21 March 1997. Thought for the Week: "At present we are living in a fool's paradise, when the grim facts of the situation demand the most vigorous, bold, and imaginative developmental policy that can be conceived by resolute statesmanship. Money must be released as though Australia were at war... The overall policy for Australia's development must be governed by the principle that what is physically possible should be financially possible."
The Money Trick
WHAT UNEMPLOYMENT PROBLEM?
by Eric D. Butler
There is the time-honoured excuse of all governments who fail to implement their election promises. "Give us time" was the excuse of the Fraser Government, after it took over from the Whitlam Government. And, of course, all incoming governments discover that the financial situation was much worse than they had realised before the elections.
The politicians who give their excuses rely upon the notoriously short memories of the electors. How many electors remember that John Howard was Treasurer for most of the terms of the disastrous Fraser Governments? And of his attempts to "reform" the taxation system? John Howard was a pioneer of the policy of de-regulating the Australian banking system as a major feature of what is known as "economic rationalism". Howard failed at the time to persuade his Liberal and National Party colleagues that his proposals were sensible. The implementation of these ideas had to await the election of the Hawke Government in 1983 and the appointment of "the world's greatest Treasurer", Paul Keating. John Howard complained that Keating had stolen his policy!
The shuffling of the politicians has made no difference to the basic finance economic policies imposed on the Australian people since the election of the Whitlam Government m 1972. It was the Whitlam Government, dominated by the Fabians and internationalists, which destroyed any last remaining vestiges of nationalism in the Labor Party. Internationalism has been the dominant philosophy of every government since then.
John Howard and his colleagues insist that they intend to internationalise the Australian economy, to make it more "efficient". They are now being openly supported by Gough Whitlam, who is concerned that a desperate Labor Party, haunted by the fear that it has no future as a political force, is tampering with the idea of "putting the clock back" to prevent any further unemployment because of a reduction of tariff protection and further electoral losses for a Labor Party which can no longer pretend that it represents traditional Labor supporters.
Echoing his internationalist masters'
view, Rupert Murdoch, Paul Kelly of The Australian,
has entered the growing controversy about tariffs, with an
article in The Australian of March 12th, in which he
rehashes the moth-eaten arguments about how the protection
of Australian industries is a subsidy, generally of "inefficient"
industries, which Australian consumers must pay in higher
prices. Many Australian primary producers were misled by their
leaders into accepting that de-regulation of the banking system
and other forms of internationalism, would be of great benefit
to them. They failed to grasp that the end result of this
policy would be the flooding of Australia with primary production
from nations with wage structures with which they could not
"Economic rationalism", a term used to describe the current form of internationalism, fails to measure the economic, social and other costs resulting from Australia allowing the countries to provide Australia with what they once grew and made themselves. How do we measure the loss of manufacturing skills resulting from the destruction of Australia's manufacturing base? There is the steady loss of national independence.
John Howard calls for "greater growth" as being essential for overcoming unemployment. The arithmetic is simple: If economic growth can be increased to, say, between 4 and 5 percent, there is an automatic increase in jobs. But as even some of the orthodox financial "experts" admit, this type of growth means accelerating inflation within a short time the Reserve Bank being forced to increase interest rates in an attempt to bring inflation "under control". This means a slowing of economic growth and no prospect of reducing the rate of unemployment.
Primarily as another public relations exercise, John Howard and his "advisers" are resorting to the type of mickey-mouse employment schemes tried out by their Labor predecessors. John Howard's comments concerning the jobless being forced to engage in some form of economic activity, however useless, in exchange for the dole, can only increase the growing resentment of the members of what is becoming a type of underclass.
There will inevitably be increasing social disintegration as the young are denied the opportunity to engage in meaningful economic activities. Such activities would automatically take place if John Howard and his colleagues asked the right questions and then acted upon the answers. For a start, the question could be asked: Are there economic activities, which are required to increase the independence of Australia?
A number of such activities are required, starting with a build up of the nation's military defences. A build up of military defences requires that Australia's manufacturing base be restored. The regeneration of the nation's industrial base would immediately result in a growing demand for skilled labour. Australia's long coastline requires the building of small boats for surveillance activities.
A wide variety of skills is essential for the building of such boats. Australia not only can quickly develop the necessary engineering skills but has adequate natural resources. Are there transport projects which would also increase the nation's capacity to defend itself? Should the nation's existing train services be upgraded? Given time, there would be no problems about expanding the nation's steel industry to meet increased demand. What is required for the regeneration of rural and regional Australia? Providing they are competing as a genuine level playing field, with no artificial financial restrictions, Australians are capable of competing against primary producers in any part of the world.
