialisation; and measures to stimulate additional investment and foster growth in SMEs.

Funding for the package — a bit of which is a reheat from previous announcements — will come from barring companies with turnover of greater than $20 billion from accessing the R&D Tax Incentive, which is expected to save up to $250 million a year.

There have been some predictable complaints about cutting access by very large firms to R&D incentives, but the savings measure has an honourable antecedent curiously overlooked in the media coverage: it was proposed by the Business Tax Working Group last year as a possible savings measure to fund a cut in the company tax rate. The BTWG discussion paper somewhat allusively noted “evidence suggests that tax incentives have different impacts on the R&D performed by small relative to large firms. To the extent that the incentive is not, or is unlikely to be, effective in influencing company R&D investments there is an argument that the revenue forgone could be better employed.”

That is, the working group seemed to suggest, why is the taxpayer paying for R&D when companies would do it anyway? The Australian Financial Review’s John Kehoe put it more forthrightly in an excellent piece calling the incentive a rort being gamed by big firms and their accounting and tax advisers.

Simply shifting $250 million a year away from funding research that would happen anyway, or paying for mining companies to build roads, to encourage innovation and improve SMEs’ access to capital is likely to be of net economic benefit regardless of how the policy is implemented. Too bad the government couldn’t apply the same logic to the huge handouts it gives to multinational automotive manufacturers to keep them running inefficient plants in Australia.

The installation of more hoops for large project proponents to jump through in terms of local content, up to and including embedding “Australian Industry Opportunity Officers” in the biggest corporations, and yet another new bureaucracy, the Australian Industry Participation Authority, to encourage use of local content, is all unnecessary red tape. But at least it still stops short of the sort of protectionism demanded by unions and the Greens such as the mandating of minimum levels of local content in large projects.

As a political narrative and as an economic policy it all hangs together, in a way this government has never previously achieved …”

In launching the policy, the Prime Minister gave a speech that was almost cringingly awful at times.

Innovation can be coming up with new ways of combining old things. We are all used to opening a tin and getting fruit out to have for dessert. But, of course, it was innovation that put that fruit in a plastic cup with a lid you could peel back so that you could take it with you to work to have at lunch time or you could put it in the kids’ school pack for lunch at school. Those things are all innovation, and if we can focus on innovation, that will drive productivity growth and new jobs.”

But she also located the statement in the government’s broader economic narrative, again discussing the impact of a stubbornly high dollar and the need to respond to the challenges it presents industry, and the importance of Australia’s proximity to Asia. Whatever huge political problems the government has, it now has a coherent and nuanced economic message, one that artfully exploits the impact of the high dollar in a way reminscent of Keating’s exploitation of the sense we were economically falling behind in the 1980s.

While Keating had the challenge of motivating a national embrace of the need for economic reform to prevent us from falling behind, Gillard has the challenge of governing when our economy is outperforming most of the developed world. The high dollar is thus central to the story the government therefore wants to tell about reform; it’s now playing the same bogey-man role the current account deficit played in the 1980s. Gillard’s speech, again:

We need to have a real plan to deal with a persistently high Australian dollar. Some would say to you ‘Well it’s all about cost cutting. If we just keep cutting and cutting and cutting, if particularly we cut wages and conditions, then we will be able to compete around the world.

But that ignores the fact just how severely you would have to cut in these conditions. If your currency has gone up more than 50%, if you were looking at your wages cost in your business to try and get back to something that looked like square, you would have to be cutting wages by 30%. We would have to see the average wages for a full-time income earner move from $70,000 a year to $50,000 a year. Well Australian working people don’t want to see that and I don’t want to see that for them.”

And in that statement, Gillard links up the government’s economic policy message with its key political message, about managing the economy in the interests of working Australians.

As a political narrative and as an economic policy it all hangs together, in a way this government has never previously achieved, particularly under Kevin Rudd. Maybe it’s the influence of John McTernan in the PMO.

It’s unlikely to help save this government, of course — there was something very apt about the way this statement simply vanished beneath a slew of leadership stories today based on the latest of Fairfax’s once-in-a-blue-moon polls — but at least it’s finally doing the basics right. Hopefully someone is taking notes for the next time Labor is in government.

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  • 1
    Jimmy
    Posted Monday, 18 February 2013 at 1:46 pm | Permalink

    Bernard - You last paragraph basically stole my comment.

    The PM has now made 2 speeches in the last month that articulate the challenges facing the Australian economy and outline the very Labor way of tackling them, both of which have been praised on this site.

    However in the MSM the coverage these speeches have receivied can be boiled down to, “PM announces poll date” and “Poll shows Labor behind” - well done MSM.

