While free trade advocates dodge questions on the demise of Australia’s manufacturing industries, Frank Lee reminds us that protection is a friendly word
A generation ago, one breadwinner was able to support a family in reasonable comfort, but soon the same family would need the incomes of two people to get by.
Not long after Canberra whispered to a chosen few that unit labour costs must be reduced only to see living standards fall through the floor.
So how did this happen?
In the 1980s a revolutionary system of governance was imposed on people in Western countries under the theory of liberal economics espoused by the Austrian writer Friedrich von Hayek. His ideologies of free markets, deregulation and free trade had been standard texts in the economics departments of universities and business schools for a couple of decades.
He was opposed to the free associations of working people, that is their trade unions.
Hayek was described as a totalitarian by Dr Frank Knopfelmacher, one of Australia’s finest post-war writers, who believed Nazism and communism were morally indistinguishable and equally evil.
But once Hayek’s neoliberal theories took root with academics and government bureaucrats, their advice became the policies of politicians in the form of so called free markets and free trade.
In fact, free trade policy required the removal of protection for Australian industry, such as tariffs on foreign imports and import quotas.
Free trade advocates in governments and media kept defying logic to imply protection was wrong when almost everyone knows ‘protection’ is a friendly word, just as people take out insurance to protect their lives, houses, cars and the rest.
The success of full-scale protection throughout industry in China has made the Chinese communist elite and its followers the richest people on earth.
This year, the United States has introduced a “ buy American” policy and scores of other countries have imposed tariffs, duties and other protections for their industries against imports from foreign predators who might pay their workers as little as a dollar a day.
To label protectionism as a cause of the 1930’s Depression is an unfounded fabrication spread by free trade ideologues.
Australia has been cutting tariff protection since 1973, resulting in the decimation of our crucial manufacturing and agricultural industries
Both these industries are primarily essential for our own domestic use and the clean and green food on our tables, and whatever production is left over can go to the export trade.
Yet our television screens show Chinese farmers using human waste to fertilise vegetables destined for Australian supermarkets. How does this pass our quarantine?
Australia's Deficit
From 1985 to 2005, manufacturing fell from 18 to 11 per cent of gross domestic product and the loss of several million Australian jobs to other countries.
Instead of making products for the past 30 years, Australia has been sucking in imports and running up foreign debt from $6 billion to $680 billion, described as dangerous levels by the heads of the four major banks and the International Monetary Fund.
Kevin Rudd has said: “I don’t want to be prime minister of a country that doesn’t make things anymore. I want there to be a long-term manufacturing industry for this nation.”
Then, don’t join China’s rush for an Australia-China free trade agreement for an estimated loss of 170,000 jobs in Australian manufacturing shown in a study commissioned by the Electrical Trades Union (The Epoch Times, 22 October).
Even Ross Garnaut, architect of removing tariff protection for the Hawke Government, now says Australia’s recent growth funded by increasing foreign debt is unsustainable.
The Finance Minister, Lindsay Tanner, told The Age recently that Australia’s very large current account deficit needs to be tackled and many benefits from the reforms introduced in the 1980s had run their course.” What will we be selling to the rest of the world in 10 or 15 years’ time” he asked.
“Don’t sell the farm.” was the blunt message from Don Argus, chairman of BHP Billiton, at a recent meeting of the Melbourne Mining Club.
He suggested the Federal Government should open a bond market to facilitate investment in the country’s “endowment assets”. This approach would be an alternative to China’s multi-billion dollar buying spree, targeting mineral resources, swathes of residential property, government securities and many other assets on a scale that is fast posing a risk to our economic sovereignty. (The Epoch Times, October 8).
Mr Argus also noted that about a quarter of the national savings of $1 trillion in Australia’s superannuation funds–around $250 billion–is currently invested outside Australia.
To reverse Australia’s present unhealthy reliance on foreign borrowing and foreign debt of $680 billion, the Federal Government could establish a development bank for the issue of bonds for depositors and especially for the superannuation funds.
The development bank could finance the resources industry (because the private banks won’t) – it could also finance manufacturing, agriculture, the Government’s infrastructure programme and assist in rolling over foreign debt (The Epoch Times, September 10).
When people in the northern hemisphere saw their banks collapsing last year and their countries swimming in debt, the unregulated free market agenda began to disappear.
They were forced into that agenda, but Australia can choose—it is time to value Australia’s manufacturing and agriculture sectors, not give them away.
Frank Lee was editor of The Clerk national journal Federated Clerks Union of Australia.
