by Alan BarronNews Weekly
Rethink US-Australia FTA (letter)
, February 28, 2004
The Free Trade Agreement between America and Australia will not benefit this country. Do we really think the Americans are stupid? Would they sign an agreement which would disadvantage them in any way?
Read my lips! Of course not!
Economic rationalism has been a disaster for this nation. Prior to Australia going down the free trade path, this nation averaged an annual growth rate of 4.5% and unemployment was a genuine 2-3%.
Today, Australians are being forced to buy more and more overseas goods that they once made themselves. As a result, Australia's overseas's debt has climbed from $19 billion in 1982 to $361 billion in 2003.
Since tariffs have come down, car imports have doubled rather than rising by 15 per cent as the Industry Commission forecast when they started reducing tariffs. During the past twenty years, imports less exports, have risen from $4 billion to $43 billion annually, plus a $15 billion loss in interest and dividends.
Manufacturing's share of gross domestic product in Australia has fallen from 24 per cent in two decades to just under 11.5 per cent of GDP today (the rest of developed world is about 19%).
The loss of our clothing, fibre, textile and other manufactures has meant that Australia must now import these products that we once made. We borrowed between $35 bn and $45 bn per annum to pay for goods and services we no longer produce ourselves and we can't pay for from our earnings. This equates to borrowing at about 5-6% of GDP annually to grow the economy at around 2-4% of GDP annually. It's a zero sum game.
Put another way, if Australia had not borrowed this money over the past 20 years, we would have had zero or negative economic growth for a decade or more. Conclusion? We are, as a nation, living on unsustainable levels of borrowing. Australia cannot sustain its huge debt indefinitely and unless moves are taken to protect local industry and jobs. Overall, 400,000 manufacturing jobs have been lost in this country.
We need to ask ourselves some pertinent questions. Which is better: to have a job, thanks to some degree of protection, or to have available cheaper imported goods (with company profits going offshore), which means adding to our already huge balance of payments problem?
Australia has pursued economic rationalism for over two decades. Has unemployment really been reduced? The official jobless rate of just over 5% per cent is a sham, with unemployment, and under-employment in this country approaching 17% based on Australian Bureau of Statistics figures.
Australia has sold off much of the farm in order to help pay off our huge debts as the direct result of pursuing such policies. And, worse still, over the past decade, 87% of all new jobs created paid less than $26,000, and nearly half paid less than $15,600 per annum.
Twenty-five years ago, Australia had the smallest proportion of its population in part-time/casual work. Now it has the highest proportion after the US. (In the US, non-supervisory wages declined 19% in real terms between 1973 and 1996.)
It's time we gave globalism the flick!Alan Barron,