Politics wins over practicality every time when industry puts its hand out for government support.
Politics wins over practicality every time when industry puts its hand out for government support.
TREASURER Christian Porter didn’t pull his punches when reacting to the federal government’s $275 million assistance package to General Motors Holden so it could maintain its operations in Victoria and South Australia.
Mr Porter said the $215 million component to come from Canberra would be much better spent investing in new infrastructure in Western Australia where it would assist in the creation of new, productive jobs, create new wealth and boost exports.
It was a classic WA response, but one that hasn’t been heard that often. In one sense it reflected clear self-interest; in another it was sending a message to Julia Gillard and Wayne Swan that the state government is watching how they are spending taxpayers’ money – and it’s not very impressed.
And Mr Porter didn’t have to worry about the political niceties, because it was a state Liberal treasurer talking to a federal Labor government.
How Julia Gillard tried to sugar coat the pill was irrelevant. The federal contribution was a “strategic co-investment, not a handout” she said, which would secure the future for Holden.
But the ‘future’ has a time limit. Watch what happens in 2022 when the 10-year plan runs its course.
There was also a feel-good factor. The company was committed to manufacturing ‘environmentally friendly vehicles’. And not surprisingly, the package got a tick from the union movement because jobs of members would be secure, for the time being.
There is an historical factor here. Victoria and South Australia have been manufacturing states, traditionally shielded from competition by government protection. This has steadily been wound back since the Whitlam government in the early 1970s.
Sections of WA’s modest manufacturing sector have all but disappeared during that time as the state has been forced to rely on its traditional strengths. The burgeoning resources sector is leading the charge.
And that was Mr Porter’s point. At what stage is the federal government going to acknowledge that feeding the vehicle-manufacturing sector is a bottomless pit? Business, no matter how big or small, will always hold its hand out if there are taxpayers’ dollars being handed around.
If this is the way Canberra is going to use the billions it will raise from the new Minerals Resource Rent Tax – most of which will come from production in WA – then national productivity will not be the winner.
One result will be that all Australians will be paying more for Australian-built vehicles, and that means less to spend on other products. That will push costs up, which is not in the best interests of export-oriented states like WA.
The dilemma for the federal government is whether Australia should always have vehicle manufacturing. If the answer is ‘yes’, how do you prevent it being featherbedded? After all, competition is the lifeblood of industry.
Both Liberal and Labor have to resolve that issue. The test for Mr Porter is whether he can afford to be that outspoken next time the vehicle industry holds its hand out, and his Liberal colleague Joe Hockey just happens to be the federal treasurer.
Straight talker
NEW Foreign Affairs Minister Bob Carr might need to curb his natural exuberance when placed near a microphone, but his translation to federal politics has been greeted with unusual enthusiasm by most observers, including some of his political opponents.
One reason is that Senator Carr is particularly well informed in international issues. Also, because of his experience at the state level after more than 10 years as premier of NSW, he is well briefed on Commonwealth-state issues. And he exudes the maturity and confidence of a seasoned politician.
That doesn’t make him an accident-free zone, however; far from it. The more our leaders make themselves available to the media, the greater the prospect that they will trip up, whether self-inflicted or by walking into a media ambush.
And Senator Carr has his share of critics from his NSW days. But his record in recent weeks has been a welcome change to the usual public performances of our political leaders, from the prime minister down.
Listen to a cabinet minister being interviewed and count the clichés: ‘moving forward’, ‘working families’, ‘robust economy’, ‘doing it tough’, ‘true Labor reform’ and ‘two-speed economy’. It’s all shorthand for the insiders, but tell that to the majority of listeners, readers and viewers. They’ll tell you it’s eye-glazing stuff.
Opposition leader Tony Abbott has his own selection of negative rhetoric, of course, with ‘great big new tax’ being repeated ad nauseam.
Senator Carr’s big plus is that, apart from his booming voice, he avoids the clichés. He uses everyday words in a conversational way. It doesn’t sound rehearsed, and it doesn’t sound as if staff members are on ‘word watch’, listening to him just in case he happens to stray off message.
But, just when Australians are crying out for senior MPs to level with them and tell them like it is, comes a new tactic to deflect the intent of interviewers’ questions and get the responses back to more comfortable territory.
Take the first two questions from a recent interview with Ms Gillard on ABC Radio’s AM program after the passage through parliament of the MRRT.
The exchange has been edited in the interests of brevity, but it went as follows:
Sabra Lane: Has the fight (for the minerals tax) been worth it? You and Labor lost a lot of skin. It also contributed to Mr Rudd losing the prime ministership?
PM: Well I’m not accepting the premise of your question about the past events in Labor, but of course it’s been worth it.
Sabra Lane: This (the mining tax) was a relatively simple proposal to redistribute some of the huge profits made by these mining companies. Why on earth did it take so long and why did it claim your predecessor Kevin Rudd?
PM: Well again I’m not accepting the premise of your question but clearly mining companies don’t want to volunteer to pay more tax.
In both cases the PM declined to accept the ‘premise’ of the question. What does she mean? According to the Macquarie Dictionary, ‘premise’ means ‘a proposition from which a conclusion is drawn’ or ‘a basis for reasoned argument’.
But the minerals tax issue was, we are led to believe, a key factor in Mr Rudd being dumped as prime minister in 2010. And it took well over 18 months to get a minerals tax passed. Why? Was it badly handled by the federal government? The overwhelming evidence suggests it was, but the PM ‘doesn’t accept the premise’ of the question. So she avoids that sensitive issue in her answer.
Certainly the strategy is designed to enable her to skirt around tricky parts of the questions and move on to more familiar territory.
Ms Gillard is not alone in this tactic. A keen observer first drew my attention to its use by the Defence Minister, Stephen Smith, some months ago. Let’s hope it ends there.
Should the eloquent foreign minister start using the ‘premise’ debating tactic, then he really will be in a corner.
