$275mill for Holden ...Help me understand

[Admiral Byng]

Sorry ...nope ...don't get it.

You're not trying hard enough for what is a fairly simple concept. Manufacturing is struggling with the high Aussie dollar, which was brought about by the mining boom. Sooner or later the mining boom is expected to come to an end. When that end comes we will have to turn to other industries to drive the economy. Manufactoring might be one of them, especially in the high tech end. The car industry is the most high tech industry we've got. If we simply let it whither away and die during the mining boom it would be very difficult, almost impossible to revive it again once the boom is over. So for a small-ish investment spread when out over 10 years we keep the industry going. it's not just making cars, it's keeping and building skills in engineering, robotics, IT and all the other associated stuff. It needs a critical mass to keep all of this skill base alive. Makes sense to me.

 

[Paradigm]

I think you should keep this sentiment for talkback radio. The merits of protecting car manufacture are entirely unrelated to hospital funding, which is essentially a state govt responsibility.

Sunshine, it's $50 mill of state funds going towards this ON TOP OF the God knows how many mill went to Mitsubishi - I've seen it before...heard all the arguments - protect jobs blah blah - didn't work then - don;t see why it will work now.

Seems Alexander Downer knows what I mean....

http://www.adelaidenow.com.au/news/...cts-we-dont-want/story-e6freacl-1226244842178

I remember the discussions in federal Cabinet about further subsidies for Mitsubishi. Everyone knew it was a waste of money economically. But how many seats would we lose in SA if we didn't hand over the cheques?

Not enough consumers think Australian-built cars are all that great. Middle-class consumers would rather pay more for a Volkswagen Golf or a 3 series BMW than buy a Commodore or a Falcon.
The car makers will say they are not competing in that market space. Well, the space they are in doesn't seem to have enough buyers.
You can, then, dismiss the excuse about high labour costs as irrelevant. I doubt Australian car workers get paid much more than their German counterparts. No, it's the product that is wrong. You as consumers just don't want it. So the State and Federal governments now want to take more money out of your pocket and invest it in loss-making car makers based in Detroit and Tokyo who produce something you don't even want. And they are doing this because it's good politics.

 

[Paradigm]

You're not trying hard enough for what is a fairly simple concept. Manufacturing is struggling with the high Aussie dollar, which was brought about by the mining boom. Sooner or later the mining boom is expected to come to an end. When that end comes we will have to turn to other industries to drive the economy. Manufactoring might be one of them, especially in the high tech end. The car industry is the most high tech industry we've got. If we simply let it whither away and die during the mining boom it would be very difficult, almost impossible to revive it again once the boom is over. So for a small-ish investment spread when out over 10 years we keep the industry going. it's not just making cars, it's keeping and building skills in engineering, robotics, IT and all the other associated stuff. It needs a critical mass to keep all of this skill base alive. Makes sense to me.

Fairly simple concept ...like good money after bad? Wasn't a high dollar when the whole Mitsubishi thing happened.

Maybe we should be using this money to develope another high tech industry that might be more profitable. No-one rescued the white goods industry as far as I can recall, yet we all survived.

 

[Scotland]

Well the fact that there's an excise for fuel purchased for off-road work basically means it's a mining and agriculture subsidy. Mining does have a special deal because they're the main sector that uses fuel off road. It is a subsidy and the vast majority of it is directed towards the mining industry.

Also it's not on road-going vehicles. As Cancat showed it's specifically for off-road uses which is pretty much mining and agriculture. Sure if I want to run an off-road taxi service I might be able to apply for the excise but somehow I don't think that will be profitable.

Whether you see it as only road going vehicles pay excise or everyone pays it and only non-road going vehicles get it back the net effect is the same.

If the government wants to remove fuel 'subsidies' (ie charge excise to everyone who uses fuel) then fine, but the reality is people see profitable mining companies and a 'subsidy' and draw the simple conclusion that 'mining companies should pay fuel excise'.

 

[Clay Davis]

Sunshine, it's $50 mill of state funds going towards this ON TOP OF the God knows how many mill went to Mitsubishi - I've seen it before...heard all the arguments - protect jobs blah blah - didn't work then - don;t see why it will work now.

Thanks, mum. But I don't see why the red herring of funding a remote hospital has to be brought up into the discussion. Given the Federal govt is chipping in the bulk of the money, my point stands.

