Fighting For Australian Jobs — Based On A Labor Lie

THE LATEST empty slogan hurled vigorously, repeatedly and abusively at Prime Minister Tony Abbott by the ALP is that he has “refused to fight for Australian jobs” by “allowing the car industry to shut down;” the warped premise these stupid pronouncements are based on has been picked apart and — needless to say, in a play on his own words — shows Labor “leader” Bill Shorten to be considerably dumber than “every other first world country.”

The problem with the politics of abuse and deceit is that eventually, someone calls the ruse; it mightn’t make the front page of a newspaper or otherwise gain the mass circulation it should, but eventually, the truth will out. It always does.

For this reason, I’d especially ask readers who find today’s piece resonates with them to share on Facebook, retweet on Twitter, repost in other social media forums or otherwise help to circulate it: the material I am featuring today explodes at a stroke the myths and lies behind Labor’s predictable attack on the Abbott government in the wake of Toyota’s announcement that it will stop building cars in Australia.

I have read an article in The Australian this morning from its regular columnist and economist Professor Judith Sloan, and whilst it sums up neatly the whole distort-and-smear approach of the ALP to the daily political grind, it also knocks out the foundations on which Labor’s latest ill-conceived offensive is based.

Most readers will know that since the Toyota announcement was made on Monday (catching a good number of political players off guard, I’m told), Labor — and its “leader,” Bill Shorten, in particular — have expended a greater amount of energy even by its own usual grimy standards to run around the country accusing Abbott of “refusing to fight for Australian jobs.”

The basic charge seems to be that Abbott has “allowed the car industry to shut down,” despite Ford calling time on its manufacturing operations during Labor’s own term in office, Mitsubishi having departed some years ago, and in spite of ample anecdotal evidence to suggest General Motors had made a similar decision about Holden in the middle of last year — but which it delayed making a formal announcement on until the September election had been held and finalised.

Even so, Shorten thunders, Labor holds Abbott “at fault” for the looming disappearance of the car making industry.

If Labor won last year’s election, Shorten says, Toyota would still be making cars here into the future — no ifs, no buts, despite the rather obvious fact that this piece of hyperbola can never be tested or validated.

And one of the gems he and his colleagues have been circulating to bolster their “case” against Abbott and fortify their onslaught against the government is a disingenuously dishonest assertion that the level of industry assistance historically provided by the Australian government to car makers is far lower than that given by other first-world governments who subsidise their car manufacturing sectors.

“Mr Abbott thinks he’s smarter than every other first-world country,” Shorten blustered accusingly.

If we run through the reasoning and logic of Sloan’s article, it ticks off a series of boxes that ultimately expose Labor’s (and Shorten’s) position as the manipulatively dishonest rubbish it is.

When was the information relied on by Labor compiled? 2009, in the wake of the Global Financial Crisis, when stimulus spending by governments across the developed world ran at record levels in a one-off spike desperately seeking to stave off a 1920s-style economic depression. That spending spanned whole economies, and was not limited to automotive manufacturing.

Other forms of government expenditure in foreign countries have been lumped together with the kind of industry assistance the ALP advocates to stiffen up its argument and sharpen the attack on the Liberals in what, viewed from any perspective, isn’t and wasn’t intended as a like-for-like comparison.

Using Productivity Commission figures — a much more objective reference point than Labor’s dodgy, doctored, self-serving numbers — Sloan’s calculations based on a level of subsidy per vehicle manufactured reveals the truth of the issue, and detonates Labor’s ridiculous accusations: at subsidies of US$1,885 per vehicle, Australian government assistance to car makers is six times that of the Swedish government, nine times that of the Germans, and eleven times that of the USA.

I would also point out that even many Labor Party and trade union figures concede that the auto workers in those countries are far, far more productive than their counterparts in Australia: this fact, combined with the true scope of industry assistance in Australia, makes it fairly easy to see why the car makers don’t want to continue building their products here any more.

The other thing that stands out for me insofar as the homework Sloan has done for her article (and I am grateful to her: it has saved me doing a lot of the donkey work I don’t have time to do at present) is that industry subsidies shelled out to Toyota alone over the past four years average out to some $50,000 per worker per annum, based on the size of Toyota’s workforce and the half-billion dollars shovelled out to the company by the last government.

