The myth of high Australian labour costs.

There is a myth being perpetrated by the Abbott government that the Australian labour force is expensive and incompetent. This is a slur on Australia and a lie to cover Abbott’s twisted economic policy to give multinational companies the cheapest possible cost so they can screw Australian Workers.

The major problem with Australian labour costs is dumping. Dumping is when a company produces at the level that gives the lowest cost and maximises prices. When the lowest cost gives production units that is higher than the level needed to maximise profit the extra units are ‘dumped’ at cost on any country that has low levels of protection. When Abbott says Australia is open to business he means that Australia is open to anyone who wants to dump their excess production and in the process distort the relative costs of Australian labour. The cost of imported goods in Australia in many cases bears no relationship of the actual costs of production. This makes it impossible for say the Australian car industry compete with imported vehicles that are selling at thousands of dollars below their true price.

Protectionism is a dirty word according to Abbott and his economic minnows. Having tariffs that raise the cost of imported goods to the level of their true value is not protectionism; it is creating a level playing field. A system of tariffs that protects against dumping but goes not create not inhibit true competition would be flexible across industries and flexible over time would require a sensitive touch that is difficult to achieve, but the benefits would be a true indication of the cost of Australian labour and I would be surprised if we were to be found to be non-competitive.

There is another aspect to the argument. If Australia is to be competitive in a modern world Australians will need to get used to the idea that they will pay the true price of imported goods. Australians cannot have it both ways. We either have a vibrant economy or cheap imports. We cannot have both.

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How much did Abbott Government Contribute to Holden Decision?

The report that the decision to close Holden came by way of a phone call half hour before the decision was announced sounds strange. It sounds as if the Abbott Government was bypassed in the announcement. If you look at the way the Abbott government has been trying to bully General Motors in the last week it is not so strange. If the decision was marginal it was time for negotiation, not for throwing governmental weight around in the media. Did Abbott tell GM of any of his announcements before he made them public? How would a company like GM react to a person like Hockey threatening them in Parliament instead of talking to them? Did GM simply join the long list of entities, such as Indonesia, China and the UN that the Abbott government has managed to piss off in the last three months? Did the ‘Perfect Storm’ GM refereed to include Abbott?

All over the world countries subsidies and support local car industries because they understand that a country that builds cars can build anything. Car making is the basic training ground and skills development area that all other manufacturing industries rely on. If Australia stops making cars the backbone of Australian manufacturing will be gone. If Abbott continues treating major manufacturing companies the way he treated GM the mining companies will be the only ones left and they only dig holes.

Abbott’s backward facing stance sees digging more holes and dumping the waste on the Greet Barrier reef as the way forward. Or maybe Australia becoming no more than a quarry is what this is all about. It might be good for the big mining companies in the short term but the world is changing rapidly and we need to be able to look after ourselves. That means the ability to be as self sufficient as possible. Take away the car industry and we become dependent on others in a way that takes Australia back 60 years.

Fortunately there is just sufficient time for one more election before Holden closes and I hope that Labour will start negotiating a deal with GM to keep manufacturing in Australia to be implemented when Labour wins the next election.