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The Forum > Article Comments > The Dutch Disease has infected the Australian economy > Comments

The Dutch Disease has infected the Australian economy : Comments

By John Töns, published 17/8/2011

How strong would our economy be without mining? The Australian government needs to remember that with every boom, there comes a slump.

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*so they can spend it on imported movies from Disney or the latest gadgets from Apple.*

There you go Vanna, trying to impose your view on the world. What say
people decide for themselves what they like or don't like and how they
spend their money. Frankly its none of your business. I happen to have
bought an Apple Ipad. Its the greatest little thing since sliced bread
IMHO and I use it constantly. Equally if somebody wants to watch
Disney, well so be it, its none of my business. What is it with you
control freaks?

*Initially, a lot of the items from Asian countries was crap*

Indeed Vanna, some still is. But I know of plenty of pensioners who
want the odd power tool and are happy to buy a cheapy at Bunnings,
to potter around in the workshop. Good on them. Its their choice,
their decision, it is no business of yours or Govt. Years ago it
was Jap crap, look at them now. I spend money on music technology
at the cutting edge. The Japanese are making what nobody before them
has made. Amazing stuff. Our industries need to learn to make what
consumers actually want, not what they feel like making and then
demand a market based on tariffs.

What tariffs created was a heap of lazy, inefficient industries
which when thrown in into the real world, battled to cope.
Posted by Yabby, Friday, 19 August 2011 8:41:13 PM
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Hankering for a return to an imagined golden age will not get us very far, nor will a total rejection of the idea that somethings can be done better by returning to past practices. We need to selectively mine our knowledge of the past and reclaim those nuggets of wisdom that are to be found there.
Sometimes that wisdom lies in knowing the mistakes that have been made:
1. The failure to acknowledge that not all government services can be delivered better by private enterprise.
2 Small family businesses not committed to growth but a long term, secure future providing local employment. (These are the backbone of the German economy - worth chasing up the BBC world service business reports to find out more.)
3 Our continued failure to exploit Australian inventions - when working as a business consultant I lost track their way overseas just so that we could import them.
4 A consistent cultural cringe evident in all levels in Australian society that assumes overseas is better.
5 A misunderstanding of the role of protectionism - you protect a plant from the full fury of nature in its seedling stage but there comes a time when that plant has to survive on its own. The economic history of Britain and the USA shows that their demands for the global abandonment of protectionism came AFTER their industries were mature enough to withstand competition.
6 A commitment to quality - yes there is a demand for cheap, shoddy products and we can import those by the truckload but there is also a demand for quality goods.

We are running the danger that the death of manufacturing becomes a self fulfilling prophecy.
cont.
Posted by BAYGON, Saturday, 20 August 2011 6:39:38 AM
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cont...
At present government no matter which party is in power is not the solution but part of the problem for they are committed to stay the present course. We wont get a different result by continuing to do things the same way.
We need a government that rediscovers Adam Smith and this time actually reads him only to discover that he was not advocating perpetual growth but acknowledged that a mature capitalist economy would cease to grow and reach a stable equilibrium.
Maybe then, just maybe will they get off the obsession with growth.
This may well include a new form of protectionism - provide protection to start up industries for a predetermined period of time.
Recognize that our small size means that we need a government innovations fund that ensures that our inventions stay at home by providing the start up capital needed to keep those business here.
Apply tariffs to those products that have been produced by flouting environmental and labour standards that should not be tolerated in the 21st century. (Do we really want to support child labour, do we really want to encourage products that have been produced by US prisoners ie slave labour? Fish that has been caught using the oceanic equivalent of strip mining?)
Instead of the growth GDP as a measure of successful government the criterion should be the level of employment, our capacity to support those members of our society in need, our ability to care for people who are disabled, and finally our ability where people do not feel the need to spend all the hours god gives them to have secure empoloyment and a comfortable standard of living.

Then just maybe we will discover that the true role of government is to ensure that the burdens and benefits of social co-operation are fairly distributed.
Posted by BAYGON, Saturday, 20 August 2011 6:53:08 AM
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I would agree with that Baygon.

Particularly the part about “A consistent cultural cringe evident in all levels in Australian society that assumes overseas is better.”

That is now becoming the No 1 problem IMO.

Australia produced some of the best quality agricultural products in the world, (and still does), so it is difficult to believe that manufacturing products from Australia were poor quality.

Ironically, one of the reasons why Australian coal is so much in demand worldwide is because it has uniform quality and low sulphur content, which makes it better to burn in power stations.

It is incredible that people are preferring imported food, when Australia grown food is probably healthier, and grown using much more environmentally friendly farming practises.

The mindset that Australian made is inferior is quite pervasive, and this mindset now extends through government departments and almost completely through the education systems (and there are now teachers and university lecturers who wouldn’t even glance at an Australian made product because they believe it is inferior).

But all the “government spending” has to come from somewhere.
Posted by vanna, Saturday, 20 August 2011 8:02:46 AM
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The so-called “level playing field” of globalization is a farce when most of the companies that have relocated to Asian countries are paying miniscule amounts to workers.
Australian companies are not able and will never be able to compete and become fat and lazy.
Why would an Australian or US company move offshore unless there was more profit by so doing? The “more profit” comes from employing virtual slave labour.
The sad thing is that the skills we need are being “exported” as well as the factories. There is no incentive to train the young, if there are no factories left to employ them in.
Posted by sarnian, Saturday, 20 August 2011 9:23:23 AM
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*but there is also a demand for quality goods.*

You are quite correct there, Baygon. Back in the days of high tariffs,
the prevailing attitude was "she'll be right". Since dropping tariffs,
our industry attitudes are finally changing for the better.

Just to prove Sarnian wrong, let me give you a number of examples
from a country paying some of the highest wages on earth, which you
can see in your local supermarket still today.

Australia made IXL jam, all sugar, little fruit. High class hotels
preferred to serve their guests Hero jam, for its made to a standard,
not down to a price. Today Beerenberg jam has emerged, finally somebody got the quality message.

Australia made Cadbury's chocolate, not too much cocoa butter in there.
That leaves a market for companies like Lindt and others.
We now have an emerging quality chocolate market, unlike before.

Australia dominates the wool industry and made Lister and Sunbeam
shearing gear. Along came a company like Heiniger, with attention
to detail and quality took away most of their market share. Again
made in a high wage country.

The list is endless. Fact is that people will be complacent unless
they have to change and competition is what does that.

Companies like the wine industry and others, which have always
been exposed to the global market, are highly innovative and
produce world class products.

Where we now have a problem is again of our own making. Why would
I build a company in say Sydney, if my employees were forced to
pay some of the highest housing prices in the world? In the end,
that is reflected in the cost of my products.
Posted by Yabby, Saturday, 20 August 2011 10:32:44 AM
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