Viewed in such terms, the spectre of industry subsidies are nothing short of a national obscenity — especially when it is remembered that labour costs have been the greatest driver of the car manufacturers in shutting up shop and going elsewhere.

In the context of industry assistance to car makers, does this all add up to Tony Abbott arrogantly believing himself “smarter than every other first-world country?” On no account. In fact, a case could be made around the stupidity and vacuity of Shorten for even suggesting it.

But to suggest that Abbott has “refused to fight for Australian jobs” because the government he leads has declined to continue and increase the obscene amounts of money being thrown at car makers — especially in light of Productivity Commission figures Sloan quotes — should be seen for what it is: a cheap, tacky, meaningless slogan from a cheap, tacky, worthless political outfit.

Shorten might think that his ticket to becoming Prime Minister is to oppose and criticise everything, as he and his colleagues regularly complain Abbott did to them when the latter was opposition leader.

The fundamental difference is that Labor’s policies were bad policies, as is becoming clearer with every day the new government digs further into the mess it inherited; and in any case, Labor mishandled the nation’s finances so badly in office that were it not for the hundreds of billions of dollars in debt it bequeathed its successors to deal with, the conversation around the cessation of industry assistance to the car sector might not even be happening.

I think Australians can have faith that their Prime Minister will indeed fight for Australian jobs, although I acknowledge some in the labour movement might not agree with that assessment given yet another of their cosy little sinecures — this time, at Toyota — is soon to cease to exist.

But whether they do or not, the people of this country are entitled to better than the bare-faced lies the ALP is attempting to peddle.

Once again — this time on the issue of jobs — all of this is just another Labor lie, and deserves to be called out as such.


No Surprise: Toyota Quits Australia

THE ANNOUNCEMENT that Toyota will tread a well-worn path and follow Holden, Ford, Nissan, Mitsubishi and Leyland out the door comes as no surprise; with Toyota the last operator standing, economies of scale to make car manufacturing in Australia viable no longer exist. Blame should be sheeted home to the anti-business union movement, and despite the job losses, the opportunity to build more productive and efficient industries grasped.

This is the end of an era and, to be sure, news that Toyota is ceasing to manufacture cars in Australia is both disappointing and more than a little sad.

Yet there is no surprise here; with the progressive departure of the rest of the car making industry — most recently Holden — the environment in which other operators could continue has been steadily eroded.

Many will seek scapegoats in the wake of Toyota’s departure and I confess — in pointing the finger at the unions — I’m probably guilty of the same thing.

Even so, a lot of what is being bandied about over this doesn’t stack up.

Toyota — like others before it — has invoked the spectre of “the high dollar” as being a contributor to its decision; as we have discussed, the Australian dollar has already depreciated by 20% against other major currencies in the past year or so, and it is difficult to blame it for decisions such as this.

Opposition “leader” Bill Shorten has blasted the Abbott government for allowing Holden and Toyota to cease manufacturing.

He accused the government of “goading” Holden to leave, which is a hypocritical cop-out designed to milk votes from the misfortune of sacked workers: Holden, as key Labor figures know very well, had already decided to quit manufacturing here prior to last year’s election.

Shorten, however, is and was strangely silent about the redundancies sacked GMH workers would receive under their enterprise bargaining agreement of up to half a million dollars — money that could have been spent on making the manufacturing operation viable rather than being paid out as “entitlements” on a scale few employees in Australia will ever see.

It is true the Abbott government has signalled there will be no more “industry assistance” doled out to car makers, and this is as it should be; with the federal budget haemorrhaging tens of billions of dollars each year (as a direct result of the incompetence of the last Labor government) throwing billions of dollars at any industry is simply not sustainable.

Many have made the point that all governments subsidise their car manufacturing industries; this may well be so. But it is no reason to blindly follow the pack in throwing good money after bad. And — as today’s announcement shows — doing so merely delays the inevitable. It solves nothing.

And it is important — when weighing any allegation of fault on the Liberals’ part, made by Bill Shorten and his cronies — to remember that Ford not only walked out on the watch of the last ALP government, but that the unions were mute on the question of the apportionment of blame.

