Labor risks throwing away Australian jobs

miantiao says:

07:40pm | 28/07/09

We have been acting in good faith since the 70s. China, the US, the EU, Russia, they are all industrialized economies. Who loses out when one industrialized economy closes the door to anothers imports whilst at the same time retaining access to the others’s market?
We are on the same side here Andrew, we support the thing, free markets.
Cheers for your advice, he’s off to the US next year on a football scholarship, he’ll probably choose to study mandarin, like his father.

Andrew says:

04:14pm | 28/07/09

Free Trade does need to be a two way street, but just like in any relationship someone has to take the first step as an act of goodwill. As an industrialised economy Australia has less to lose and much to gain from Free Trade.

Furthermore, my advice to you son would be to invest in his personal human capital stock by attaining skills that a Guangdong factory worker doesn’t have so he’ll never have to compete with them.

miantiao says:

12:38pm | 28/07/09

here is a thought. china presently justifies its ban on exporting rare minerals for strategic reasons. Perhaps our iron-ore could be treated the same way.
Want steel? well here is some land, and here is your labour force, grab some cash jump on a plane and go for it! Of course, you’ll require a local partner and are not allowed more than a 49% share in your investment. Oh and by the by any technologies you use will become property of the state.

This scenario is ridiculous in the extreme, but that is what is facing businesses that want to expand into the largest and fastest growing marketplace in the world.

miantiao says:

12:16pm | 28/07/09

Andrew, don’t get me wrong. I’m a supporter of free trade and i’m dissapointed my lucrative plans to import roo meat into china has hit a brick wall. Free trade only works when everyone steps up to the plate. It can’t be a one way street. What happens to the nation that that allows tarrif free imports but has exports subject to restrictive protectionist policies of trading partners?

One last thing. I hope I never see the day my son has to compete in the same labour market as a Guangdong factory worker.

Andrew says:

09:38am | 28/07/09

RE: Miantiao

I know that in reality it’s not that simplistic it was merely a simplistic model for illustration. It’s true that your own kid will be unemployed and relying on handouts because he is not willing to work for a competitive wage which is an unfortunate circumstance for him to be in. If we isolate the scenario to only him then it appears that we should be protectionist and have him mow the lawn and not the neighbours kid. However if we do this we ignore the fact that both you as the parent and the neighbours kid will be worse of under protection.

In all situations there are economic winners and economic losers and there are no simple choices to be made. We face a trade-off as to which is the best outcome and what we will choose is determined by our own personal values. Personally, I think that encouraging competition provides the best welfare to society as a whole and that the Government should intervene and assist those who are unable to compete in the marketplace, however this assistance shouldn’t be at the expense of those who are competitive.

g.hardstaff@big pond.com.au says:

09:28am | 28/07/09

What makes everyone think that Australian Manufacturing is not
competitive or profitable. I work for a company that is both profiable and
competitive and yet, a Managing Director from our Chinese plant is
coming to Austraia next week to take our jobs and profits to prop his
plant, in China which is running at a loss.
I"m with you Dave!

miantiao says:

11:39pm | 27/07/09

andrew it’s not that simplistic. what happens to your own kid, he’s unemployed and relying on handouts?
since the 70s tariffs on imports have been gradually lowered and we’ve signed FTAs with some nations. however, although we’ve accomodated other nations in their bid to develop we still find the door closed for many of our exports. in particular china. apart from commodities, for obvious reasons, exporting into china is difficult and and impossible in some instances
i tried importing roo meat into chengdu only to be told that china doesn’t allow such agricultural imports. in fact when questioned further, the official eventually lost it and said that we are cruel to roos and that roos carry disease and are not safe to eat. russia has come out with similar bs. the eu are happy eating our roos.

given recent events, chances of an fta with china eventuating in the near to mid-term seems rather slim.

Harry Cole says:

09:05pm | 27/07/09

Well, having read all of these comments I now remember why I can longer be bothered to fight for workers rights! It’s disheartening to say the least, to see how effective the bosses’ economists have been in brainwashing the workers.
When you manufacture locally you add value to raw materials locally. That wealth is local wealth. You either choose to keep an Australian employed, and pay him or her a reasonable wage, or you keep an overseas worker employed on a slave wage and let the corporation pocket the difference. It seems to me, from reading these comments, that the majority of people prefer the latter. Well that’s fine, but don’t whinge when you lose your job!
If protectionism is so bad, ask yourself this: why was the Australian worker’s standard of the living the highest in the world when it was in place?
You’ve been sold a lemon!
Honestly, if I could go back in time I would tell our forefathers: the men (and women) who were beaten and jailed for organising trade unions and fighting for an Australian manufacturing base, not to bother.
Read your own history!

Jason says:

06:35pm | 27/07/09

Try getting competitive rather than expecting the rest of us to protect you from the global economy with our tax dollars.  stupid unions never seem to get the big picture.

Andrew says:

06:08pm | 27/07/09

Apparently you have a very simplistic understanding of what protectionism is Mr Oliver. Tariffs are one way to pursue a protectionist agenda but it is certainly not the only way. Your example about lawn mowing was interesting but let’s alter it to show how the Australian economy actually works.

You could pay your own child to mow the lawn but perhaps they might demand $30 from you to compensate them for the leisure time they have given up to mow the lawn (which they estimate to be worth $20) and to give them enough money to go to the shops with their friends (which will cost them $10).

