why

[Jerry_Atrick]

Agree Marty.. Part of the purpose of government fiscal policy is to direct taxes and spending to changes for the benefit of the community, especially where there is no incentive for capitalism to step in as the oligopoly traditional energy generation is. So subsidise the tarrif and the supply chain and you get return on investment which equals massive takeup. It doesn't have to go on forever, but to the ctitical mass required where economies of scale make it work, then a gradual universal withdrawal. It will definitely mean a shift in the generation economy from concentrated and centralised ownership and workforce to a decentralised workforce, but, hey, if the government had any vision, it would provide low-interest; deferred payment start up loans to suitable Aussie organisations to incubate manufacture here to support local requirements (with requisite incubation of materials, production and product technology to ensure Australia remains globally competitive)...

 

Hmmm.. But no,. let;s withdraw from another investment opportunity to better our community and improve our economy.. After all, ideology killed car manufacturing in Aus.. may as well thwart any other developments in other areas.

 

 

[old man emu]

Jerry,

 

This thread is about politics. Comments like "if the government had any vision" should go into the Funnies section.

 

 

[facthunter]

Politics or some hidden agenda killed car production in Australia. Nev

 

 

[nomadpete]

Car production in Australia only happened because foreign interests were able to subsidise their business by milking the government of the day. The whole incentivisation process was a failure. It was initially intended to be a transition using a subsidy to help the manufacturer overcome their setup costs, but the handouts and bailouts continued. The government kept paying up in an effort to buy votes (protecting jobs). The foreigners only stayed whilst they got paid to stay. That is not a good business model.

 

Since Australia has such great resources, it should be well placed to manufacture just about anything. I don't buy the argument that our wages are too high - modern manufacturing is automated. I suspect that our controlling red tape is a significant problem, along with poor transport infrastructure. Along with a shortage of long sighted big investors.

 

 

[spacesailor]

"The foreigners only stayed whilst they got paid to stay."

 

AND now the EV maker's want to get subsidies too. OR they wont play with us. BOO Hoo

 

spacesailor

 

 

[Yenn]

The government gave us an incentive to put in solar panels. That was good from the perspective of getting more solar vailable nd good for those of us who put the panels in. Since then the government has bleated that solar costs too much and is causing problems. Well that is their problem. They have also hinted at reneging on the contracts we have. Which would not be unusual for government, just think how they treated Those who bought Telstra shares, when they privatised it.

 

 

[nomadpete]

The solar subsidies are different in as much as they are not for ever. It achieved its goals, one of which was just raising public awareness of the long term benefits. Having achieved that, the subsidies are drying up. And that is as it should be. Now, even without any subsidy, rooftop solar does make financial sense. And there are now quite a lot of businesses that are secure enough to provide long term support for the product they sell.

 

Sure, it would be great to be actually making the product, but that is another story, without any quick fix, so our pollies aren't about to do anything about it.

 

 

[Litespeed]

I think a bit of perspective is needed about the car industry.

 

All developed countries that have a car industry provide some form of incentives either direct or indirect. Even Germany. They understand that the industrial capacity, technologies , research and development, and associated industries provide significant strategic advantage to a country for its people and economy.

 

It provides considerable jobs in allied industries such as parts makers, exports and taxation receipts. For every one job making cars their can be 20 hitech exportable market jobs created.

 

Even car makers that do not make a taxable profit generate considerable productive wealth for the country and taxation in Gst, wages taxes, superannuation and direct r&d, payroll taxes and so on.

 

This is a economic sustainable model even when the subsidies might be considered. The economic multiplier effect is considerable and the best investment for industry assistance a country can generally do.

 

A car industry is also considered vital in times of war as it allows the fast turnover into a war materials production facility. That alone makes industry assistance a very cheap military investment.

 

Our investment was one of the smallest in the world and we got back considerable benefit. The ongoing planned assistance was planned to be well under a billion a year and steadily decreasing under the last labour government.

 

It all came to a crashing heap when the new policy was announced and Abbott did everything possible to make sure the industry new it would be not supported in any way under his government.

 

He campaigned in the Murdoch press how red tape and ridiculous union wages made it uncompetitive to make cars here and all the money was just a gift to foreign Car makers.

 

At the time the world heads of GM, Ford and Toyota were in Australia to sign off on future car development and manufacture plans including many billions in investment over the long term. These included export plans for parts, engines, research and development centres for their world car products- including for models not to be made here.

 

At the time besides making stuff for our market,......

