Australian (ASX) Stock Market Forum

Bringing back Australian Manufacturing: Discard programmed obsolescence

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MovingAverage said:
Ok, on bringing back manufacturing back to Australian. I don’t won’t to be the wet blanket and unpatriotic, but I’m so so sure Australia is up to the task of building a world class manufacturing industry. Sorry, but it’s just MHO. If it is to happen we need to complete on the world stage, I just don’t think we are to it for a whole raft of reasons. Internationally, we are expensive, government generally doesn’t provide the necessary incentives, our tax system makes us uncompetitive and I question whether we have the necessary local skilled workforce. It’s one thing suggesting that we Australians support locally made goods, but it’s another expect the rest of the world to support it. Unless the rest of the world supports our local manufacturing industry then we will never build a competitive manufacturing industry to support just patriotic locals.
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That IMO is the very reason it has to be a carrot or stick approach, the same as used in the 1960s.
When BHP wanted to open up iron ore mines in W.A, Charlie Court made them build a blast furnace at Kwinana, otherwise they would have to pay higher royalties.
It is a long story, but BHP ended up 'finding' a way around having to install a steel furnace in the last 1980s, which ultimately ended everything steel related in W.A.
As has been proven over and over, unless it is written on paper you have nothing.
So getting back to manufacturing, like has happened with Lynas, they built the processing plant in Malaysia, we should say o.k that saved you say $20 m/ ton on the cost if you had built here we want a slice of that value adding the royalties on the rare earths go up.
The royalties on iron ore have hardly changed since the mid 1960s
 
SirRumpole said:
If we continue to labour under the delusion that we are on a level playing field with other countries that pay slave wages and no benefits then you are probably right.

Start putting on tariffs that account for the difference between our salaries and benefits and the country of origin and I think we'll be competitive. The 'emerging' countries have had it pretty good for too long, it's time they paid their workers a living wage and decent benefits.

'Free' trade is not necessarily 'fair' trade.
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Tariffs....while I agree we compete in a global environment in which slave labour is common...I’m not sure tariffs are the right way forward. After all the risk with tariffs is they breed uncompetitive, inefficient and poor quality local industries and Australia is no stranger to that. I’m not sure what the answer is but I think re-introducing tariffs is a step backwards.
 
MovingAverage said:
Tariffs....while I agree we compete in a global environment in which slave labour is common...I’m not sure tariffs are the right way forward. After all the risk with tariffs is they breed uncompetitive, inefficient and poor quality local industries and Australia is no stranger to that. I’m not sure what the answer is but I think re-introducing tariffs is a step backwards.
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I agree, IMO royalties are the answer, they can chose, value add here or pay more for the raw materials.
 
SirRumpole said:
In your moniker "Time wait's for no man". Should just be "waits".

Sorry I was being a bit of a smart ass, I should get out of the habit of correcting other people, I make enough mistakes myself.
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Haha, all good Rumpy, I considered it was a punkuation lesson, but couldn't find it in my post's...:p
Was thinking maybe you were referring to, there will be waits for Aussie made products....?

This idea could grow legs, there's lots of people out of work. There's no better time to get it going again.

There's no such thing as a free lunch, so why free trade ?
Tariffs may be the short term solution.
What's the point of a cheap 55" TV when I can't even buy a bag of flour or rice at the moment... tariff away I say. They (TV's etc) are temporarily? luxury items now for many, IMO.

Bring back "village" mentality...
Dibs on the village idiot role...:roflmao:
Ye hears me @barney, me, dibs!

F.Rick
 
Skate said:
@frugal.rock, you have made some good points. Australia has to learn from this recent experience & forgo the heavy reliance on other countries to produce what we consume.

Government Industries
Handing out free money is the immediate answer but in the longer term our Governments should be reintroducing employment opportunities. Once-upon-a-time the Governments were a large employer & in the short to medium term this could be a novel approach to stimulate the economy.

Social housing
For a start the Government should introduce "building social housing" on a mass scale, employing tradies & apprentices in volume. In this way, we would get the best "bang-for-buck" as an alternative to giving out free money. The flow-on effect from this alone would be an enormous boost to every community. Imagine the employment opportunities just to implement this idea before employing one actual worker to start building the houses. Than there would be local businesses needed to supply the necessary products & materials, a win/win for everyone. Nothing increases self worth more than having a job.