    Meanwhile the Herald Sun had the letters to the editor headline as something like “Reader find lots to like about Abbott” and Blot’s second article blaming the “Drugs in sport” issue on Gillard. I just hope News Ltd especially is happy to reap what they sow.

  • 2
    Ginas new vajazzle
    Posted Monday, 18 February 2013 at 2:21 pm | Permalink

    defies expectations in being, probably, the least worst possible statement of industry policy reform that we could expect from a Labor government.’

    This may be true but it actually fits perfectly with expectations that the government will do something that does not lay a glove on the issue before it - the high AUD creaming services and manufacturing jobs. 

    Every other Central Bank in the world is out there pumping, putting up barriers, taxing - doing whatever - to prevent their currencies appreciating. The RBA and Australian government are doing nowt.

    This isnt to say the Liberals would/will do anything better, but it is to say that the ALP has done nothing on the defining economic issue of the moment, the same as it has done nothing on the equally important (to its core constituency) of doing something about Australia’s ludicrous real estate prices except to suggest to those at the bottom of the ladder that they take out larger mortgages (and presumably ignore the implicit message in the government/RBAs lack of preparedness to do something about the AUD and the effect it is having on Australian employment - which will become far more obvious from circa 2H2013.

  • 3
    Steve777
    Posted Monday, 18 February 2013 at 2:32 pm | Permalink

    ” you would have to be cutting wages by 30%”

    That would suit Gina just fine.

  • 4
    Scott
    Posted Monday, 18 February 2013 at 2:47 pm | Permalink

    Not a big fan of R&D incentives being removed.
    Economic growth in developed countries increasingly requires technological advancement, usually on the back of R&D.
    There is an argument to suggest that as the public ultimately benefits from this R&D (even industry R&D), public investment via subsidies or tax rebates can be warranted. Removing incentives for big business (who are the most likely to be running large R&D programs) and hoping that business will invest anyway is a bit weak in my opinion. May not be the case.
    As for the dollar, ironically, the Government is already doing the best thing it can to reduce the dollar’s value - run a large deficit. But probably won’t be enough. Currency is all about comparison….and we are looking the goods in just about any measure compared to the US. Hence our dollar will remain high until the Yanks get their house in order…

  • 5
    Jimmy
    Posted Monday, 18 February 2013 at 2:49 pm | Permalink

    Gina - “Every other Central Bank in the world is out there pumping, putting up barriers, taxing - doing whatever - to prevent their currencies appreciating. The RBA and Australian government are doing nowt.” What are our RBA interest Rates and how do they compare to the other countries you allude to?
    What is our unemployment rate and how does that compare?
    What is our growth rate and how does it compare?

    What impact would “pumping, putting up barriers, taxing” have on our inflation rate?
    How has the removal of barriers in the 80’s effected our economy today?

    Also given the RBA is independent of govt how is it the ALP’s fault the RBA isn’t acting like “Every other Central Bank in the world”?

    And why would we be “pumping” when we haven’t hit 0% interest rates?

  • 6
    Jimmy
    Posted Monday, 18 February 2013 at 2:51 pm | Permalink

    Scott - “Not a big fan of R&D incentives being removed.” The threshold is pretty high, I rqad today it will only effect about 15 -20 companies all of whom would continue to do the same amount of R&D anyway.

    As for the dollar, ironically, the Government is already doing the best thing it can to reduce the dollar’s value - run a large deficit.” While I agree with the sentiment could you define “large”?

  • 7
    billie
    Posted Monday, 18 February 2013 at 3:00 pm | Permalink

    This morning on 774 Greg Combet said that R&D incentives are being removed from the 20 largest companies, including retailers, banks & miners, they can still claim R&D as expenses against their tax bill.

    Greg Combet’s explanation made the existing R&D incentives sound like an additional subsidy for the 20 largest companies by turnover.

    Companies embarking on $500 million projects will have to submit their outsourcing and tendering requirements to Australians first. We need to be more than just a quarry!

  • 8
    Apollo
    Posted Monday, 18 February 2013 at 3:05 pm | Permalink

    But does the general public listen to this government anymore, especially on this topic?

    I find the calibration of unemployment target at 5% quite wrong and that probably reflects their performance in the poll. In 2008 it reached 4%, the structure of the economy has been changing since the GFC, people save and don’t spend as much as prior to the GFC, the high dollar has not only been helping to contain inflation but also help people to save and go overseas and spend on holiday instead. This has big impact on local businesses from retail to manufacturings.

