May 16th 2020


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Articles from this issue:

COVER STORY Basin inquiry raises more unanswered questions

EDITORIAL Rebuilding industry won't just happen: here's what's needed

CANBERRA OBSERVED Regret over our rushed marriage to China

NATIONAL AFFAIRS Giving back from the top

NATIONAL AFFAIRS Crucial to get Virgin Australia flying again

REFLECTION The ridiculous attack on reason

NATIONAL AFFAIRS Cardinal Pell: The story of a targeted assassination

INTERNATIONAL AFFAIRS The China bear in the global living room

FAMILY 'Coronaschooling'

ECONOMICS Looking back for the purposes of going forward

POLITICS The willy-nilly manufacture of rights

POLITICAL PHILOSOPHY 'The hours have lost their clock'

HUMOUR A tribute to Bond Stott, late of BC/AD

MUSIC Punk is defunct: Long live de funk

LOCKDOWN CINEMA CLASSIC A journey through Death's dark kingdom: The Masque of the Red Death

BOOK REVIEW A DIPLOMATIC EYE ON ASIA

BOOK REVIEW A LIFE SPENT IN HELL

POETRY

LETTERS

AS THE WORLD TURNS

ROYAL COMMISSION Hatchet job on Cardinal Pell breached basic principle of fairness

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EDITORIAL
Rebuilding industry won't just happen: here's what's needed


by Patrick J. Byrne

News Weekly, May 16, 2020

After the covid19 crisis vividly exposed the vulnerability of Australia’s global supply chains, (re)building essential medical supplies and other strategic industries will take far more government involvement than just cutting the company tax rate.

Commenting on their report, obtained by the ABC, the then Defence Department’s director of preparedness, Cheryl Durrant, said the exercise found that if global supply chains broke down, the likelihood was that:In an exercise eerily predictive of the current crisis, the Department of Defence last year assembled 17 senior engineers from peak industry bodies – including health care, electricity, fuel, water, mining and telecommunications – to assess Australia’s vulnerabilities in the event of a pandemic or global power conflict.

Specialist medical supplies “may be exhausted within days”, with “severe repercussions for public health” as 90 per cent are imported.

Water-treatment and sewage systems could start to fail as crucial imported chemicals ran out (earlier this year companies began stockpiling essential chemicals when they realised the covid19 crisis could lead to shortages).

With only two months’ reserves of liquid fuels, there could be food shortages.

Essential services including electricity and telecommunications could fall apart because these industries critically depend on imported spare parts.

Furthermore, former Air Force deputy chief John Blackburn warned that Australian governments have failed to consider the risks of an overwhelming reliance on global trade as “almost all our trade … depends upon foreign-owned shipping systems”.

The Defence Department’s predictions reflect Australia’s vulnerability after 40 years of de-industrialisation under the policies of deep globalisation and deregulation.

STEP BY STEP

The conditions needed for establishing strategic industries, like those to produce essential medical supplies, and for re-industrialising Australia, include:

1. Declare the production of essential medical supplies, and many other security-related products, as strategic industries, which would give them security exemptions under the World Trade Organisation rules and thereby allow favourable treatment of such companies and the prevention of foreign takeovers.

2. The Foreign Investment Review Board (FIRB) would have to be tasked with preventing such takeovers by foreign companies.

3. Trade policy would require appropriate limitations/restrictions on imports where foreign competitors threaten a strategic industry, particularly where the competing imports are subsidised.

4. Strategic industries need to be Australian owned, or majority owned, and given incentives to stay onshore, while welcoming partnerships that encourages technology transfers.

5. Government equity, temporary or sometimes permanent, may be needed in some companies for them to be viable.

6. A major emphasis should be on incentives to build new industries in regional areas as part of federal and state commitments to decentralisation, which will provide other benefits such as decongesting cities and making more affordable housing available.

7. Wherever possible, governments should encourage domestic companies to supply strategic industries, further minimising reliance on global supply chains.

8. A development bank, modeled on banks like the former Commonwealth Development Bank or Germany’s KfW, is needed to target long-term capital for strategic industries and infrastructure.

9. Incentives should be provided for strategic industry research and development.

10. Incentives are needed for liquid fuel exploration, extraction and refining to ensure energy security.

11. Many strategic industries, and their upstream suppliers, will require lower-cost electricity, which means building new coal-fired power stations and reducing subsidies on renewables.

12. An inventory of skills required by strategic industries would give direction to the education and training needed for these industries.

13. All levels of government should have procurement policies that support strategic industries.

14. To secure international trade routes, there needs to be a domestic shipping line and airline, or a majority government stake in these critical transport industries.

15. Tax reform should give priority to ensuring multinationals operating in Australian pay their fair share of tax.

There are three major impediments to this constructive agenda: political and bureaucratic commitment to deep globalisation under the banner of “free trade”; commitment by many major corporate leaders, such as Andrew “Twiggy” Forest and Kerry Stokes, to Australia remaining heavily reliant on China; and the existence of more than 600 environmentalist groups with tax-deductibility status working alongside the Greens to block the development of many major strategic projects and key infrastructure.

The big question is, can the battle to establish strategic industries and to ensure Australia’s sovereignty triumph over the power of vested interests that benefit from 40 years of deep globalisation policies?

Patrick J. Byrne is national president of the National Civic Council.




























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