Jamie Briggs MP

 

The strength of the Australian dollar, caused by a combination of a once-in-a-generation mining boom and a weak US economy, is causing waves through our economy. In fact, it has been a long time since economic reform has been so critical to our future. The boom in the mining industry is a massive positive, but the repercussions of this boom for other sectors have some negative consequences.

 

Given this, it is sad that some in the debate insist on playing the populist card to provide economic false hope. For instance, in recent days we've heard the manufacturing union demand more government intervention to save Aussie jobs in heavy manufacturing at the same time as it marched its vehicle builders off the job at Toyota as part of an exaggerated wage claim. Such an economically irresponsible act, at this moment, not only damages the prospects of these workers but it puts into doubt the credibility of those who claim to speak on their behalf.

 

The truth is that we can't save jobs by government protection, no matter what self-interested players promise. I say this because we are spending billions now trying to protect jobs and the evidence says it is not working.

 

The most reliable evidence is the independent annual analysis of government assistance to all industrysectors is contained in the Productivity Commission's Trade and Assistance Review, which shows that since 2004-05 the manufacturing sector has received $48.3 billion in government assistance.

 

The report makes the point that while net tariff assistance has declined in recent years, governmentassistance has increased by more than 20 per cent in real terms. In effect, the government has replaced one failed protection regime with another. At least with direct assistance, the cost is obvious for all to see.

 

It poses a legitimate question: is the Australian taxpayer receiving value for its nearly $50bn investment?

 

Take the tale of vehicle production at Mitsubishi in South Australia. For many years, South Australians were told that if Mitsubishi left it would be economic catastrophe for the local economy, thus the government had tointervene to save the jobs. While the local operations made losses every year after 1989, the taxpayer made up the shortfall. In the end, the patient refused treatment. While the end was sad on many levels, the closure of the vehicle manufacturing plant did not destroy the South Australian economy. It raises the question: why is it that some jobs are worthy of government subsidy while others are not? Ultimately, protection for one is at the expense of another. Economically, there is no such thing as a free lunch.

 

Again the Productivity Commission put it best: "Although assistance generally benefits the firms or industries that receive it, it typically imposes costs on other sectors of the economy."

 

There is a role for government to assist industries to adapt to changing environments, but taxpayers

funding a romantic attachment to a bygone era is not a position the Australian economy can afford or sustain.

 

No one wants to see jobs lost and traditional industries leave, but providing false government hope is simply prolonging the inevitable to the cost of all taxpayers. We simply can no longer afford to be throwing good money after bad to satisfy the political posturing of a chosen few.

 

There will be manufacturing in Australia. It will be smart and efficient and it will not require massive government assistance to survive. Now is not the time to return to our protectionist shell; rather, it is the time to be economicallyambitious so Australia can take advantage of the enormous markets of the flat world, increasing our prosperity.

 

John Howard said economic reform is like a running race with an ever receding finish line; the job is never done and the competition is never far away.

 

Marty McFly had it right in Back to the Future II: you must look to the future, not the past.