IT WAS interesting to see two issues juxtapose this week. Firstly, the Holden bail-out scheme, where Federal and State governments chip in $275 million just to keep the car-maker in operation.
Secondly, you have the upcoming debate on amendments to the Wheat Marketing Act, where the government relentlessly pursues a free market-industry where any improvements must be self-funded.
Just why are we so attached to propping up car manufacturers? A lack of government investment in countless other industries is costing jobs – but is it just that it is not the big headline of a Holden Elizabeth or Port Melbourne plant closing.
Some tough questions have to be asked about our car manufacturers and their ongoing viability, given cheap labour costs internationally.
No one wants to see a repeat of Thatcher’s Great Britain, where the manufacturing sector was forcibly brought to its knees, causing great hardship to many families, however could we not transition these manufacturing workers into industries that have a real future in Australia?
That $275 million could go a long way towards improving profitability in many rural-based businesses.
You look at the creaky infrastructure moving the nation’s grain to port.
Investment in this is a long-term positive for the government, who will see return on their capital for 35 years to come.
How long before the car manufacturers have their hands out again?
Workers who could lose manufacturing jobs would likely have good skill sets to work in such infrastructure projects.
Or the money could towards ensuring the widening gap between city and country is not perpetuated in the technology sector by allowing extra funding to patch in black areas in the National Broadband Network.
Access to reliable, high speed data lines allows many skilled workers to base themselves in rural and regional centres.
This, in turn has advantages both in terms of easing the strain in crowded capital cities and by bolstering rural communities, that, interestingly enough, seem to miss out on whopping subsidization packages when their leading employers are threatened, such as was the case with Heinz in Girgarre.
There’s going to be pain in pulling the rug out from the car industry’s comfortable little cocoon of government support, but is now not the perfect time to do so?
Employment levels are high, there are countless opportunities for workers to seek fantastically high wages while the mining boom continues and there is scope for the government to create replacement employment through big picture projects that sets up Australia’s economy for the next generation.
We’ve got nothing against government assistance for industries likely to provide benefit into the future. It’s hard to see, given the current economic climate and our labour costs, that car manufacturing will be one of them. In terms of cold, hard economics, there will be better return on investment in $275 million in agriculture and regional projects rather than in an industry that has not found a way to reinvent itself in a global market.