Skate.
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They tried that with the NBN and butchered it.
School halls sounds familiar
 
The way I see it, there's two key aspects to all this going forward.

1. Government is going to be under massive political, social and financial (budget) pressure to get people back into paid employment.

2. The strategic risk of relying on imports has been laid bare for all to see.

Boosting local manufacturing hits both points directly and to be blunt - what other option do we actually have? :2twocents
 
We did have a fantastic motor vehicle industry until recently, and bi-partisan political support to sustain it, until 2013. Part of the rationale for propping-up it and our steel making facilities related to maintaining a potential manufacturing base in case of war. That's gone!

Anyhow, there are huge impediments to manufacturing in Australia, eg
  • We do not have the population base for economies of scale
  • Our labour costs are high
  • We no longer have the essential supply chains; and
  • We would need to break international covenants in order to prevent external competition.
We also do not have incentives, mechanisms or the political policy stability needed so that the private sector has the confidence to invest.

It took China decades to become a manufacturing behemoth, and they as a nation easily satisfy the first 3 points above. The 4th point remains moot, as it would for Australia if we tried to price external suppliers out of our economy.
 
rederob said:
We did have a fantastic motor vehicle industry until recently, and bi-partisan political support to sustain it, until 2013. Part of the rationale for propping-up it and our steel making facilities related to maintaining a potential manufacturing base in case of war. That's gone!

Anyhow, there are huge impediments to manufacturing in Australia, eg
  • We do not have the population base for economies of scale
  • Our labour costs are high
  • We no longer have the essential supply chains; and
  • We would need to break international covenants in order to prevent external competition.
We also do not have incentives, mechanisms or the political policy stability needed so that the private sector has the confidence to invest.

It took China decades to become a manufacturing behemoth, and they as a nation easily satisfy the first 3 points above. The 4th point remains moot, as it would for Australia if we tried to price external suppliers out of our economy.
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Valid points, but Australia has done it before when those key points were even more critical. The imperative was greater of course, because of the war, but we also do have some unique advantages if only we could capitalise on them, rather than doing a best to minimise them.
 
rederob said:
We did have a fantastic motor vehicle industry until recently
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Sorry but it was not a fantastic motor industry by global standards and that is why it died. In recent times our local industry produced motor vehicles that had many flaws and shortcomings. The vehicles were no longer wanted by local or overseas consumers--our industry did not move quickly enough to embrace shifts in consumer trends both locally and overseas. Quality of the vehicles was not up to world class standards. The industry as a whole was horribly inefficient and required significant heavy government subsidies. Our motor industry fell well short of the global leaders such as Japan and Germany. Even our local taxi companies and fleet operators, once big supporters of our local industry, started to move away from purchasing Holdens and Fords long before they withdrew from Australia.
 
MovingAverage said:
Sorry but it was not a fantastic motor industry by global standards and that is why it died.
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Whatever, but we never had the volumes to be competitive globally, suffered the tyranny of distance in terms of export costs, and our per unit labour costs never matched those of Asia.
We still have our Australian made Aurion and would not swap it for quids.
 
rederob said:
Whatever, but we never had the volumes to be competitive globally,
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If we are to be competitive then we need to think global market not just local. Focusing on supplying the local market alone will never work because as you point out the volume isn't there to be economically viable. We need to think about supplying a global market
 
In the 50's and 60's we made household appliances, whitegoods, mowers, tv sets, radios, clothes and footwear, cars, aeroplanes (Victa), computers and that was for a population of 10 million or so.

We can do it again if we are prepared to introduce tariffs or quotas on foreign imports, the question is whether the political will is there to do this because we have become lazy and dependent on cheap imports.

If labour costs are too high then use machines as is the world wide trend. The US and Japanese industries grew because they restricted foreign competition until their own industries were strong enough. It's not rocket science it just needs political courage to resist the bleating of countries who prefer us to be dependent on them.
 
qldfrog said:
Just a bit sad that the next headline will be the closure of the last major tea producer in Australia.
And their tea is not bad, mostly organic etc
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i occassionally drink tea, but more on the coffee side. Can't say I've tried there tea myself.

With such a large estate and farming experience, they would have a real shot at diversifying their crops. Wish them the best. Would be sad to see them go under.
 
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