Christian
Kerr writes:

The
Australian

kicks off its reporting of Treasury Secretary Ken Henry’s address to the Society of Business Economists
yesterday with: “Nervous shareholders can relax: the recent turmoil in world commodity
markets that has sent resources stocks plummeting is predicted to be
short-lived.”

The lead in The SMH
is very different:

Australia could be on the cusp of a sustained
resources boom but it will have a dark side – depressed wages, stunted
manufacturing and an exodus of workers and investment from Sydney to the mining states, the
Government’s chief economic adviser has warned…

Same with The
Age
:

Victoria could be hit by rising unemployment
and falling house prices as the Australian economy abandons manufacturing and
heads west in search of commodities, the Government’s chief economic adviser
has warned…

Well, d’oh!
That’s exactly what we said on Budget day last week. It’s nice to see that Ken
agrees.

We also
pointed out, however, that there are many more marginals in NSW and Victoria
than in resource rich areas. And that’s where Henry’s remarks gets interesting.

The
Treasury Secretary warned that government should help – rather than resist –
the shift from manufacturing and services in the south-east to mining in the
north and west. He warned against business welfare. He warned of years of
pressure for manufacturers.

So, where’s
the Government on this one? Well, yesterday it tossed $50 million to Mitsubishi
and GMH.
Now that’s sensible, sustainable policy making for the long term.

Peter Fray

Save up to 50% on a year of Crikey.

This extraordinary year is almost at an end. But we know that time waits for no one, and we won’t either. This is the time to get on board with Crikey.

For a limited time only, choose what you pay for a year of Crikey.

Save up to 50% or dig deeper so we can dig deeper.

See you in 2021.

Peter Fray
Editor-in-chief of Crikey

SAVE 50%