    Industry policy should have some link up with Regional Development Policy. Dairy farmers are in dire situation. The regional development office should help dairy farmers to come together and be a distributor or wholesaler, a part of their productions will supply the stocks, and traget small supermarkets and convenience stores. These can’t compete with large supermarkets as they buy bulk cheaply while killing both the farmers and the small outlets. Another problem is wastage, I noticed milk getting out of date at Wooly and Coles sometimes, and I know that it is a problem for small supermarkets and convenience stores to manage because their price is higher and it is much harder for them to sell all of the stocks at such price when customer demands for them are quite unpredictable.

  • 9
    Apollo
    Posted Monday, 18 February 2013 at 3:10 pm | Permalink

    BTW, Singapore exports about $100 billions more than Australia per year eventhough it is a tiny place with little natural resources.

  • 10
    Jimmy
    Posted Monday, 18 February 2013 at 3:16 pm | Permalink

    Billie - “Greg Combet’s explanation made the existing R&D incentives sound like an additional subsidy for the 20 largest companies by turnover.” That’s correct.

    Apollo - “But does the general public listen to this government anymore, especially on this topic?” Do you think the medias cover age has anything to do with this?

    Dairy farmers are in dire situation.” - That is a vry big generalisation. In my region dairy farmers might not be making the money they did a few years back but most of them are still making very good money, althoug I am in one of the best regions in the country.

    help dairy farmers to come together and be a distributor or wholesaler, a part of their productions will supply the stocks, and traget small supermarkets and convenience stores.” Not sure if you know this but dairy farmers don’t sell the milk direct to supermarkets, they supply the milk factories, it is the factories who sell to the supermarkets. Most dairy famrers would have shares in Murray Goulburn or Warrnambool Cheese or whoever which have generally evolved from co-operatives so what you are suggesting is basically happening.

    And contrary to media suggestion it is the high dollar that is impacting milk prices much more than the milk wars and there is also an easy way to help farmers avoid the impact of the milk wars, don’t buy the home brand product.

  • 11
    Apollo
    Posted Monday, 18 February 2013 at 3:24 pm | Permalink

    Jimmy, it was in the news recently, the story on ABC. I deleted the sentence out because I don’t want the comment to be too long.

    I know they don’t sell directly. That’s why I sai a “part of their productions’ could supply the stocks for their own distribution network. I saw part time farmers selling their own beef directly to customers and make good profit. I can’t see why dairy farmers can’t get together and become a distributor and sell part of their production, cut out the middle men and make better money, and give customer better price.

    Now that you mention factories, there is great demand for Australian produce from China and Viet Nam because of poison scare, they prefer to buy Australian produce if they can.

  • 12
    Chess C
    Posted Monday, 18 February 2013 at 3:24 pm | Permalink

    Once upon a time there was a progressive lord, landed with a large estate, who owned 10,000 souls. The lord empowered his serfs to elect their own representative council. Elections were held every three years and the council was given autonomy to manage the affairs of the serfs. It managed issues such as fairly allocating plots of land for serfs to till, maintaining public order and looking after the elderly and sick. All serfs had to contribute a portion of their harvest to the communal store which was managed by the council. Soon two parties emerged: the reds and blues. The reds’ policy was to take a higher portion of the harvest from the serfs with large plots, and re-distribute it to the serfs who worked smaller plots. The blues wanted to lower the taxation on the serfs with the larger plots, which also meant there was less food to redistribute to the serfs with smaller plots or to the sick and elderly. One of the consequences of having the elected council was that ordinary serfs no longer needed to interact with the lord, he became almost invisible, in fact soon many serfs forgot he even existed. Yet, there was one thing which the council had no power over: the portion of the harvest that was paid to the lord.

    Then the progressive lord died and his son inherited the estate. The son kept his father’s progressive policy of allowing the serfs to elect their own council. But he also had great ambitions. To fund his ambitions, the new lord increased the portion of the serfs’ harvest that was due to the lord. Under his father, the serf governing council had sent 10% of the total harvest to the lord. This was increased to 15%, at first, then to 20%, 30%, 50% and then finally to 60%. This happened very gradually, over the course of 30 years. The serfs somehow felt their lives were getting harder. Even though they were farming more efficiently, working harder and longer hours, most of them could no longer find the time and materials to build a simple dwelling for their families to live in. The serfs all blamed the governing council. The serf politicians, rather than explaining what was happening, instead produced statistics showing that living standards were in fact improving. And they blamed the other party. The blues blamed the reds for giving too much of the harvest to the lazy serfs who didn’t work. The reds blamed the blues for taking food away from serf working families.

