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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

where to now? « Previous | |Next »
September 14, 2012

The current political fight between centre-left and centre-right is between two different visions of a post-mining boom Australia, and between two sharply discrepant views on the role of government. The writing is on the wall: Australians can no longer rely on mining alone to sustain economic prosperity.

RoweDNewman.jpg David Rowe

So were to now? More technocratic progressivism? A greater emphasis on tyhe means of achieving a more equal society from the ALP? More debates over the market versus state? More in the way an individualistic and entrepreneurial interpretation of freedom for Abbott's particular brand of Conservatism?

One issue is stark. Australia's failure to improve productivity sufficiently in recent years can be attributed in large measure to a lack of skills that would enable it to make the shift to high tech manufacturing. Instead we have calls to take the tough decisions required to deal with our high costs.

The AFR editorial says:

The Gillard government mouths this message with talk of productivity gains, but its heart and its headspace remain trapped in the politics of redistribution....Rather than making our industrial relations system more flexible and our tax system less complex, Labor is re-regulating workplaces and has imposed on business a poorly designed mining tax and an ill-conceived carbon tax. And rather than reining in spending to address the budget’s gaping structural deficit, Labor has committed itself to new spending that this newspaper estimates will cost about $120 billion over the rest of the decade.

The AFR's proposal to overcome the slowdown in productivity growth is the federal government needing to get its fiscal house in order; dumping the pricing of carbon; improving Australia's competitiveness by reducing the costs of doing business; rejecting the politics of redistribution; and for the federal government to fall in line with the what the big miners want. After all, this is an industry that has the potential to be globally competitive and wealth-creating for decades to come.

There is nothing here about Australia currently experiencing a classic case of ‘Dutch Disease' in that the mining boom results in the value of the currency going up, manufacturing becomes less competitive, the country losing quite a few industries to lower wage countries, people became more concerned and spend less. With the inevitable downturn after the mining boom there is here was a lot of political pressure on the need for massive spending cuts.

It is fascinating that the AFR makes no mention of using the wealth from the mining boom to ensure that significant part of the NBN is in place to create a sufficient mass to start building new business models on top of this infrastructure. This would create new economic opportunities in the emerging digital economy. Maybe the AFR is in the dark about the benefits of the NBN?

| Posted by Gary Sauer-Thompson at 6:18 AM | | Comments (14)


Isobel Redman, the leader of the SA Liberal opposition, has let the cat out of the bag---the cuts to the Public Service are in the order of 25,000---one quarter of the public service.

Fair enough. Better skills can, in some cases, lead to higher productivity.

But let's not forget the increasing casualisation of our workforce and the pitiful state of our infrastructure.

Its just not cuts to public health--the Newman Government is determined to remain in the fossil-fuel age.

It seems like gradual attrition an dumbing down.
I read a review of Jeff Sparrow and Anthony Loewenstein's collection of essays,the name of which escapes me; the reviewer focussed on Guy Rundle's contribution, which seemed pessimistic.
Just talking to an American of FB,it can get worse!

Where i am working a skilled worker is someone that has a truck license or a lolly pop sign ticket or can do basic computer stuff in an office. The bar is low.

digital technology is to the 21st century what electricity was to the 19th century - it transforms the entire economy".

The Minerals Council's Report Opportunity at risk: Regaining our competitive edge in minerals resources, says that the Australian economy is a high cost and low productivity one.

Its recommendations about what Australia must do to remain competitive are clear: running budget surpluses, reforming the industrial relations system so that it emphasises pay increases in return for productivity, and changing tax and royalty systems so that they are both stable and internationally competitive.

The miners go on and on about Australia being a high cost and low productivity economy and that this is affecting their capacity to open up new mines and sell more minerals to China. Australia is no longer competitive

Its the miners who make contracts and sell minerals to China---not Australia. So maybe they need to look at their own practices and stop pointing the finger at Australia. Why is it Australia's problem that the workforce is not skilled enough? Why don't they train the workforce they require?

Australia's economy is a high cost and low productivity one.

The miners would say that it is the unions who continue to suck the life blood out of the industry by imposing stringent rules and regulations.

The National Farmers Federation supports the termination of the Renewable Energy Target scheme (RET) , along with feed-in tariffs, support for low-emission technology demonstration plants, subsidies in energy efficiency, minimum energy performance standards and even requirements for reporting energy use.

Which means we remain with coal-fired power stations.

The Australian Industry Greenhouse Network (the Greenhouse Mafia according to ABC’s 4 Corners) wants the fixed target removed to reflect lower demand for electricity.

Australia's future is clean coal says the coal industry. It can create an environmentally friendly product if the government funds it.

Environmental regulations will cripple the economy says the coal industry and prevent it developing clean coal. The coal industry is even prepared to go beyond clean!

The coal industry's rhetoric is that protecting our health and the environment will destroy the economy and leave us in the dark. The lights will go out.

The future is clean tech. An example-- replacing South Australia’s two brown-coal burning plants in Port Augusta with solar thermal power. They provide 20 per cent of the state’s electricity, and are responsible for 50 per cent its electricity-related emissions – are slated for closure.

Their owner, Alinta Energy, has taken both off-line, with Northern possibly returning for the summer high demand.

The existing electricity industry is working hard to block emerging competitors --eg., denying PV owners a fair feed-in tariff and preventing wind farms from being built.

The former --denying PV owners a fair feed-in tariff--is achieved through a gross tariff system in which the householder must export all electricity back to the grid at a low price and then import all its use at a much higher price.