JC Political Thread - For all things political Part 2

Just watching this Labour failure getting slowly worse every week, with more pre election promises getting broken again then again,
honestly how long is it before there will be another election, are we going to have to watch a full term of stuff ups or can one be
seen on the horizon anytime soon?

 

Relax rex.

Question. what makes you assume so much answer ?.

 

actually conservatives often want religion taught in govt schools, while liberals want it silenced there. big difference.

 

Don't be a smart arse.

 

AUSTRALIA'S car industry is facing job losses and costs of up to $460 million under a carbon tax.

In a potential blow for 50,000 industry workers, the Gillard Government's green scheme is forecast to increase the costs of production by up to $412 per vehicle.

And senior industry figures claim Holden, Ford and Toyota will have to absorb the carbon cost - rather than pass them onto consumers - for fear of losing further market share to foreign brands such as Honda, Suzuki and Volvo.

For the first time, the motor vehicle lobby has weighed into the carbon tax brawl and warned of a wave of "green unemployment" if the Government doesn't get it right.

Based on a carbon price of $20 to $30 per tonne, the projected annual cost to the industry is forecast to be up to $84 million - unless the Government delivers adequate compensation.

Even with support, the car industry will have to absorb a minimum of $30 million a year, according to the modelling by consultants PriceWaterhouse Coopers.

Last night, the motor vehicle industry warned that the costs of a carbon tax - due to come into effect from July 2012 - could be terrible for the troubled manufacturing sector.

"The bottom line is, if we don't offset these additional costs, it will undermine the case for further investment and our ability to sustain jobs," Federal Chamber of Automotive Industries' boss Andrew McKellar said.

The motor vehicle industry wants the Government to introduce a low carbon price of just $10 per tonne - and only increase this in line with other foreign countries who make cars.

"If we don't get compensation for these costs, we won't have green jobs, we will have green unemployment," Mr McKellar said.

Continued here: Carbon cost blow of up to $460 million for carmakers | Adelaide Now

 

Some may argue that Australia shouldn't have an Auto industry but I suspect few realize how many 2nd, 3rd, 4th and more tier jobs that Holden, Ford and Toyota support. There has been of course been a trend to source offshore over a long time - surely our government policy should be to support Australian manufacturing and not shoot it in the head???

I believe that Julia was summoned to meet the Queen when she was in UK for the wedding. I sincerely hope it was so Liz was delivering a warning that Julia is skating very close to treason the was she is managing Australia.

Reaper

 

if the car industry was a person it would be a pregnant 15 year old girl in moccasins, hanging out the front of the Broady Centrelink for its next govt payout.

 

I wonder how many small business owners have been told that bad results are the result of bad decisions and been told to sink or swim? I wonder how many small business owners have been offered or are demanding tax breaks before the tax even comes into existence?

Always been a bit confuddled about how people who are so strongly in favour of 'sound economic management' want it achieved without any taxes being paid. Of course, they are in favour of reducing their own personal taxes, or claiming anything else that is useful directly to themselves, that's human nature I guess.

Car industries the world over have to toe the line when governments make decisions.. except in the US of course, where the car industries and banks actually make the decisions ! Hmmm and the US economy is now a basket case...

'Green' motives aside.. I mean seriously, does ANY government apply the taxes collected totally and precisely to the purpose it was ostensibly for? You want better economic management, the govt. doesn't have the money to pay the bills, it needs more money.

You will whine that we cant afford a few refugees, the smallest unemployment benefits payout bill in the western world, or to help out those who are physically unable to work (even thought they have previously paid taxes all their lives).

Industries can be replaced if they aren't making money, by those industries that are. Jobs come in some industries, go in others. You want us to give the car industries a break by excusing them from paying the taxes that others will pay, but you are against building new infrastructure, with the technology and job creation benefits they create, on the grounds that we cant afford them.

We can have a car industry that doesn't produce cars, its no problem. We can use technology and expertise to design parts to sell to the rest of the world. Its no big feat... not exactly rocket science. We can use that same technology to make other things too, its just a matter of introducing new, more profitable and better products and discontinuing the old ones which are too expensive, don't sell, or are judged not appropriate for whatever reason.