But if blame is to be pointed anywhere, for a “win” it must be pointed at the unions and the extortionate bargaining agreements it has struck with Toyota that have progressively priced their members — Toyota’s workers — out of the market.

For a “place,” the Fair Work Act stands out like the proverbial pimple on a pumpkin.

In short, Toyota foresaw the problem its EBA was causing and attempted to take steps to vary its terms; naturally enough, its endeavours came to nothing, as the Act prevented the workforce being given a say on altering the terms of the agreement.

Like GMH, however, the figures bandied about by Toyota as the cost differential between building cars in Australia and building them elsewhere is in the region of $4,000 per vehicle, and this is recognised everywhere (except in the union movement) as the difference in labour costs.

Now that Australia is to become an import-only market for passenger vehicles, it is imperative that the federal government now abolish altogether the remaining tariff on vehicle imports, as well as the so-called luxury car tax that cuts in at such a low price threshold that even a top-of-the-line Holden station wagon was expensive enough to trigger it.

In short, all remaining distortions to Australians being able to purchase vehicles at competitive prices must be removed immediately.

It is bitterly disappointing that the car industry soon will be no more: the reasons are fairly clear, and whilst both sides of politics are culpable for throwing endless billions down the tube rather than tackling the real problem — extortionate labour costs — the root cause, for me, is trade unions that have gotten away with the “outcomes” they “achieved” to “advance” conditions for their members.

The end result of those union efforts is no jobs for their members, and the absence of supply chains that will now disappear will have a knock-on effect into the wider economy. No-one advocates workers toiling away for a pittance, but any representative body like the unions that strikes deals featuring half-million dollar redundancies and six figure incomes for people performing menial work is its own — and its members’ — worst enemy.

If any good is to come of this, it should take the form of businesses learning to be self-sufficient: handouts, industry assistance and other artificial measures to prop up enterprises and industry sectors that would not otherwise exist are a self-perpetuating problem; add a union, and a permanent equation exists of government subsidising labour costs rising well beyond the inflation rate, on a compounding basis and in perpetuity, which ultimately arrives at exactly the same outcome that has now ended vehicle manufacturing in this country.

Other firms are at grave risk of following. “Industries” in the “green” sector and the solar lobby, for example, should receive no more favourable treatment than any other. Unless the ingrained industrial culture of “give us a multi-billion dollar handout or we’ll sack everyone” is extinguished once and for all in Australia, events like today’s will become depressingly regular indeed.


Ford Quits Australia: After The Redundancies, The Hard Truth

THE LOSS of thousands of jobs, supplier industries included, is a terrible thing; but the decision by the Ford Motor Company to abandon Australia — aside from keeping a sales presence, and retaining a few designers — makes some deeply unpleasant realities impossible to continue to avoid.

It is difficult to point any exclusive finger of blame, except to say that governments at both state and federal level, of both Labor and Liberal persuasion, have all been hoodwinked into the ruse of industry assistance for the automotive sector — assistance that has delayed the inevitable collapse of the car industry, but not averted it.

I feel sorry for the car workers set to lose their jobs as a result of Ford’s announcement that it will close manufacturing plants in Geelong and at Broadmeadows, in Melbourne, in 2016; the only good thing to come of it is that the stated schedule at least buys those workers — and their families — time to plan, and reskill, and to look for work.

But the simple fact is that it is not feasible to economically manufacture cars in Australia.

The cost of manufacturing labour in Australia is astronomical, and in an internationally competitive automotive sector represents a millstone around the neck of the local industry.

The unions must shoulder a fair portion of the blame for this; automotive workforces in Australia are among the few remaining that are highly unionised, and far from improving the lot of their members, unions to a large degree have ultimately priced their workers, and by extension their products, out of the market.

I make the observation, though, that the agenda of unions is to increase pay and conditions for their members; I think they have done their people a disservice in this case because the end consequence was foreseeable. Others may and will disagree, but I’m not looking for a fight over the unions on this occasion and I encourage readers not to do so either.

Even so, the arrival some 20 years ago of Korean automotive giant Hyundai — with its cheap imported cars built by cheap Asian labour — was meant to signal the end of local car manufacturing: at the time, it didn’t.

But the arrival in recent years of Chinese cars such as Great Wall and Chery, and their parent companies operating with inexhaustible cheap labour, are a different matter again.

