Another PHON policy stolen...

[Rorschach]

An election-winning policy: a development bank for Australia
by Patrick J. Byrne
News Weekly, November 17, 2018

Bill Shorten wants a development bank established to expand the infrastructure of the Pacific- island states. If either Scott Morrison or Mr Shorten announced a development bank to develop the Australian economy, he would romp home in the next federal election.

Mr Shorten’s announcement last week comes after News Weekly has twice in the past six months called for a development bank to help develop our Pacific island neighbours.

News Weekly (July 28) said: “Australia’s development aid to the region is expected to be $261.3 million in 2018–19. This needs to be greatly expanded.

“In particular, since Australia has generously endorsed China’s Asia Infra­structure Investment Bank, Australia should create its own Australian Infrastructure Investment Bank (AIIB), in part to develop regional Pacific island states.”

Again, News Weekly (October 6) said: “Since Australia has already committed to supporting Beijing’s Asia Infrastructure Investment Bank, it is pertinent to ask: why doesn’t Australia create its own Pacific infrastructure investment bank to expand investment in PNG and among our Pacific island neighbours?”

The Abbott government made Australia part of China’s AIIB, while Australia has been a long-time member of the Asian Development Bank and the World Bank.

Here is why Australia now needs its own development bank.

Unemployment: In May last year, Adam Creighton headlined in The Australian: “Be honest about unemployment.” He said that when the underemployed (those who cannot find enough paid work) and those only marginally attached to the labour force are added to the unemployed, it comes to over 3.37 million, or 23 per cent of working-age Australians. Those 3.37 million were competing for only 170,000 advertised jobs that month.

This 23 per cent corresponds to the about 25 per cent of people who won’t vote for a major federal political party, making it difficult for both Coalition and Labor governments to have budgets adopted.

If governments won’t ensure jobs, it is no wonder so many Australians won’t vote for them.

Where have the jobs gone?

Manufacturing: Australia’s manufacturing industry has shrivelled to below 6 per cent of gross domestic product (GDP) (see table), below the level of Greece; while Germany, Japan and even the United States have maintained much higher manufacturing sectors. Whole industries, like the car industry, have either closed or shifted offshore.

Manufacturing, value added (% of GDP)

World Bank national accounts data, and OECD National Accounts data files

As a result of radical free-trade policies, Australia has forgone hundreds of thousands of skilled, long-term jobs. These are well-paid jobs because capital-intensive industries like manufacturing can afford high wages.

Agriculture: For each job on the farm, there are four jobs off the farm in transport, food processing, and farm input industries. Australia’s largest manufacturing sector is the processing of food and fibre off the farm.

From 1975 to 2016, Australia’s population grew 75 per cent: from 13.9 to 24.3 million. Yet, major agricultural industries have been devastated by radical free-trade policies and deregulation policies that dismantled major forms of rural risk management, like marketing agencies.

Here is a snapshot. As the population has grown 75 per cent since 1975, by 2016:

The beef herd was 6 million under its peak of 29 million in 1975.
The sheep flock (mainly wool sheep) dropped by 100 million to 68 million since its 1989–90 peak of 170 million.
Total production of wheat and coarse grains were about 20 per cent above Australia’s population growth.
Despite major investments in sugarcane and dairy, production has declined in both sectors since deregulation in the 2000s and production in both was about 20 per cent below population growth.
Wine grape production greatly increased in the 1990s, but has plateaued since 2001–02.
Forestry increased above population growth, but has significant levels of competing imports.
Off a low base, there have been big increases in relatively new industries like cotton, oilseeds and pulses since the 1990s.
Horticulture, only measured since the 1990s, doubled since 1990, but faces growing import competition.

How is Australia expected to help feed our Asian neighbours with our rural industries in such a state?

Infrastructure: Infrastructure is the foundation of private enterprise. In recent decades, infrastructure development has focused on the major cities, but now the focus has to be on building infrastructure in regional areas – roads, rail, reservoirs, communications, etc. An Australian government development bank is the ideal vehicle for such investment.

Without blowing out the federal budget, a development bank is an ideal vehicle for investment in infrastructure, agricultural and hard manufacturing industries and jobs growth. This is not rocket science.

Whichever leader grasps this can win the next federal election.

PHON wanted to re-establish a People's Bank, much like the original Commonwealth Bank which would support investment in the country and its development... this policy goes back 2 decades or more. Funny how the major parties take so much time to catch up. In fact Costello was Treasurer and ridiculed the idea when PHON first brought it up.

[Rorschach]

Oh look now they are thinking about cutting immigration numbers... yet another PHON policy from decades ago....