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| Greg Hunt during a press conference in Canberra in 2013. Photograph: Alan Porritt/AAP Environment minister Greg Hunt is set to grant himself retrospective legal immunity against potential claims that he failed to consider environmental advice before approving key mining projects. |
Photo Damian Kelly
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A MAJOR national bank has been forced to remove more than 100 misleading out of order signs from its ATMs after being targeted by anti-coal activists.
A MAJOR national bank has been forced to remove more than 100 misleading out of order signs from its ATMs after being targeted by anti-coal activists.
A score of ANZ Banking Group machines sprawled across six capital cities were plastered with "out of order" signs on Sunday after campaigners launched their latest bid to draw attention to the bank's funding of the coal industry.
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"So here we sit, largely reliant on one market for the export of an unprocessed raw material, a yawning federal budget deficit, an ageing population and a conga line of distressed manufacturers crying out for assistance that in most cases will never arrive."
ReplyDelete.....
Bickering hides our resource failure
Both sides of politics have played a direct role in the demise of Australian industry and have wasted the proceeds of the resources boom, writes Ian Verrender.
What a spectacle: The self-righteous fury and finger pointing on both sides of the political spectrum that has greeted the long, slow and ultimately unavoidable death of the domestic auto industry.
Who is to blame? Who cares?
The simple fact is that the hollowing out of the Australian economy is gathering pace while our bickering leaders thrash about with no plan on how to arrest the decline of manufacturing and precious little understanding of why it has occurred.
Of even more concern, neither side will acknowledge the direct role they have played in the demise of Australian industry. Nor will they admit to squandering the proceeds of the resources boom, cynically opting to enhance their electoral prospects by delivering instant gratification to taxpayers rather than formulate any long-term plan to enrich the nation.
Economists often refer to the forces wreaking havoc across our economy as Dutch Disease, a term coined by The Economist newspaper back in the late 1970s when North Sea oil discoveries radically transformed the Netherlands economy, squeezing out manufacturing.
In fact, an Australian economist, former Reserve Bank board member and Australian National University academic, Bob Gregory, pioneered the theory years earlier in a seminal work that became known as the Gregory Thesis.
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It is no longer a theory as thousands of Australians are discovering to their horror. Our manufacturing industries now contribute just 7 per cent to our economic output, the lowest in the developed world, and falling. In 2004, it stood at 12.5 per cent.
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How did we get to this, and how could it have been avoided? It is certainly true the strength of the Australian dollar has been the blunt weapon that has laid waste to vast swathes of Australian industry, rendering it uncompetitive.
Bickering hides our resource failure
ReplyDeleteBut government policy failures throughout the first decade of the new millennium have been a major contributing factor.
Rather than quarantine the windfall gains generated during the early years of the resources boom, the Howard government, swamped by a huge and unexpected lift in company tax, instead chose to lower personal tax rates. The Kevin 07 juggernaut not only endorsed the policy, it went one further.
Returning that cash to taxpayers boosted consumption, fuelled a borrowing binge, lifted inflation and elevated interest rates, making Australia a very expensive country in which to do business.
That was exacerbated by a currency surging on the back of the vast capital inflows required for new mine construction and expansion.
The first public recognition that this was less than ideal came from Ken Henry's review of the tax system, which, as its centrepiece, advocated the introduction of a resources rent tax.
Under Henry's model, the resources tax would have funded a cut to company tax, an idea that was broadly embraced by big business but viewed with alarm by a heavily armed mining industry that broke out the big guns on the issue.
What followed was one of the greatest triumphs of vested interest over public policy.
Having botched the introduction of the tax, the Labor government's response to the industry's $28 million media blitz was to dump a sitting prime minister and capitulate to the miners' demands, introducing a neutered tax regime that barely raised a cent.
So toxic was the tax concept to the electorate, the Coalition elevated its removal as a major plank in its stunning election win despite holding no real ideological objection to an extra tax on non-renewable resources.
State governments for generations have been collecting mining royalties and Coalition-led states in Western Australia, Queensland and NSW raised their royalties during the Labor years. The Abbott government, meanwhile, since has applied a new resources tax to onshore oil and gas.
But the tax alone was not a panacea. The more important issue, and a possible solution to the grave situation now emerging in the economy, was what the revenue could have delivered.
Resource rich nations from the Middle East for decades have squirreled petrodollars into sovereign wealth funds that have invested across the globe, preparing themselves for the day when the wells finally run dry.
Norway has stashed $800 billion of oil proceeds into its fund while provincial Canadian governments now are scrambling to build their own funds.
How could such a fund have helped us? By investing offshore, it could have helped stabilise the currency, partially offsetting the dollar-boosting effect of a resources boom, thereby easing pressure on our manufacturing and services industries.
The investment phase of the resources boom rapidly is coming to an end. As mining construction winds down, employment prospects are dwindling. Modern mining is a highly mechanised endeavour.
We now are entering the production phase of the boom as all those new mines begin exporting iron ore. Ordinarily, that should benefit the nation.
The problem is, a large proportion of the proceeds will end up flowing offshore given all our big miners – BHP and Rio Tinto included – mostly are owned by foreign investors.
So here we sit, largely reliant on one market for the export of an unprocessed raw material, a yawning federal budget deficit, an ageing population and a conga line of distressed manufacturers crying out for assistance that in most cases will never arrive.
This is the first of a weekly column by Ian Verrender - the ABC's business editor
"The problem is, a large proportion of the proceeds will end up flowing offshore given all our big miners – BHP and Rio Tinto included – mostly are owned by foreign investors."
DeleteThat says it all.
