From the AFR our leaders are caught in their usual gas bagging, this time over the carcass of Ford:
Australian manufacturers cannot compete with the cheap labour available overseas and must focus on high end markets and quality, opposition leader Tony Abbott says, as he signalled future Coalition industry assistance would be export-oriented.
“That means lower taxes, less regulation, higher productivity and that gives manufacturing a fighting chance,’’ he said.
…”If you’re going to economically make cars in Australia, you’ve got to export the bulk of them and Ford never did that,’’ he said.
”The Coalition, should we win the election, will work with the industry, we will work to support the industry, but we want to support the industry towards a much greater export orientation.”
Mr Abbott cited bootmaker RM Williams as an example of a high-end, quality product manufactured in Australia that was still competitive.
”It is a high-end quality, niche product, and that’s the future for us. It’s not making T-shirts, it’s not doing something that the Indonesians and the Chinese can do at $2 or $3 an hour. No, it’s staying a couple of steps ahead of the game and we have to have faith in our initiative, in our ingenuity, in our drive,’’ he told radio station MMM.
Meanwhile Joe Hockey blamed the carbon tax and industrial relations.
While the focus is welcome, this is all twaddle. The Coalition has already committed to a high dollar and Labor’s industrial relations structure. Removing the carbon tax will only increase the cost of climate change mitigation by making it less efficient. It’s committed to removing the mining tax, which was supposed to provide tax cuts to other sectors being squashed by Dutch disease.
Meanwhile Labor’s Trade Minister, Craig Emerson, is out insisting we manufacture more food, exports of which haven’t grown in five years.
For comparison, a real leader might be proposing the following:
- cuts to negative gearing and housing capital gains and plugging holes in the mining tax
- used to fund massive R&D tax breaks and other tax cuts for industry
- rate cuts and/or Tobin taxes to bring the dollar down to 60 cents
- a massive innovation drive and new national narrative based around export dynamism and productivity
- maybe even a free economic zone in Darwin with imported Indonesian labor
As you can see, fixing manufacturing is not possible without taking on other rent-seekers in mining, banking and real estate. That’s the thing, we already have a distorted market with a fiscal framework that favours other sectors over manufacturing. If you’re for real, you can’t fix one without addressing the other. Who is going to do that?
