Recent article says we have lost 120,000 manufacturing jobs in Australia over the last 10 years.
Preamble. I'm from Adelaide and not so long ago we had a shoe factory operating in the CBD called Slatters.(now apartments)
I'm still wearing my Slatters shoes though pretty old. For one pair of Slatters I probably go through 4,5,6 pairs of imported. Slatters is gone like many of our home spun industries. It's not just shoes but socks, toasters, radios, crockery, microwaves - take a look around your house or go to your local CHEAP as shop. We are importing and buying a lot of crap products.
I'm not bagging China - good luck to them - but should we close factories to support the non sensible free trade principle that is non existent.
Try and digest this in a simplistic argument.
1) 1000 workers earning say $40k/yr. Total wage of $40 million.
2) @ 15cent in the dollar that's $6 million tax
3) Lets say $30 million spent - $3 million GST
4) The last $4 million goes on mortgages - money moving around in our
banking sector.
5) 1000 workers now unemployed. They go on Newstart say $300/week.
Round that out to $15 million/year in Centrelink payments.
6) The standard retraining for these workers is in the service
industry (waiters, florists, forklift drivers etc). This sector is
dominating our workforce.
7) We lose our skills as a workforce.
8) We put those that have lost their jobs under enormous duress.
9) France and Germany the powerhouse economies of Europe support
their industries by subsidy. USA is now encouraging their
manufacturers to come home (ie New Balance )
10) Question. Considering our real unemployment and under employment
figure is over 20% are we completely stupid as a nation not to
subsidise our manufacturing industry (as well as supporting new
innovation in the sector).

That's Australia Mate ! A Labor Government is simply compounding the selfish nature of the population. The decent Australians have been pushed aside since the Goaf Whitlam circus.
Just look at the forum, it's full of those who believe they're owed a living.
Anyone with some get-up & go is immediately pounced upon by the bureaucratic maggots hitting them for permits, licence fees & all sorts of other economy stifling idiocies.
There's no incentive ! That's why manufacturing has gone down the Labor-provided shute.

Jumbuck>> 9) France and Germany the powerhouse economies of Europe support
their industries by subsidy. USA is now encouraging their
manufacturers to come home (ie New Balance )<<

Bloody amazing Jumbuck….all our manufacturing jobs in the First World have been lost because of the abolition of protectionist tariffs. Now we are going to buy them back with our taxes.

When the UN, World Bank and IMF drew up the Lima Agreement, the cry was share the wealth with the Second and Third Worlds……but the only ones to prosper were those who now have so much power and wealth that they can’t count it.

Yes, we need to get manufacturing going again.

Why, non-food manufacturing still represents 65% of global merchandise exports, and agriculture less than 10%.

As Katter and Palmer said yesterday, wealth is created by producing something.

Not sure about Coalition, but indeed it will be a better option than Labor in terms of major parties. Costs need to be addressed.

....As Katter and Palmer said yesterday, wealth is created by producing something.

So true, yet this was identifieid years ago, yet we chose to ignore the warnings.

I remember back in the 70's, my parents used to say that one day we will no longer repair things, we will simply throw them away and buy another. Commonly known as the throw away society, and how true was that.

If you look at our employment markets, so much employment is funded through the taxes paid by other employees.

The plain raw facts are, that manufacturing WILL NEVER survive in this country again, unless government subsidizes the industries for ever and a day.

Now we have one huge problem with that, NO MONEY!

I am sorry gentlemen to disrupt your anti labour tirade but the globalisation trend was started by very right wing governments in the US and UK (Thatcher & Reagan) and has been continued on by BOTH sides of government since. They have of course sold out to big business who now own the governments.
This has allowed them to move their factories to Asia and very cheap labour.
They are now in the process of importing VERY cheap labour here to run mines that cannot be moved offshore as in 457 visas.
http://www.news.com.au/national-news/foreign-prostitutes-wanted-on-457-skilled-work-visas/story-fncynjr2-1226660651907
The only answer to this is to support any pollies that are willing to stand up to the present regime and bring in strict tariffs.
This would mean that you would have to forgo your smart phones and all the other junk that you find so essential but in the long term you would learn how to manufacture again and have jobs.
Our so called governments fool you into supporting one side or the other, when in fact they are both the same with different labels.

