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economic woes « Previous | |Next »
September 26, 2006

Finally we have some concerns being expressed about Australia's the poor state of Australia's trade in the national press. Tim Colebatch, writing in The Age, says:

Until 1980, our trade was more or less in balance, and on goods, in surplus. Since then, we have run trade deficits in 22 of the past 26 years, and in the past four years they have averaged more than $20 billion a year.Our share of global exports of goods has shrunk from 1.12 per cent in 1996 to 0.94 per cent in 2004. Of the 30 OECD members, only three have had worse export growth in that time.

That would indicate poor economic management by the Howard Government. It covers up what has gone wrong by talking up the way the resource boom is bringing the trade deficit down. So there is no need to worry. Colebatch challenges this argument:
The manufacturing malaise has to be tackled because most of the world's trade---most of Australia's merchandise trade---is in manufactures. Last year we ran a staggering $92 billion deficit in manufacturing trade alone. We need reforms to stop that getting worse. And unless we want to trust in praying that global prices for our minerals stay high and volumes grow, we must identify ways to significantly cut that deficit, and get back in the black.

An opportunity for the ALP to broaden its emphasis on the skills shortage and declining labour productivity. The ALP used to be strong on policies about trade and manufacturing. It seems to have gone silent.

The Howard Government has been captured by the mining industry. They cannot see beyond Quarry Australia. Even though Australia is one of the world's sunniest countries and an innovator in solar research solar power is sidelined in the talk about clean and green. As Suzy Freeman-Greene in the Age says:

No single power source can replace our reliance on coal; we need diversity. Solar is not the panacea. But there's so much more we could do to foster an affordable, large-scale industry. Far from a fringe affair, the [Conservation] foundation says solar PV is the fastest-growing energy technology in the world, with growth rates of 60 per cent annually over the past five years.

Australia used to be a world leader in solar research but no more. Yet, the increase in temperatures through climate change and the inevitable growth of air conditioner demand on the electricity grid, indicates that the Federal Government should be moving from just setting up demonstration projects (Solar City) to looking at encouraging an Australian based solar energy industry. Freeman-Greene says that:
One effective way to encourage investment in solar power is to reward panel owners for the unused power they can feed into the electricity grid. Many in the local solar industry are calling for the introduction of a "feed-in tariff", where a small levy is added to all power bills. The money is then used to pay households or businesses for their excess solar power at a higher rate than that paid to dirtier sources.

A feed-in tariff would cost the typical power consumer the equivalent of one cup of coffee a year (presumably about $3).

The fifty percent cut back in solar subsidies to community organisations and the closing of the program in 2007 for residential rebates is a backward step. It removes an important incentive that pays back the community by lessening the demand on the electricity and public infrastructure. Instead of supporting genuinely clean forms of power the Howard Government boosts our coal and uranium industries.

| Posted by Gary Sauer-Thompson at 8:12 AM | | Comments (0)