 

[Paradigm]

Thanks, mum. But I don't see why the red herring of funding a remote hospital has to be brought up into the discussion. Given the Federal govt is chipping in the bulk of the money, my point stands.

Fine ...but this excuse of a govt we have here should not bullshit and say they have no money for hospitals (3 mill for Keith hospital - thats all - 3 lousy mill) and then turn around and subsidise a global company making 7.6 billion dollars profit a year.

It's no red herring.

Why are we not learning from the Mitsubishi disaster?

 

[Admiral Byng]

Fairly simple concept ...like good money after bad? Wasn't a high dollar when the whole Mitsubishi thing happened.

Maybe we should be using this money to develope another high tech industry that might be more profitable. No-one rescued the white goods industry as far as I can recall, yet we all survived.

Any ideas what that might be?

I'm genuinely curious, I can't really think of anything.

 

[medusala]

You are kidding me, this was a policy that had to happen otherwise we were at risk of part of the banking industry collapsing. People were making a run on financial institutions to withdraw their funds and hold them in cash under the mattress.

No I am not kidding you. The banking industry wouldnt have collapsed. It was a panicked move with potentially disastrous consequences (see Ireland).

Even if you believed it was a good policy how can you justify Mac Bank getting guarantees?

The cost of providing this was minimal especially when you consider the risks involved.

See Ireland. See Iceland's recovery.

 

[Pie eyed]

Any ideas what that might be?

I'm genuinely curious, I can't really think of anything.

Flying cars would be a winner if there was somewhere to land in the CBD.

 

[Max zero]

Well the fact that there's an excise for fuel purchased for off-road work basically means it's a mining and agriculture subsidy. Mining does have a special deal because they're the main sector that uses fuel off road. It is a subsidy and the vast majority of it is directed towards the mining industry.

Also it's not on road-going vehicles. As Cancat showed it's specifically for off-road uses which is pretty much mining and agriculture. Sure if I want to run an off-road taxi service I might be able to apply for the excise but somehow I don't think that will be profitable.

40% of the tax rebate goes to the mining industry.

Considering that government takes 60c a litre in fuel tax on diesel (one of the highest in the world) I am not sure the government has much room to complain.

But hey tax the mining companies more, who cares about the impact, I mean we have heaps of industries that can take it's place right?

Oh wait...

 

[Footy Smarts]

40% of the tax rebate goes to the mining industry.

Considering that government takes 60c a litre in fuel tax on diesel (one of the highest in the world) I am not sure the government has much room to complain.

But hey tax the mining companies more, who cares about the impact, I mean we have heaps of industries that can take it's place right?

Oh wait...

So you're saying we can't take away this subsidy because it will jurt mining. This is the same argument of why we can't take away the subsidies to the car industry, because we don't have anything to replace it.

My only comment was that those who are against subsidies to the car industry are generally far less vocal about subsidies to other industries like the fuel rebate. In terms of jobs gained compared to money spent/lost then the car industry is in fact a far better investment.

If you're against subsidies then be consistent with them. Personally I'm not entirely against either of these.

 

[noddy]

Those that are against the car industries (including many associated small industries run by your average small business people) subsidy how do you feel in general terms of how we should approach our struggling manufacturing industries including the steel industry?

Maybe just let them sink or swim as long as we have minerals to dig out of the ground then we are ok so stuff the rest & let what happens in the future happen.

 

[Relativity]

So you're saying we can't take away this subsidy because it will jurt mining. This is the same argument of why we can't take away the subsidies to the car industry, because we don't have anything to replace it.

My only comment was that those who are against subsidies to the car industry are generally far less vocal about subsidiesto other industries like the fuel rebate. In terms of jobs gained compared to money spent/lost then the car industry is in fact a far better investment.

If you're against subsidies then be consistent with them. Personally I'm not entirely against either of these.

The fuel tax rebate is not a subsidy. Fuel excise was originally introduced as a means to fund development and maintenance of our road systems. A type of "user pay" system. The rebate was introduced as recognition that off road use was not contributing to the "wear and tear" of our roads. The rebate is a refund on taxes already paid.

 

[Relativity]

Those that are against the car industries (including many associated small industries run by your average small business people) subsidy how do you feel in general terms of how we should approach our struggling manufacturing industries including the steel industry?

