May 2nd 2020

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Articles from this issue:

COVER STORY Gearing up to ditch free-trade policy

EDITORIAL Post-covid19, create a national development bank

CANBERRA OBSERVED Keelty water report misses the point on water shortage

ENERGY Pandemic has exposed our overreliance on imports

CARDINAL PELL Locating the golden thread

CARDINAL PELL High Court practically shouts 'not guilty'

FAMILY Dismantling myths around family tax benefits

REFLECTION Covid19 and the Church past, present and future

OBITUARY R.I.P. Bruce Dawe: poet of the people

FOREIGN AFFAIRS Doctors of WHO let the covid19 dogs out

INDUSTRY POLICY The rise and fall of Australian manufacturing and covid19

ASIAN AFFAIRS Politics done by stealth in the UN: China and the WHO

HUMOUR Get them hug-dealers off the streets

MUSIC Farewell to an Aussie jazz legend: Don Burrows

LOCKDOWN TV CLASSIC Unique, unsurpassed: The Avengers





NATIONAL AFFAIRS Crucial to get Virgin Australia flying again

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Pandemic has exposed our overreliance on imports

by Chris McCormack

News Weekly, May 2, 2020


  • Ninety per cent of our pharmaceuticals are imported
  • Plastics manufacturer closed after power bills rose by $1.2 million a year
  • Affordable energy key to domestic manufacturing

One thing covid19 has highlighted is Australia’s overreliance on imported products as essential medical equipment and other product lines of supply dry up.

Manufacturing in Australia has fallen from around 29 per cent of gross domestic product (GDP) in 1960 to around 6 per cent today. Successive governments abolished protections for local industries (by removing tariffs), which has decimated home-grown businesses as cheap – and often inferior – imports undercut the prices of Australian-made goods, leading to consumers abandoning the local products.

Cheap imported food products, some of which don’t meet our sanitary standards – remember the contaminated frozen berries from China from China and listeria found in European vegetables – have also smashed local producers.

But the chickens have come home to roost in two ways. First, the result of sending manufacturing offshore has seen the level of unemployment, underemployment and discouraged workers (those no longer seeking work) surge to around 23 per cent of the workforce. The “official” youth unemployment rate is higher than that in some areas.

The official unemployment figures are meaningless. And that was before the covid19-sparked economic shutdown. The figures now will be far worse.

Second, a reliance on imported goods has led to Australia struggling to source necessary products since supply lines have been interrupted due to covid19. Filtering facepiece respirators (FFRs) – masks that prevent the virus passing through – are in short supply. Only one manufacturer exists in Australia. Also in short supply is personal protective equipment (PPE) such as medical clothing. Ventilators likewise, if the number of infected patients balloons.

Ninety per cent of our pharmaceuticals are imported. In December, the stock of EpiPens for children ran out when the supply chain was disrupted, forcing the Therapeutic Goods Administration (TGA) to advise Australians to use out-of-date or contaminated EpiPens.

A report from the Institute for Integrated Economics Research in February said: “Australia has almost no capacity to manufacture any active pharmaceutical product for most of the products listed on the World Health Organisation’s list of essential medicines. We simply do not understand the risk to our national security by focusing primarily on lowest cost.”

Federal Industry Minister Karen Andrews has suggested that there can’t be “business as usual” after the pandemic has passed and that diversity in Australian manufacturing must be increased.

While government policies based on an ideology of deep globalisation have decimated our manufacturing and food industries, another factor adding to the economic woes of local producers is the cost of energy. From the Federal Coalition’s election in 2013, with its fastest-in-world pursuit of renewables, till 2018-19, power prices had risen 85 per cent, although they eased late last year.

Senator Concetta Fierravanti-Wells said that the plastic bottles to contain hand sanitiser came from China and we lack the manufacture of plastic bottles here. Plastic Granulating Services in South Australia went out of business in 2017 costing 35 jobs, after their power bills increased by $1.2 million a year after the State Government’s solar and wind revolution. Power price spikes in South Australia in July 2016 were estimated to cost more than $150 million, leading to BHP, Arrium and Adelaide Brighton Cement to question the cost of doing business in SA.

Germany’s industrial capacity is under threat due to its wind and solar obsession, with only imported electricity from neighbouring countries saving it from blackouts in June 2019 when the cost of short-term “balancing energy” rose from €64 to €37,856 ($A64,500). Australia, however, cannot import base-load power from neighbouring countries to save its bacon. Any discussion around increasing local manufacturing is vain unless affordable, reliable power is prioritised.

So, what needs to be done to lower power prices?

We must ignore any emissions targets associated with the Paris Climate Agreement and abstain from attending or signing any further climate agreements.

The federal and state Renewable Energy Targets that cost taxpayers over $3.6 billion annually in subsidies must be abolished, including all subsidies for rooftop solar and wind and solar farms.

Royalties on coal must be lowered to lower power stations’ running costs, which are passed on to consumers through electricity bills.

We must built high-efficiency, low-emissions (HELE) coal-fired power stations to secure low-cost base-load power.

It is delusional to maintain that we are the “clever country” if we can’t even value add to our raw materials. Covid19 has exposed our vulnerability stemming from deliberate policies to rely on cheap imports and high-priced electricity.

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