    Beyond the horizon, silk flags fluttered from the towers of the lord’s manor. Almost everyone had forgotten that it was the lord who was the true master of their souls.

  • 13
    Jimmy
    Posted Monday, 18 February 2013 at 3:40 pm | Permalink

    Apollo - If you have a look next time you are at the super market (whether that is coles or a smaller independent) right next to the $1 a litre milk would be a name brand milk, that brand is owned by a milk company and as the farmers generally on the milk company (ie get dividends, capital growth (at least for the listed companies) as well as income from milk sales where is the incentive to build your own milk processing plant, milk tankers etc simply to compete with the big boys?

    It is relatively simple to convert a beef cow to a vacuum sealed steak, it isn’t so simple in dairy farming.

    And before you get too worried about the dairy farmers in what other industry to you get step ups which are retrospective? ie You sold you milk for 20c a litre 6 months ago but now we will buy it off you for 30c so here is the extra 10c for the last 6 months.
    And which other farming venture could you get paid fortnightly?
    Contrast that with the grain farmer who has 9 months of costs and could lose everything if they get 1 frost or it doesn’t rain in the right fortnight.

  • 14
    Apollo
    Posted Monday, 18 February 2013 at 3:50 pm | Permalink

    That’s why I said, the Regional Development office could provide help to them to set up their own little distribution (and factories if necessary).

    If they distribute part of their own supply, they don’t have to supply too much to the milk factories, their won’t be a glut, an oversupply that helps to produce cheap home-brands from their own milk. They will have a bit of control.

  • 15
    Apollo
    Posted Monday, 18 February 2013 at 3:50 pm | Permalink

    there won’t be a glut

  • 16
    Apollo
    Posted Monday, 18 February 2013 at 4:21 pm | Permalink

    There are people selling fresh milk, non-homogenised. Bottled and nicely labeled. Sold under pretense as for cosmetic reason, not for food consumption, but people who buy it drink it becasue they prefer natural milk.

    I don’t know how small producers are able to bottle their own milk, but it does not seem to be too hard.

    Enough on milk for today, I feel like we’ve already had this conversation before, somekind of deja vu. Strange!

  • 17
    Puff, the Magic Dragon.
    Posted Monday, 18 February 2013 at 4:39 pm | Permalink

    Cripes Bernard, can I get you any more wet for your blanket?

  • 18
    Jimmy
    Posted Monday, 18 February 2013 at 4:40 pm | Permalink

    Apollo - You are missing one of the key points here, most of the dairy farmers own shares in their milk company, ie the profits the milk company makes are returned to them anyway. They also have control because they vote, and can run, for directorships.

    Why would they want to or more to the point why should I, the tax payer, subsidise them setting up thier own little milk company that will only succeed in selling more expensive milk than the milk companies are now.

    There are people selling fresh milk, non-homogenised. Bottled and nicely labeled. Sold under pretense as for cosmetic reason, not for food consumption, but people who buy it drink it becasue they prefer natural milk.” The key words are “not for human consumption” - I suggest the market for people willing to drinnk something labelled not for human consumption is limited.

  • 19
    Jimmy
    Posted Monday, 18 February 2013 at 4:43 pm | Permalink

    Also Apollo - “there won’t be a glut” The amount of milk being produced is the same and given milk is a global commodity taking a few thousand litres out of production won’t make a dent in global supply factors.

  • 20
    Ginas new vajazzle
    Posted Monday, 18 February 2013 at 4:48 pm | Permalink

    Jimmy,

    What is it you are contending the ALP (government ) is doing about a high AUD?

    There would be a monetary policy side to doing something about high AUD (something the RBA would nut out) and a macro prudential side (something the govt would mull?)

    What are our RBA interest Rates and how do they compare to the other countries you allude to?
    What is our unemployment rate and how does that compare?
    What is our growth rate and how does it compare?’

    Our interest rates are significantly higher, and that combined with an AAA rating would largely explain demand for Au paper and high AUD. Our unemployment rate is 5.4% - are you suggesting this means we do nowt about industry policy? are you suggesting our industry is not being hollowed out? Our growth rate is circa 2.5% at the top of the biggest terms of trade tip in our favour generations. Mining covers all! But with mining capex coming back what are you suggesting is the way to go with keeping employment up and doing something about industry? Or are you suggesting we sail into a downturn (with private debt per capita running about 150% of earnings on average) and cop the kicking when it gets here?

    Sorry I was just assuming we would prepare for that sort of stuff in advance. But if consumer/industry/employment sentiment is such that you want to focus on the upside I will just go take some more prozac.

