BOOKS: by John BallantyneNews Weekly
GETTING ON TRACK: A Business Plan for Australia
, November 20, 2004
Bold vision for rebuilding Australian economyGETTING ON TRACK: A Business Plan for Australia
By Ken Aldred, Ernest Rodeck AM, Patrick J. Byrne and Martin Feil
The Society for Australian Industry and Employment
Available from News Weekly Books, RRP: $19.95Getting on Track spells out an exciting vision of what we as a country could achieve economically if we put our minds to it.
It is non-technical and easy to read, yet it is a substantial contribution to public debate because it looks far beyond anything our major political parties are prepared to contemplate.
The book calls to account both sides of Australian politics which, together, have presided over a disastrous weakening of the Australian economy.
Prime Minister John Howard and Federal Treasurer Peter Costello may have slashed government debt and kept inflation and interest rates low, but they have neglected to tackle our declining industrial base and our vast foreign debt which is projected by the end of this year to exceed $400 billion.
Borrowing from overseas would not be problematic if the money was invested in productive enterprises; but much of it has gone into financing property speculation and ever higher levels of consumption.
How can we generate sufficient exports, not only to cover our appetite for imports, but to start paying off our foreign debt?
We have allowed our manufacturing sector to decline catastrophically. The proportion of our workforce employed in manufacturing has shrunk from 26 per cent in the early 1970s to between 11 and 12 per cent today.
According to OECD statistics, Australian manufacturing has shrunk to the proportions of Greece and Turkey.
Former managing director of Pacific Dunlop, Ernest Rodeck AM, reminds us: "If you reduce your manufactures as a share of domestic output, you are increasing the demand for manufacturing imports."
As former Federal Liberal MP, Ken Aldred, points out, part of the decline in Australia's economic competitiveness can be attributed to the decline in our investment in national infrastructure. The Institution of Engineers conservatively estimates that the deficit in Australia's inter-capital road and rail systems is $20 billion.
By not maintaining and improving our highways, railway lines, harbours, dams and irrigation, we have not "saved" money for taxpayers in the long-run, as some economic rationalists misguidedly argue. Instead, we have ensured that the problem becomes ever more expensive.Radical alternativeGetting on Track
's great strength is that, although it calls for a radical alternative to economic rationalism, it avoids the error of trying to save uncompetitive industries with old-style high protective tariffs and import licensing.
A former director of the Industries Assistance Commission, economist Martin Feil, warns: "These barriers are wrong if they allow local industry to become lazy, to be inefficient and to fragment into uneconomic production units."
But, equally, he argues: "Their absence is equally wrong if we ... permit the importation of dumped goods or goods priced on a predatory basis that eliminates the local manufacture and creates a long-run profit-maximisation opportunity for the predator left in control of the market."
The book, then, does not seek to prop up uneconomical and declining firms. Rather, it seeks to realise Australia's undeveloped manufacturing potential through encouraging research and development, providing tax inducements for new capital equipment and modernising our infrastructure.
The chapter by NCC vice-president, Pat Byrne, provides a forward-looking big-picture perspective on how to unlock Australia's huge export potential, especially for agriculture.
Half of our exports, he reminds us, go to Asia - a region whose 3.5 billion population is growing by 30 million (one-and-a-half Australian populations) a year.Unequalled opportunity
Australia has an unequalled opportunity to export fresh foods, commodities and carefully targetted manufactures and technologies to this rapidly growing market.
To be able to do this, however, Australia needs to embark on the sort of ambitious infrastructure projects advocated by the visionary one-time Snowy Mountains engineer, Emeritus Professor Lance Endersbee.
One scheme would be to exploit the abundant but untapped fresh-water supplies in the northern parts of Queensland, the Northern Territory and Western Australia, much of which currently drains out to sea. These under-developed regions, close to the markets of Asia, could produce a wide range of tropical and semi-tropical crops and processed food products on a huge scale.
To make Australia's vast export potential profitable would require Endersbee's scheme for swifter transport, namely an Asian Express railway, to deliver fresh product to Asia in less than 24 hours from as far south as Melbourne to an expanded, automated port of Darwin.
A two-track Asian Express rail would cost about $10 billion, equivalent to the interest Australia pays on its foreign borrowings in one year.
The benefits of the Asian Express would be huge. It could eventually be extended through to Perth and Adelaide and be part of a fast transport ring rail around the continent to supply a number of ports. This would overcome the tyranny of distance and allow farmers to shift to higher-valued agricultural production for export.
Martin Feil calls on Australians to do more to turn their raw materials into finished consumption goods. He says: "We are still behaving like a colony supplying raw materials and unprocessed agricultural products to the industrialised economies and buying finished goods from them."Incentives
He describes Malaysia's success in advancing its timber industry along the value-added chain by incentives and import restrictions, so that the country has progressed from exporting logs to supplying timber furniture.Getting on Track
is an essential handbook for serious discussion on Australia's future directions.
It tackles vital issues which were ignored by the media and both sides of politics in our recent federal election.
But, most important, it provides an exciting vision of how Australia could break free from its present limitations.