I agree with most of this!

Revitalizing manufacturing is as simple as supplying what the industrialists need and then leaving them to do what they do best, which in our case is innovate!

And we could make that very possible by doing a few things right, from the get go.

The first being the world's cheapest industrial energy, via thorium reactors connected to micro grids; the second is massive tax reform and simplification to eliminate avoidance as well as eliminate tax compliance costs.

If the total tax take is 4% of the GNP, and the GNP is a measure of our combined unavoidable spend, then a 5% equally unavoidable expenditure tax will raise more revenue!

And given this simple stand alone measure would end any need for (7% averaged) tax compliance costs, find taxpayers better off by at least 2%; plus whatever they also save not having to pay most other taxes!

And a brand new poeples' bank supplying low cost venture capital to resident manufacturers and value adding processors, would compell local enterprise to prosper and grow globally!

All that prevents that is Government intransigence/governments who see such things as personal piggy banks!

We could keep a car manufacturing base, i.e., as an employee owned co-op; building carbon fibre electric motor vehicles. All that's missing is genuine vision and leadership! Ditto ship building, steel and aluminum/light metals smelting!

And given all component parts are produced by a single entity on a single site, remove all, the passed on cascading costs that quite literally treble the (multiple companies) cost on manufacture in this massively mismanaged country!

And given discretionary spending is the local domestic economy, after massive tax reform, create even more of it with the world's cheapest domestic power, via homemade biogas/ceramic fuel cells!

And just too easy, if we replace the ideology and dogma; absolutist assertions with the still missing reason and logic; and a blend of public and private enterprise, and based on a best practice, historical lowest possible price formula!
Rhrosty.

"Overzealous regulation by government has ripped out the soul of 'Western society'."

Regulation has indeed caused untold damage, but...
Since when did Western society have a soul?

If anything, then overzealous regulation has always been its soul!
Can you think of a time, at least since the Romans, when Western society was not heavily regulated?

"We need politicians who are committed to community economy"

We need politicians no more than we need snakes: let them all be exorcised out of our way, then people could form their own communities and/or economies or however else they choose to live.

Murray Hunter, you've got some things right but you're mostly wrong. Fiscal deficits do not cause failed governments – or at least, not for financially sovereign nations. The reason Greece is in so much trouble is that it surrendered its financial sovereignty to the European Central Bank.

National comparative advantage is a better foundation for the economy than protecting inefficient industries. The problem is our dollar is so high that it's damaging even efficient industries. It's economic policy, not industry policy, that's mainly to blame.

____________________________________________________________________________________

Rhosty, you're spouting rubbish again!

Thorium reactors connected to micro grids would probably give us the world's MOST EXPENSIVE energy. Nuclear power is expensive to run and needs economies of scale to make it work. We have the potential for cheap power, but it will probably never be as cheap as Iceland's.

The total tax take is about a quarter of the GNP, not 4%.

Your comments about the car industry make no sense. How do you think the employees would be able to afford it?

Before you go ripping into me with you usual unresearched ideological diatribe Aidan; you need to read Thorium cheaper than coal.

And the reason being, thorium consumes around 95% of its fuel; whereas, oxide reactors, which you confuse with thorium, consume around 5%!

And even then the 5% waste product from thorium reactions is far less toxic and eminently suitable for long life space batteries!

And given their small size able to be built as mass produced modules and simply trucked on site almost ready to begin producing power!

Buried in bedrock adjacent to an industrial estate, able to eliminate virtually all transmission line losses, and therefore, able to supply power for less than half the lowest costing power in the country.

If as you say the 4% number is wrong, take it up with the ATO.

95% of corporate Australia have offshored their operations, and other multinationals are operating from Singaporean or Irish HQ's, all of which would seem to exclude them from our GNP?

If however, you include all income earning operations, be it a toll road or tunnel, rail or road freight, or multiple shopping malls or our foreign owned banks, excetera etc; then the GNP number is far larger.

But even if you're right, a single stand alone expenditure tax set at 18%, would be enough money to run a very streamlined Government sector.

18% of a 1.6 trillion dollar economy is still 380 billions; or around 30 billion more than the current gross tax take.

And given the fact it would still be unavoidable, end the need to shell out an averaged 7% as tax compliance costs; which in effect would be equivalent to an 11% tax rate, or if you will, lower in real terms than the 15% they pay in Ireland?

And given our tax would be unavoidable! See those companies operating offshore, paying far more tax than local operations.

Bet your sweet bippie they'd soon all become local operations and included in the GNP; and therefore allow the tax rate to be lowered! 5% infinitely variable perhaps?
Rhrosty.

Aidan, please engage brain before putting mouth into gear.

And an F- for failing as usual to do any homework, or requisite research; which likely explains why your essay is risible rubbish!

Try harder least you have to do grade one again and for the forth time!
Rhrosty.

Oh and by the way, there's no law that prevents governments from loaning start up funds to local co-ops, which would allow our home grown expertise to remain here and producing superior products.

