I was disappointed to see media coverage in the last few days from union representatives and others calling for more government support for auto manufacturers so that Australian can keep General Motors, Toyota and Ford producing cars here.
While I understand the interest in supporting the manufacturing sector and thereby keeping jobs, government assistance provides false economy, it protects the businesses and those who work in them from reality. This, in my view, makes them less competitive.
I don’t see the long term value in government assistance packages, especially when governments do it for one sector but not another.
Imagine the boost to the economy if every dollar of government assistance was spent on building needed infrastructure or providing for needed and underfunded government resources such as health and education. Surely this more practical investment would be more valuable than protecting uncompetitive industries.
Newsagency businesses live or die by the decisions of those who own and work in the businesses. There is no safety net, no parachute, not since 1999 when the federal government deregulated the distribution of newspapers and magazines. Many newsagents are still digesting the ramifications of the deregulation. This has been made more challenging by the lack of government support.
The auto makers say that they can’t compete with China and India. Hmm, our print products are challenged competing with digital yet there is no support or assistance package.
My point is that governments or all colours support some industries and not others. I think this is wrong.
We all need to be accountable for our situation. Tough as it is, dealing with what we face relying only on ourselves will make those who do make it stronger, more competitive and more valuable to the Australian economy.
We hear all the time that we should let bad businesses go under because they hurt the rest but it seems that if you make enough money and have enough pull then you must be saved at all costs, see banks during GFC that are still making Billion $$$ profits and then Steel workers ano the car industry.
We are told that as small business operators we must adapt to the changing economy, and too bad if you can’t but again if your employees are union protected and as such labor protected then let the taxpayers bail them out.
Sack 10,000 employees over the country from small businesses and that is just business but sack 1000 steel workers and you get $1million compo.
Any way good luck to small business, we for one have sacked 5 full time employees during these hard times, that equals 83% of our workforce and we are doing the rest ourselves while raising two boys but we are being told we do not qualify for any assistance? I’m sure we are not the only ones and it is a story across Aust.
I believe rather than bailing out manufacturing businesses to save jobs the money should instead be invested in re-training and education in sectors that are more sustainable going forward, such as technology.
What about the Millions of Dollars these car companies spend on advertising and sponsorship? (dont get me started on super funds doing the same). I would tell them to tighten thier belts before asking for any assistance.
i say good work by their lobby groups, too bad our industry in not so well organised.
Rick, you said it all – we have worked for years under the umbrella of being “looked after” by associations etc and we have received absolutely nothing in return for our fees.
I am a long term newsagent and our industry is (or should be) a very powerful
employer in this country and yet we haven’t been able to harness that power politically or economically.
What a shame – a bit like Julia really – bad
leadership.
It seems to me that people who are on boards etc lose their ability to understand
why they are there. It then becomes all about power and no policies.
I am still hopeful of change within our industry but methinks it will come after I
retire (this year I hope) No cheering please!!!!!!!
Car manufacturers are an interesting anomaly. While I certainly question the validity of propping up a sector that is not self sustaining it is important that we look at the situation of competitors when analysing the ‘false economy’ claim.
Many other countries provide large government subsidies to their own car manufacturing industries. This can distort the price of imported vehicles. If the economy in which manufacturers compete is already made false by other governments, are we contributing to the false economy by injecting subsidies? Or are we just levelling the economic playing field?
We also have to look at the potential return on such subsidies when compared to the potential loss of tax revenue if more people purchase cars from foreign manufacturers.
A union strong hold is what it is about
Jarryd’s post was most interesting, their could be more to this than is known, it would be nice to know answers to his questions.
Its got nothing to do with Unions Jim!
I do not like it either propping up, however how can you compete with imports for example from China? A lot of Government & Corporate source their Fleets from these manuafacturers, that may have something also to do with it also.
It is frustrating that Small Business is not mentioned in Canberra & State, Lukes example of sharing what his family is enduring is what the Government should be foccussing on, coming up with protection methods for overheads, Looking into shopping centres, rebates for utilities, incentives to keep staff the list is endless, No Government should be operating Government owned post offices, The product, the practices and the free ride all underwritten.