 

Holden was selling cop cars in the USA, plus Monaro and Commodore and to the middle east with the Caprice as well. . and the UK was happily buying the GTS.

 

Its HSV group was also exporting. The Current Camaro was actually developed here in Australia. Holden was considered the design center of excellence for GM and had a very big future developing cars for world markets.

 

Ford, pretty much locally based but also a design centre for global car development hence the current Mustang was developed here. It was also a exporter to NZ and world wide for design and engines sales.

 

Toyota besides making Camry and Corolla was the biggest exporter of Camry's for Toyota to the middle east and some other markets. It had expansion plans to double then triple production for export.

 

All the car Chiefs said Abbott was lying and red tape, wages and such were internationally competitive and world class for overall quality and production output.

 

Abbott made it clear he would not support manufacturing at all but would throw many billion a year to mining which rapes the environment, rarely if ever pays any tax and is going robotic.

 

And naturally are mostly foreign owned.

 

So Abbott killed the car industry and created a decline in the manufacturing sector on purpose. When all the data and advice was ignored and he created facts to suit his ideology.

 

Makes a two year old look mature.

 

So unemployment jumps, businesses close, exports are lost, skills and intellectual capital is trashed. We loose all the taxes collected and have to pay billions in restructure assistance and welfare benefits. The wages if those displaced drop for most to low skill low pay jobs. Real estate and local economies fall and everyone loses.

 

Oh except some miners and Abbott.

 

 

[facthunter]

As said ALL Countries subsidise their Auto Industry. There is a support sector of over 200,000 workers sales people and design you must have for a lot of reasons including security and even the sums add up on the money invested in new plant for the proposed projects. Workers and the companies pay tax and your overseas balance of payments is better. We sold spares for other makes from here too.. The figures were available at the time. . Why the indecent haste one can only conjecture.. Abbot pushed for the new BMW armourplated cars they now have, that were over 300K more than the equivalent offering from Holden to the same specs.. Nev

 

 

[nomadpete]

Litespeed, I have a problem with your argument at a very fundamental level.

 

For sure, Mr Rabbitt and co was the last straw for our foreign car makers here.

 

I do agree with all those benefits that you mention, there are financial 'trickle down' effects. There were a lot of smaller businesses that were kept in business by the bug car makers.

 

BUT, the examples you give are for a German owned car maker operating in Germany.

 

If any of 'our' car makers were actually Australian companies, I'd agree with you. But none of them were Australian. They were all basically trying to make profits for another country.

 

 

[Litespeed]

Nomadpete,

 

only a tiny fraction of any profits generated from the industry ever left the country even under foreign ownership. They made real money by making a profit on the products exported and the design work creating parts and vehicles to be made elsewhere eg Mustang, Comaro etc. All foriegn capital essential uses another country to generate profits. That is modern economics.

 

If we refused to allow foreign owned companies or capital we would be in serious trouble, just as any economy would be. The vast majority of the benefits from the car industry stayed in country. We got a great deal.

 

Mining/resource extraction is the exact opposite, most of the capital outlays for engineering is made overseas by foreign companies. They often import labour to build the mining infrastructure claiming we don't have the skills. They don't pay taxes here for that labour or follow our pay rules. They get massive subsidies from government of 10's billions a year for r and d, don't pay diesel taxes. They take our gas, coal, oil etc and pay a pittance in royalties - which is a bullshirt term and call it a tax. It is not a tax, it is a cost of production for the resource they take from us. They make massive environmental damage and rarely ever clean it up. We the people are left with the cost and we give them massive amounts of water for free worth billions a year. Water our environment clearly can't afford to loose nor can farmers who get polluted water or a trickle.

 

And they get the best tax deal on the planet, they rarely ever pay and tax on massive profits and artificially shift costs onshore and profits offshore. A example is Chevron with the gas, they sell it dirt cheap to world markets but we now have some of the highest gas prices in the world. It is our gas. This makes power and heat for manufacturing artificially expensive and uncompetitive. It is estimated that due to deals done by Howard, Chevron will not have to pay us anything in royalties and taxes for at least 20 years and maybe never.

 

What a clever country we are.

 

A good analogy for the mining game is this-

 

You invite a really dodgy character with a long criminal record into your home as a babysitter.

 

He molests your wife and kids, burns down your home, steals all your stuff, leaves a toxic hole and actually you pay him a massive wage to do it. He promised it was good deal, so you pay him even more to keep coming to your new homes and families.

