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Are We Living Beyond Our Means?

Treasurer Joe Hockey is attempting to bring about sweeping changes in the way the Federal Government spends money.   His plan is to bring about cuts in certain areas, so we can bring Australia’s budget under control.

This will be a big job, as Australians are, and have been, living beyond their means. 

It appears one of the biggest cuts will be to social welfare, which for some will be very hard to swallow.   One result of that policy is that the retirement age will move up from 65 years  to 70 years of age.   But is the government cutting off its nose to spite its face?   In many areas of employment, a 65-year-old has started to slowdown and while they frequently can offer work ethic, guidance or knowledge, they may find it difficult to keep up.  Then there is the argument that they are keeping a job which a younger person could fill.

Currently, there are simply not enough jobs to go around.  It is a real concern that the jobless rate is at 6% today.  Politicians talk of people taking fruit picking jobs, or moving to find work.  But these simplistic solutions are not always the answer or are even practical.  There are only so many jobs in fruit picking, (many may not have the physical capabilities to work in these industries), moving is costly and requires finding accommodation when you may own your own home or be settled where the family is.   There is no simple solution, as I make my point later. 

Australians demand top wages and conditions, superannuation, penalty rates, and even maternity leave, however most small businesses are buckling under these requirements because they simply can’t pass these costs on.  There are approximately 900,000 small businesses employing a massive number of people in Australia, but they are crippled by costs and are standing staff down. 

This problem is not limited to small business alone.  Big business too is suffering: from geographical isolation, high wages and high costs of production.  This is all leading to mining industries, Qantas, GPO, etc standing people down.   

The fact is while we all want the best wages and conditions; we still demand low prices on food, clothing and many other goods.  This plays into the hands of the duopoly, Woolworths and Coles, who use ‘market perceptions’ to tell the customer they are providing them with the best products at great prices with great eco-friendly conditions attached, but they do not tell the consumer that they pay nothing for those ‘extras’.  They give the impression that the farmer and manufacturer is happy to work with the costly constraints that the duopoly demands, but does not pay for. 

Our society is skewed in its knowledge of how goods and services are delivered, and how costly it is to deliver eco-friendly goods to the public.  In reality, how much do the public really care?  

The duopoly and government and agencies continue to talk about food security whilst we watch our food processors go out of business, and other manufacturing simply go overseas. Once they are gone overseas there is definitely a loss of standards and quality. 

Or the importation of foods grown with less scrutiny and care than our food, but mixed with our foods stuffs to lower the cost of production for the duopoly.  When will people wake up?

Tariffs are a dirty word in Australia and we continue down the path of the supposed ‘level playing field’, which is greatly tilted against Australia in reality.   The MLA’s information that the $5.5billion to be earned from the new agreement with Japan will effectively end up in Australian cattle farmers pockets is very incorrect. 

First, that trade deal plays out over 19 years for beef, so that $5.5b will come in slowly.  Second, the tariffs are funds directly into the pockets of the Japanese government when the goods land on the wharf, and even if the tariffs are lowered, it is still a tremendous slog of money earned by Japan on the back of our product.  

But who will earn the extra income from the increased volumes and prices our beef will be sold for in the future?   It will be the processors and beef traders, not the Australian cattle farmer.

It is very annoying when the wrong impression is conveyed by the media, because in reality producers are now receiving very low prices for cattle while the drought continues and numbers pile up at the abattoir doors.  And from those low prices, the processors readily admit that they have been supplying increased volumes of beef at increased prices to the international markets.  ‘Making a Motza’!!  And are likely to do so for some time in the future.  To date, none of those profits have flowed back into producers’ pockets. 

For some reason Australians believe that manufacturing is not important in this country and we can let other countries do the manufacturing with cheap wages and lower working conditions.   This is the very attitude that has bought America to its knees, with a society that prefers to pay for services provided instead of doing much of the work themselves and keeping themselves in command of their own dollar.   

In Australia, we are rich in resources and could have a manufacturing industry with those resources, but labour costs, attitudes and conditions seem to be too expensive to be viable. The sacrificing of our manufacturing industry under Whitlam’s signing of the Lima Agreement should have had all Australians marching in the streets, but apathy rules, as does lack of knowledge. 

Truth is, manufacturing not only supplies income in difficult times but can be absolutely essential to a country’s health and security.

It is interesting to watch Southeast Asian countries (namely China) who export huge amounts of food to New Zealand, who then repackage it as a product of New Zealand!!  The same countries’ elite are now looking to Australia’s clean food market, which is grown under the strictest possible conditions.  Will we suffer the same fate….or is that already happening?

Another factor that has enormous influence over the Australian government’s bottom line is the foreign-owned large corporations operating in Australia, using their tax haven status and using price transferring tactics to make themselves much money at our expense. 

These companies can operate at a loss in Australia.  When their product reaches the overseas markets, they are priced at a different level which can give enormous profits to the businesses’ home offices and to the country they are based in. 

When we look at the beef industry it seems this is not uncommon and it seems that the Treasury should be looking at these rorts.

Written by: Linda Hewitt & David Byard


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