Jobs and Industry

CountryMinded is committed to maintaining a productive and affluent workforce. The best protection for Australian workers is achieved through stable and full utilisation of the workforce by viable businesses. In turn this means we must also provide an environment that fosters productive and affluent Australian employers.

In an increasingly globalised market, it is essential that Australian businesses are able to compete internationally. Australia’s necessary commitment to maintain a high standard of living to provide adequate health and aged care, education and infrastructure requires a strong economy, which is underpinned equally by an affluent work force and thriving business sector.

It is clear that multi-national corporations and foreign owned business have an unfair capacity and will to undermine Australian pay and conditions. It is also clear that many multi-national and Australian based big businesses deliberately abuse loopholes in Australian tax law including moving their domestic incomes offshore to avoid paying Australian taxes.

CountryMinded is committed to small and medium sized business and seeks to ensure these sectors in the economy are able to compete with big business to provide necessary competition, stimulate innovation and better utilisation of the domestic workforce.

It is true that Australian labour costs are higher than in many competing nations, increasing the economic pressure on margins for domestic goods and services that are subject to international competition. However, labour costs for Australian manufacturing, which has been hit hard by international competition, only attribute about 17% of the total costs in manufacturing. This indicates that the solution to the pressures on international competitiveness are in fact much more complex than just adjusting the labour market.

The Australian car industry is set to close facilities and cease manufacturing in Australia resulting in the loss of tens of thousands of jobs both directly and in the varied supply industries. While high labour costs were a factor in the decision to shut down, there were a range of issues affecting the domestic manufacturers’ ability to compete with cheap imported cars. The comparative costs of imported cars are directly affected by factors controlled or heavily influenced by Government policy outside of the labour market.

Currency exchange rates are affected by Government fiscal policy and resulting Reserve Bank monetary policy amongst other things. A high exchange rate brings down the comparative cost of imported items and effectively drives up the comparative costs of domestic enterprises. At the time the car industry determined it was unviable the exchange rate was well over parity. It is now well under parity and sensible fiscal policy would keep it that way and provide competitive trading to extend car manufacturing and stimulate all other forms of manufacturing also.

The Government also has the ability to implement countervailing duties to protect Australian industries from dumped products or offset foreign subsidies. The reality is that forcing domestic industries to compete with nations that do not impose the same level of regulation as Australia around environmental compliance, labour market compliance and general operating compliance is hardly free or fair trade. In a quid pro quo, Australian governments must also be pressured to reduce their own regulatory burden on domestic industry.

Regardless of current Government propaganda around free trade and the forecast efficiency gains, the ongoing abolition of all forms of protection to Australian domestic industries has eroded business and labour market resilience. This has occurred particularly in regard to the increasing levels of government regulation and associated compliance costs for domestic industry and small business.

The reality is that the vast majority of any benefit of bilateral trade agreements are captured by big business. (This is the same big business that shifts its income and avoids having to pay appropriate levels of tax in Australia.) Independent analysis suggests there is very little if any benefit from liberalising trade into Australia to the broader economy or small business, where most of the domestic workforce is utilised.

Any decline in the utilisation of a skilled workforce in Australia will simultaneously result in the decline of training for a skilled workforce. This will create a long-term crisis in ability to maintain a first world standard of workmanship on critical specialist services. The potential is for a negative feedback cycle that will cripple domestic industrial capacity, labour demand and the Australian economy.

The labour market is heavily regulated in Australia and there is ample evidence to suggest that there is a real need for reform, particularly in relation to the rigidity of pay and conditions for small and regional business operators and employees. There are clear disincentives in the current system for full utilisation of the work force and common sense must prevail. Small business and their employees seem to be caught in the cross fire between big unions and big business in relation to the pay and conditions debate.

It is clear that if labour pay and conditions are aggressively undermined and more financial pressure is brought to bear on the workforce generally, the economy will be exposed to an immediate shock.

Any adjustments to pay and conditions needs to be tied to productivity and improving labour utilisation in a way that provides opportunity to both employee and employer. Ambit wage claims increasing cost to business without comparative increases in either productivity are unsustainable. Similarly, decreasing the rate of pay will not necessarily increase the rate of employment, leading to less tax to government, less money flowing into the business economy and less money to the private sector, resulting an almost immediate recession.

CountryMinded is committed to protecting Australian jobs and maximising the productivity of the workforce to increase employment rates in terms of people in paid work, and more importantly, the people in full time work.

We will achieve this through considered policies that actually support domestic industries and businesses that provide real development and employment opportunities, with a particular emphasis on small business.