 

Someone complains so you change the rules to make complaints irrelevant, make law to allow him to do anything he wants and must pay him to keep coming over. Then you help him destroy your wife's reputation in the media because she said it was not fair and the bad guy should stop.

 

She says you should have employed the qualified child care worker who is a union member and government regulated for a mere fraction of the wage and kept the family safe.

 

So you slander your wife, throw her out of the home and threaten anyone considering a child care qualification or business with ruin. You make laws to outlaw unions from complaining about the treatment of your wife and kids. Now you invite all the criminals mates over and give them anything they want. Now you go to the pub and celebrate how great a dad you are with all you mates. You all get really shitfaced and go around burning down childcare centres. You invite friendly press to take pictures and they report it as a fire started by childcare workers.

 

Substitute mother for Julia Gillard and Kevin Rudd or anyone really.

 

Babysitting for industry policy.

 

Home for our country..

 

Qualified child carers etc for a unionised car manufacturing industry.

 

Kids for the future.

 

And Naturally the career criminal is mining.

 

Government regulation for the changes Labour wanted on mining taxes.

 

Can you guess who the father is?

 

Who is it who keeps paying the crimes with our money?

 

What about the Grandfather?

 

And the mad uncle who cheers whilst the abuse happens?

 

Abbott, Costello, Howard and Joyce.

 

I wish this analogy was wrong but it isn't.

 

 

[nomadpete]

I like your analogy.

 

I totally agree about the mining/oil/gas industries.

 

However I do have one little objection about the foreign car industry that we once had.

 

I just don't believe that General Motors or Henry Ford (or the others) would have set up here unless there was a (big) dollar in it for them. They sure didn't do it as an act of philanthropy, just out of the kindness of their hearts!

 

 

[old man emu]

Don't forget that the American vehicle manufacturers, and the British, were exporting vehicles to Australia long before they set up their own assembly plants here.

 

General Motors exported engine/chassis units and Holden Body Works did the bodies. In 1924, the Holden became the exclusive supplier of American car manufacturer General Motors in Australia.

 

In 1931, the two companies merged to become General Motors-Holden's Limited (GM-H). In 1936, Holden opened a new HQ and assembly plant at Fishermans Bend in Port Melbourne. On November 29 1948, Prime Minister Ben Chifley unveiled the first Holden 48-215, which became affectionately known as the "FX". During the War Years, Chifley had been Minister for Postwar Reconstruction.

 

On 31 March 1925, Ford announced that Geelong, was to be the Australian headquarters. Ford Australia's first products were Model Ts assembled from complete knock-down (CKD) kits provided by Ford of Canada. Ford Motor Company of Canada, Limited was a separate company from Ford USA. Henry Ford having granted the manufacturing rights of Ford motor vehicles in the British Empire (later the Commonwealth), excepting the United Kingdom.

 

By the 1950s US and European makers were importing so many cars to Australia that companies like Volkswagen saw the use in creating assembly plants here. After threats by Menzies to hike up import tax on foreign-made vehicles, Volkswagon starts sourcing components for the Beetle from Australian manufacturers and foreign companies like Bosch set up manufacturing plants to supply the auto market. By 1959 VW Australia stops importing Completely Knocked-Down kits from Germany and is making complete cars here.

 

So, from as early as 1924, motor vehicle manufacture has been pouring money into the Australian economy. The vehicles might wear foreign badges, but the majority of input costs have circulated through Australian hands. It's true that GM, Ford and the rest have made millions from the Australian vehicle industry, but I'd say that billions have stayed right here. Workers on the assembly lines buy Aussie meat and two veg.

 

 

[Jerry_Atrick]

As I recall, the minining boom generated a dual economy - those working in the mining industry propspered (which is why they are hell-bent on robotising it) and everyone else, who, if you separated the two economies, were living in recession at times. Manufacturing, as alluded to by the above posts, may expatriate some profit, but it generates a hell of a lot of profit for local business that does stay in Australia (not to mention wages and taxes in the form of PAYE/G, corporate, sales or the dreaded whole sales tax of days gone by, etc). Of course, mining does to, but not to the same extent.

 

So even if the motor companies expatriated every last penny of net profit (which would have been suicidal), there would still be enough left to justify it..

 

 

[spacesailor]

BUT ( love that word)

 

Are we going to give the same incentives to the electric vehicle makers, as we refused the IC car makers of old.

 

Millions to get them to play with us, !. then losing out on the fuel ripoff taxes.

 

I don't think ant government could lose that much revenue & survive.

