Posted to Liberal Party on 3/6/2011 at 2:38 PM
Commenting on "Sustainable Population Growth"http://www.liberal.org.au/Issues/Environment/Ideas/2010/Direct-action-on-water-and-the-environment.aspx#129515495102220000The predictive economic models are questionable for modern day use. The yesteryear world was "smaller" and separated by barriers, and things moved more slowly. Debt borrowing was not as prevalent then.
It is evident that when US sneezes, the world catches a cold, and Australia stock market becomes infected with pneumonia – it was hit hard by the loss of $33 billion in a day on 2 June 2011.
The head of Treasury, Dr Martin Parkinson, told the senate hearing that, "Mining is 8 per cent of gross domestic product," and continued to say "It's a very important 8 per cent, but there's a very important 92 per cent of GDP which is out there which for some reason we have stopped talking about." I would argue that this 8 per cent is far more important than the rest of 92 per cent, because without this 8 per cent, the rest of domestic consumption will stall.
Mining industry is a primary industry, and so far the boom is centred in Western Australia and Queensland. Mother Nature has not been kind to Queensland, but not too cruel to spare Western Australia. If Mother Nature can do that to Australia, the supplier of natural resources, it can also do the same to our buyers. We have witnessed Mother Nature’s did not spare Japan from the destructive force of tsunami. Australian iron ore export to Japan has dropped so drastically because the Japanese car manufacturing plants are closed. Sorry if I am sinful to sound like cursing China; what if China experiences something catastrophic that Australian exports to this biggest buyer has to come to a halt?
I am a true believer that Australia’s economy is fundamentally depending on the land as a primary producer. However, we have not made full use of our gift of large land mass. We keep digging for iron ore and coal, and the rest of Australia, or those working in the service / tertiary industries, benefited from the activities.
With the carbon (dioxide) tax on large carbon emitters, which unfortunately means the coal-fired power stations, the future of coal use in Australia will be decreased. What is Australia going to do with the coal? Will it stay in the ground or sell it to countries like China or India? Coal mining billionaire tycoons have so much of their money buried underground, and so many coal miners’ mouths to feed; they cannot afford not to sell the coal overseas even at low prices. What guarantees that these countries do not pollute the world more than Australia?
Australia, with the bleeding hearts politicians and former politicians like Julia Gillard, Kevin Rudd, Bob Hawke, Malcolm Turnbull, Malcolm Fraser, John Hewson, is naïve to the nth degree. Australia loses export income for low coal prices, becomes an accessory to the murder of planet Earth, causes unnecessary financial stress, pain and suffering to Australian families and deprives them quiet enjoying of this lucky country.
Before mining boom, sheep and wheat kept Australia prosperous, and what a lucky country! What has Australia done to the land and water supply? Virtually nothing, and as a result, Mother Nature punished Australia and brought forth drought. Australia was unprepared, and suffered from losses of production and income.
Money from government assistance or funding does not really come from the government; it comes from taxpayers. The money just rides on the merry-go-round. Real money to fill the kitty should derive from exporting things for money to overseas.
With millions and millions of hectares of land, Australia should be the food bowl of the world, and yet, the people are too complacent, contented and relaxed, and import foods from overseas; and most disgustingly, selling off the rural land particularly the productive ones to foreigners. What this means, Australia will buy foods from overseas companies, foods that are grown in Australian soil by Australian labour, at the price controlled by foreigners. What a joke?
Out of the blue the most prosperous European country, Germany, is hit with E-coli problem, which appears to be food-borne. Only if Australia is able to supply fresh foods cheaply by utilising the farmland more productively and intuitively, this could be a golden opportunity.
Have I missed out secondary industry? No, I have not; because there are not many around to create real employment. One after another, factories are closed or sold off. The so-called Australian icons that Australians are proud of have become history. The lack of foresight and poor planning are due to the arrogance and blindness of Australians and the Australian politicians. They do not take heed from what have been happening in United States of America and United Kingdom.
Smart countries, instead of benefitting the workforce from years of precious time, hard work and money spent in R&D, they stupidly transfer the technology to the developing countries and make the population of those countries smarter at minimal costs, leaving behind a pool of technologically knowledge poor and unemployed workforce. Put it simply, how many smart countries have factories producing hi-tech equipment, digital television, computers, solar-cells, computer chips, luxurious cars, etc.?
Economy is about supply and demand, and utilising limited resources in productive matter. If resources are limited, then the only way to survive for long term is diversification. So what should Australia do?
Many policies can be changed with the stroke of a pen, despite what the politicians have been telling us. The many debates in the Parliament are no more than theatrical performances by the Government and the Opposition.
New predictive economic models need to be found. At present, RBA should NOT increase interest rate to curb the so called inflation, because there is NO real inflation but human suffering in the economy. Private consumption with borrowed money is not a true reflection of GDP growth!
Many financial advisers tell their clients not to put their eggs into one basket, and have their assets, namely shares, properties and superannuation, apportioned proportionately. Ideally, I would like to postulate the following regarding GDP contributions:
For every 1 part contribution from primary industry, there are an equal part from secondary industry and 3 parts from tertiary industry.