Maybe just let them sink or swim as long as we have minerals to dig out of the ground then we are ok so stuff the rest & let what happens in the future happen.

My problem with this particular subsidy is that it benefits a selected company rather than an industry. This effectively props up a selected manufacturer, giving them an advantage over their competitors. If subsidies must be paid then it should be industry wide rather than company specific.

 

[Chief]

The car industry is the most high tech industry we've got. If we simply let it whither away and die during the mining boom it would be very difficult, almost impossible to revive it again once the boom is over.

Aren't we just putting off the inevitable pain for another day/government to deal with?

 

[noddy]

My problem with this particular subsidy is that it benefits a selected company rather than an industry. This effectively props up a selected manufacturer, giving them an advantage over their competitors. If subsidies must be paid then it should be industry wide rather than company specific.

I believe that Ford already has there subsidy in place.

 

[Relativity]

I believe that Ford already has there subsidy in place.

And if we lived in a car market duopoly you'd have a point.

 

[beaver fever]

Those that are against the car industries (including many associated small industries run by your average small business people) subsidy how do you feel in general terms of how we should approach our struggling manufacturing industries including the steel industry?

Maybe just let them sink or swim as long as we have minerals to dig out of the ground then we are ok so stuff the rest & let what happens in the future happen.

How about we stop thinking about car manufacturers, and start thinking about customers. How can we make things easier for them? The minute we start trying to pick winners in the market, the minute the customer suffers.

 

[Chief]

Any ideas what that might be?

I'm genuinely curious, I can't really think of anything.

If you could, you'd be a billionaire.

 

[beaver fever]

You are kidding me, this was a policy that had to happen otherwise we were at risk of part of the banking industry collapsing. People were making a run on financial institutions to withdraw their funds and hold them in cash under the mattress.

The cost of providing this was minimal especially when you consider the risks involved.

Have you ever wondered why banks don't get private insurance for bank runs? It is because no-one in their right mind (except for the brainiacs in government) would insure them, as to do so would create moral hazard i.e. it would increase the chance of banks failing. The policy of guaranteeing bank deposits increased the risk of bank failure, it didn't prevent it.

There is not the amount of actual printed notes in the economy to allow this and the institutions can not hold the amounts need to deal with the extra space required to hold this sort of volume.

This is because the FBA creates money out of thin air, passes it onto the commercial banks, which then only holds a fraction of it and passes it onto another bank, which does the same thing. This means the original amount of money has been significantly increased, while all the banks remain in effect, bankrupt.

People make deposits with the expectation they can take their money out whenever they want, yet banks treat their deposits like loans. Their original loans are tied up in illiquid assets, most commonly property. As the money used to finance property assets was created out of thin air, and a product of inflation (not backed by genuine savings), this creates a bubble and eventually the bust. This is when people want their money.

If we are serious about fixing the problem, then we must get rid of the RBA, make fractional reserve banking illegal, go back to the gold standard, and allow badly managed banks to fail.

 

[beaver fever]

...coz I just don't get it.


http://news.ninemsn.com.au/article.aspx?id=8439182



http://abcnews.go.com/blogs/business/2012/02/gm-posts-record-7-6-billion-profit/

[YOUTUBE]6uR4lqa7IK4[/YOUTUBE]

 

[RIOLIUSTAR]

You're not trying hard enough for what is a fairly simple concept. Manufacturing is struggling with the high Aussie dollar, which was brought about by the mining boom. Sooner or later the mining boom is expected to come to an end. When that end comes we will have to turn to other industries to drive the economy. Manufactoring might be one of them, especially in the high tech end. The car industry is the most high tech industry we've got. .

WTF??

If we're truly relying on the manufacturing industry well we a truly ****ed

 

[noddy]

WTF??

If we're truly relying on the manufacturing industry well we a truly ****ed

I don't believe anyone is saying we should rely on the manufacturing industries

But without those manufacturing industries what as a nation are we left with?

 

[beaver fever]

I don't believe anyone is saying we should rely on the manufacturing industries

But without those manufacturing industries what as a nation are we left with?

The best way to help manufacturing is not by subsidising, but by making investment more attractive.

 

[Admiral Byng]

WTF??

If we're truly relying on the manufacturing industry well we a truly ****ed

it's clear you haven't understood a word of what I said.

"WTF??" indeed.