Shadowminister,

What would Australian management do without the unions to blame? I could say that the restraints on innovation and production in Australia are due to relatively poor and grossly overpaid top local management compared to its Asian counterparts. This was certainly the case 10 years ago when I took a course on the problem. What ever your experience in your segment of the economy, industrialists in this country have not risen to the challenge, our current account deficit indicates this. Too much of the borrowed funds have been wasted on consumption and asset inflation, the Howard government has wasted a decade in order to pander to short term considerations, the economy is weak and the next unfortunate government will take the blame for Howard's incompetence. We will be left with no industry and an empty quarry. I suggest you read an economic history of Japan or Korea.

Wiz, you are right, 2 posts is restricting. Perhaps everyone could
send GY an email, suggesting that this is changed to 4 posts,
as in General.

Bottle tops might not be an issue, but bottles certainly would be.
Most PET bottles are made on the run. That needs functioning machines
to happen. So its a globally interdependant world now.

Aussie made kids clothes are available on the net:

http://www.googoogear.com.au/

So if you can't find things at David Jones, do a google search.

Australia will have a more dynamic manufacturing economy, when
we have flexible labour, innovative management and lower overheads.
Right now, exporters are not appreciated in Australia, instead
they are taxed with payroll tax. Perhaps if the Aus Dollar crashes,
people will wake up.

As to regulating how much people borrow, the question arises as to
how much you want a nanny state. By rights the pokies should be
shut down tomorrow, that would save workers billions.

Fact is that Aussies are bad savers, but taxes are geared such, to
make them so. Given that profits from own homes are tax free,
people prefer to plow their money into their houses. If they
save the money, inflation takes half, the Govt takes the other half,
of any interest payments.

Distribution is a huge issue, as its such a major cost. Go and
ask a small shopkeeper in a shopping centre how much rent they
pay, you'll see why then need huge margins. The internet can
shorten the chain from manufacturer to consumer, at much lower cost.

Good article.

not convinced that a strong heavy industry sector is a sign of a healthy economy.

yes we need to move forward with 'green' technologies and we can be world leader in this. but do we need to manufacture washing machines, ovens or cars?

because of trade barriers which favored Australian manufacturers production efficency was low, as was quality, design and innovation. top loading washing machines are a prime example.

i have come to be a 'protectionist', because i think some things are more valuable than cheap consumer goods. if oz integrates it's economy with the rest of the world, it becomes unable to manage it's political and social affairs as an independent nation.

in simple terms, by being dependent on cheap chinese imports, we can not effectively protest against chinese national policy in thibet. neither can we protect low-skilled ozzies from unemployment or low wages, when there is no tariff protection from cheap imports.

the best protection is a tariff wall on people: simply by stopping immigration, the bottom half of the labor spectrum would get better comparitive wages due to simple market forces. by stopping immigration, industry could be forced to pay for educating and training new employees for higher level jobs. by stopping immigration, we could begin to relieve the population pressure on the environment.

we should aim to feed, clothe, house and educate ozzies first, enrich foreign corporations last. this need not result in having to settle for inferior goods either. nokia manages to make top quality phones with no national competition, perhaps a 'one or few but good' policy can be better than open slather capitalism.

Wizofaus “But surely the point of prudent governmental oversight of the economy is to prevent the situation getting to that point.”

Prudent government has the sense to recognize what it is good at and what the vehicles of private commerce are better at.

The reality is taxes are not the best source of venture capital funds, stock markets are.

Governments are not the best planners or managers of commerce. Commercial businesses assessing risk and opportunity, without the concerns of a general election are in a position to take a better long term view and balance the return to the assessed “risk”.

Governments are there to regulate and ensure ethicacy and standards of public conduct, as Richard Pratt & Co are finding out.

As for all this “debt”.

The debt is of a private, not a public, nature.

In that lies the difference. Private borrowers cannot “fix the market” or deflect the consequences of poor borrowing choices, governments can (especially by screwing more from tax payers).

The problems which some have alluded to here with borrowings, ignores that these are private debts.

Any fallout or “collapse” is not going to materially affect a significant number of borrowers, only a tiny minority (who are possibly overdue for a good lesson in real-world economic management).

“But it's never that simple, and the pragmatic position is to accept that having regulations that prevent irresponsible behaviour is generally less costly and dangerous than allowing it go on unhindered.”

We have heaps of regulation. Companies Acts, employment regulations, etc

There are always those who get suckered into schemes and false reporting.

The reality is, every system of regulation runs behind the inventiveness of the criminally inclined. Many dupes ignore the commonsense advise “if it sounds too good to be true, it probably is”.

“Regulation” must not be so proscriptive as to hinder the ability of the real venture capitalists to develop, invest and be rewarded from their investment in risk and innovation.

absence of venture risk-takers reduces the opportunities for all in a way government cannot compensate for (viz real jobs and trade).

Demos, whilst your intentions might be very noble, in reality things
are just not that simple.

Introduce tariffs, the biggest losers are in fact the poor. Clothing,
bicycles, paint, food, you name it, they pay more.

I remind you that the biggest cost in the economy is not profits,
but waste. Look at the balance sheet of most large industrial
companies. Profits are only a tiny % of turnover, costs are the
big issue.

The reality is that no competition means complacency, which means
waste. All those office workers, staring out of windows, watching
the cars go, cost somebody, for their wages have to be paid.

Thats why Govt is usually so hopeless at running anything.
They have no competition, so can waste time and resources with
relative impunity.

Try to force international capital, they will simply pack their
bags and go elsewhere. As to Australian capital, the largest
shareholders in Australian companies are in fact workers, through
their super funds. The vey beneficiaries of high Australian
corporate profits, are the owners, the people who own 1 Trillion
$ worth of investments in their super funds. Australian workers
of course.

Nokia did well by being internationally competitive and giving
consumers what they want. That is all about great entrepreneurship
and management, not about Govt policy. Any Australian is free to
start a Nokia tomorrow, if he thinks he has the ability.