  • 21
    Jimmy
    Posted Monday, 18 February 2013 at 5:24 pm | Permalink

    Gina - I asked you to compare all those figures to the “Every other Central Bank in the world is out there pumping, putting up barriers, taxing - doing whatever - to prevent their currencies appreciating.”
    The reason I asked you to do this was that you would have some idea of the stark differences between our economy and those who are taking such drastic action.
    The action you suggest has negative consequences as well so before you advocate it I would like you to explain how it would impact our economy.
    “Or are you suggesting we sail into a downturn (with private debt per capita running about 150% of earnings on average) and cop the kicking when it gets here?” Not at all but I would like you acknowledge that currently both fiscal and budgetary policy is expansionary, and that we have considerable room left in both fiscal & budgetary policy for increasing the expansionary setting before we get to ” pumping, putting up barriers, taxing - doing whatever”

    Australia’s issue right now is that we are a very successful economy in a world where almost is a basket case, behaving like we were a basket case is not the answer to our problems.

    But if consumer/industry/employment sentiment is such that you want to focus on the upside” See the latest consumer confidence figures were up from 100 to 108, reality is starting to shine through.

  • 22
    Ginas new vajazzle
    Posted Monday, 18 February 2013 at 6:37 pm | Permalink

    Righty ho Jimmy, obviously we just arent seeing the world the same way. That’s happens, but let me explain my end.

    “Every other Central Bank in the world is out there pumping, putting up barriers, taxing - doing whatever - to prevent their currencies appreciating.”

    OK, In the US the Fed has QE running, in Tokyo the BOJ has QE running, in London the BoE has QE running, and those japesters in Franfkurt have LTRO running (much the same thing). Then branching off from there we have the boys in Zurich pegging the Swiss Franc so it doesnt go too high, the boys in Brazil taxing hot currency flows, the rest of South America playing currency games of one sort or another.

    The reason I asked you to do this was that you would have some idea of the stark differences between our economy and those who are taking such drastic action.’

    Yes, I agree that our economy is different to those elsewhere.

    But what I am saying is that that difference is being significantly exaggerated in terms of our currency (and the competitive basis of our globally exposed and larger employing sectors) by both a capex phase of a mining boom and (more relevant in the context of our exchange) the trillions of dollars effectively being pumped into the global financial system.

    Those trillions of dollars are looking for a return. In terms sovereign yields there are trillions of dollars looking for both yield and AAA rating. At the moment the 10year yield have Australia circa 3.5% which comes up very very well indeed (note negative yields for short term AAA rated paper in Europe). It isnt rocket science for a fund manager to say yes ‘pile into AUD’.

    Those billions piling in to AUD makes the AUD very strong.

    That very very strong AUD makes the Australian exposed sector utterly uncompetitive. You recall car parts makers shutting up shop? Have you ever explained to someone why it would be cheaper to do a postgraduate or degree qualification in London or New York (at a good level Uni) than it is in in most of Australia’s universities? Did you know it is cheaper to buy broccoli in Moscow (where it isn’t grown within 1000klm) than in Melbourne? Have you heard about retailers being upset about people buying from Amazon or Ebay in the US?
    ‘The action you suggest has negative consequences as well so before you advocate it I would like you to explain how it would impact our economy.’
    I haven’t actually proposed any action. I noted that there is monetary policy and macro prudential policy which may conceivably be brought to bear. Beyond that there are other suggestions (Kohlers idea about infrastructure bonds – to soak up demand for Au paper, while doing something constructive locally – may be worth a try). The action I am proposing is that the government do something [Something as opposed to nothing] to either seriously address the circumstances of Australian industry or do something about the AUD. Whatever they do will have some negative effects for sure. But the one thing I am dead certain of is that what we are doing now (nothing) is having a negative effect, and it is hollowing out those very sectors we will need to grow at some point not too far down the track

    The biggest negative impact I see from the certain hollowing out of Australia’s import competing sector currently happening is that someone somewhere might point at us and say we aren’t being as monetarily orthodox as we could be. I would point them some other (US, UK, Japan, EU) direction and say ‘orthodoxy went that way’ – what we are doing at the moment is saying that our monetary policy orthodoxy is more valuable than the globally exposed and employing sectors we are hollowing out.
    ‘Not at all but I would like you acknowledge that currently both fiscal and budgetary policy is expansionary, and that we have considerable room left in both fiscal & budgetary policy for increasing the expansionary setting before we get to ” pumping, putting up barriers, taxing - doing whatever”’

    OK, ‘the pumping, putting up barriers, taxing - doing whatever,’ I said in reference to what other central banks were doing and contrasting that with the RBA and government doing nothing.

