Who Killed Cock Robin? (Decline of Australian Manufacturing)

In recent days, Australians are reeling from the announcement that Holden, one of our remaining vehicle manufacturers will close down. The Ford Motor Company’s local manufacturing arm has already flagged its intention to close its doors. These two closures will create a massive loss of employment within the Australian economy. It isn’t just the loss of jobs within the companies themselves. There’s a whole sub-industry of smaller businesses who manufacture vehicle components and provide a wide range of other services to Holden and Ford. Why is this happening and why is it being allowed to happen?

There is a great furore amongst the population, with many people up in arms at the government’s apparent refusal to provide funds from The General Revenue (read the taxation contributions of Australian workers and businesses) to prop up Holden and avert this economic catastrophe. Government providing such handouts to ailing (but economically significant) industries is something of a tradition. Many Australians apparently feel that it should continue and that a financial lifeline should be thrown to the car industry (yet again) to keep it afloat.

There is no mystery here, for anyone who has eyes to see. Prior to our recent Federal elections which saw the return of a Liberal led government, the Liberal Party ran an advertising campaign wherein they promised to create two million new jobs in Australia over the next ten years.

During the course of the election campaign, our electoral commission also ran an add campaign to encourage people to vote. The message of the campaign was that every person’s vote was one of their most precious possessions. It featured people digging out some dusty box from the attic or spare room cupboard .. and the box, when opened contained something that glowed with a warm radiance. The box presumably held their right to vote and it is apparently something that they keep at the back of some dark cupboard, to be dragged out every few years.

There are some massive lies buried here and I’d like to drag them out into the open right now, so we can all get a clear picture of just what is happening.

The first is the claim that a political party, ANY political party, can create employment. I think that politicians must also keep one of those dusty boxes at the back of the cupboard and they drag theirs out at election time too. And inside are a tried and true collection of glowing election promises. The job creation one is probably the most worn and tarnished but, like the star at the top of the Christmas tree, it just wouldn’t seem quite right, if it wasn’t on display.

There is only one force in economics that can create employment and that force is business. The only employment that a government can ‘create’ is so-called public service jobs. They can also utilise moneys from the general revenue (your tax money) to pay business for services … like public infrastructure projects. Its business, that does the employing. About all that any government can do to help create employment, is to foster an economic environment that will assist business to prosper and grow.

There are twenty five million people in Australia. SO where did that figure of two million new jobs come from? That would be one new job for every two men and women, young and old in the country! When you take away from the population equation, those people who are too young, too old or too infirm to be employed, you’d have to find two million people who are currently unemployed and who want jobs. Its one of those lies that will fail, as soon as it is subjected to scrutiny. But its a warm, fuzzy lie … so we don’t scrutinise.

Another awful untruth is the notion that a person might not vote and that, if they do, they do so only at election time. This is one of the most damaging bits of misinformation I ever saw. The fact is, voting is pretty much compulsory for each and every citizen and they exercise their vote every single day. Voting is nothing more or less than making a choice between available options. Every time you express an opinion, every time you determine a course of action and every time you spend a dollar, you are casting votes. You decide what you will participate in and what you won’t; what you’ll support and what you won’t; what will endure …..and what won’t.

For the Australian motor vehicle industry to survive, it has to be viable. For it to be viable, it must be able to sell its vehicles. And for it to sell its vehicles, it must be competitive. It is competing in both a local as well as a global market. I assume though, that the local market is large enough to support our local car industry. And the fact is, every single Australian who chooses to purchase a motor vehicle that isn’t manufactured in Australia, is casting their vote about the future of the Australian car industry. They are making a choice and expressing an opinion.

Every single time an Australian purchases a grocery item that wasn’t produced here, every time they spend anything on goods that aren’t locally manufactured or services that aren’t provided locally, they are casting a vote. They are casting a vote on the future of Australian business and Australian workers.

Another huge lie that I see in this issue, is an implied one …… the tacit suggestion that we aren’t perfectly aware of all this! We aren’t talking about some complicated, mysterious process. We’re only talking about common sense. And the government spends millions on advertising campaigns, encouraging Australians to support Australian business. We all, every one of us, know the inevitable consequences of voting NO … of not supporting local business. But vote we do.

The next lie is the one that is implied in the ‘buy Australian’ campaigns …. the notion that you should buy Australian because its the best thing for the country and in your ultimate best interest. Most of us instinctively seek the best value that is available to us, in every transaction that we make. Even the latest ‘Buy Australian’ advertisement implies that our buying choices should be based on quality and value (implying that Australian products are more likely to meet these expectations). The reality is that Australians spend vast amounts of money on foreign manufactured goods. And why wouldn’t they? A comparative overseas product is often available far more cheaply than a local one. And every one of us who’s home contains foreign-manufactured goods have exercised our precious right to vote. We’ve made a choice about the future of Australian industry.

One of the greatest lies of our age, is the notion of ‘corporate citizenship’. Its the notion that a financial entity, a corporation, can have a soul, that it can have a sense of morality or that it can have a sense of loyalty to human beings. The reality is that business has one, and only one, purpose. And that is to make profits for its owners. It has no obligation to provide employment for people, or to entertain concerns for their welfare. Business is a thing, not a person. And it only has a reason to be, while it is producing those profits. Any business that isn’t profitable will inevitably, in that great jungle that is commerce, be consumed and destroyed. Its a dog-eat-dog world out there!

Its a nonsense for us to feel outrage when we see our businesses closing their doors and heading off overseas, where labour and operating costs aren’t weighed down by ludicrously high wage rates, massive employee benefits and endless government interference, regulation and compliance requirements. Business will always go where the profit is. Business is much more viable in countries that are less ‘lucky’ …. and more realistic. You and I acknowledge and support this process, every single time we demand the best value that is available to us, every time we cast our vote and purchase a cheaper foreign-manufactured item.

We demand the best value that we can find and that is our right in this global economy. So why would we expect business to be any different. It will go where it can find the best deal. Australia might be a great place to take a holiday. It might be a great source of raw materials. But its a pretty toxic environment for manufacturing industries.

The loss of our vehicle manufacturing industry isn’t the fault of one political party or another. Continuing financial subsidies won’t suddenly cause it to become competitive in a global market. And the rest of the economy can’t afford to prop it up forever. We’d probably all understand this a lot better, if our politicians would desist from the perennial election lie that they can, and will, create jobs! Our car industry isn’t dying … its just shifting house to a nicer area … just like you or I would.

Let’s be clear though, about who killed Cock Robin. You and I, old sparrow, that’s who. We exercised our vote on the Australian car industry and we voted ‘No’. Its a bit stupid to blame whoever happens to be in government at the time. Now where are the keys to the Hyundai?

Andrew Caddle 2013-12-13

andrewcaddle.com

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