Victorian liberal backbencher, Sharman Stone, has broken ranks with the Coalition Government, claiming that the Prime Minister and Treasurer are “lying” by blaming SPC Ardmona’s woes on “overly generous” workplace agreements, which they have used to justify not providing the company with $25 million in co-investment funds so that it can modernise and re-tool its plant. From the AFR:
Dr Stone, whose electorate of Murray includes SPC Ardmona’s main operations, said the cabinet was using excuses.
“It’s not the truth. That’s right, it’s lying,” Dr Stone told ABC radio.
“The independent panel, their own independent panel, I understand recommended that this industry be supported.”
Business Spectator’s Rob Burgess – one of the few commentators to correctly diagnose this issue – has today raised similar concerns:
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SPCA workers earning around $50,000 a year are being used as cannon fodder…
What is at risk now is what should be a large growth industry – innovative packaged fruit products with strong export outlooks. The industry around Shepparton looks likely to be shut down to allow the Abbott government to present a united front against the union moment…
While this decision was justified in terms of SPCA’s ‘excessive’ enterprise bargaining arrangements, the company’s workers are already receiving pay well below the average manufacturing wage ($67,000), and far below general full-time weekly earnings of $74,000…
The wages issue is a smoke-screen.
The Coalition had already displayed inconsistency in providing SPC with funding in light of its pre-election promise to provide Cadbury with a $16m grant to support tourism and manufacturing in Tasmania. But according to Burgess, this is only the tip of the iceberg, with the Coalition yesterday announcing that it would provide $3.5 million of “co-investment” funding to Tasmanian fish farmer, Huon Aquaculture, under the Coalition’s $100 million ‘Economic Growth Plan for Tasmania’:
This government does not, in principle, have anything against careful co-investment to stimulate job creation. That can be seen clearly by looking at its actions elsewhere – and the $100 million ‘Economic Growth Plan for Tasmania’ is a case in point.
That plan helped the Abbott-led Coalition pick up three seats in Tasmania at the 2013 election, and was blithely waved through by media commentators…
In a statement [yesterday] it said: “The project [Huon Aquaculture] will provide the equipment to process fresh fish, as well as smokehouses and other machinery for boning, skinning, portioning and mincing. It will also extend the existing factory building, car park and effluent treatment facilities”…
Put this deal alongside the SPCA plan and the ‘co-investment’ proportions are roughly similar – SPCA planned to put in 64 per cent of the jobs-creating investment, whereas Huon plans to put in 58 per cent (see table below).
…When I spoke to Stone early today she said funding the Huon scheme but not SPCA was “deeply hypocritical”.
“You can’t argue processed fish is more valuable to the economy than processed fruit,” she said. “They are both important.”
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As argued yesterday, the Abbott Government is scapegoating SPC Ardmona workers in order to wage an ideological war against the the union movement. It’s decision to refuse assistance that would increase plant productivity considerably – equating to around $1 per Australian only – now risks the loss of 5,000 jobs across the Goulburn Valley Region, with the loss of tax receipts, welfare payments, and retraining dwarfing the $25 million investment from the Government.
It also places at risk Australia’s last fruit and vegetable processing plant, along with the potential export of higher-value goods, such as freeze-dried fruit, single-serve plastic cups, and squeeze tubes, in turn contradicting the Government’s own goal of Australia becoming the food bowl of Asia.
My argument remains, I agree that Australia needs to engineer lower real incomes to improve its competitiveness and both H&H and I agree with Joe Hockey’s argument to end the “age of entitlement”, but the decisions made along the way should be calibrated with pragmatic cost/benefit analysis.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