    ‘that we have considerable room left in both fiscal & budgetary policy for increasing the expansionary setting before’ - you start to lose me about here Jimmy. Given Australia’s requirement to fund its operations from overseas saving at a rough risk/return I would have thought 2-2.5% would be effective zero interest rate policy in Australia. That leaves the RBA with maybe 50bp in its kitty, after having blown 175bp over 18 months for no real result on either demand or the AUD (maybe orthodox monetary policy isn’t going to cut it from here). On the fiscal/budgetary side we already have both parties banging on about balanced budgets and the incumbents aren’t going to deliver that (courtesy of a stuffed MRRT) – how much fiscal acreage for manoeuvre are you seeing? Is it time to say the fiscal side and monetary side aren’t likely to deliver an effective outcome (given the trillions being pumped elsewhere) and limber up for something unorthodox? Or are you saying our orthodoxy is so precious as to fry tomorrows jobs today? I put it to you we don’t actually have much room, and will need to try something different.

    ‘Australia’s issue right now is that we are a very successful economy in a world where almost is a basket case, behaving like we were a basket case is not the answer to our problems.’

    I see Australia’s problem right now is that it is setting itself up to be the basket case of tomorrow, and keeps telling itself it is a ‘very successful economy’ on the strength of mining investment and the response by the current basket cases . Australia is not a successful economy for anyone looking for a positive economic trajectory – it just looks successful to anyone looking at the other basket cases (and given the state of the non mining state economies it doesn’t look successful for all that long – which is why the industry policy announcement and the PMs comments the day she announced the election date have generated the response they have)
    ‘behaving like we were a basket case is not the answer to our problems.’
    Neither is doing nothing, and drawing patterns in the sand with our feet while the globally exposed sector fries is certainly basket case like behaviour.

    ‘See the latest consumer confidence figures were up from 100 to 108, reality is starting to shine through.’
    Prozac, Prozac on the wall who has the fairest economy of all.

    My take, thanks for yours

    Gina

  • 23
    jeremiahwuzza
    Posted Monday, 18 February 2013 at 6:44 pm | Permalink

    Bernard please do the world a favour and stop saying things like;
    “It’s unlikely to help save this government, of course …
    … Hopefully someone is taking notes for the next time Labor is in government.”
    In this polarised politick if you don’t support the government you support the opposition.
    Do you really think the opposition will be right for this country through to 2019? Have you any idea how absolutely beastly it is going to get by then, with climate and population pressure and a wider gap between rich and poor world-wide?
    And are you aware which side of this balance the Australian parties lie?
    Please help the nice guys get in …

    In 1787: Burke said there were Three Estates in Parliament; but, in the Reporters’ Gallery yonder, there sat a Fourth Estate more important far than they all.

  • 24
    Hamis Hill
    Posted Monday, 18 February 2013 at 6:52 pm | Permalink

    No business reading this industry policy could imagine anything like it emanating from the coaltion ranks.
    No-one in business, large or small could ever imagine the above article being written about anything emanating from the coalition ranks.
    No businesses, large or small, rely upon the MSM for information on goverment policies pertinent to their continuing success.
    Labor is serious and the coalition, from their leader down, are just clowns fopping about in the Mudorch limelight.
    Business will not be funding the coalition in the upcoming election.
    So do not be too concerned about the message not getting played in the MSM.
    Business can expect to have a close and direct line to government, especially under the leadership of an accomplished communicator and negotiator like the PM. Abbott, in contrast, has nothing but obselete dogma set in a policy vacuum; in consequence, watch the coalition business fundraising collapse.

  • 25
    Hamis Hill
    Posted Monday, 18 February 2013 at 7:09 pm | Permalink

    Thanks, jeremiahwuzza, for that source of the “Fourth Estate”. I have previously misinformed others that it was Thomas Carlyle rather than Burke.
    The pace eunuchs of the press, politicians in hiding.
    Those more directly concerned with industry policy will have bypassed the eunuchs and, their influence on voters aside, gone straight to the government for their information.
    The antidote to the prospective Abbott “Anarchy”.

  • 26
    Hamis Hill
    Posted Monday, 18 February 2013 at 7:26 pm | Permalink

    sorry Palace eunuchs in the Empire of Rupe.

  • 27
    jeremiahwuzza
    Posted Monday, 18 February 2013 at 8:25 pm | Permalink

    HH don’t know about ‘Palace eunuchs’ and the best Wiki could come up with about ‘Empire of Rupe’ was ;
    “Carmen Rupe (1936–2011), New Zealand/Australian entertainer and … “The Empire Strikes Back: A Posttranssexual Manifesto”. Politics of Sexual …”

    Anyway hopefully we have stopped the armchair economists in their tracks by derailment.

