Perhaps the Government should be restricting its handouts to Australians who actually invent something new, but who have to eventually sell their ideas overseas due to lack of capital. Australia then ends up having to buy from foreigners innovations which originated in their own country.

I’m sure the author wants the ACCC reined in, not “reigned” in, but I don’t quite know what he has against the ACCC, a quite useless organisation which is certainly no threat to industry, nor any protector of consumers.

A few points.

1. It is wrong to say that governments cannot pick winners. The Asian Tiger economies of Taiwan and South Korea became rich precisely because their governments used investment and trade protection measures to build up their industries. They made sure, however, that these measures were targeted only at those industries and organisations that were successfully able to export their goods, thus ensuring they weren't pouring money into lost causes.

2. The Howard Government also ploughed money into supporting the car industry - at least Rudd is now putting some environmental focus on this investment.

3. It is better to implement policy according to the issue at hand rather than allow yourself to become mired in a position of ideological purity which fails to take into account the human elements of society

It has always intrigued me that mantras along the lines that "Governments cannot pick winners" get so much currency.

When I hear this coming from advocates of private enterprise, I am reminded of the fact that approximately 80%? (or is it closer to 90%?) of all private businesses in this country go broke pretty quick. I consider spectacular failures of all those businesses we recall from Bond to FAI and beyond. Is private industry so terrific at picking all winners ? Where is the probability analysis here?

Why shouldn't governments take some risk? At least there's going to be a general presumption along the way that governments are supposed to be trying to do something of benefit to taxpayers -- whereas businesses have primary responsibilities for:

a.) avoiding responsibility for the effects of mistakes (the point of the Pty Ltd company) and

b.) getting more money from the public than they ever pay back to the public (aka profit).

And we see yet another local invention like gene shears or crucial solar energy technology go offshore because local investment industry doesn't have the nouse or courage to pick it up why shouldn't government jump in and give it a go ?

Crusty old mantra aren't worth wasting time on.

The real issue here is not that governments shouldn't involve themselves in all kinds of things. Rather, it is that we need to reform some of the sillier rules we make governments follow when they try to do something useful. We need to get governments more efficient at what they do. That isn't achieved by telling everyone to keep out of the specialist failure areas of business.

Must agree with the article.

The Button Plan was supposed to solve the problems of the automotive construction industry but here we are again, throwing money at Toyota who have said they don’t even need it. Obviously Toyotas viability analysis and corporate plans have an edge over the “Lady Bountiful Bequest” budget of Krudd & Co.

Cazza “The Asian Tiger economies of Taiwan and South Korea became rich precisely because their governments used investment and trade protection measures to build up their industries.”

They also exercised different standard employment contracts than those used in Australia and dealt with unions in a particularly stern way.

“It is better to implement policy according to the issue at hand rather than allow yourself to become mired in a position of ideological purity which fails to take into account the human elements of society”

Agree, this “human element of society” would sooner my income was left intact, rather than being taxed for the purpose of government to piss it up the exhaust pipe of a car maker.

PeterGM “Why shouldn't governments take some risk?”

The practice of government is not to take risks.

What they do is worse.

They acquire an interest, then operate it in a monopoly/oligopoly environment, denying the consumer access to the benefits of free competition.

“getting more money from the public than they ever pay back to the public (aka profit).”

The public have a choice to buy or to go elsewhere. Further, “Profit” is subject to taxation and through tax the public share in the benefits.

Finally regarding “profit” the enterprising owner who gets the profit also took the risk. The public did not.

“We need to get governments more efficient at what they do.”
Wholly agree.

Less / smaller government,

fewer bureaucrats, consultants and experts (with their opinions but taking no risk. Ie “ put your money where your mouth is”)

lower taxes,

more dollars in the pocket of people risking their own money in beneficial investment, instead of government funded, union run sheltered workshops.

>The practice of government is not to take risks.

Generalisation of the highest order which doesn't stand up to detailed examination. The whole of the CSIRO started off as a packet full of risks. Trying to get "free enterprise" to follow up once those risks are covered is still a problem.

>They acquire an interest, then operate it in a monopoly/oligopoly >environment, denying the consumer access to the benefits of free >competition.

Governments are hardly "denying access" when the free enterprise market won't invest in areas of national importance because bureaucratic managers in the private sector refuse to take on the "risks", which very often are assessed as risks for the manager's career and comfort. And if you think there aren't bureaucratic managers entrenched in the private sector you haven't been there recently.

Meanwhile, if private enterprise delivers "free competition" and doesn't move to oligopoly as soon as it gets the dollar clout to do so, explain the oil industry, the pharmaceutical industry. Tell us about Woolworths and Coles, and the benefits to their primary industry suppliers. So-called free enterprise makes oligopoly the standard way of working as soon as it can, so why can't we just have our own government oligopoly -- run properly ?

>“getting more money from the public than they ever pay back to the public (aka profit).”

>The public have a choice to buy or to go elsewhere. Further, >“Profit” is subject to taxation and through tax the public share in >the benefits.

Have you tried that choice at the bowser recently ? If you've found an alternative source of petrol, I think you should let us know about it.

Think oil companies are paying much in the way of tax ? Heard of global price-transfer mechanisms ? Oil companies can make their "profits" on paper anything they want to make them -- and do. Why else do you so many of their parent / subsidiary companies are offshored?