Business has been doing this since the first time a caveman decided it was better to rent out his woman for a night for a decent feed instead of swapping her permanently for a dead mastodon...

Workers who get displaced will find other jobs. We have a massive skills base in this country that is not used efficiently, yet we import 'skilled workers' because we cant find people to fill the positions.

If it wasn't a carbon tax, it would be some other kind of tax break. The industry is not self supporting, it needs to be left to sink or swim.

In the latest blow to the local car making industry, Ford Australia is set to shed 240 factory workers’ jobs and cut production by 20 per cent to from 260 to 209 vehicles a day from July.
It’s the biggest job-shedding exercise at Ford Australia since 2008, when it shed 800 jobs affecting the breadth of its operations.
The 240 jobs will be cut from July, and will bring Ford Australia’s manufacturing workforce from 1800 employees to 1560, and the total staff from 3400 to 3160.

The unemployed in this country total about 580,000 people, creating an unemployment rate of 4.9%... the lowest in the Western world. If Ford closed down tomorrow, it would directly add 3400 people to the jobless rate, or less than half a percentage point.
It would indirectly affect many other industries too (the so called 2nd, 3rd, and 4th tier industries), in the short term, but these are manufacturing industries that can and will adapt to make something else.. or make the same thing and export it instead..

It is not the governments function to keep companies afloat. Ford are in trouble because they only make large cars in Australia and the market is falling for those cars... not because the govt. is going to impose a carbon tax.

I'm against a carbon tax, it wont work. I am even more against protectionism. If a business cant cut it on a fair and level playing field, its a failed business. Other, more competitive businesses will replace it. Let the car industry sink or swim, just like the guy who owns the deli down the street has to do.

 

Why is it that our government expenditures on such things as unemployment benefits are so frequently compared to the rest of world, so that our figures seem absurdly low?

Let's just consider this for a moment. Australia's population is just over 22 million. We occupy the seventh largest land mass in the world. Our population density is the lowest of any continent apart from Antarctica. So we should accept that we don't pay much by world standards for unemployment benefits as a total sum?

Who are we compared with? Europe, with hundreds of millions of people in a land mass only a percentage of Australia's? The US, with a similar land mass, but 16 times the population? Asia - half the world's population lives there, so how can we be compared to that?

Because of the vast distances between our major centres, our infrastucture costs are probably many, many times those of Europe, but with a minuscule population to pay for it. The US has a vast population, and enormous secondary industry compared to us, to pay for their infrastructure. For example, how much would the upgrade of the Hume/Pacific/Bruce Highways cost to link Melbourne to Brisbane with a proper, safe, modern highway, like those that spread all over Europe? Billions. And you can't build thousands of kilometres of highway overnight. Railways - same problems, huge distances and enormous cost. Dams - not enough of them, and too few places where effective dams can be constructed because of the Australian topography (ie our country is too flat and major centres are too far dispersed).

So, if we have small welfare and unemployment costs compared to other countries, we have plenty of worthwhile ways of spending the savings building the country to meet its needs for now and the future.

In relation to inefficient industries, well, I for one don't like the prospect of returning to those times where Australian is just seen as the world's quarry, producing commodities and bugger all else. Some of our secondary industries were established for reasons which are still valid today, but they are operating within totally different, and far more competitive environments than those which existed when they were established. I would prefer to see our industries survive as self contained entities, with the emphasis on exports rather than just supplying the local market. Ford's mistake isn't just building the wrong cars - it's the fact that they have never seriously looked at any other market than Australia for their product, because Ford in the US prevents them from doing so. GM has been far more sensible in that regard, allowing Holden to provide the large rear wheel drive markets that used to be served by Chevrolet and Buick.

 

I'll just make one final point here. The car companies agree that a carbon tax of 20-30 $/tonne will raise the cost of a car by up to $400, thereby making them uncompetitive. I don't know about you, but if all else is equal, ie build quality, performance, economy, reliability, etc... the Australian one will be designed with Australian tastes, colour schemes, bling and other preferences and options, and I will pay the extra $400 for that. So will anyone else who normally purchases an Oz made car.