Government can raise finance at half the cost of the private sector!

Co-ops are the only form of free market private enterprise that largely survived the great depression intact; and because everyone on the shop or factory floor has a vested interest in the success or failure of the operation; and therefore will share the pain or the gains.

And create a manufacturing model able to successfully compete with the emerging economies!

And almost without exception the best improvements come when those in the production line see and exclude the problems, along with any of the drones creating production bottle necks.

And given all the shareholders are in there with their sleeves rolled up; eliminate the dead weight of shareholder expectations, which dramatically lowers production and or borrowing costs; and possibly alters the knowlegable voting intentions at the AGM's.

Nor is there any example I can find, where such entity has grown to big to fail.

Given the emphasis is on maximized production and profits; rather than massively engineered equity/capital gains!

Right wing vitriol spouting Ideologues, endlessly extol the virtues of Government funded PPP's, except where the private entity is a tax paying co-op!?
Rhrosty.

Rhosty, what you assume to be a lack of research on my part is actually a lack of research on yours – for unlike you I look at the claims of the detractors as well as those of the proponents. I suggest you do too. Even if you only read the Wikipedia page on thorium power, you'll find your predictions rest on some heroic assumptions.

Your assumption that I'm confusing oxide reactors with thorium ones is wrong.

Your assumption that I'm taking an ideological position on this is also wrong. I do think thorium power has a bright future. But I was similarly optimistic about solar thermal and dry rock geothermal, and those have been much slower to develop than I thought.

And why are you so obsessed with the transmission losses? Only 5% of our power is lost in transmission and distribution.

And don't &$%^@* well tell me to take up my rebuttal of your claim with the ATO when you did not cite the ATO! I took issue to what you wrote, not what the ATO wrote, and namedropping government departments won't turn your delusions into reality.

Have a look at http://www.aph.gov.au%2F~%2Fmedia%2F05%2520About%2520Parliament%2F54%2520Parliamentary%2520Depts%2F548%2520Parliamentary%2520Budget%2520Office%2FReports%2F01-2014%2520Trends%2520in%2520Australian%2520Government%2520receipts%2FReport01_2014Chapter2.pdf if you want to see the real situation. Admittedly it uses GDP rather than GNP, but AIUI there's less than 3% difference between them in Australia.

You might regard a smaller government as "streamlined" but there's a danger of it losing its capabilities. Beware of false economies.

A dodgy estimate of tax compliance costs is not a fact, and a lower tax rate than we have now won't prevent companies from offshoring profits.

But your tax proposal is a recipe for economic collapse! It would shift the tax burden onto those least able to pay, and would encourage the use of foreign currency for business currently done in Aussie dollars.

As for funding Co-ops, the problem is ensuring they risk losing the money if they fail.

We used to have a car industry making high value items. But mass produced cars are no longer high value items. Better to concentrate on the things that still are.

According to my source, and you or anybody else can read him just by googling, transmission line losses, to find out just how much you Aidan, apparently bend the numbers?

Transmission line losses are approximately 17%; and distribution losses are approximately 50%!

So that's a total of 67% lost between the power station and the consumer, and not the decidedly dodgy 5% you ascribe! Schematics Aidan?

I've read countless economists who claim i.e., that a 2% transactions tax would replace current tax collection; or that one third of one percent would replace all PAYE!

And given both if adopted, would put most tax practitioners and the ATO virtually out of business, or the money for nothing merry-go-round sometimes called tax reconciliation or tax returns; made null and void!?

One can therefore, understand and appreciate your concern?

Yes there is a difference between our Gross Domestic Product (GDP) and the Gross National Product (GNP).

And given the Gross National Product actually includes all the commerce done on these shores, a better number to use for the purpose of calculating a broad based stand alone unavoidable tax.

You don't need to go back very far, to see where I and several other posters have quoted the ATO as the source of the 4% of the GNP, as the total tax take!

The fact that an unavoidable stand alone tax negates the necessity to pay any tax compliance costs, which as memory serves, averages a 7% impost on the average bottom line, and therefore under my model able to be returned to the bottom line.

Given my model and some serious and long overdue rationalization; and streamlining of government services!

The 10, soon to be 15% and applied to everything GST, (bureaucratic honeypot) would be the first to go!

Meaning the worst off currently, would be better off paying a 5% unavoidable expenditure tax on all their purchases/service provision and what have you!

Game, set and match!
Rhrosty.

The reason we can't compete with products sourced from halfway around the world, is our manufacturing model! Take cars as a classic case. We build a body, then outsource all the other component parts. This means we buy and engine from and engine manufacturer, replete with all his passed on costs! i.e, tax, shareholders dividends, Workforce PAYE, council rates, fuel tax and well it's a long list that may include up to 140 different tax imposts, fire levies and licence charges excetera etc.