 

Same goes for the service stations, FREE fuel for EV cars. No more servos.

 

spacesailor.

 

 

[Litespeed]

And another side effect of mining is the hollowing out of the economy local to the mines. They suffer hyperinflation as competition for staff and accommodation play havoc. Some communities found they could no longer afford to live there as demand for rentals pushed prices to waterfront view levels in mining areas. What was a $200,000 house now was a $ million, rents went from $250 a week to $2000 or more. Investors rushed in, the locals could not afford to have a roof over their head. Local business found it could not find employees, as they needed super high wages just to pay rent. Naturally a cafe or butcher etc can't pay so are on a spiral downwards. All while the economy is apparently booming around them. The politicians happily create a two speed ecomomy, a very few in fast coward and most in idle or reverse.

 

Then things slow prices wise for the commodity and the mine lays off its workforce and destroys the local economy already hollowed out. As soon as super profits slow, the miners shift to somewhere else. The community bares all the real costs, and the mining companies scream for even more gov help.

 

Contrast that to the car industry which invest long term and is sustainable to for the ups and down in the market. A car design is a 5-10 year process to start making for sale and planned to sell for 7-10 year cycles or more.

 

Mining is a example of market failure in economics when all true costs are accounted for. In most cases our economic and social health is far more harmed than any benefits gained. We would be a better country if we left most of the stuff in the ground.

 

 

[octave]

Are we going to give the same incentives to the electric vehicle makers, as we refused the IC car makers of old.

 

Perhaps in fairness, we could provide subsidies for a similar time and value to the subsidies we provided them for car makers of old, sounds fair.

 

then losing out on the fuel ripoff taxes.

I actually agree with you on this, new methods of road tax will have to be developed. Perhaps a per KM charge

 

Same goes for the service stations, FREE fuel for EV cars. No more servos.

 

Although some chargers were free (paid for by the manufacturer) they do charge (money) In other countries there are charging stations within petrol stations. In Britain Shell is installing chargers at its stations, and no they are not free to use. service stations already cater for a variety of fuels, I do not see why they won't just change with the demand as any business would do.

 

 

[spacesailor]

AND $millions from the NRMA.

 

Not even a safety check (Free) for their Members,!.

 

spacesailor

 

 

[octave]

AND $millions from the NRMA.Not even a safety check (Free) for their Members,!.

 

spacesailor

geez space is there anything you are not unhappy or angry with?

 

I suspect the NRMA is responding to where the technology is going. If the rest of the world goes EV should we be a quaint country stuck in the past?

 

“Just as the NRMA was there to help Australia navigate the rise of the automobile 97 years ago, we will be here to help future generations navigate this new era of electric vehicles,” Loades explained."

 

 

[Litespeed]

I would not expect the NRMA to give you anything unless they see it as a way to rip you off blind as a member. Membership is to them just a way to have a captive market. Any discount you get is a small fraction of what they overcharge.

 

Since it corporatized over 20 years ago it is only about profit at any cost to the public and members.

 

 

[old man emu]

Well, as of October 2018, the Federal Government gets 41.2 cents per litre on unleaded petrol fuel (including standard, blended (E10) and premium grades) through excise tax. Plus 10% GST per litre pump price, which includes the excise tax - double dipping. The "double dipping" (GST imposed on the excise tax) was fully compensated for by lowering the excise at the time the GST was introduced in 2001. The Government also and stopped the automatic indexation of the fuel excise tax. The indexation of the fuel excise tax was reintroduced by the Abbott Government from 10 November 2014 by Tony the Rabbot.

 

 

[red750]

I wonder when they do start charging for charging, whether there will be high and low cycles, or will we be able to rely on a stable price.

 

 

[pmccarthy]

An analysis of where the dollars went in a gold mine that I was associated with was roughly 60% local for wages and supplies, 20% national for supplies and equipment, 10% overseas for equipment and 10% as profit and taxes including royalties. I think the overseas owners got about 4%. Miners cop a lot of uninformed cr.p and I see a lot of it here.

 

 

[Litespeed]

They I respectively suggest the Gold mine is a exception.

 

 

[facthunter]

When I see mostly nicely restored mine sites , no heavy metals going off site in rivers or dust and workers not getting killed or suffering black lung, I'll start to sprout the virtues of mining when it's done with more care for the environment.. You can't just put profit first last and always. and most of it goes overseas with NO tax paid here. My ancestors were coal miners so I know about mining accidents and silicosis. Nev