It wont be mandatory for the car companies to absorb the extra cost, and in my opinion there is no way they will do that. They will make a mutual decision not to (yes omg collusion is illegal..) and the cost will be passed on to the buyer, the buyer will still buy and the workers will keep their jobs... if the tax was the deciding factor, which it isn't. Jobs will be lost anyway as these companies struggle to compete in a modern world.

The deciding factor will be the manufacturing and marketing choices these companies make in what will become an increasingly tough industry to compete in..not a tax.

The issue of loyalty vs price applies to Asian car companies as well incidentally. How many Great Wall twincabs are sold compared to Hilux's in this country, despite the massive price difference ( and we are talking 20+ grand here, not a few hundred bucks )? Thats an extreme example of course, and there are other factors involved, such as the perceived lower quality of the Chinese car and the fact that many Twincabs are purchased as fleet vehicles and tax deducted anyway so the cost becomes less relevant... but people will buy what they buy, sales will go to whoever builds the best car at the best price, and $400 on top of every Australian made car will not influence the buyers into buying an import.

Its not a tax that will send them broke, its bad management, bad marketing, and poor decisions. I cant see why we have to compensate them at all.

Again, as I state in every post concerning the Carbon Tax.. I DO NOT SUPPORT A CARBON TAX. I am simply stating that if the fools implement it, it needs to apply to everything.. no exemptions.

 

Dakster

I'll try to clarify my points.

1. Comparison with other countries. I was thinking in terms of total expenditure, not percentages of the workforce. Total expenditure is obviously relevant to total number of potential taxpayers, hence the comparison with nations with much larger populations than ours from whom to draw taxation and fund government services.

2. Infrastructure. I am STRONGLY in favour of infrastructure construction, to the point where I refuse to accept that the money being spent on the NBN is money spent wisely, and should be diverted to highways, railways, dams, hospitals etc. Those things we need. World's best broadband, we don't.

3. Returning to the world's quarry. Australia once rode on the sheep's back. For its first 150 years, this nation relied solely on primary industry for its wealth and quality of life. Wartime demonstrated that we had to have a viable secondary industry to survive and to grow. Since the thirties, this country has gradually built up secondary industries in areas which have been essential to support our way of life. That includes the motor industry. Some on this forum believe that the motor industry should be allowed to wither on the vine to the point where it just becomes an assembly industry rather than a manufacturing one. I don't. If we abandon medium and heavy industry to countries such as China, our ability to be self sufficient deteriorates to the point where we become dependent on other nations' wealth and prosperity, so that they can buy our commodities. We all know that the current boom with China can't last forever, so why would we permit our secondary industries to die out when we are certain to need them sometime down the track?

4. Support for local car manufacturers. I don't agree with the support that governments have given to Toyota, Ford or Holden, because of the fact that our local facilities are simply offshoots of huge multinational corporations. However, if it comes to the choice of either paying companies to keep people employed whilst producing something useful, or paying those people to be unemployed, I think the choice is pretty obvious.

5. The health of Ford. Yes, they survived the GFC in a stronger position than GM or Chrysler. However, I was talking about the fact that Ford Australia has done little to develop export markets for the Falcon or Territory, because they would compete with US or European-made Ford products. That limitation on Ford's capacity is principally the fault of Ford HQ in Dearborn, not Ford Australia in Melbourne. It seems strange that Holden can market their car in so many foreign markets, yet Ford, who make almost an identical product, can't crack it for anything more than NZ at best. I must admit, though, that the poor sales of Falcons compared to Commodores on our local market these days is a mystery to me.

As for the Carbon Tax - well, enough said. We both agree on that one. There is nothing to justify its existence.

 

Nice to be having a reasoned debate rather than just being called an idiot for having an opinion, thanks mate.

 

Well, my point about government expenditure was more general, not specific to subsidising local car plants, so perhaps I've missed the original point there. As far as broadband goes, I still maintain there was an effective and far cheaper option than that chosen. Our existing network is deficient, no argument, as I live in a regional area and my mobile internet option is limited to Telstra, whom I loathe intensely. But I believe we could have improved the existing system far cheaper than 43 billion bux. Commercial benefits are only one consideration - there are too many other deficiencies, all of which hinder financial and commercial development in this country to allow such massive expenditure on one project. We'll agree to disagree on this point.

