Arthur,

Economics is called the grim science because it imposes “heartless” rationality on the lives and choices of people, and it cares nothing for feelings or nostalgia. Your arguments are based mostly on feelings and nostalgia, and have little basis in economics.

As an engineer (with MBA) who specialises in designing high tech heavy industrial plants, I should have a vested interest in expanding the manufacturing base.

The plant I am building now will produce more with 90 people (over all shifts) than the multiple plants it is replacing that employed several hundreds, (with a capital investment of more than $10m per job created). The skills requirements will be higher, and there will be almost no room for lower skilled employees.

The grim reality is:

• The service industry is driven by the high demand for services
• The high cost of labour and materials in Aus means that any head to head match with China or India in manufacturing will lose.
• New industry is highly automated, and has a high demand for skills. There is little future in Aus industry for unskilled workers.

Thus the clothing industry is a lost cause, and the focus should be for the niche markets where style and specialist knowledge is required, or raw materials and transport create a barrier.

In the interim, Aus had until recently less than 4% unemployment and one of the highest per capita income rates in the world, supported largely by the service industry, and the nations that are suffering the most from the economic downturn are those with the greatest industrial component (Japan, Germany, etc)

Finally I chose “shadow minister” long before the present labor government and because I don’t entirely support either party, though I lean away from socialist interference and the nanny state.

Shadow Minister
While I compliment on your achievements as "an engineer with MBA" you have yet to recognize the differences between running a business reliant on profits with the option of liquidation or bankruptcy, and running a nation without that option.

Your description of the "grim science" and "heartless rationality" suggests a limitation to comprehend the overall dynamics of economics.

Corporations hire personnel to improve efficiency and productivity to provide shareholders with a return on investment. You reject or terminate those below your standards. That is the art successful management in running a profitable business for shareholders, and that is the heartless reality component of economics in business.

From a national perspective however, your attrition based success results in the "several hundreds" replaced by every 90 of your staff, becoming the responsibility of government and the taxpayer.

As you admit, "skills requirements will be higher, and there will be almost no room for lower skilled employees."

Your operation enhances Australia's ability to compete in selective industries and is a crucial component to our future.

Your reference to "feelings and nostalgia" is ill founded. It is merely the other side of the "grim science of economics" that you ignore; the national problem for social security to provide for unemployment and retraining (where possible) to counter related health problems, accommodation, rising violence and crime.

Treasury (taxpayer), not corporations, fund these problems.

Hence my earlier unanswered question, "what industries will create these jobs?"

Any ideas?

Industry to replace Centrelink?

I assume the 4% unemployment you refer to must somehow include the resource industries that produce the ripple effect that flows down through the service industry.

Who buys our ore and coal?

At least we share a common view on politics