Jan 30, 2018

Australia makes a new bid for dumb protectionism for defence industry

The government's enthusiasm for defence protectionism -- strongly backed by Labor -- isn't just idiotic, it's immoral.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

In the old days there was what you might call vanilla protectionism: old-fashioned tariff walls and import quotas designed to shield local industries from cheaper, better products. Then there was new protectionism: fewer tariffs and trade barriers, but far more taxpayer handouts to industries to keep them operating here. And while vanilla protectionism was killed off for the most part, new protectionism survived well into the 2010s, primarily in the automotive industry, until the Abbott government correctly cut off the flow of handouts to multinationals.

Recently, new protectionism has revived in Australia, in the bipartisan push for an expanded defence industry. Except, it's more accurately called dumb protectionism, because it's massively more expensive than automotive industry subsidies: the cost per job of paying 30-40% more to build major naval construction projects locally runs from $100,000 per job to over $1 million per job. That compares to, according to the Productivity Commission, around $18,000 per job for automotive assistance, and represents "a major step back from the historical reduction in using government procurement preference as industry policy."

Free Trial

You've hit members-only content.

Sign up for a FREE 21-day trial to keep reading and get the best of Crikey straight to your inbox

By starting a free trial, you agree to accept Crikey’s terms and conditions


Leave a comment

7 thoughts on “Australia makes a new bid for dumb protectionism for defence industry

  1. CML

    Perhaps you should have a rethink Bernard…it would have been far better for Oz to continue subsidising car manufacturing, both economically and morally, since it now seems obvious that governments here are hellbent on giving our money away on these dangerous pursuits.
    Cars kill less people than weapons do???

    1. Rais

      If they’re serious about subsidising arms exports that’s shameful. No government with an interest in selling arms to belligerent states can have an interest in brokering peace between them. The sale of devices which, when used as directed, kill people should never be encouraged as a money earning industry even if, in the absence of strong peace treaties, preparation for self defence is inevitable. But what aspect of self defence justified Australian involvement in the invasions of Iraq and Afghanistan?

    2. zut alors

      Indeed. And Oz cars were actually useful. There are no positive stories about weapons.

  2. klewso

    “Private Jobson Grothe reporting for duty Sir. Who can I kill first?”

    On the bright side there’ll be rules to stop these weapons being used by the wrong people for the wrong purposes …… surely? …. Like “AWB – Australian Weapon Bans”?
    How was ISIS armed?

    1. Rais

      How indeed was ISIS armed? Do you remember all those pictures of their columns of brand new Toyota utes? They didn’t have a chook raffle to buy those. Now it’s being alleged that a power involving itself in the Syrian conflict and needing a proxy force has evacuated several thousand of them out of the way of capture by the Syrian Army or the Russians and relabelled them Free Syrian Forces or some such.

      1. klewso

        Ordnance (paid for) falling into “the wrong hands” :-
        “Never mind. There’s plenty more where they came from. We can sell them replacements!”?

        1. klewso

          …. “Air dropped ordnance” of course.

Share this article with a friend

Just fill out the fields below and we'll send your friend a link to this article along with a message from you.

Your details

Your friend's details