I accept your points about subsidising foreign companies - it shouldn't happen today. Setting up GMH through government encouragement and finance in the 1940's was one thing but the world is very different today. If government policies are instrumental (but not solely responsible) for creating the situation faced by local manufacturers, through bullshit carbon taxes or whatever, and this eventually adds to the burden to the point where local manufacture is no longer economically viable, and hundreds or thousands of employees are chucked on the dole queue as factories close, where does the economy benefit? Our manufacturing base is eroded and the unemployment numbers increase. You can't just say to those firms or employees "Look, your product sucks. Build a new mousetrap that the world wants and do it now." It takes time and the adaptation from one industry to another is not a simple matter.

To use China isn't a good example because their culture and economic and demographic history and development in no way parallels ours and their wages and workforce bear no comparison to Australia's. Our 22 million (or workforce of 14 million) simply can't compare with China's. The two countries are simply too different to use as valid comparables.

New technology is the answer as you suggest, but the government has a responsiblity to encourage R & D of that technology, rather than imposing taxes that "force" manufacturers to develop the technology. Imagine if money was made available for local firms to develop a new source of power that completely replaced coal fired generators, but wasn't nuclear based, for example. The world would beat a path to your door and the financial and environmental benefits to the entire planet would be enormous.

Ah well, I can dream, can't I?

 

If the Carbon Tax adds 400 bucks to the price of a 35k car, its not going to add a lot to smaller purchases. I dispute that it will have any major effect on any business. Other taxes may have more effect on business than that, but the bottom line is that the taxes get passed on to the consumer almost all the time, so the companies will survive, its just that you and I will have to pay more for the product. Company taxes either reduce a companies profit margin, or push up the price of the product at the consumer level. They don't bankrupt large companies. They can certainly have an effect on small business of course, which is my whole point.. if you are going to offer tax breaks you need to offer it to the small, not the large, businesses.

You can indeed tell companies to build a better mousetrap or go under. That's how business works. And they will do it, and succeed.

China is a good example of how small industry can move a country forward, though I agree with you that I personally am very glad I am not a resident of China for all the reasons you mentioned. The difference is, their small industry has for many years just been making cheap crap, and there was a market for it. Their quality is now improving, as their technology improves, and they realise that people are no longer willing to buy substandard stuff.
Our product will be more expensive, due to labour costs, so we need to compensate for that by either being techno savvy and producing the same product with less labour costs than we currently do, or.. build a better mousetrap.. one that everyone wants.

I have faith in this country. I think we have the skills and intelligence to create world class products at the right price, and export them in large quantities. There just aren't enough incentives or assistance to do this on the scale required at the moment, and that is where tax breaks, grants etc should be applied.. not to (foreign owned) car companies who cant or wont compete.

 

Yes the taxes ultimately get passed onto the consumer no matter what the companies/govco might claim. That said, when company "A" is manufacturing in Australia and gets taxed where as company "B" is manufacturing off shore where the tax rate (for example) is lower, that is a competitive advantage that company A has no way of recovering from. You can't just say that "companies will survive" and leave it at that. For sure Company "A" will survive - it'll shut up it's Australian manufacturing plant and head off shore like it's competitors. What does that mean?? More Australians out of work and assuming the carbon pollution involved in manufacturing the item doesn't change significantly, more carbon will be pumped into the atmosphere due to the extra freight and handling involved. Way to go Prime Minister Brown :bang:

You don't think record high prices for energy doesn't already provide enough economic incentive for business and the consumer to build said better mousetraps?? Or maybe it's a case of nomatter how much you wish for it, the better mousetrap might be a fair way into the distance if possible at all. Just saying we will tax the guy over there and hope that a better solution will materialize makes no sense at all.

Rofl at China being a good example. Their major competitive advantage is dirt cheap labor rates, poor or non existent workplace safety regs/practices and disgraceful pollution.

