A primitive economy.

[artme]

Is Australia in danger of becoming one of the world's primitive economies??

We have lost, or are going to lose, most of our manufacturing ability and much
of our computer work is now outsourced. It looks as though our ability to can
fruit is going to be lost.

This is the country that was the third to launch a satellite, the one that first developed
digital technology, only to have it shelved because of a timid government. We have
skited much about our solar research and development, but has it got us anywhere?
We seem to be too bloody stupid or laid back to adopt more green technology.At one
time we had an aircraftindusrty

What do we do at the moment? I contend that we are a nation of hunter/fisher gatherers.
We dig blood y great holes in the ground to gather coal , ion ore and iron ore. We fish the
ocean. We gather wheat and wool and we gather up cattle for export.

How do we overcome this position??

[BobL]

I don't think canning peaches is any sort of real manufacturing is just primary produce processing like refining alumina into aluminium or copper or gold ores into metal (whoops it looks like I didn't put a tick against Al)
Manufacturing involves substantial value adding like motor vehicles or electronics.

Anyway, for those that are interested here are the numbers.
The ticks are essential primary production
Only two of the top 10 are not primary production.
#4 is the income from international students - this is not going to last forever either as countries with insufficient educational institutions increase the number and quality of their own educational resources.

[wireliner]

Interesting to see natural gas up there! OK, here is an energy resource we have in abundance. Please don't say it will run out tomorrow, it won't! Use it to develop clean, renewable energy while we can. Bob,mate, we still are the lucky country. The cure for cancer will come from us. Technology is a hidden asset now days but it is still there.

[artme]

Agreed Bob, canning is not exactly manufacturing in the true sense.

However it seems utterly ridiculous to have what was once a thriving
and important rural/regional industry die, thus effecting the lives of
hundreds, if not thousands. The orchardists will remove trees, as
happened in the MIA when Leeton closed. Where then do we get our fruit?
Much will be imported from sources of dubious quality and hygiene.

When Golden Circle closed in Brisbane the idea was to can in NZ. Is it really
better economy to ship raw products to another country and import the
processed product back?? This is what has happened to car manufacturing
and iron production here.

I was listening to Paul Howes today as he addressed the National Press Club.
An interesting and rather illuminating speech, to say the least. I am very much
of the same view as he is. Our industrial relations system has a huge amount
to answer for. He talked of the sea-sawing battle between unions and business
and while I didn't get to hear all the questions it was apparent that, from at least
one early question, positions are so entrenched that we never get away from
the warfare, or the "them and us" mentality.

[steamingbill]

How do we overcome this position??

I dont know - keen to see some debate - some suggestions

As long as there are countries where labour is much cheaper, then I believe attempting to do any value adding manufacturing would be difficult without some sort of artificial govt controlled protection.

Will there be a period of "levelling" of standards of living ? Lasting a couple of decades ? Wages and standards of living in previously 'poorer' countries catch up to Australia/Britain/Canada/USA/Europe/What countries have I missed out ? - With less people working for $10 per day then there will be less incentive buy foreign goods because its no cheaper ? If its not possible to import something for cheaper than we make ourselves then there is incentive to make things here.

I backpacked around Indonesia 33 years ago and the Indonesia I saw on TV a few nights ago was nothing like what I remembered. Big surprise.

Are there niche markets that are worth exploring - ie trying to do something to incredibly high quality so that people know that products are expensive but don't mind because of stunning quality ? Vaguely remember 20-30 years ago this idea being promoted as a model that had worked in Norway or Denmark or Sweden

Have read a few posts recently about Australian businesses struggling against foreign competition - have seen some posts from some people on this forum running businesses but having difficulty matching internet shopping prices.

In the spirit of the Euro, should there be a "Worldo" ? A single currency all over the world might sort out some of the banking business based on money changing and futures that makes huge profits but adds little value - Naive I know but a thought nonetheless.

Are we short of people ? - Is there a critical mass of people required in order for us to be "self booting" and "self sustaining" cycling our own raw materials around an internal economy ?

So in short - I havent got a clue and would really like to see some opinions from people with appropriate experience in economics/business/manufacturing ............ ummmm is that why we elected those politicians ?

Anybody recommend any good web pages on this topic ?

What did Germany do to be such a strong economy ?


Bill

[BobL]

Anybody recommend any good web pages on this topic ?

If you want to see how we sit relative to other economies this is a very interesting website.
It's called the "observatory of economic complexity" and displays graphically imports and exports for 127 countries
The Observatory of Economic Complexity :: Australia Exports, Imports and Trade Partners
It also generates and plays time based series - (e.g. The Observatory | What does Australia export? (2010)) The data stops at 2005 but it is still very interesting

Australia ranks 78th - ie we lack diversity and export too much of one type of thing and we export to much to just a few countries.
If and when things go pear shaped economically we will have limited resilience compared to other countries.

