Old habits die hard

Car Assistance

Once again we’re arranging ourselves into our usual trenches.

Are you a free trader or a protectionist? And so we get the usual rehearsal of lessons from our recent experience as Ford closes. Fair enough. If you have to consume the lesson in a single slogan I guess “don’t assist industries unless you’ve got a well thought out reason to do so” isn’t a bad take out. However this graph is at least worth keeping in mind.  Assistance is very low now – even with the various subsidies we provide. Is this a justification for the subsidies? No. But it should be telling us that the debate is much less important than it has been. And if we want to have productive discussion about what to do we need to be thinking with a little more subtlety and curiosity about our subject matter.

I tried to reflect this – and also address the public’s desire to see governments “do something” in this interview which a number of people have liked.  There are plenty of things to turn our attention to as far as collective endeavour goes, so it would be good to try to articulate what those things are lest, abhorring a vacuum public hankerings to do something turn to other things.

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Pedro
Pedro
8 years ago

I suppose one way to approach this question is to look at it from a welfare / work for the dole perspective. At least that would be honest. But it is so difficult to imagine a successful multi-manufacturer car industry here that the only sensible approach is to accept and honestly manage the wind-down of the industry. I don’t know enough to work out if one could possibly survive, but my guess is not really.

I don’t think it matters that other countries assist car makers. The point is that we would be better doing something that did not require assistance.

It also seems to me that those who worried about the long run implications of energy policies and work place relations policies in this country are being proved right.

murph the surf.
murph the surf.
8 years ago

http://www.smh.com.au/comment/both-parties-drive-carmaking-myth-20130527-2n7ge.html
A sensible commentary on the subject from Peter Hartcher.
“Volvo cars are now owned by the Chinese,” says Sweden’s former prime minister and now Foreign Minister Carl Bildt. “And that’s fine,” he says.
“Saab as a maker of cars no longer exists” after its bankruptcy. Its assets were bought by a Sino-Japanese consortium and are now used to make electric cars only. “There were enormous calls for the government to step in” to keep it afloat, says Bildt.
But they were resisted: “Subsidies give industry a false sense of security, and then they don’t change sufficiently. They just demand more subsidies and eventually collapse.”
Article ends with a plea for a “next generation Keating” to stand up and speak the truth to the Australian electorate………..that globalisation has entrenched international competitiveness as the new standard.

john r walker
john r walker(@annesanders)
8 years ago

murp
Last I heard, GM had blocked the sale of SAAB to China , on the basis of IP that was somehow still owned by GM in Saab cars (sounds like nonsense, but there you go). Have you got a ‘reference’ for this story?

Paul Bamford (aka Gummo T)
Editor
8 years ago

Speaking of industries that demand more and more subsidies until they eventually collapse (although in this case it’s more like concessions):

Labor has cut more than $250 million from the cost of doing business for television networks since 2010 but Communications Minister Stephen Conroy insists the industry can’t afford to forgo the advertising dollar of betting companies – estimated at $40 million a year.

Senator Conroy said on Monday that life had become ‘‘harder and harder’’ for the commercial free-to-air stations despite the government’s decision to halve the license fees for them and award two free digital channels each.

‘‘You’d actually be surprised,’’ Senator Conroy said, ‘‘for the last three and four years advertising has been significantly reduced.”

I say to hell with it – let the commercials go under, nationalise the whole bloody broadcast spectrum and start selling blocks of air-time to content providers who can actually come up with workable 21st century business models.