Now, let me say from the outset that senility is no laughing matter. It is highly distressing to those families afflicted with it. And debilitating to the sufferer. That is perhaps why the nation is in pain today as it reads Ross Gittins.
Yesterday Mr Gittins wrote that:
If foreign investment in Australian businesses is so unpopular with so many people and such a hot potato for Malcolm Turnbull and his government, why do we persist with it?
Short answer: because we prefer our material standard of living to go up, not down.
…When you remember that our level of material prosperity has been dependent on foreign investment since the arrival of the First Fleet, it’s a wonder so few punters can join the dots.
Yet today he writes:
When it suited the world’s big mining companies to come to Oz and engage in a decade-long frenzy to build more mines before China went off the boil, it never occurred to our policy makers to make the miners form an orderly queue.
Rather, we let them turn our economy upside down. We saw our job as ensuring the miners’ frenzy didn’t cause an inflation surge, using high interest rates and tolerating a hugely overvalued exchange rate to suppress the non-mining economy and allow the miners to get all the resources they wanted.
We did lasting damage to our manufacturing and tourism industries to allow the miners to have their rowdy party.
We’re left with a huge, capital-intensive, 80 per cent foreign-owned mining industry that employs just a handful of Australians.
Its foreign ownership wouldn’t matter so much if it was paying its fair whack of tax. But we let the miners con us out of imposing a sensible resource rent tax, and now we discover they’re turning legal somersaults to minimise the company tax they pay.
Wha? From the SMH in October 2009:
We don’t have Dutch disease because that describes a situation where the resources boom soon subsides, leaving the economy marooned. In our case, the boom seems likely to run for decades because it’s built not on some cyclical surge in commodity prices, nor the exploitation of a single mineral deposit, but on our prime position as abundant supplier of resources to the Asian region – China, India and the rest – while those countries build the almost endless infrastructure needed to become developed economies.
That’s the point that’s slowly dawning: the resources boom is coming back and has decades to run. It will involve further huge expansion of our mining industry and huge growth in the volume of our mineral and energy exports, either at prices roughly the same as they are now or, quite possibly, higher…
Those industries that can’t stay profitable under the high exchange rate and interest rates will contract and thereby release workers and capital to be taken up by the ever-expanding mining sector.
From the perspective of the overall economy, that won’t be bad, it will be good. Why? Because the economy will be shifting to the production of a more valuable and profitable combination of goods and services.
And again in October 2012:
HAVE you noticed how joyfully the media trumpet the bad news they seek out so assiduously? The latest is that the resources boom is finally busting…. Is the much-ballyhooed resources boom about to disappear into the history books?
Don’t be misled… Spending on the building of new mines and liquefied gas plants is expected to grow strongly for another year before it starts to fall back. Even then, it will stay way above what we normally see for several more years.
Coal and iron ore prices may be falling, but don’t imagine they’ll return to anything like what they were…
The econocrats now expect that, by 2019, they will have collapsed to a mere 50 per cent above that 100-year average. Nothing to show for it? This means we’ll remain wealthier than we were (our exports will continue buying far more on world markets than they used to).
All this ignores a further benefit from the resources boom that, though it has already started, is largely still to come: vastly increased quantities of coal, iron ore and natural gas for export. This, too, adds to our wealth.
Also in 2012, he was pleased to see everything else hollowed out:
Beware of dire predictions that manufacturers will be wiped out by the strong dollar unless they’re propped up by the government. All our experience says it won’t happen.
Manufacturers and their (highly vociferous) unions gave us the same warning in the 1980s when the Hawke-Keating government decided to take away their protection from imports. It didn’t happen – the industry adapted, and survived to complain another day.
So, at last count:
- foreign investment is unquestionably awesome;
- foreign investment is unquestionably damaging;
- the foreign capital mining boom is unquestionably awesome;
- the foreign capital mining boom is unquestionably damaging;
- hollowing out is unquestionably awesome;
- hollowing out is unquestionably damaging.
Australia deserves so much better than this flip-flopping tripe.