There is an enormous amount of constructive activities urgently required throughout rural and regional Australia. If the realistic questions are asked, and many more could be asked, it can readily be seen that with an enormous amount of meaningful economic activities required throughout the nation, it is absurd nonsense to keep on bewailing unemployment problems.
What is physically possible and genuinely necessary must be made financially possible. In order to achieve this, the first essential step is to bring the Australian banking system under the control of the elected representatives of the Australian people. Politicians not prepared to take this step have no hope of dealing with the unemployment or any other problems confronting the Australian people. As there is no evidence that the Howard Government is prepared to do this they must be removed in favour of those who will undertake what is in essence the adequate defence of Australia's sovereignty and independence.
REALITY INTRUDES INTO TARIFF FIASCO
by David Thompson
Former Prime Minister Whitlam took Beazley to task on the new tariff policy, complaining that it was against the A.L.P. tradition of responding positively to internationalism. "The internationalisation of the Australian economy began with my Government's 25% across-the-board tariff cut of July 1973. That ended an ethos of protection all-round, which took its antecedents from the time of James Scullin " he boasted (The Australian, 14/3/97).
This internationalisation continued under Fraser, Hawke and Keating, with the latter making a virtue of deregulating banking and finance in 1984 as an essential step towards committing Australia to the new global market. Now, however, with the long-term effects of the elimination of industrial assistance becoming obvious, with high unemployment and an eroding industrial base, reality begins to bite. Whitlam did at least have the luxury of slashing protection from relatively profitable (and probably relatively inefficient) industries, when unemployment was relatively low by today's standards. Those days are long gone.
One current example serves as being typical
of the slaughter of Australian industry since Whitlam s day.
This is the family-owned suit manufacturer, Rundles, of Newcastle
in N.S.W., which was placed in receivership last week. Why
was Rundles placed in receivership? Were they "inefficient"?
No, but their Australian bank moved in on Rundles because,
in the bank's view, Rundles would not survive the imminent
tariff cuts that protect the clothing textile and footwear
industries. More than 200 workers, producing about 90,000
suits a year, face retrenchment if the N.S.W. Government fails
to broker a staff co-operative deal this month.
The academic arguments of economists portray the elimination of tariff barriers as making good, rational economic sense, and a benefit to the economy in the long run. Thus the term "economic rationalism". Peter Rundle and his staff beg to differ. A new survey shows that only 12% of footwear, clothing and textile manufacturers are confident of surviving the proposed new trade regulations, under which their 37% tariff will be progressively eliminated by 2010. The textile competition comes from Fiji and China, where labour rates are 90% lower than in Australia.
RATIONALISTS FORGET SOCIAL COSTS
Economic rationalists like Paul Kelly,
former editor of The Australian, argue that those who
support higher tariffs are, in fact, supporting higher taxation,
since it is the consumer who eventually pays the artificially
higher price of protected goods. "By contrast, the lower tariff
politicians are tax-cutters, and this is their political sell,"
he wrote. "Growth comes from a dynamic economy in which you
promote efficiency. Lower protection creates jobs, real jobs."
Kelly's argument makes superficial sense, but the social costs are ignored by the rationalists. What happens to the 200 workers retrenched from Rundles? Do they rush off to another factory, which gratefully employs skilled tailors, machinists, etc.? No, they go onto the dole, and few will ever hold another job. They mount the welfare treadmill, financed by higher taxes from those still working. As their region begins to deteriorate, the social costs continue to mount. Crime becomes an escalating problem, with higher police, court, prison and rehabilitation costs. Or else redundant workers are perennially "retrained" (again, at taxpayers' expense) for jobs that simply no longer exist!
The motor industry is presently nervous
about the recommended cuts to tariffs, and the chief executive
of the South Australian Economic Development Authority launched
a blistering attack last week on the Productivity Commission's
draft report on the car industry. He described it as deficient,
naive, dumb, scurrilous, nonsense and selective.
It would be refreshing if it was true that Kim Beazley has repudiated the Whitlam/Hawke/Keating long-term programme of globalising the Australian economy. There is little evidence that he has. Rather, Beazley is learning hard electoral lessons, in which his own blue-collar base has been progressively eroded by A.L.P. policy. Beazley seeks power, which means he needs those blue-collar votes. Their perception is that it is the new global market, which has cost them jobs, and jeopardised the future of their children. The Beazley approach is classical Marxism - two steps forward and one step backwards. If it requires a step backwards on tariffs to return Labor to power, then so be it. This will not change the general policy direction of the A.L.P.
