Thread: help needed to save our manufacturing.

And Frantic, Cheaper labour in Thailand?.....Doesn't make any difference?
Frantic, like I said, you may be the best figure man on the Planet, BUT THEY JUST DON'T ADD UP,...unless of course, as I've said before, you know better than 40 yrs of everybody controlling Aussie for the last 40 yrs, who have been unable to do the things that YOU say are financially viable. Why would that be?
Mate, I know you are a passionate man, but I'm sorry, I just don't believe that.
What is the latest at Whyalla, Arium etc?
Pickles.

Originally Posted by TerryO

You're totally missing the point,

.so not sure where you think the money would come from to fund the extra spending on higher cost locally produced steel etc from other than increased taxes and or running even larger deficits?

Tariffs on imports from countries using slave labour, like most of the 'ese.

Originally Posted by TerryO

Your totally missing the point, if the government had to put up taxes to pay for this and other assistance packages there would be a massive backlash about how the poor PAYE was again propping up the nation.

99.9% of the nations tax payers would have brain explosions if the tax rate went up no matter how noble the cause and you know it.

Why mention gst? The Feds don't get a cent of it to keep, it all goes to the States, its PAYE and Company tax the Federals collect for their own use. As for tax dollars already collected covering it, in case you had not noticed since 2009 all Federal Governments have run a deficit, which means they are already spending more than they are collecting, so not sure where you think the money would come from to fund the extra spending on higher cost locally produced steel etc from other than increased taxes and or running even larger deficits?

Actually, you've absolutely missed my point, simplify it.
Currently steel employs about 20-25,000 directly , all pay tax for example of $15-25,000 which is around $4-500million INCOME going to govt.
Shut it down govt looses that $500million income
Then has to PAY welfare of $15-20,000 per person, maybe much more if families and it's a fresh DRAIN on the budget of over $500 million

So shut steel to save 100 million today means tomorrow your budget position is $1billion worse off.

Flow on effects, all studies show 4-5 times multiple for jobs lost directly by a manufacturing industry to those lost up and down the spending and supply lines.
So a real budgetary effect could be over $6 billion lost in PAYE tax and increased welfare payments.

For car manufacturing , we won't see the full impacts until 12 months after toymota and general shut shop. Then there will be certain circles screaming about "massive increase in welfare cost being unsustainable " when they've created the costs.
P.s further "economies of scale crap" a majority of EU models sell less than any of our 3 remaining cars do in their home markets. The numbers are made up by exports which all govts should have incentives on. They along with the USA get more than double any oz made car ever did per vehicle. But we're smartser than them euroes n yanks ay!

Well most of Europe and the USA are nearly bankrupt with Government debt to income ratio's that even a blind man can see are unsustainable.

Where as we have just about the lowest Government external debt ratio of any nation on the planet, so you now what Frantic, I guess your right maybe we are smarter than they are. ...

Pickles, I understand your argument and in many respects agree with it. For too long in this country we have paid too much for many things and the protectionist policies we used to have were clearly not sustainable in this era of the global economy.

I agree it is very difficult to argue for the protection of inefficient industries and that on balance, protectionism does more to harm our exports than protect local industry.

What worries me though is what we will be left with. I have worked in engineering for over 30 years and in that time have seen industries, skills and opportunities slowly eroded. Every time an industry moves offshore it reduces the skill levels in our society. Not just the process workers, but all those that support them, engineers, accountants etc. As these skills diminish so do the opportunities for businesses as they have no skilled workers to draw on.

We used to think as skilled technical people we were safe - it was just the unskilled jobs that would go offshore. Fabricators were the first to feel it, now soon we will lose the ability to fabricate anything as my generation retires and no new skilled tradesman are being trained. Then it moved on to drafting, rates are so much cheaper overseas and now the same thing is happening to those skills. Engineers and Project Managers are now going the same way. Skill bases that have taken centuries to develop are being lost, which reduces our ability to take advantage of any opportunities that may arise in the future.

A viable steel industry does more for the country than make steel. These large industries are where people used to go to get trained in all sorts of areas, with cadetships in engineering, business management etc and apprenticeships in many trades. They had programs designed to teach skills, rather than just make a dollar. These people would move on to other industries so broadening the skills base of the country. Sadly this barely happens any more. Then there are all the companies involved in building, maintaining and supplying the steelworks. This reaches far beyond Whyalla.

Maybe you would argue that because we cannot compete in these areas we no longer need these skills. So then what's next? Do we become a nation of farmers, bankers, or do we rely on tourism? What happens when the price of wheat tanks, or when all the banks move to Shanghai or the reef dies because of global warming.

I think we need to ask ourselves what sort of society we want to live in. Ultimately a sustainable society needs to produce stuff, be it food, minerals or manufactured goods, we cannot rely on just moving money around to survive. To me this needs to be in a broad range of industries so that we can support the whole when one industry has a downturn.

I agree that none of this simple and I certainly don't have any answers. The government shouldn't prop up every failing industry, but I think the steel industry is worth saving. We can and do make steel efficiently and can compete on both price and particularly quality. What we can't compete with are heavily subsidised steelmakers dumping their product below cost.

Cheers,
Jon

Very well put. Jon.

Originally Posted by TerryO

Well most of Europe and the USA are nearly bankrupt with Government debt to income ratio's that even a blind man can see are unsustainable.

Where as we have just about the lowest Government external debt ratio of any nation on the planet, so you now what Frantic, I guess your right maybe we are smarter than they are. ...

Facts are a bitch
Total foreign whoopsie
https://en.m.wikipedia.org/wiki/List..._external_debt

And total govt debt
Country List Government Debt to GDP

Hell let's be like Afghanistan, they must be great being in the top ten.
Reality is the nations below us, NZ excepted, you wouldn't lend a lawn mower let alone billions of dollars. With the exception of 5 out of the lowest debt 6, a vast majority with our debt levels are 3rd world countries, doing little to nothing for their population, or at war.
Another interesting fact, since 2010 Germany have reduced their debt to GDP by 10% from 81% to 71%, yet we have added over 50% to ours(20-33%)?

Originally Posted by jon3950

. For too long in this country we have paid too much for many things and the protectionist policies we used to have were clearly not sustainable in this era of the global economy.

I agree it is very difficult to argue for the protection of inefficient industries and that on balance, protectionism does more to harm our exports than protect local industry.

so where does this leave us?