Yabby, it's not a question of the Govt *telling* the industry what it should and shouldn't do, but where and how the government the spends money in infrastructure, education, research, incentives etc. etc. make a huge difference in the direction the economy takes.
As I've pointed out before re your favourite example of Switzerland, the Swiss government pumps far more money in to education and research than our own. Further, governments there haven't been obsessed with keeping the budget in surplus over and above all other considerations. There is the Swiss Office for Trade Promotion that actively helps out exporters and other corporations wishing to operate in Switzerland, sometimes with tax breaks, but mostly through cooperative research and market analysis. There are still considerable agricultural tariffs, with no concrete plans to remove them. And while not part of the government per se, the Swiss National Bank's policy is explicitly to encourage the Swiss Franc to ensure trading terms remain favourable. Oh, and FWIW, 25% of its workforce is unionised.
Anyway you look at it, the Swiss economy is hardly some paragon of a laissez-faire, unmanaged economy. It has just as many "well-meaning" government officials doing their best to keep the economy running smoothly - and they obviously do a very good job, for the most part. Indeed, pretty much the only economies that could be said to be truly laissez-faire are black-market ones, and those of failed African states. Which should tell you something.

They say our massive foreign debt is kept from the notice of the media and public because any reduction will lower the value of our exports?

Can any of our bright minds explain how this can come about, because it sounds we will be broke whatever way we go?

Cheers - BB, WA.

Mac “We are a already banana republic,”

You might be but I am certainly not.

The debt is not a “taxpayer financed government debt”. The “foreign debt of 1/2 a trillion dollars” is private.

As Yabby correctly observes, “2.4 trillion$ worth of assets, why should 500 billion of debts be a problem?”

So, if some bunny has hocked himself up above his neck, it is his private and personal problem and likewise a problem of the fool who lent him that much.

Speaking personally, I have a debt to asset ratio of around 1:5 (about ankle high and capable of eliminating same debt in under 2 years if I needed to). As things go, I am certainly not a “private banana republic” and when the bell tolls to ring in the debt, am not going to sweat any.

“You are concentrating on government surplus as the only measure of competence”
Not at all the incumbent governments debt reduction strategy is having and will continue to have an ongoing benefit for future generations of Australian, just as the history of “socialist debt funded spending junkets” would leave a taxpayer funded interest bill for our children and grandchildren to pay.

The attitude of the incumbent government in not pretending to run a nanny state which knows better than private commerce is the same government who has freed up the labour markets from under the jackboot of unionists and demonstrates a government going the distance to maintain Australian competitiveness in the face of “The industrialists in NE Asia” who seem to be you boogey man.

I might add those same “industrialists in NE Asia” reflect the “spirit of venture capitalists” which we need.

Such “spirit” will not only overwhelm but be beyond the comprehension of those who think there is any solution to be found in the hypocritical socialist alternative of a “committee of experts” who are prepared to take risks with tax payers funds, so long as they don’t risk their own security blanket and resources.

“There is the Swiss Office for Trade Promotion”
Australia has maintained the bipartisan equivalent for years.

Col Rouge,

You can't use your own personal balance sheet as an analogy, or simple arithmetic. The national assets and liabilities are the aggregate of thousands of individual enterprises each with its own financial health and all interlocking in some way. According to your logic the Great Depression never occurred. During a recession or a drought you can be sure the Nanny State will come to the rescue of the rugged individualists when they come bleating for a bail out or some kind of government intervention. Private profit, socialised loss.

Sooner or later private debt is public debt, most of us will be affected in a severe recession.

The NE Asian industrialists are not my bogey men, they are examples or real entrepreneurs,we have to compete in their world, not in a textbook fantasy.

Aussie Know-how?

Col, certainly agree with you somewhat, but much of our overseas debt trouble surely must relate to the lack of production of our own rolling stock?

Possibly you are too young to realize that most of our farm gear even during the Great Depression was produced by HV Mackay, Sunshine Victoria taking the name of the company.

Not only did they produce the world’s first stump-jump plough as well as the Sunshine grain stripper, both much favoured in Argentina, but also a generally whole farm plant, reapers and binders and so forth also produced with the Sunshine Aussie touch.

Furthermore, from out of patent overseas ideas Sunshine also built the first true reaper-thresher, now sold back to us in the shape of the big Yankee Combine Harvesters some now worth three quarters of a million bucks a throw.

Now with a re-rising China with its demand for our precious pitstocks, it seems we have forgotten how innovative we once were, having reached the stage that we don’t seem to encourage major innovation and production these days, leaving it to both the old and new overseas producers, with us too much relying on what was also called in the colonial days quarry economics, most of that machinery of course being owned by the big companies, and of course, also imported.

Finally, Col, your success plan seems too much searched over by a study we did called The Changing Global Political Economy, which though seemingly good for the Third World, still talks about farm products bought six to ten times less at the farm gate, than eventually sold in the shops without much more cost to the Big Biz buyers.

Could say, Hey Ho to the renewed Corporate Culture.

Cheers – BB, WA.

Wiz, I think you will find that Swiss companies like Nestle, Roche, Novartis,
Schindler, Saurer etc, have done well globally despite the Swiss Govt, not
because of it.

These companies all spend huge amounts on r&d, had to compete globally,
had to be well managed, or they would have gone broke a long time ago.

Contrast that to Australian industry, which was largely geared to hide
behind high tariff barriers and did not have to invest in r&d, as they lacked
global competition and the outcome is for all to see.

Yes, Swiss agriculture is subsidised and protected, that’s why its one of
the least efficient in the world and is carried by an efficient industry sector.
Exactly the reverse of our economy!

Just throwing money at something is not always the answer. How its actually
spent matters greatly. What the Swiss do get right is their education system.
They have a good vocation system, which means that apprenticeships are
the norm, thus they have a highly skilled workforce. That’s what we lack.
But that’s not just a Govt problem here, but an industry problem too.

Just throwing money at an industry, does not mean it will thrive, as our
MV industry shows. We have yet to find more niche industries that we are
good at, but then we are still in a state of change, from a backward,
overprotected industry sector, to one which has to learn to compete
globally.

My point in quoting Switzerland is not to say that they are perfect in
every way, as you seem to presume. My point is that these companies
have done well in a global economy, without Govt protection,
without Govt interference or industry policy like MITI. What matters
is good management, a skilled workforce that is flexible, great ideas
and innovation, tied up with great r&d. The best thing that Govt can
do is facilitate things for industry, not interfere with tax dollars.
Best to cut out the taxes in the first place, not pick winners at the
expense of others, as some here still want Govt to
do.