  • 28
    Hamis Hill
    Posted Monday, 18 February 2013 at 9:11 pm | Permalink

    jeremiahwuzza, the palace eunuchs were in the Chinese Manchu? Dynasty and while ostensibly impotent and outside the politics of rule, as journalists are supposed to be, did , in fact, rule through intrigue and plots.
    Just as the Fourth estate were/are unelected political players.
    Rupe is the ruler of the Murdoch empire.
    But fills a double role as emperor of the eunuchs?
    The analogy has become derailed.

  • 29
    Counterpoint
    Posted Monday, 18 February 2013 at 11:21 pm | Permalink

    HH

    Well done. Some good thoughtful debate on this article, then along you come with the token blind leftist diatribe. Oh, and yes, you managed to throw Murdoch in there too. Bravo.

    You are correct when you say no business would see this coming out of the Coalition ranks. However almost NO business would dream of supporting the current government.

    Save for a few highly unionised (obviously) industries, the vast majority of business in this country has seen one single piece of legislation passed that makes the act of conducting business easier.

    They will not support Gillard, no matter what she says, or does.

  • 30
    taylormade
    Posted Monday, 18 February 2013 at 11:32 pm | Permalink

    Cannot imagine many private enterprises being happy about being told how to manage thier business by a public servant. For many employees it can be quite difficult entering private enterprise after a stint in the public service. A lot of companies steer well clear.

  • 31
    Jimmy
    Posted Tuesday, 19 February 2013 at 9:06 am | Permalink

    Gina - A few things - “Given Australia’s requirement to fund its operations from overseas saving at a rough risk/return I would have thought 2-2.5% would be effective zero interest rate policy in Australia.” So you are saying that if the RBA cut rates beyond another 0.5% then the demand for the AUD would plummett because the risk reward would be too low, isn’t that what you want?

    On the fiscal/budgetary side we already have both parties banging on about balanced budgets and the incumbents aren’t going to deliver that (courtesy of a stuffed MRRT) – how much fiscal acreage for manoeuvre are you seeing?” Given the deficit is going to be small (which the MRRT will only be a small component) and our federal govt debt is low (especially compared to the other countries you mention) there is plenty of room to move if required.

    OK, ‘the pumping, putting up barriers, taxing - doing whatever,’ I said in reference to what other central banks were doing and contrasting that with the RBA and government doing nothing.” That is clearly wrong, in fact you contradict this argument by pointing out the RBA has dropped interest rates by 175 points - how high would the AUD be without that, and the govt has been operating expansionary policy, where would the economy be if the had of been running surpluses?
    And you haven’t even discussed the impact on inflation of doing “something unorthodox” in an economy with strong growth and low unemployment?
    And how effective would it be when all the other countries you list are doing the same thing, if Australia tried to drop it’s dollar, the US etc would try to drop theirs further meaning we had to do more.
    The best long term thing for the Australian economy to do is adapt to having a higher dollar which will mean that as the US recovers and our dollar returns to historical averages we are even better placed.

  • 32
    Hamis Hill
    Posted Tuesday, 19 February 2013 at 10:49 am | Permalink

    Blind Leftist diatribe?
    Mudorch is in this debate in remembrance of the AUSTRALIAN of late 1975 where the anti-Labor bias was so intense that the journalists actually went on strike in protest.
    Eight years after achieving this regime change, wet behind the ears Treasurer and suburban solicitor John Howard produced record high interest rates and inflation, of which businesses are so, so enamoured.
    The present coalition are the shambling leftovers of the discredited Howard legacy, grown weak, flabby and incompetent under the debilitating protection of a three year repetition of Mudorch’s late 1975 effort. Competition? Not happening!
    A coalition, do-little, laissez-faire government would have tipped Australia into the GFC because of Howard’s private debt orgy, which has left the country with a mortgage debt equal to 85% of GDP.
    The reduction of disposable income has reduced the market for Australian manufactured goods and the increased demand on wages to pay for for exhorbitant housing is doing as much damage as the high dollar, which, as has been stated, is linked to the high interest rates which are another burden on industry n’est ce pas?
    Business will not welcome the undisciplined Abbott “Anarchy” of opposition imposed on any government he leads; and matching the chaos and recession already delivered by ideological state coalition governments.
    Blind Leftist diatribe or an inconvenient truth?
    The coalition would be quite happy to shut down manufacturing altogether just to destroy unionism.
    Pity that manufacturing underpins the nation’s defence capacity.
    For those willing, and intellectually capable of venturing beyond the narrow bounds of specialised debate, here is lesson in history.
    Abbott will do to Australian manufacturing what Bloody Mary did when married to Philip of Spain, leave the English navy to rot in the docks.
    There is an early example of multi-national politics for you; with the minor nations sacrificed to the largers’ interests.
    Abbott will cast Australia adrift; betrayal, look at his record, is in his DNA.
    Nationalism is not a leftist trait, by the way; equally frowned upon by a certain imeperialistic religion No?
    This is not a debate for the sort of pointy-headed specialism which delivered the GFC, so no resentment please when the light of wider considerations intrude into the benighted shambles of economics.
    This ploy, of pegging out a territory then excluding all other considerations, will not work in a political debate, so please do not bore everyone by trying, it is the 21st century now, and specialised arguments are no longer capable of yielding a return on investment.
    And certainly the voting public are no longer listening to the drivel of discredited experts, and are seeking the facts, so as to as the best educated generations in history, work it out for themselves.
    So this, “shut up the experts are talking”, just won’t cut it any more. Thankyou.