Techno savvy??? Do you think China is stupid?? The way to decrease labor is either via motion analysis (happens to some extent everywhere) or via automation. The problem with automation is that it can just as easily picked up and plonked in a Chinese factory as it can in my factory in Carrum Downs. So it might need 1 bloke to put out a million widgets a day - the guy in China still costs a fraction of what it costs in Aus. Not to mention a saving due to no Carbon tax on the consumption of energy. Not to mention they probably make a pirate copy of said automation at a fraction of the cost of the real mccoy in Australia too :hmmm:

Australian manufacturing has been under siege for years and for our own Government to deliberately shoot it in the foot like it has is disgraceful. If they were serious about reducing carbon emissions and pollution in general they would encourage manufacturing here, not push it away.

Reaper

 

'assuming the carbon pollution involved in manufacturing the item doesn't change significantly' probably wouldn't be a clever assumption. You've just said so.. 'Their major competitive advantage is dirt cheap labor rates, poor or non existent workplace safety regs/practices and disgraceful pollution'.

China is all of that, no doubt. They are still proof that a country can move ahead with light industry. They make products, they sell them, they grow. Many people wont buy Chinese stuff on human rights grounds, quality concerns, or just brand loyalty to their own locally made product. This applies to everywhere.. but they still find a market for their stuff, and so can we... we can pick up the ones that wont buy Chinese for all those reasons for a start. The fact is, they are producing and exporting huge amounts of product from light industry. So can we. If we cant compete with them on price, we can do it on quality, aesthetics, innovation, etc.. we don't even need to impinge on the Chinese market at all.
Mercedes Benz are as cheap as Holdens in Germany, but we still buy them at double and triple the price here... you just need to provide the right products to the right market.

Freight and handling is an added cost, not only in terms of actually paying money for the product to be moved, but also of course in the use of carbon fuels to transport the raw materials from here to there, make the car, and bring it back to here. These additions to the production cost of their cars will help to make us more competitive... IF we apply the same carbon tax to them.

Of course it would help if the govt applied the same tax to the imports as well. They simply have to do this if they are to make any sense at all. Not sure that they are though...
I don't believe in tarrifs, protectionism, or anything else that limits free trade. I also don't believe that something imported should not have the same taxes applied to it as the products of this country too, so if they want free trade, they can pay the same taxes on the same level playing field as us or sell their stuff elsewhere. That's also going to help make our own manufacturers more competitive, at least in this country, so I don't believe the tax would endanger the local car industry at all if the imports were also taxed.

By a better mousetrap, I mean by making innovative products which people want to buy, not just green energy. We actually do this, over and over, but the people who design them cannot get the funding to make a go of it over here, and are forced to go offshore to make it happen at all. Yes, the govt needs to encourage manufacturing over here. New, profitable manufacturing. We don't need to finance the car companies by exempting them from a tax, we need to exempt our small manufacturers and help them in any way we can to expand and export.

If it was such a bad thing to be building cars in Oz, and if $400 per car was enough to make a company move its billions of dollars worth of equipment and expertise elsewhere, Toyota wouldn't be making cars here or in the US.
They do, and will continue to. They wont go, no jobs are under threat that wouldn't already be from normal business downsizing and redesign. They may claim they are, but its just spin.
I don't believe they are going anywhere, Australia is a very stable environment in which to run a large business, its close to resources, is technologically up to the task, and it makes sense to be here.

I for one would rather exempt small Australian companies from this tax rather than a large and rich multinational, and I'd go beyond that and offer grants and other tax reductions to help viable businesses who wanted to develop to export. Apart from that, we are arguing the same thing.. a Carbon tax is bad.

There is something here too that no-one seems to be picking up. A Carbon tax..what is it actually for? Its supposed to make people think twice about Carbon emissions. "The best way to protect something is to place a value on it".
But who are we 'buying' the carbon from? The Govt, which as far as I know doesn't actually own all the carbon. So.. its an income generator thinly disguised as a 'green initiative'.
What is the income to be spent on? I don't think I have heard any specifics on that, just some passing comments saying 'greening the environment'. I guess a fair chunk of it will be going to the NBN, which is a very necessary project that happens to be ridiculously overpriced.

If they are going to hit us with this tax 'to protect the environment', then the income needs to go back into the environment, in the form of encouraging new green technologies and further developing existing ones. This may even result in export income !! Sadly, little of that will happen.. its just extra money to buy elections with... or car companies..