A good article that deserves a lot of discussion. With the exception of your position on uranium and nuclear energy, this is what the Australian Manufacturing Workers Union has been saying since about 1977 in a range of nearly annual publications and speeches by our National Secretaries and other prominent officials. In fact, our first national publication - "Australia Uprooted" - dealt with the first post war decline in manufacturing, ie value adding to resources, in response to the 1970's resources boom. We have also laid out clear policy proposals that answer the question "how we can make this shift to value adding" as well as saying this is something "we must do". For more info go to www.amwu.asn.au or email donald.sutherland@amwu.asn.au .
Don

Pretty much agree with DonaldS's comments. Glad to see that that the sense in engaging in processing of our vast natural resources...

Speaking of which, Australia's not short of sun either. So whilst uranium and nuclear options may be questionable to many (and I am far from happy with the option), there is clearly a solar alternative.

I know I mentioned this in a post yesterday, but Australia's mining boom is actually making it harder to develop a value-adding manufacturing industry.

As the ore is dug up & sent overseas tax dollars flow into the government's coffers, creating big surpluses and strengthening our dollar. With the stronger dollar, imports of manufactured goods from overseas are cheaper. Not only do exporting industries here find it harder & harder to sell goods in foreign markets, but domestic manufacturers can't compete with the flood of cheap imports.

We all know it'd be great to have strong value-adding industries here, but its just not economically viable to do so & the boom is making that situation worse.

The term for it is Dutch Disease, where the exploitation of natural resources results in pain for other parts of an economy. There are various ways of dealing with this, especially the method Norway adopted. The solutions are there - all we need really is a government with the foresight and long-term fiscal responsibility needed to implement them.

Mostly agree with this article.

The only caveat I would add is that we should have the right sort of value adding industries: The car manufacturing industry is a prime example of something that only exists because of huge government subsidies.

If we have value adding industries then they must be internationally competitive and add value to the country

I worked in a factory that produced sugar, and exported that sugar.

Almost every piece of equipment in that factory was imported. This included alternators, turbines, switching gear, motors, instrumentation, computers and even valves.

We imported all that equipment, and exported sugar.

What's new? Ever since Australia was founded as a colony we have exported our raw materials. Blind Freddy can see we need our own manufacturing and value adding basis, but while Australia remains a country allowing cheap imports of food stuffs and paying high wages for labour it will never happen. But, when oil becomes really expensive and western people buy only essential goods, the manufacturing market for China will fail, because the economy which has been based on cheap labour in factories will fail as factories close and our resource boom will end as they stop buying our resources.
What then?