Governments should introduce fines for in this example charging Newsagencies more rent if they open early by centre managements, they are in this example not going even look into it because their Post Offices do not open until 8:30 or 9:00.
Small Business need a unified voice, a loud voice, a body who is not restrained or obliged to anyone.
Most subsidies are borne out of fear, political payback or ignorance. Rarely are they borne out of sound economic research.
Tote up the hundreds of millions (and more) given in aid and support and consider what this could do for the economy if released in a more appropriate way.
While newsagents were let down badly in 1999, that’s in the past. I don’t think any association could match the might of the auto and mining lobbies.
Well to a point some looking after is ok but not indefinitely.
Derek,
In support of Other Jim, do you really believe this has nothing to do with the unions?
If you do, please come round to my place and I will introduce you to the fairies at the bottom of the garden.
Whilst others have had some influence on this decision there is no doubt that the present government is strongly influenced by and in fear of the unions just as they were in the steel situation.
Jarryd asks a valid question as to whether other countries subsidise car manufacturing in order to remain competitive – but should we perpetuate an artificial economy by doing the same or should we realise that with our standard of living we will never more be competitive in this type of manufacturing and move on, perhaps investing a bit more in supporting small business which employs far more than car manufacturing ever has or will
Jim,
The government approach to protection of manufacturing has not changed from the Howard ear to today. They have been as bad as each other looking after uncompetitive industries but for different reasons.
Perhaps if our government refrained from entering Free Trade agreements with other countries, this latest round of assistance to our long-established car manufacturing industry would not have been needed.
To wit, as a direct result of the US-Australia FT agreement we got American cars. After the China-Aus FT agreement we got Chinese cars.
For pity’s sake, we are a small population. Just how much choice do we really need when it comes to buying a car?
And please don’t get me started on food!
australian gov spends $$ like water and think China boom will never end. I think they know it will be their last governing job for sometime to come , so they will look after their mates now before all gone.
Original Jim
My ol sparring partner, I do not think it is about Unions at all, however you never say never . I think it was GMH this morning with approx 100 redundancies, it would of been more if the Government did not offer a package.
Is it right? If I was a employee, it would be, the bigger picture I am not sure.
Maybe it is Lobbying from all sides to save as many Jobs as possible.
At least we can agree on something, Small Business should be the focus of the Government. I am of the view the country is being run very badly and is very deceptive and asMark mentioned & as Eric so eloquently put it the government spends (wastes) money like running water
No accountability, plenty of deniabilty and no direction sums up in my view this current Government.
Istivan is right we do not need Chinese Cars but they buy our resources they say!
Mark if you get time can you explain what you meant in post 12 regarding the different reasons.
Derek, The conservatives pander to very rich business people while Labor panders to unions and workers. Fair enough as they are their constituents.
Support based on what is economically responsible would deliver a more valuable outcome. But that would need government without an eye to special interests.
Mark,
This is my point – ok, so I didn’t mention the conservatives but they’re not the ones bending over to vested interests at the moment.
As to Australia having economically responsible government without an eye to special interests (those fairies at the bottom of my garden are looking brighter and brighter by the minute) – isn’t this what the Westminster system is based on – you scratch mine and I’ll scratch yours or, in Craig Thomson’s case, you scratch mine and I’ll pay for it on the union Amex!
Jim, it’s only in government that politicians can really bend over for vested interests. Think back to the hundreds of millions is dubious financial aid given by conservative governments. They are all as bad as each other.
The real issue with politicans in this country is that for almost any other occupation you need to have specific set of skills, experience and knowledge to be effective or successful.
All politicians need is an adeptness at hustling for preselection votes. This includes a slavish devotion to whoever happens to be leader at the time.
We need a preselection system which determines appropriate qualifications and credentials.
We wouldn’t trust our health to an unqualified doctor. Why should we be expected to trust our lives to unqualified leaders.
Rocky
You are on the right track I believe with Post 20.