It can only be a matter of time until either or both of the remaining car builders — GMH and Toyota — follow Ford’s lead; there is an argument that without three major car makers the sector as a whole loses the critical mass required to sustain it at all.

It remains to be seen what effect Ford’s withdrawal has by way of a knock-on to supplier companies, their ability to profitably retain adequate workforces, and their capacity to supply product to Ford and Toyota on a cost-effective basis.

But with Mitsubishi and Nissan already gone — and Ford now going — it seems inconceivable that the others won’t follow.

Holden is only committed to remain until 2022, and at this point in time you would have to say that all bets on it retaining its manufacturing here beyond that are off.

It is interesting that there has been a clamour today for “emergency tariffs” to be slapped on imported cars in an attempt to “save” what’s left of the local car making industry: a kneejerk response quickly and properly dismissed by Prime Minister Julia Gillard, who pointed out that such a move — not guaranteed to even achieve its objective — would run the very real risk of trade reprisals against Australia.

And, frankly, it would be a case of “rightly so.”

The car industry — despite the abolition of tariffs — has nonetheless remained a subsidised and protected industry to a considerable extent.

For one thing, it has milked $12 billion out of government in Australia in the past ten years in the form of handouts, grants, and other subsidies dressed up as “support” for an industry that is not sustainable.

For another, the 33% tax on “luxury” imported cars — presently a vehicle with a GST-inclusive price above about $59,000 — is a measure that disadvantages overseas manufacturers in competing against some of the top of the range and larger vehicles manufactured in Australia.

And it’s obvious that if the local automotive industry can’t exist profitably with these advantages — high wages and cost base notwithstanding — the rate any tariff would need to be set at to be effective would be ludicrous.

The simple fact is that governments of all persuasions have tried, and tried hard, but despite their efforts car making in Australia is simply not a viable long-term proposition, and I think the withdrawal of Ford will be followed within ten years by the other two players, and that will be that.

At the outset, I said it was difficult to point the finger of blame, and to some extent it is; depending on which way you look at it, the Liberal and Labor parties have either fought to retain a valued industry in Australia, or have merely shovelled billions of dollars into the coffers of foreign companies for no eventual reward.

But they tried.

That said, I have to single out Victorian opposition leader Daniel Andrews for a kicking; he has claimed, for instance, that Premier Denis Napthine did nothing to try to save Ford jobs when in fact, Napthine intervened personally and was told by Ford that it didn’t matter what he or anyone else said or did, the decision was final.

Andrews criticised Napthine for failing to match the federal government’s contribution to a $39 million fund to support displaced Ford workers (Victoria is contributing $9 million). Never mind the fact the package was designed, jointly, by Napthine and Gillard working directly with each other.

And today Andrews took another pot shot at Napthine over the latter’s proposals to make retraining available to sacked Ford workers, on the basis Napthine “isn’t the man to retrain anyone” and who had done enormous damage to the TAFE sector in Victoria.

Never mind the fact Napthine was neither Premier nor Higher Education minister when changes were made to TAFE funding two years ago; never mind the fact some of the money cut from TAFE at that time has been restored since Napthine’s ascension to the Premiership eight weeks ago, and with the promise of more to follow.

I am singling Andrews out because he has chosen to play petty politics to score grimy, cheap points over an issue and at a time when everyone on all sides of the political spectrum are putting such differences aside.

Indeed, were it not for Andrews, I wouldn’t even be sinking the boot into anyone — readers will note there is no criticism of the federal government in this article, and only mild and qualified criticism of the unions insofar as the unintended consequence of doing their job has been an undesirable one.

Regrettably, the adolescent rhetoric and almost infantile public conduct Andrews insists on engaging in is becoming a pattern — and he has helped no-one, least of all himself, with his shameful utterances in the past 48 hours.

Daniel Andrews needs to grow up and stop acting like a child if he aspires to even remain the leader of his party, let alone seek the office of Premier of Victoria.

And perhaps he can go and speak to the devastated people of Geelong — not a hand-picked bunch of stooges but the ordinary people of Geelong, whose town is about to have a large part of its lifeblood drained and its history terminated forever — and explain to them why, when so many of their families face unemployment and hardship as a result of this decision, he’s the only one playing politics over their fate.