  • 33
    yeah, eh
    Posted Tuesday, 19 February 2013 at 10:50 am | Permalink

    Very sadly, HH many businesses rely on MSM for their information and guidance. Very unfortunate indeed.
    Counterpoint - Pot? Kettle?

  • 34
    Hamis Hill
    Posted Tuesday, 19 February 2013 at 11:08 am | Permalink

    Industry Innovations Precincts”, which included affordable, non-speculative housing for those involved, would be therefore made more financially viable and provide a good example for industry generally.
    Industry was very badly served by the Howard private debt orgy.
    Unlike the propagandised readers of the MSM, industry is not blind to the consequenses of a return to fiscal insanity.

  • 35
    Hamis Hill
    Posted Tuesday, 19 February 2013 at 11:22 am | Permalink

    Why, a century ago, were chambers of industry and chanbers of commerce separate bodies?
    Perhaps becuse their interests are fundamentally opposed?
    Industry relies upon purchasing power amonf consumers to provide a market for their products.
    Commerce, by contrast, not producing anything can only achieve profitability by reducing wages.
    When chambers of industry and chambers of commerce are joined, as they are now, whose interests dominate?
    Increase wages and the value of the dollar will drop, do the opposite and it will rise.
    German industry thrives because it has freed itself from dependence upon “Commerce(Read banks), becoming self financing and capable of pursuing its own interests.
    All those at odds with this argument, please take it up with Adam Smith.
    Yes, INDUSTRY POLICY!

  • 36
    floorer
    Posted Tuesday, 19 February 2013 at 11:26 am | Permalink

    I hope you’re right Hamis but when is “Industry” going to start spreading this message about? Strikes me now would be a good time.

  • 37
    Stephen
    Posted Tuesday, 19 February 2013 at 11:31 am | Permalink

    As the sun rose 19 February, one story and one story only had ridden roughshod over Gillard’s industry policy.

    But it wasn’t anywhere to be seen on Crikey. Memo: Must do better, when Guardy Oz arrives.

  • 38
    Hamis Hill
    Posted Tuesday, 19 February 2013 at 6:50 pm | Permalink

    Who would credit, surveying the vast ruins, that Australians are the heirs of the Industrial Revolution.
    It now looks like something out of the old Turkish empire, once reviled as the “Sick Man of Europe”.
    (Turkey is no longer like this, enjoying a strong manufacturing sector).
    Bureaucrats, bankers and rentiers are the lords of misrule in Australia.
    Some European entrepreneurs, educated in science and engineering, please come to the rescue!
    There is a vacuum waiting to be filled.

  • 39
    Hamis Hill
    Posted Saturday, 23 February 2013 at 10:33 am | Permalink

    And the Industry Policy of the alternative government is: not going to be scrutinised at all before the next election?
    Hey if Campbell Newman CAN DO it so can Tony eh?

  • 40
    Hamis Hill
    Posted Sunday, 24 February 2013 at 10:44 am | Permalink

    Labor’s broader narrative”?
    So Labor has a narrative after all?

  • 41
    Hamis Hill
    Posted Sunday, 24 February 2013 at 11:29 pm | Permalink

    So journalism is a service industry which ostensibly gives the citizens of a democracy the informationto make reasoned, choices in their best interests?
    After assuming a working public education system?
    Is there an industry policy to ensure this?
    Because it ain’t happening now!

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