DESTRUCTIVE FUEL TAX HIKE
If Paul Kelly and others who are concerned about taxing the consumer, perhaps he might turn his attention to fuel prices, which influence every aspect of the production system. The consumer wonders why the price of fuel gradually increases year by year, and assumes that the avarice of the multinational oil companies is to blame. In some respects the global oil companies do exploit their near-monopoly on fuel supplies. But the gradual price increases have much more to do with gradual tax rises.
In N.S.W. the N.R.M.A. (National Roads and Motorists Association) has finally convinced the Shell Oil Company to open its books for a study of where the fuel dollar goes. The figures show the N.RM.A., that over the past 16 years, the cost of the fuel - mainly petrol - has remained relatively static, while taxes have gone up from 6c per litre in 1980 to 34c per litre last year. The oil companies do not really emerge with clean hands either, as figures show that although N.S.W. State Government taxes are reduced in remote areas, the prices for fuel are extremely high. The truth is that competition between metropolitan retailers keep retail margins low, while oil companies split the high profits in country areas with remote retailers. In effect, rural consumers who travel longer distances are subsidising city consumers, and the subsidies are dramatic.
The N.R.M.A's. David Anderson points out that the fuel excise is the third largest source of Federal revenue, bringing in $10.5 billion every year, and the electorate is mainly unaware of this hidden tax (Sunday Telegraph, 16/3/97).
MULTICULTURAL CHICKENS STARTING TO ROOST
Although proponents of multiculturalism are usually effusive in their enthusiasm for cultural "diversity" and "richness", when pushed for specific advantages of multiculturalism, they struggle, and usually resort lamely to the observation that there is a greater variety of restaurants open now. Big deal. On the other hand, warnings of the long-term consequences of a rapid injection of large numbers of aliens are, unfortunately, being increasingly vindicated.
The League always looks well ahead, and has been condemned as "racist" for warning that the rapid increase in Asian migrants - whether "boat people" or otherwise - would cause increasing social friction. Although the press is reluctant to report on the ethnic or racial identity of those charged with crimes, it is now impossible to ignore the ethnic - particularly Asian - influence in crime. Whether it is in the form of street gangs, "home invasions," or the drug trade, it is a fact of life that the Asian criminal influence has mushroomed. The N.S.W. Police Force has resorted to recruiting Asian police officers in order to even begin to address the crime problems in Sydney suburbs. Other States are feeling the same effects.
Reports from New South Wales last weekend illustrate the pattern now emerging. An inner-west Sydney high school, Tempe Languages, has been forced to employ an armed security guard to patrol the school to protect students from Asian gangs armed with cricket bats. Eighty-five percent of the school's 700 students come from non-English speaking backgrounds, which illustrates the problem. Some of the gang members are believed to be former students who were expelled or suspended from the school. Police have been walking through the school at closing time each day to prevent violence, but on the request of the principal an armed security guard has been hired to patrol surrounding streets. Students claim that all teachers on playground duty now carry mobile phones in order to ensure a quick response to trouble (Herald-Sun, 17/3/97).
In Victoria, police are finding that,
as in Sydney, the Vietnamese involvement in the drug trade
has reached startling proportions. According to newspaper
reports, more than 90% of heroin dealers caught in a drug
blitz in Melbourne over the last year were Vietnamese. Police
report that of 119 people prosecuted for drug trafficking,
111 were of Vietnamese origin. The Vietnamese influence in
the heroin trade is not confined to street level, with many
of the organised crime syndicates of Vietnamese origin.
Victorian Opposition Health Spokesman John Thwaites (A.L.P.) describes the situation as "a social crisis". He claims that big cuts in school language programmes, a lack of "ethno-specific" drug programmes and poor job prospects have made drug trafficking seem attractive. "If you've got people on the outer, they resort to crime," he said (Herald-Sun, 17/3/97, emphasis ours).
The irony of his comments appears completely
lost on Mr. Thwaites, whose Party has largely been responsible
for the huge increase in Asian immigration at the Federal
level. People "on the outer" in this case happen to be mainly
Asian migrants, and irrespective of whether they live in Melbourne
or Sydney, the result is the social crisis described by Mr.
With the probability of increasing centralisation of the press into fewer hands, their role can only become even more poisonous. It is so far left to groups who do not fear the tag of "racism" like the League to continue to warn of the long-term effects of dangerous policy. People like Pauline Hanson and Graeme Campbell should be accorded immense respect for their courage in standing against the prevailing tide of abuse leveled at those who offer responsible warnings on the race issue.
FROM THE PRESS
Timely to recall overwhelming 'yes' vote
of 1967* - The Australian, 11/3/97
Mercenaries a perfect example - The
Suckered - The Australian
"On Target" is published by the Australian League of Rights, Box 1052. G.P.O. Melbourne 3001.