Jumbuck,

You are about 40 years too late.

Whitlam started the downsizing of Australian manufacturing with this statement. " Tariffs don't protect jobs, they only protect profits".

Since he cut tariffs and so has every government since, our manufacturing capability has fallen like a rock.

don't worry guys the Greens will ensure manufacturing is supported by wind farms. Most plants will operate abot 2 days a year.

in fact they are both the same with different labels.
Robert LePage,
Oh come on Bob,that's just leftie hype that's trying to water down Labor/socialist failure/incompetence. In order for labor voters to see some sense the Coalition has no option other than occasionally step down to Labor's level & hopefully build up again to a more sensible level. It's no good if you have incompetent Government being voted in by indoctrinated voters when they are in the majority, you have to get the indoctrinated to glance over their right shoulder occasionally.
As long as we have this idiotic notion of democracy we'll never get a chance to educate those who need educating & eventually think. Also, the term education needs to be brought back to its real meaning.

It is simplistic to just blame China and cheap labour for everything. For just look around what is being sold. Mercedes, BMWs,Hyundais, Toyotas, etc, not made in China, but made in first world countries. Miele kitchen appliances, made in Germany. Aircraft, made in USA and EU. Billions of $ worth of prescription drugs, made in the first world. The list goes on. Tariffs would achieve nothing, other than decrease our standard of living.

Banjo>> Whitlam started the downsizing of Australian manufacturing with this statement. " Tariffs don't protect jobs, they only protect profits".
Since he cut tariffs and so has every government since, our manufacturing capability has fallen like a rock.<<

Banjo that statement of itself is correct, but the premise is wrong.

Bloody Globalization and the control of trade had its modern genesis with the Lima Agreement in 1973.

Both sides of parliament went along with the signing away of our right to make our own decisions, our sovereignty.

All governments since have disengaged tariffs when they were directed to by the IMF.

Banjo you can’t blame Whitlam. Have you noted that as manufacturing fled the First World over the past 40 years not one First World government told the IMF to go jump, neither side of the political spectrum….what does that suggest?

Yabby>> The list goes on. Tariffs would achieve nothing, other than decrease our standard of living<<

It is a chicken and egg thing Yabby, our standard of “comfort” may alter marginally, but it would increase our nation’s wealth and with wealth comes comfort.

Thankyou Jumbuck and Robert for your pertinent comments. Pretty well on the money from where I sit.
Perhaps a gst. of 20-30% at point of sale on all imported retail products could help redress the imbalance between the cost of our labour and that of the slaves in free trade zones. Every dollar spent on these imports adds to the country's foreign deficit and has to be balanced with foreign earnings.
Surely there are some classes of goods which could again be produced in this country especially if they were gst. free.
Such a move would bring a number of wins. The government would gain more revenue from the increased gst. on imported goods and the income tax from those re-employed. The social security bill would be reduced or the money reallocated and the dependency on foreign exchange would lessen.
I believe that retail price increases would not necessarily follow because at the moment prices are not based on production and distribution costs but on what the market will stand in terms of spending power. For instance I recently purchased a camera which had a local retail price of $559, I took the camera with me on a trip to Kathmandu in Nepal where I saw the same camera for sale for $235 brand new. Who is being ripped off here? us.
Den71

I have for years advocated that Australia should saw off the rest of the world.
We should import nothing that we can manufacture here.
That would mean we would still import large aircraft, some electronics
parts such as CPU chips, and no doubt a number of things that have not come to mind.

It will take many years to build up the technical knowhow to acheive,
this but it must be done, because otherwise we will just be a quarry
and source of cheap food for the owners of the country.

You can now see it happening, even the gas we need is being sold off
not by us but by overseas companies.
The Chinese are buying, not just oil fields but our productive land.

WELCOME TO THE COOLIE SOCIETY !

