[LINK] PM "knowledge and ICT skills more important than minerals"

[Glen Turner]

On 06/10/2012, at 10:04 PM, tomk <tomk at unwired.com.au> wrote:
>> 
> I think it is more likely that we need plumbers, machine fitters, 
> turners, boilermakers, mechanics, farmers (and not the mechanised type), 
> factory workers.

I don't know where you live, but here in Adelaide -- the industrial heartland of Australia -- you've pretty much described the older unemployed.  There simply is no work for fitters, turners, boiler makers and factory workers. Because of attitudes like your's about what is "real factory work" we missed the bus on electronics assembly, and now there are just too many positive externalities for firms assembling in China for firms assembling elsewhere to compete.

There isn't even work in farming. Even the highly profitable farms -- such as organics and vineyeards -- are still highly mechanised. At the most they need seasonal labour, and I'm not going to knock that as picking fruit has helped pay for my house, but it's not a year-round living.


> What Julia should be doing is giving Australian companies that develop 
> in Australia with 100% Australian trained staff a 30% preference on all 
> government contracts and a 20% tax break.
> 
> Now that would both get ICT going again and open up Australia to all 
> kind of foreign investment.

Oh dear, you just don't understand how modern trade works. If you get a tax break then competitors in the market you are selling into will lobby for your pricing to be inflated by that amount. Australia's beef with such treaties isn't that this happens, but that it isn't applied to agriculture as well. In short, a tax break or subsidy is a way to constrain Australian firms to Australia.

It's hard to talk ICT in Australia without talking about our most significant ICT firm -- Telstra -- and noting its complete failure to penetrate a market outside of Australia+NZ. Telstra is already strongly subsidised (eg, was given rent-free an existing last-mile network) and it's hard to see how further subsidy would have lead to it being more successful overseas. If fact you could argue that its high Australian prices have made Telstra unable to compete overseas (and I don't mean from a labour productivity point of view, but that such a strategy would have lower returns than their operations in Australia and thus be unacceptable to stockholders).

You can compare that with Altassian -- who needed to sell overseas from the beginning and doesn't really have a "home market". But their entire operation depends upon good ICT infrastructure at good prices being available in Australia.

-- 
 Glen Turner <http://www.gdt.id.au/~gdt/>