Ditto the steel supplier, the paint producer/supplier, the gearbox maker, the diff maker, the axles and universals supplier, the bearing supplier, the bolt maker, the windshield/glass manufacturer, the window seal manufacturer, the seat maker, the fabric maker, the leather hide tannery, the spring maker, the spark plug maker, the fuel injection system maker, the instrument maker, the headlight park and turning light manufacturer, the plastics manufacturer, the windscreen wiper motor maker, the washer pump maker, the electronics supplier, the wheel maker and the tyre manufacturer and all the transport applications in between.

With each passed on cost cascading and amplifying upwards and onward, through the assembly line and through on to the retailer!

Now if all that could be done on a single site and by a single government funded co-op, with real skin in the game.

Normal passed on costs could be halved, and able to successfully compete with all comers and on an international market.

Except in our case, we would be best advised to create carbon fibre, electric motor vehicles, for niche markets around the world.

And enormously assisted by much cheaper and carbon free power, unheralded economies of scale; and genuine massive simplification and reform, of both the tax act and the trade practices act.

And all too hard for complex rationalists/nay sayers and the odd corporate psycho/micro managing control freak?

Some might question the viability of a co-op, all of which are invariably owned by the workforce; which is the one private enterprise free market model, that undeniably survived the Great Depression largely intact! Is there a safer investment?
Rhrosty.

What an extraordinary article.

Mr Hunter blames the usual suspects - "Thatcherism, Reaganomics, Rogernomics, and economic rationalism" - while completely ignoring the historical impact of those policies across the globe.

Without the comparative advantage that he derides, how would the economies of Asia have grown to bring a billion people out of poverty in the cosmic equivalent of the blink of an eye? Is that Mr Hunter's idea of an undesirable outcome?

"One of the deep costs of neoliberalism has been the destruction of local economies for the lowest common denominator. A McDonaldscape exists in most places, where communities now tend to look physically the same."

Other, perhaps less jaundiced eyes, would describe this in terms of the host of countries who have been able to raise their standards of living to one closer to our own.

But, far more importantly, after the paragraphs of excoriation, where are the germs of a solution?

"Government needs to promote and develop local community industry as a prime tenant of its economic policy."

Ignoring for the moment the rampant solecism (tenant - gah!) Mr Hunter's concept needs considerable expansion in order to be in any way credible. So, how does he propose this may be achieved?

"We need to restock and take another look at new models of regional cooperation that can promote the advantages of large markets, yet recognize the need to maintain local community markets."

An example would be nice, somewhere this has been achieved? No? Thought not.

"We need politicians who are committed to community economy"

A definition here of "community" would be nice - are we talking towns? villages? streets? No? Thought not.

"The cost of not doing this in the near future could be drastic."

And the cost of doing this (whatever "this" might be) would be... what? No idea? Thought not.

"The majority of people won't be able to afford medical services, and three descent meals per day."

Always good to finish with a literal. Adds the finishing touch, doesn't it.

I don't know why articles like this get so far up my nose. But they do.

Rhosty, if transmission losses were 17% and distribution losses 50%, total losses would be 58.5% not 67%, as power that's already lost in transmission could not be lost again in distribution. But why do you base your beliefs on a claim on a single website which doesn't cite the source of the figure?

Try doing that Google search again and look on page 2: You'll find http://data.worldbank.org/indicator/EG.ELC.LOSS.ZS which gives the actual figures for many countries. Australia's at 5%. Only poor countries with poor infrastructure have the high figures that you seem to assume apply everywhere.

A 2% tax on all transactions would raise as much revenue as current tax collection IF it didn't result in people and businesses changing their behaviour to avoid it. But most people would change their behaviour to avoid it, and many businesses would very quickly go bankrupt if they didn't.

GNP differs from GDP by a very small amount in Australia (about 3% IIRC). But you're wrong about what it consists of. GDP defines production based on the geographical location of production, GNP allocates production based on location of ownership.

I'm not going to search through all your old posts just to identify the source of your current error. It's not use blaming the ATO if (as I suspect) you're wrongly assuming the ATO's figure for GST is their total figure for all taxes.

That an unavoidable stand alone tax negates the necessity to pay any tax compliance costs isn't a fact at all, it's just conjecture. Absurd conjecture IMO, as people will always find ways to avoid the "unavoidable" tax.

Earth to Rhosty: You're not the umpire, and considering how blind you are to what's actually happening, that's probably just as well.

(TBC)

If car manufacturers could build their components cheaper than buying them, they probably would. But suppliers have cost advantages when they're not tied to a single supplier. And suppose a manufacturer started making all the components then found a supplier could make some components (to the same standard) more cheaply. What would they do? Would they carry on making them themselves at a competitive disadvantage? Or would they buy them instead? Train manufacturers have traditionally made more of the product themselves than car manufacturers have, but more recently the trend has been to outsource what can profitably be outsourced.

And how many car manufacturing cooperatives survived the Great Depression?

Why are you so quick to assume certain processes will solve all the problems when you haven't bothered to check the opposing arguments?