Now assume that your neighbour’s child offers to do it for $15 because he only places a value of $10 on his sacrificed leisure time and only needs $5 to spend at the shops.

Therefore you can now get your lawn mowed and pay for your kid to go the shops for only $25 instead of $30. Which would you choose?

Sure you kids have lost out the $20 but they are still going to get to go the shops so they probably won’t be too disappointed. You’ve saved $5 so your better off and the kid next door has made $15 and he’s happy too. This is how a competitive economy works.

Shane from Melbourne says:

05:27pm | 27/07/09

Hmmm it’s okay for the United States, Europe, China and Japan (to name a few obvious offenders) to have protectionism but not Australia? Obviously the Federal government and readers believe that Free Trade exists and the impass on the Doha round of GATT is a figment of my imagination. I’ve never heard such rubbish from the PM in my life….

Michael says:

04:35pm | 27/07/09

Dave Oliver, you sir are naive.

It’s called RETALIATION. You stop buying their goods, they stop buying your goods.

Ben Payne says:

02:57pm | 27/07/09

Our manufacturing sector is doing just fine, but unfortunately, there are no positions for *people* within this automated and mechanised environment.

Technological Unemployment needs to be addressed in fairly short order, because the service sector (which traditionally has taken in the majority of the displaced manufacturing workers) is itself becoming automated, and displacing its own workers.

But don’t worry; I’m sure the CEOs of these companies will tip you a dollar when you clean the windshield of their Rolls Royce at the traffic lights.

Sam c says:

02:24pm | 27/07/09

Australian progress so far has been because of exports rather than satisfying the domestic demand. The writer conveniently forgets what happens if our other trade partners choose the same he is preaching?

Formersnag says:

02:13pm | 27/07/09

I suggest killing 2 birds with 1 bullet. Instead of introducing an ETS, (isn’t trading in carbon default swaps, derivative forestry futures, shares in timbercorp, great southern, etc, what got us into the first GFC, and will bring on the next one?) we give reduced corporate taxation to “good corporate citizens” who satisfy a set industry standard for all corporate behavior including polluting, employee share ownership for all, etc.

Encouraging good corporate citizenship can hardly be called protectionism.

Razor says:

02:06pm | 27/07/09

Next time you get an X-Ray or MRI Scan make sur eyou get it done by an Australian designed and built machine.

What?

You can’t?

But I’m sure you’ll get it done anyway.

Ricky says:

01:23pm | 27/07/09

so, lets subsidise unprofitable, unproductiove business here in australia at the taxpayes expense just to keep these businesses viable. What happens when the govt contracts run out and these australian manufacturers run out of customers….. Again small minded, narrow visioned union rubbish simply to try tio justify why these organisations are sucking money out of peoples pockets on a weekly basis. Keep paying your union fee’s workers and watch the union reps live the high life on your hard work.

Dallas Beaufort says:

12:57pm | 27/07/09

Mr Oliver, are you wearing clothing made in china, of which affords you other affordable choices, whose value now seems oblivious to the uninitiated.

RodneyA says:

11:48am | 27/07/09

Don’t do as I do Do as I say! I recall a town I worked in several years ago where the elected officials voted to have the Council administration buy local and give local contractors a preference over non locals. When it came to supporting the local business by the elected officials - that was a joke, mnay were seen on weekends shopping in another town 200 kms away. I guess my remarks to the story is “If the Unions want this” then they have to also ensure a commitment by all union members are doing the same to “Buy Local” No more imported TV’s, DVD’s, mobile phones and so on.

B says:

11:27am | 27/07/09

If the ‘public’ that apparently support this aren’t willing to buy locally produced goods themselves even if it means paying a little more, why should the government? It’s another case of ‘let somebody else take responsibility’. If we were willing to pay a bit more to support local industry, perhaps they could achieve economies of scale to reduce prices that allow them to compete without protectionist measures.

Shinsengumi says:

11:13am | 27/07/09

This suggestion is patently absurd.  How dare our government spend money back into our economy?  The simple fact is our industries are not competitive with China, India, Brazil, Pakistan, Bangladesh, etc.  We’ve been living like spoilt, mollycoddled children, expecting absurd things like superannuation, a pension, retirement at 65, workers compensation, OH&S, workers rights, social security and the complete absurdity of a government paid for medical system.  This rot has to stop - we need to compete with the slave labo- err, I mean the progressive, efficient labor markets of Asia.  For far too long Australians have lived in a fantasy; I find it personally offensive our Government, which we vote for, and which we pay taxes to, would protect us in any way shape or form.  Disgusting!

Patrick says:

09:47am | 27/07/09

No no NO! this *is* protectionism. You start giving preference to “Australian made products”, and China and other countires will start giving preference to “Chinese made products”, killing off international trade. It is as simple as that, and the stupidity of your position is compounded by the fact that Australia is primarily an export driven economy.  You might “save” a few thousand jobs in the short term, but you will greatly damage Australia’s prosperity in the long term with stupid policy like this. This country’s prosperity rests on engagement with Asia and the world, not retreating into some economically isolationist bubble.

Jim says:

08:45am | 27/07/09

A big problem is Government accounting. A product may be cheaper for Department X if bought from overseas but is it cheaper in whole of government terms? Often not as the increased social security payments and reduced taxation revenue more than outweigh the saving. But this would require imagination to implement and the Treasury is poorly equipped to do that!