Specifically, CountryMinded will pursue policies that will:

  • abolish state based payroll tax;
  • implement fiscal policies that reduce interest rates and bring down the Australian dollar;
  • close tax loopholes to ensure all companies participating in the Australian economy pay appropriate and equitable taxes, regardless of their country of origin;
  • aggressively attack and abolish inhibiting regulation and needless government intervention and compliance costs and conditions on domestic enterprise;
  • make bureaucracy accountable for the cost they impose on industry through thorough commercial cost benefit analyses;
  • attack Government waste at all levels;
  • mandate premium shelf space on Australian supermarkets for Australian manufactured goods;
  • modify competition policy to give small business the same rights under the law as consumers;
  • implement an award specifically for small business providing flexibility and equity;
  • modify fair work policies to give small business the same rights as employees;
  • provide public sector investment in a range of true nation building infrastructure initiatives, such as dams, roads, railways, and airports to facilitate efficiency gains; 
  • aggressively wind back the market share and/or market power of monopolistic companies that control access to markets for Australian small business;
  • ensure that all Australian Governments purchase Australian manufactured products where they are fit for purpose.

Showing 3 reactions

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  • Luís Cardoso
    commented 2016-08-16 10:48:44 +1000
    It’s really true: “Australian labour costs are higher than in many competing nations, increasing the economic pressure on margins for domestic goods and services that are subject to international competition. However, labour costs for Australian manufacturing, which has been hit hard by international competition, only attribute about 17% of the total costs in manufacturing.”
  • Andrew Charles
    commented 2016-07-02 10:29:51 +1000
    I think you unfairly group all large multinational corporations together. That’s unjust and prejudiced. Is it really “unfair” to run a more efficient organisation or business model? That kind of thinking is perverse. You imply that it’s better for a business to be badly run. Rather than attack all multinationals as bad, focus on bad practices and abuses at all levels. Small businesses are just as responsible (to be fair, often more as they seek to expand their sales without making any investment in production) for the destruction of Australian manufacturing.
    What businesses need, rather than freedom to underpay workers and avoid regulation, is incentive and access to cheap funding for production investment. I’d like to see a national Industrial Development Bank offering the same kind of base-rate finance we provide to the banks, but instead funding Australian production operations for businesses of every size (secure, affordable, stable finance being a fundamental struggle particularly for small producers), and the purchase of qualifying Australian-made products. Other countries do it, and its a key driver of Chinese manufacturing growth. Why should base-rate, government backed finance only be available to the banks who have corrupted the economy? As someone thinking about small business, I’d rather have lower finance costs and secure local suppliers who can afford to invest in the new lines I might want than special award wages. I’d rather pay my staff more and run a more efficient operation.

    I wouldn’t mind a much higher GST (Europe’s is now 20%), if it was used to fund medicare, super contributions and regional infrastructure, reducing the burden on local businesses. A high GST levels the playing field between local companies with lots of staff, and importers and foreign companies with few in Australia. As it’s a tax based on revenue, not profit, companies can’t use accounting tricks to avoid tax by moving profits offshore.

    Blaming the high dollar for the loss of Australian manufacturing not merely simplistic, it’s incorrect. Ford, Holden Toyota, could all have shouldered the burden of a high dollar. What hurt was the rapid rise along with commodity costs. High-capital intensive businesses with long lead times like the automakers need a stable exchange rate. High or low, doesn’t matter. Since a lot of their input costs are imported components, tooling, plant and ultimately US-dollar priced raw materials, the level of the dollar is largely irrelevant from a cost basis. As long as it’s stable it doesn’t much affect your production costs. What you can’t have though is investment in plant, tooling and R&D at a low exchange rate (making investment high cost in $A), only to be followed by a high rate that makes it hard to pay back that investment. That’s why the fall in the dollar has made no difference to their investment decisions. They’ve earned from painful experience that it will likely rise again and destroy their returns. That this rise matches rises in commodity prices, not economic productivity, further undermines their business here. And yet despite that these large multinationals probably would have stayed if they could have been assured access to adequate low-cost finance for new products on a scale to support local suppliers. They’re in one of the few businesses that still understands the cost advantages of local production and a local supply base for lean enterprise, perhaps because they still think their business is manufacturing, not trade. Holden was even in discussion recently to sell their plant and continue production on a contract basis, but with a low dollar and the imminent loss of local suppliers it was not feasible. At this point large-scale emergency funding could still reverse their decisions, but only if at least Toyota and Holden could be persuaded to make new investment and local suppliers could be assured of adequate business to invest in continued manufacturing. South Africa does it, and even with exports to Africa, their market is not that big.

    Any fiscal policy is useless then, unless you can disconnect the $A from commodity prices.

    Robert, 547 Visa workers will always be required for short-term projects. It isn’t worth it either for employers or tradesmen to train, often for years, for a project that may only last 12 months. We’d be better off cracking down on or banning labour brokers. Traders in any industry are fundamentally corrupt (it appears to be a psychological affect of thinking of your business as trade), and will seek to maximize what their customers pay, and minimize what they pay their suppliers, whether or not it’s legal or even good business. Extending brokerage to labour only exacerbates the inherent evils of mercantilism (if you’re not persuaded by foreign abuses, just read The Wealth of Nations).
  • Robert Manton
    commented 2016-01-25 15:46:18 +1100
    547 visa workers are not needed. If we have a shortage of skilled workers it is becaue eployers are not providing apprenticeships.
    There should be a levy on employers to provide finance for quality training of our own youth.