What did Germany do to be such a strong economy ?

Located in the middle of a large market
Already have made and have ongoing massive govt and private investments in infrastructure (roads rail airports ports etc)
Invest in (technical) education and take it seriously
Innovative
Savings mentality
Hard working
Sensible levels of Govt spending and control especially in finance
Low levels of corruption
And they do this with a 19% GST
Not litigation free, but lawyers are very limited in what they can cream off from cases thus reduces frivolous litigation.

[Big Shed]

You might add to that list of what Germany does better:

Unions in "partnership" with employers and government, not the old English adversarial system of us against them (scr*w the bosses or scr*w the workers in other words).
They have learned that they depend on each other for prosperity.

[artme]

You might add to that list of what Germany does better:

Unions in "partnership" with employers and government, not the old English adversarial system of us against them (scr*w the bosses or scr*w the workers in other words).
They have learned that they depend on each other for prosperity.

This is almost exactly what Paul Howse was saying, not in relation to Germany in particular, but as a means of ensuring industrial stability, improving productivity
and remaining prosperous.

[Lyle]

I think a long hard look should be taken at 'penalty rates'.
Work styles have changed.
If you work in an industry where your core work hours are say 10.00Pm to 06.00Am 5 days a week then I do not believe you need to have penalty rates!
If you are required (asked) to work "over' those times then yes some form of overtime rate should apply.
But your core hours should only be at the standard award rates.
Penalty rates are a reason many businesses do not prosper.

Working mums who want the taxpayer to subsidise their childcare. Another bugbear. If you cannot afford the costs then either don't work and stay home and look after your own child, don't get a huge mortgage based on dual incomes.
In other words live within your means and plan ahead.


That should get a few comments.

[Sebastiaan56]

As an employer I categorically state that it is not penalty rates, not for me anyway. Staff on-costs, well thats a different matter. Super, various types of leave, insurances, etc add up to 40% on to the wages bill in my business.

But it is not the wages that are the problem IMO. The problems are scale and access to markets. We compete with companies in countries with much larger populations and much shorter distances to market. Tighter margins mean you need to sell more and we haveplenty of everything here. It is just plain difficult in a country of 25 million to compete with countries that are multiples of our size. Personally I have been watching this decline for decades. I cant see any way of stopping it.

[BobL]

While we're talking about Germany here are their typical penalty rates
A normal work day is 8 hours a day, above that 25% overtime applies up to 10 hours above that a mandatory rest period applies
No Saturday Penalty rates
Sundays and Holidays are @ 50% overtime.

[MAPLEMAN]

Work for peanuts till we drop dead into our graves..what a wonderful world ,So then ,if every worker took a pay cut immediately,would the cost of living REALLY come down?? I don't think so!!The net result would be more hardship for the average Joe...MM

[Big Shed]

This is almost exactly what Paul Howse was saying, not in relation to Germany in particular, but as a means of ensuring industrial stability, improving productivity
and remaining prosperous.

I think Mr Howes has had a conversion on the road to Damascus

He is, and always has been, a very radical unionist of the old school. He wasn't even democratically elected to his job but anointed by his predecessor, Bill Shorten.

He is the very man that fancied himself as a non-elected king and queen maker and the main instigator in the downfall of 2 of our elected Prime Ministers.

I don't think I would trust too much of what Mr Howes says, he tends to say things to further his own ambitions, not in the interests of his own members or indeed in the interest of the nation.

[steamingbill]

Is Australia in danger of becoming one of the world's primitive economies??



What do we do at the moment? I contend that we are a nation of hunter/fisher gatherers.
We dig blood y great holes in the ground to gather coal , ion ore and iron ore. We fish the
ocean. We gather wheat and wool and we gather up cattle for export.

How do we overcome this position??

Germany has already been discussed, how about the rise of Japanese manufacturing after WW2 ? How did that work, didnt they have very little in the way of natural resources as raw materials. Any other examples out there ?

Bil

[Big Shed]

Germany has already been discussed, how about the rise of Japanese manufacturing after WW2 ? How did that work, didnt they have very little in the way of natural resources as raw materials. Any other examples out there ?

Bil

The rise of manufacturing in Japan was fuelled largely by American dollars after WW2, it was in the US interest to rebuild the Japanese economy as a bulwark against Communist China.

They did the same in Germany, remember the Marshall Plan? In this case it was to build a bulwark against Communist Soviet Union.