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Big government bad news for Aussie jobs

By Genevieve George - posted Friday, 22 February 2013


Julia Gillard's $1bn jobs package is nothing more than thinly veiled protectionism. As with most policies released by the current Government, the rhetoric outweighs the actual benefit.

Working with industry and unions, the Government has outlined a three point plan to produce a 'strong, fair and smart nation'. These three prongs are aimed at backing Australian firms to win more work at home, supporting Australian industry to increase exports and win business abroad, and finally to help Australian small to medium sized businesses grow.

If you are honest with yourself then these three initiatives make absolute sense. Small business has and always will be a core component of any successful economy and having a strong base of Australian owned companies is healthy. This should never be at the expense of tried and proven free trade economic principles that underpin any successful economy. This is where the Prime Ministers plan starts to unravel. In what has been described as a kickback to the protectionist wing of the union movement, Gillard's Jobs Plan is nothing more than a thinly veiled attempt to rebadge failed policies of the 20th century.

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History shows us that any attempt to create what Gillard terms 'Industry Innovation Precincts' are bound to fail. Think back to the Howard - Kennett attempt at producing the 'Commonwealth Technology Port" within the Melbourne Docklands. It failed because it produced bureaucrats not businesspeople. What Governments are trying to achieve by implementing such policy is symbolic at best. The Jobs Plan has enabled Gillard's backers in the union movement to give their members a pseudo 'victory'.

One only needs to look at the reaction the PM's plan received within the Union movement to see that this is the case. The day after the Jobs Plan was announced AWU boss Paul Howes came out publicly in support of Julia Gillard's leadership '110%'. Perhaps the most appealing aspect for Unions is the Anti-Dumping Authority. Anti dumping is a protectionist economic principle - it aims to prevent 'dumping' of cheap goods produced overseas in domestic markets. In doing so it acts to shore up local 'aussie' jobs. As any economist or free thinking person will tell you, protectionism only acts to prolong the life of inefficient industries. By adopting free trade and minimal government intervention you allow economies to specialise which ultimately produces the best results.

Perhaps the crowning glory of the Jobs Plan is the Australian Industry Participation plan. All large projects with a capital expenditure above $500 million will be required to prove involvement with local firms - blatant protectionism. In reality these initiatives are successful in two regards: creating jobs for public servants in Canberra and the complimentary red tape associated with said jobs.

This embedding of public servants in the private sector is taken to the next level for those looking to spend upwards of $2 billion. Serious national projects that will create jobs, encourage investment and ultimately improve the nation will be required to comply with an Australian Industry Opportunity Officer. This Officer will be involved in procurement deals to ensure that investors get the worst price possible. Embedding public servants in enterprise has and never will work.

The fact that such a token effort to involve Australian workers has been received so well by the Union movement is telling. All fingers point to the fact that clearly the Union bosses are as much on the take as the Labor party. I have nothing against producing and protecting local jobs - and undoubtedly this is what makes the Jobs Plan so appealing to AWU rank and file. But the reality is that this sort of plan only serves to discourage investment. Investors and businesses are far less likely to involve themselves in a country that so vehemently restricts their right to the best price. The people most hurt by the Jobs Plan are those very people it is designed to protect - blue collar workers.

In addition to the obvious policy weaknesses of the Jobs Plan there is a second game being played.

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Many of the policies being presented are old news, rebadged in order to allow the Government to appear proactive whilst simultaneously making budget savings. Of the proposed $1 billion package there is an estimated $600 million in savings. This is achieved through re-announcing old programs such as the Transformation Research Program and the Manufacturing Technology Innovation Centre, as well as listing equity in addition to investment funds to give the appearance of a large expenditure. These measures are tokenistic and designed specifically to satiate Union bosses upon whom the Labor party is reliant. There is absolutely nothing about the Jobs Plan to indicate a successful result down the track.

If the key to unlocking Australia's financial viability was ensuring big business buys locally at higher cost,  embedding public servants in private companies and creating more red tape for small business, then why only allocate a supposed $1 billion? Julia Gillard's Jobs Plan is nothing but thinly veiled protectionism. What Australia needs is an emphasis upon free market economics, minimal government intervention and most of all, freedom from the Labor parties biggest client - the Union movement.

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About the Author

Genevieve George is the managing director of the job-matching website OneShift.com.au.

Other articles by this Author

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Creative Commons LicenseThis work is licensed under a Creative Commons License.

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