Manufacturing moving off-shore is mainly the result of corporate greed chasing higher profits plus consumer demand for ever-decreasing prices for their goods and has been going on for a very long time.

Both sides of politics have failed to halt this migration and neither side is likely to even try.

There was an attempt to raise our education levels about 10 years ago with a view to becoming a more innovative society but the government decided we couldn't compete with the "bowl of rice a day" wages and thought we should concentrate on providing services instead.

In other words, serving coffee and sandwiches to visiting tourists and using the money they pay us to import the goods they manufacture.

Welcome to the world economy.

* but it would increase our nation’s wealth and with wealth comes comfort*

Well no, Sonofgloin. Things like Ipads and computers would become so expensive, that you simply could not afford them. So your standard of living would drop dramatically.

In the longer term everything will become local as the well head cost of
oil reaches levels that cannot be afforded except for pharmacauticals and some plastics etc.

International trade will decline except for very compact devices.
It actually has started already, it is just that you have not noticed.

There will be plenty of oil available, it is just that it will be so
expensive that production will be only be a very small percentage of current production.
It will be a crime to burn oil.

Welcome to the post peak oil world.

"Well no, Sonofgloin. Things like Ipads and computers would become so expensive, that you simply could not afford them. So your standard of living would drop dramatically."

And they raise our standard of living?

It is all about profits.
Why make anything when you can improve your profits by importing.
How loyal are you when it comes to the choice between an import and buying locally and, if you had your own business would you consider making something in Oz or make massive profits by having some cheap overseas option make it for you?
We are now part of the global economy and there will never be a pollie brave enough to change that nor will there be a government in the foreseeable future that can afford the subsidies required too bring industry home again.
Our only solution is to compete and that means cheaper and, that is not going to happen until we are forced into it. Some time to go yet but it will happen.
Take it easy.

SD

SD, I think you will find that it is all about fierce competition, where the consumer is king. Unless a company has massive amounts of intellectual property, there are no massive profits, but small margins. We have enough public companies publishing their figures, to substantiate that, when it comes to consumer goods.

People buy some things on price, but others on value for money or quality, where price is not the driving factor. A Mercedes, a Miele appliance, the latest drug for cancer etc, are not the cheapest, but more likely considered value for money and the best. That drives a whole other market, which is why Korea, Japan, Germany, Switzerland and other countries still do ok with manufacturing. They are simply smarter than we are.

In Australia the entrepreneurs can make far more money from real estate development or mining or building another casino, to have to bother themselves with manufacturing. So they don't bother, most of the time.

No Shaggy, it is not like at all.

I hated it, but had to either go offshore, Taiwan, for a number of solid brass & bronze products, go broke, or at least get out of those products.

It cost $6.00 for the brass to start making one product here in Oz. I could import the thing, made to my specifications, chrome plated, & assembled, with 3 bespoke rubber gaskets, for $2.00 landed into my store in Nerang Qld.

You are never alone in business, & although patented, it was not viable to try to protect that patent in court, against every copier, so we had to compete on price.

To put costs into perspective, the average price of shipping that product around Oz was $13.00 each. Even to Perth, it was cheaper by truck than by rail.

We have got a lot of things that need fixing to get our economy, particularly manufacturing in order, but god knows where you would start first.

It still comes down to profits. If you cannot make a quid on an Australian manufactured product it is obvious the answer is to go somewhere else where it is far cheaper to make.
A reasonable margin is expected and if overseas manufacture is the way to achieve this so be it.
I was not knocking profits but to maintain the margins an Oz product will need to be far cheaper to produce than it currently is.
Profits is what it is about, you source the product from the cheapest supplier. After all one is in business to make a quid.
Look at all the reputable clothing companies and their involvement in such places as Bangladesh. It is the way to make a quid. Who wouldn't if you were in business.
Until we become far cheaper than present the status quo will apply.
Take it easy.

SD

During the Whitlam years the international thinking on poverty was that we make everyone in the world equal by a level playing field so there are no isolated wealthy nations and no nations living in poverty. However not all factors like war, population growth, and primitive world views that hold people in fear and superstition of change. The view was all about sharing wealth and not about personal factors of education and social responsibility. The whole event went pear shape with the CEO's getting millions and the factory workers getting dirty, tired and pittance wages.

