You know things are bad in New South Wales when its government led by left-wing Premier, Nathan Rees, is trying to find ways to blame the Red Menace for its economic woes.
Today’s State budget includes protectionist measures to give priority for nearly $4 billion in goods and services to be purchased from Aussie companies, mostly at the expense of China.
It’s an idea with the intellectual depth of a children’s cartoon. Admittedly, by the end of the clip I am not really sure whether NSW Treasurer, Eric Roozendaal, is the scarecrow or the lion. But I know the NSW public is represented by the tin man who ultimately gets a punch in the face.
The NSW proposal is bad policy, and it is not even original. The Victorian government did something similar <> in November last year.
Mimicry is the greatest form of flattery, but for once it'd be better if Victoria wasn't flattered. And I'm a proud Victorian.
According to the ABS the biggest imports from China are things like TVs, furniture and clothes. It is going to be a tough sell, or should that be a 'tough buy'. The story of the past 20 years has been that Australia isn't good at producing these products, and that's why we're importing them.
The whole point of free trade is for countries to become specialised and competitive in the goods and services they can produce at the lowest cost. If everyone does it prices drop, people trade in better value goods and the extra money left over is used to increase people's standards of living.
The biggest problem for the New South Wales budget is the black hole that needs to be filled. And the best way to do that is for the government to get as much 'bang' for the taxpayer's 'buck'.
Roozendaal may think his plan anti-trade plan may result in showing some heart, but with a budget black hole he should trade it for a brain so he learns to stop digging.
- Tim Wilson is Director of the IP and Free Trade Unit at the Institute of Public Affairs - www.ipa.org.au
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