Ausbuy

Australia Needs A Manufacturing Industry

August 6th, 2008

In recent times economists and politicians have trumpeted the benefits of globalisation and there is no doubt that world trade has increased and countries like China and India have moved many of their vast populations out of poverty. However we at Ausbuy take a view that, to contribute to the world, Australia must have a strong economy and protect the welfare of its own citizens. The events of the last year have shown that, in a globalised world, Australia is vulnerable to events outside its own control and is no longer the independent self sufficient country that it was. Talk of leadership roles is nonsense and setting examples which the major countries will follow is dreamtime. We must concentrate on Australia’s best interest.The globalisation preaches said that Australia must concentrate on its areas of strength and let the other areas, like manufacturing, wither. Let us now examine the areas of strength as follows:

• Minerals. There is no doubt that this is an area which must be supported but the industry does not employ large numbers of people and booms do not last for ever - what then?
• Agriculture. Australia is vast but our agriculture depends on the supply of water - both rain and irrigation. It is also a trade which is influenced internationally by tariffs and quotas. The Doha Round of talks, which were designed to free agricultural trade, have recently failed which was not good news for Australia.
• Tourism. Distance, high oil price, and an overvalued A$ have, in recent times, reduced our income from overseas tourists. The dollar and the oil price may move in our favor but the tyranny of distance still applies. The problem can be clearly illustrated by the fact that our biggest source of overseas tourist revenue is the backpackers. Most of our tourists are other Australians.
• Education. In the past we have had a considerable income from overseas full fee students. As they build their own universities the demand is dropping and this trend will continue.
• Financial Services. This pits Sydney against New York, London, Hong Kong and Tokyo which are entrenched centres. Even changing our tax laws (which I worry about) is unlikely to overcome that competition. Anyway the industry only employs small numbers and our low saving level means that we would need support from foreign savings (hence tax changes).

Even if all the above grow they will only in employ a portion of our available population. We can employ most of the remainder in service orientated jobs. Unfortunately we have to earn money overseas to pay for our addiction to imports. At the moment mining and foreign debt are meeting the bill but that cannot go on for ever.

When you consider the above it is quite clear that Australia needs a manufacturing industry for the following reasons:

• It provides steady good paying skilled jobs for our people.
• Gives us the potential of export manufactured goods and earn much needed foreign currency.
• Gives us an alternative to relying on imports to support our lifestyle which in turn reduces our need for foreign borrowing.
• Provides training opportunity for our young.
• Helps us ride out shocks in the global market.
• Helps to create a climate where innovation thrives and we do not have to send our ideas overseas to be put into production there.

Australia must be aware of the need for a manufacturing base when signing free trade agreements where our country is penalised for applying environmental, health and safety regulations. We should charge imports with a levy equivalent to the cost of the regulations normal to a developed economy.

The above are important but the support of the Australian people is vital. Buying Australian is an investment in the future of your descendants.

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3 Comments »

1. “Sustainable development” cannot be both a response to environmental emergencies and a progression toward a better way of living. It’s advocates say that it is necessary for us to curtail our every activity to reduce envoronmental impact. At the same time they try to sell it as a more desirable way of life.

   It is neither - there is no envoronmental emergency and it is not a better way of living. It is socialism. Socialists are using a fake emergency to justify imposing socialism. Of course THEY think it is a better way of life - they are socialists. Many of them know it won’t be better for the majority: Socialists in the elite (like Al Gore), where it came from in the fist place, don’t care if anyone else benefits, because they, who will run it all, definitely will.

   The change is certainly not being driven by consumers, although after being “educated” well enough they will cooperate. Whatever “on-shoring” goes on under “sustainable development”, it will not be more efficient than now, but much less - environmentaly, economically or an other way.

   Sustaiable development comes from the UN’s Agenda 21. Read it to see the whole plan. See if you like it. It is being promoted and implemented by stealth and misrepresentation. That on it’s own shows that there is something very wrong with it.

   Comment by free_enterprise — August 13, 2008 @ 2:28 pm

2. This line of reasonning by the globalists is a distortion of the genuine classical economic idea that countries benefit most economically when they export what they produce best and most efficiently and import what other countries make best and for the lowest prices. Globalists make their recommendations about this in their own interests, not those of the countries concerned (as the list in the article indicates).

   The conflict is not between Australian and other countries, but between multinationals and all countries. MNCs have allegiance only to themselves, they do not represent the interests of any country.

   What is important is not imports vs. exports or manufacturing but the strength of our economy - how much all Australians economically benefit. No industry should be considered an end in itself or a remedy. A country benefits merely from whatever it has the advantage in.

   However, the level of manufacturing we have now is artificially low, due to the influence of multinational corporations and government restriction. It is being held back.

   The best and only true way we can encourage a manufacturing industry here - and any other kind - is to get the government off of our backs.

   That includes tariffs, which interfere with domestic business more than it protects it. They increase costs of supplies to industry and therefore also prices of their products. They introduce ineficiency to our economy - our whole national industry.

   The “free trade” agreements are also a form of government intervention in industry. The more intervention, the less free trade is, not more, so it is a complete misnomer, a lie. Agreements don’t make one free, they restrict.

   Globalists are not against government intervention since (1) it disadvantages smaller businesses far more than it disadvantages them and (2) it gives the government a means of favouring them, under its financial influence. The “free trade” agreemsnts are an example of this. The notion that big business opposes government intervention misses the point. It depends on what kind of intervenion and when and how it is exercised - in whose interests.

   Here is a key passage from Adam Smith’s “Wealth of Nations” which is relevant to the topic of this article:

   “Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer. The maxim is so perfectly self evident that it would be absurd to attempt to prove it. But in the mercantile system the interest of the consumer is almost constantly sacrificed to that of the producer; and it seems to consider production, and not consumption, as the ultimate end and object of all industry and commerce.”

   Comment by free_enterprise — August 6, 2008 @ 6:40 pm

3. Great article.

   I’m writing an article right now on the future shift towards the “on-shoring” of manufacturing processes as quality control and environmental/sustainability considerations come under a more powerful spotlight. I call it “Industrial Revolution Version 2.0″.

   The change will be driven by consumers as consumers start to make more environmentally and socially conscious purchasing decisions. I therefore believe our focus should lie on educating consumers and prompting consumers to start questioning just how “green” and sustainable the products that they are purchasing actually are. Suppliers will respond and that’s where we’ll start to see “on-shoring” taking place in a much more efficient way than ever before.

   Comment by lswan — August 6, 2008 @ 5:12 pm

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