The so called "level playing field" has now morphed into giant industrial complexes set up in overseas countries that have very cheap labour where they quite often live and work in serf like conditions.
This gives more profits to the corporations and is the point of the exercise, not to improve the lives of the "poor people".
We should have never signed up for free trade treaties with these other nations, it has just destroyed our manufacturing ability and turned us into a nation of waiters and paper shufflers.

Well no, its actually increased our standard of living, especially for our poor, who now can actually afford consumer goods. Its also dragged millions of poor people in the third world, out of poverty.

Its no point making consumer goods locally, if they are so expensive that the locals cannot afford to buy them.

Who for instance benefits from those cheap clothes at Target? Local consumers who are trying to feed and clothe their kids on a limited budget. As we can see from the numbers, Target is in fact not making money, or very little.

Good valid points Yabby;
However what do we do for a living ?

Taking in everyone's washing does not seem to be practicle.
This is what is the problem with the service industry we have as an alternative at present.

If we do not have jobs then it won't matter how cheap Kmart is.
To produce food will occupy a lot of people but those buying the food
will have to have jobs of some sort, producing something wanted by
the farmers and other eaters of food.

International trade will decrease quite significantly whether we like
it or not. The cost of container freight must rise especially when
the current glut of shipping capacity declines as ships are scrapped.

The cost of fuel is continuing to rise and the ships cannot slow down
much further to save more fuel or their crew costs will escalate due
to increased voyage time.
Manufacturing of certain ranges of products has already left China
looking for cheaper labour.
This can only continue for a short period as shipping costs will
eventually overtake the labour savings.
Already sailing ships are being employed experimentally in some areas.

So Yabby any suggestions?

Bazz, the cost of sea freight is in fact a tiny part of the final cost of most products. You can ship a tonne of grain or iron to China, cheaper than you can cart it 150Km by land. So even if sea freight charges double, it is not going to matter for most goods.

As to what we do, for a start we have to get real on costs. Things like long service leave, holiday leave loadings, 2.5 times overtime etc, are simply a joke in the real world and we won't get anywhere whilst our unions live in the 1960s. Next we have to get smarter.
If a university student in Australia can take a 1000$ and start a breakfast cereal company which now exports to about 30 countries, because its simply a great product, (Carman's) available at your local supermarket, then other Australians can do the same, if we give them a chance. We produce huge amounts of ag products, they can be value added if Australians can be bothered to do so. But we can't even convince our polies that they should get off their arses and take breaking down other trade barriers too seriously. NZ runs rings around us in that department. My conclusion is that Aus has had it good for too long and needs a bit of pain to learn what the real world is all about.

Yabby said;
the cost of sea freight is in fact a tiny part of the final cost of most products

Grain perhaps is very compact for its value and can be bulk handled.

I can see that for some products, but there must be a large range that
are affected otherwise they would not be running 25 knot ships at 15 knots.

Shipping costs plus now cheaper labour in the US has restarted many industries in the US.
The "Insourcing" is quite significant there.
Most furniture sold here is made in Australia because as in the US,
I suspect its bulk makes it expensive to ship.
Our problem is how do we get our labour costs to be similar to the
US's without a tremendous upheavel ?

However I agree with you about a need to realise the world does not
owe us a living.
I think the free trade rules are gradually becoming obsolete.
We are entering a whole new era of low to zero growth in which the
old rules will be a very poor fit

Bazz, there is overcapacity of container ships, so it would be pointless to run them at top speed and then sit around doing nothing. Much more efficient to run them at a slower speed and save money. From Australia, one of our major exports to Asia is containers of hay, for their dairy cows and race horses to eat.

Yes a number of companies are returning to the US to manufacture. Cheap energy from fracked gas is one of the reasons. The gas which we export to Asia, costs them around 14-15$ a unit. The same gas costs 3-4$ in America. Our wages here are now so extreme, that the Americans are saying in many of our industries, they are double what it costs them in the USA. Totally unrealistic