The collapse of the car industry could have been avoided

As news of the collapse of Australia’s automotive industry spread through the country, it comes as no surprise our nation’s politicians step forward playing the collective “blame game” and shedding their crocodile tears.

On one hand, we have Joe Hockey reassuring us that it is just a “restructuring of the Australian economy” whilst blaming the unions for their bloody-minded attitude and on the other we have Bill Shorten shrieking his mantra of “why didn’t you do something?” when his own party has just vacated the government benches.

However, both parties are to blame. Pursuing their globalist goal, both parties have worked diligently to remove any protection our producers had and effectively pulled the rug out from under the feet of Australian companies and workers alike.

In a nation which once boasted a strong and proud manufacturing base employing up to 26% of the workforce, slipping to 14% in the 1990s, it is a sad indictment on the economic management abilities of our parties that the figure has now dropped to around 8%.[1]

What is the real fallout of the closure of our national automotive industry? The closure of Holden is estimated to result in an economic loss to Australia of up to $4 billion, plus up to 65,000 jobs lost. South Australia is expected to suffer a loss of up to $1.24 billion, along with job losses of 13,200 in that state alone.[2]

The closure of Ford will result in the loss of 1200 jobs, with hundreds of more jobs to be lost in the community as the flow-on effect takes hold.[3] The departure of Toyota is estimated to result in 2500 jobs lost.[4]

These are figures that cannot be swept under the carpet with sleazy, mealy-mouthed reassurances that it’s “just a restructuring”.

As the political bun-fight began following news our industry was folding, politicians of both political hues began the predictable finger pointing, focusing on the issues of “government assistance” and “propping up unviable industries”, not to mention the apparent double standards displayed by government handling of the issue.

However, note that neither party liked to talk about the proverbial elephant in the room; that being their own culpability in the demise of the industry, and manufacturing in general, due to their own policies.

It is obvious that for any business operation to survive and grow it is necessary for it to have a secure local market as a foundation!

We have watched as successive governments have dismantled measures to protect our companies and workers, only to see these companies fold or move operations overseas to take advantage of cheap labour and poor environmental standards in order to survive.

Textile plants were amongst the first to go with the award for honesty going to the head of Fletcher Jones who admitted, as they closed their Mt. Gambier operation, that “Globalism was to blame”.

Few could deny that the idea of endlessly pumping taxpayer funding into a business is of dubious benefit, especially when one witnesses the continued annual bonuses received by the CEOs of the same companies. However, the argument over government action needed to go further than the discussion of endlessly handing over millions in an attempt to make a company stay.

The bloody-minded pursuit of a borderless world by New Right adherents of so called “economic rationalism” has resulted in a market environment where Australian companies cannot compete on a level playing field.

None of the economic rationalists will admit that it was a mistake to dismantle the tariff system that protected Australian jobs and gave some semblance of a true level playing field when it came to competing against imports produced using cheap labour, or prison labour, with minimal environmental regulation.

Furthermore, rather than throwing good money after bad, propping up industries that cannot hope to compete against cheap foreign produce, in conjunction with a sensible system of tariffs, governments should have been channelling funds into Research and Development grants for Australian manufacturers to ensure they remain at the lead in innovative production.

This, combined with a purely “Buy Australian” policy, would have helped avoid the situation in which we currently find ourselves.

Of course the New Right Neo Cons and their internationalist Labor bedfellows gasp in horror at the idea that the Protectionist bogeyman raises its head time and again. They claim that protectionism costs jobs and stifles trade.

However, the realities of trade are that if one party has a commodity desired by another, a transaction will take place. This was evidenced particularly during the time of the Clinton Administration, a government well-known for its heavy protection of American farmers. Despite being supposedly “shackled” by the American tariff quota system, exports of Australian lamb to the US actually rose during Clinton’s presidency.

Again, despite competing against a heavily subsidised American farming sector and “shackled” by tariffs and quotas, our beef exports to the US have risen by 8% year after year.

The idea that protectionism and a sensible system of tariffs will bring about an economic Armageddon is merely scaremongering at it’s worst on the part of the New Right, who are pushing their own agenda.

Make no mistake, the malaise in which Australian manufacturing currently finds itself could have been avoided; and the large scale job losses and the untold toll it takes upon Australian families is very real, the blame for which is laid squarely at the feet of both Labor and Liberal.

The only question left to ask is, which sector is next?

References:
[1] “Hypocrites, hypocrites everywhere”, Australian Protectionist Party, 3 January 2014
Trends in Australian Manufacturing”, Australian Government, Productivity Commission, 28 August 2003 [see “PDF file”, “Table 3.5 Sectoral employment trends, Australia”, p.27]
Manufacturing workforce study”, Australian Workforce and Productivity Agency (Australian Government)
Mining industry surges, but we’re becoming a service economy”, Crikey.com.au, 17 November 2011, Bernard Keane

[2] “How many jobs will go after Holden stops making cars in Australia?”, Australian Financial Review, 11 December 2013 (Edmund Tadros)
Holden closure could cost South Australian economy $1.24 billion: report”, ABC News, 6 November 2013 (Alex Mann)
Toyota exit ‘changes the face of industry’”, Australian Financial Review, 10 February 2014 (Mathew Dunckley, Phillip Coorey, and Lucille Keen)
Government’s treatment of Holden was bizarre”, Australian Financial Review, 11 December 2013 (Phillip Coorey)

[3] “Ford closure sends shockwave through manufacturing industry”, ABC News, 24 May 2013
1200 jobs to go as Ford pulls out of car-making in Australia”, The Australian, 23 May 2013 (Ben Packham)
Ford Australia to close Broadmeadows and Geelong plants, 1,200 jobs to go”, ABC News, 23 May 2013

[4] “Toyota completes car industry demise”, The Australian, 10 February 2014 (Mike Hedge)
Toyota to close: Thousands of jobs to go as carmaker closes Australian plants by 2017”, Radio Australia, 10 February 2014 (Emma Griffiths)

Comments

  1. We should all buy locally made goods, but in all fairness how many of these car workers that lost their jobs bought products other than what was made by the company that they worked for.
    Come on Aussies, buy local and stop whining about foreign imports

  2. ringer from the west says:

    Free trade only for Australia?

  3. Trend Prophet says:

    They give away our jobs and our industries. Then they let the beneficiaries come into our country with the profits from those industries and buy up our real estate forcing us to rent and pay them as landlords. Yes Free trade is wonderful

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