Iconic Australian car maker GM Holden’s announcement this week that it will end car production in Australia by 2017 is exactly what Paul Keating intended when he floated the dollar and slashed tariffs in the 1980s.
And he’s been cheered ever since by the same Labor and Liberal politicians, media pundits, and union leaders who today are wringing their hands over the loss of 3,000 Holden jobs.
Australians must fight back—by rejecting the consensus line that the Hawke-Keating reforms were somehow great for Australia, when in fact they ripped apart our agro-industrial base and turned the economy into a financial casino and colonial raw materials quarry.
If it is hard to accept that the destruction of manufacturing jobs is intentional, hear it from the architect. The following exchange between Paul Keating and Kerry O’Brien, broadcast on ABC TV on 26 November 2013, the third episode in a four-part interview series, reveals the deep disdain Keating had—and has—for the “blue collar” factory jobs his tariff cuts started to destroy in 1986.
O’Brien asked, “Looking now at the state of manufacturing today: the rustbelts around the major cities; industries like cars and steel and shipbuilding still in trouble; so many skills lost, jobs exported to Asia; are you still sure it was the right thing to do the way you did it?”
Without hesitation, Keating replied, “Oh, absolutely! I mean, it advanced us donkey’s years…”
Pointing to the human toll, O’Brien countered, “But many of those working people were now staring at lost jobs. Many of those working people in factories, in various jobs, skilled, semi-skilled, unskilled—gone.”
“Yeah—gone,” Keating responded defiantly. “You know what they found? A better job a week later, in a growing economy, with employment growth.”
Rising to his theme, Keating continued, “We got them off the factory floor. The aim was not to leave them doing repetitive jobs on the factory floor, but to get them off the factory floor doing better professional jobs in the big service economy of Australia. I mean, all these people got picked up.” [Emphasis added.]
Keating’s brazenness left O’Brien gobsmacked. This period was the beginning of the rise in unemployment that eventually peaked at over 11 per cent, and only came down through statistical manipulation and the permanent shift from full-time unionised jobs to part-time and casual jobs. O’Brien said, “You make it sound so simple: ‘a week later they had another job’! Do you really think that’s how it worked out?”
“No, no, the labour market in Australia had grown by 25 per cent,” Keating defended. “We’d created 1.7 million jobs.”
O’Brien: “A lot of those jobs were in totally different sectors of the economy. A lot of those jobs were in the service sector.”
“Exactly!” Keating exclaimed, happy that O’Brien was making his point. “So what would you want to be? Line up at 7.30 in a blue collar, or work in the service sector? And people said, ‘Thank you, I’ll take the service sector.’” [Emphasis added.]
Keating then described a woman he met with health problems from working in a textile factory, and said, “This is what slave labour [sic!!!] was all about, under the tariffs and under the quotas.” [Emphasis added] (He made no mention of the conditions of the Asian factory workers on cents per day who took over the jobs of Australian unionised factory workers.)
Solution: Glass-Steagall, a National Bank, and tariff protection
Citizens Electoral Council leader Craig Isherwood today laid out the pathway to reviving Australian manufacturing.
“Keating is arrogant enough to boast of what most others try to disguise behind economic theory,” he said. “Once you understand that everyone in the major parties, the media, and the leadership of the unions who support free trade actually want to destroy manufacturing, and that it isn’t an ‘unintended consequence’, then it is clear how to save it—dump their policies!
“Australia must return to being an economy in which production is more valuable that finance. To do that, we need to split up our banking system according to the Glass-Steagall principle, so that banking that services the daily economy is protected from investment banking that gambles on derivatives and makes more money from shutting down factories than from investing in them.
“Australia needs to go back to a National Bank, as the old Commonwealth Bank was under Ben Chifley. It was the Commonwealth Bank in 1947 which provided the credit for General Motors Holden to start manufacturing Australia’s first mass-produced car.
Even GM in Detroit wasn’t willing to invest. Australia developed a car industry, not to service a ‘market’, but because Chifley had the vision of Australia having an advanced manufacturing capability, and he had the Commonwealth Bank to invest in it. To restore that advanced manufacturing capability, we must return to the vision and polices that developed it.
“Australia must dump free trade and return to tariffs. All of the free trade theory that the present generation of Australia’s political leadership have been indoctrinated with is garbage.
Chifley initiated advanced manufacturing in Australia, but it only lasted and flourished as long as it did because the great Country Party leader John ‘Black Jack’ McEwen fought for ‘protection all round’.”
Isherwood concluded, “This is not an economic debate, it is a political fight, over the future of our nation. It is time for Australians to break their traditional alliances with the parties that are betraying us, and join in the fight with the CEC.”