We should be all millionaires.
But wait!
How have the Traditional Owners of this mining country done?
Quote : "....living in worse than 3rd world conditions..."
And nothing is going to change you can bet your boots on that.
Signed
"too ashamed to call myself Australian"
"The biggest fear for the Government must surely be that Bill Shorten and the Labor Opposition will be just as ruthless and just as shameless in prosecuting the case against the government on job losses as Tony Abbott was in prosecuting the case against Labor on the carbon tax.
ReplyDeleteAt a time when all politicians were being marked down, Abbott appealed to the electorate to throw out the other lot; vote for anybody but that incompetent, big spending, high taxing rabble that runs the country.
Now Shorten is saying, vote for anybody but that cold-hearted, job-destroying mob on the other side.
Abbott introduced the disease. Now he'll need to find the antidote."
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The company, the cash and the split Liberal Party
When it comes to bailouts, Denis Napthine and Tony Abbott are caught in the war between economic rationalism and political pragmatism, writes Barrie Cassidy.
On the face of it, the Victorian Government's decision to bail out SPC Ardmona with a $22 million grant surely leaves the electorate confused about what fundamental beliefs underpin the Liberal Party.
How can the Liberal Party, at the federal level, insist that taxpayers' money should not be used to prop up unsustainable industries, while the same party at the state level makes a virtue of the practice?
Same party. Same company. Two very different philosophies. One undermining the other.
The difference in approach comes down to a clash between economic rationalism and political pragmatism. And how close you are to the problem.
The Abbott Government is now on a crusade to tackle the structural deficit. An important part of that strategy is to put an end to welfare dependency across the board, and business welfare is a part of that.
As difficult as it is for the Federal Government to reject the demands of struggling companies and accept the job losses that go with that, it is far more difficult for state governments at the coalface.
SPC Ardmona is a classic case in point.
The decision has shaken the Goulburn Valley and disturbed many Victorians. The same goes for Toyota's decision to leave Australia. Just substitute Shepparton for Melbourne's west.
But the further you go from Victoria, the more likely it is that the Abbott Government's position is better understood and accepted.
Opinion polls demonstrate that just a third of Australians embrace the basic principles behind industry subsidies. That implies that outside the manufacturing states of Victoria and South Australia, support is probably less than 25 per cent.
Listen to George Christensen, the LNP member for the Queensland seat of Dawson. He told the ABC that people point at the car industry and say, "You guys have mooched off the taxpayer with corporate welfare for so long but when the going got tough you cut and run and you've left so many workers in the lurch."
As Christensen sees it, the car companies have a lot to answer for.
"Anything that's been handed to them over the last three to five years probably should come back to the taxpayer," he said.
"They won't because there's no obligation. I don't think they give a stuff about Australia. That's why they're leaving."
Now, Christensen has rarely come to national attention, apart from when he dressed up as Doctor Who and carted around a blown up Dalek to back his campaign for the BBC to film a program in Australia.
The company, the cash and the split Liberal Party
ReplyDeleteBut his sentiments on industry subsidies - outside of Victoria and South Australia - will hit a nerve. Just as Treasurer Joe Hockey did with a new folksy approach to an old argument.
Hockey told a Canberra news conference that SPC Ardmona wanted $25 million from the Government to buy new equipment. Just imagine, he said, if "Abdul the kebab maker in Parramatta Mall" asked for a new oven because he wasn't making a quid?
The Victorian Liberals on the other hand cannot hide behind the different values in the non-manufacturing states. And they face an election in November.
So the Napthine Government has pledged $22 million "to transform and modernise" SPC Ardmona's operations. In return, according to the Premier, the company has pledged "to grow new markets and produce new products that better suit the modern lifestyle".
The Federal Government has lost some skin - and will probably lose even more in the short term - for trying to lay the blame for the some of the collapsing industries at the feet of the unions. The message has been exaggerated at best and not surprisingly, workers, as opposed to unions, have taken the criticisms of their pay and conditions personally.
But the Coalition now accepts that scare campaigns built around WorkChoices have made industrial reform almost impossible for governments.
Changes will have to take place from within.
To that end, the strategy is to place pressure on business everywhere to lead the way. The message is a simple one. Whether you're Qantas or Holden, don't come to us looking for help unless you are prepared to help yourselves. Do some of your own heavy lifting to reduce your overall costs.
That help won't run to subsidies any longer, but it can mean less regulation, tax breaks and an end to red and green tape.
We are about to see an example of that thinking as applied to Qantas. That company will demonstrate its industrial credentials and promise to do more. In return, the Government will try and free up some of the legislative restrictions holding it back.
And as part of the same strategy, the Government is trying to go over the heads of unions and persuade workers that at a time of growing anxiety about job security, they can do more to help themselves; essentially by eschewing some of the conditions that unions have imposed on employers.
It's a sophisticated if transparent strategy, and it can only work if the Government has the nerve to see it through longer term. And if it brings more consistency to the table.
The biggest fear for the Government must surely be that Bill Shorten and the Labor Opposition will be just as ruthless and just as shameless in prosecuting the case against the government on job losses as Tony Abbott was in prosecuting the case against Labor on the carbon tax.
At a time when all politicians were being marked down, Abbott appealed to the electorate to throw out the other lot; vote for anybody but that incompetent, big spending, high taxing rabble that runs the country.
Now Shorten is saying, vote for anybody but that cold-hearted, job-destroying mob on the other side.
Abbott introduced the disease. Now he'll need to find the antidote.
Barrie Cassidy is the presenter of ABC programs Insiders and Offsiders
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ReplyDeleteAustralia offshore printing services