Fixing the dollar may help to protect some manufacturers but it will create a raft of other problems. It will also remove the main method by which the real income gains from the terms of trade shift have been distributed to the wider community – through lower prices for consumer goods.

Food security is a red herring. Australia will continue to produce far more food than it consumes; it will just no longer produce tinned fruit – which, as sparkyq says, few of us want any more. The land will be used to grow thing people actually want.

The multiplier is also widely misused in the economic case for industry assistance. Yes, a dollar of spending may generate jobs and incomes beyond the industry that is supported – assuming there is a high level of unemployment and under-used capital (otherwise, the jobs ‘created” arejust shuffled from one use to another). Bu that dollar has to come from somewhere, and if it comes from taxes on more productive industries, the net effect will be fewer jobs and lower incomes.

The Abbot government does indeed have no interventionist policy to support “sunrise” industries. That is one point in its favour

Tristan Ewins,

1. A fixed exchange rate can only be fixed by the government, and, as is clear in China, workers don’t have to be as careful. You are the one suggesting the high dollar should be ‘fixed’, and that’s just more government interference.

2. ‘Could’ being the operative word. Once a greedy worker, always a greedy worker no matter what you call the organisation. SPC should have a flatter management system now, if that would really make a difference.

3. What about dumping, indeed. No dumping – better for SPC you think? No. They would still be doing what they have been doing perhaps even worse with no competition. There’s a lot of talk about anti-dumping, but can you really see Australian politicians stopping China, or any other country in the global economy dumping?

4. Food security rests, first and foremost, on the backs of farmers who are continually ripped-off by the likes of SPC. Farmers have to do it tough; so can processors.

It’s clear that you know nothing about economics or business, Tristan. You say that a “low interest loan which will ultimately be repaid”. Oh, yes? You simply cannot be sure of that –what about the car companies who have left or are leaving. Do you really belief that our weak politicians will get those loans back? At the moment, this government cannot afford to loan out taxpayers’ money; and, certainly not at low interest. That’s down to the Labor Party. Much of the problem with Australian businesses is Labor’s outrageous use of taxpayers’ money on corporate welfare, and 'make-work' projects.

And this co-investment idea is nonsense. Governments, which don’t seem to be able manage to do the jobs that they are supposed to do, have no business investing public money in areas they know nothing about. The best governments can do is review the tax system, cut the red tape hindering many enterprises, cut costs and CURB THEIR OWN SPENDING of money that belongs to the public. Big government will be the death of private enterprise in this country.

Doesn't change the numbers much, Mr Ewins.

>>Pericles argues that SPC-Ardmona cannot survive without being 'a drain on the public purse'. But I am suggesting a low interest loan which will ultimately be repaid; Alongside a public co-investment -which is distinct from a 'handout'.<<

If it were possible to put SPC-Ardmona onto a profitable footing with a cash injection, the Board of CCA would have done so with alacrity. Why am I so sure of this? Simply because the costs of closing down are themselves significant from the company's viewpoint, and would have been factored in with the cost of capital, availability of low-cost loans etc, before any decision was reached to cast the company adrift.

And if you can't see your way to make a dollar, it doesn't matter how long the loan repayment stretches, it will always be out of reach.

>>I am also arguing that SPC could be more competitive over the long term because dividends would be diverted into making the company more competitive; And money would be saved as a consequence of a flatter management structure.<<

Before you have dividends to re-invest, you need profits. And any management - and parent company - would have examined the flat-management option before cutting the cord. It's what they do.

It is very easy to waffle on about alternative strategies. But you are making the extremely arrogant assumption that nobody else has thought of them, examined them in detail, and made decisions based upon their knowledge and experience.

On the evidence of your article and subsequent posts, I would surmise that you have never actually worked in a business.

Would I be right?

Pericles; You are suggesting that SPC-Ardmona simply cannot be made profitable.

That's not apparently what CCA thinks; They believe that with the government co-investment that it could well be made profitable. Otherwise they wouldn't have made the suggestion.

But there are certain issues getting in the way; Like dumping for instance; and the drive for CCA not only to have profitable businesses - but to maximise share value and dividends... (that means less profitable parts of the business get culled even if they make a reasonable profit) By this reckoning an enterprise can be profitable - 'but not profitable enough'.

From the public perspective you have to ask yourself what the cost for us would be of NOT doing anything... And that is lower tax receipts, a higher welfare bill, and massive social displacement in Shepparton.

But look at it this way; If SPC goes co-op again it can devote the dividends towards repaying the govt. Meanwhile the workers and producers etc can continue as beforehand with the existing wage structure and conditions... Over the long term - once the loan was repaid - then there would be a big boost to their competitiveness as well.

You also ignore the issue of food security - and whether or not the high dollar will last long term.

You seem to think managing a business is a precondition for having an informed opinion. That just sounds like a poor excuse to dismiss the arguments of your opponents so you don't have to meaningfully engage - or heaven forbid admit that you - or Abbott - sometimes don't get everything right.

Barnaby Joyce certainly didn't look thrilled with the SPC-Ardmona decision either... I guess you'd be dismissing his opinion - and Sharmon Stone's opinion - as well?

“Mr Davis (CCA CEO) remained among Australia's best-paid executives last year, earning a total pay package worth $7.8 million. His salary was $2.3 million. The rest of his package came from superannuation and performance-related incentive payments and other perks.”

Yep, it's all the fault of those greedy workers.

If we used the highly credible Mondragon Co-operative as a template;

“Specific pay ratios were set in 1955 and held until the 1980s. The person at the top
could earn no more than six times the salary of the person at the bottom of the
cooperative. If the boss wanted a raise, everyone got a raise. In the United States, in
1996, the ratio is about 115 to 1 in major corporations. Recently, the ratios at
Mondragon have increased to 15 to 1, because the rest of Spain has recognized how
good Mondragon's managers are and lures them away with higher salaries.”

Notice the Mondragon model prioritises employment over profits, yet still manages to be highly profitable and competitive.

Tristan Ewins, "That's not apparently what CCA thinks; They believe that with the government co-investment that it could well be made profitable. Otherwise they wouldn't have made the suggestion."

Sounds very much like their risk and our (taxpayers') money. It is just as likely that it would be the first of more dips into the trough of taxpayers' $$. Other globals have done the same ie employed the poker tactic of encouraging the opponent to keep on bidding on the fall of cards. Start with a low amount and keep on going until the pot is big and the opponent well and truly committed.

We should heed the lesson from the car manufacturer who promised ten more years to Julia Gillard, but having taken the taxpayers' $$, departed anyhow.

This would likely be the first cash injection with many more to come. The Navajo Indians say, "Upon the rider discovering his horse is dead, he should immediately dismount". However if 'Big Union' wants to stump up the tosh and manage as effectively as they say they can, they are welcome to have a go themselves.