The Turnbull government finally has an economic strategy — albeit one disguised as defence policy.
Today’s Defence white paper, while notionally about Australia’s long-term defence priorities, is actually a massive investment by government in Australian manufacturing. It’s government industry intervention of the kind a “truly Liberal” government might be expected to oppose but which, when cloaked in the garb of defence spending, gets scant scrutiny.
The Prime Minister made this plain yesterday, telling Parliament:
“Critically, this historic commitment is about jobs, innovation and regional Australia. The Defence white paper will provide incentives for Australian businesses to drive advances in innovation and technology in many fields, including cybersecurity and aeronautics. It will deliver jobs and investment in advanced, high-tech manufacturing. It will generate new economic activity in many parts of regional Australia, where Defence communities and Defence industries are so often based.”
Turnbull is in effect saying the government will dramatically ramp up buying from our advanced manufacturing sector in coming years. This isn’t about encouraging innovation, or providing the right tax incentives for start-ups, or giving advice to would-be exporters on how to break into foreign markets. This is good old-fashioned public sector support for a specific sector, regardless of whether that sector can offer taxpayers the best value or equipment.
Supporters of Australian manufacturing — and politicians and business in South Australia and Victoria — will be delighted with this huge investment. But like any government support, the question should always be whether this is the best way of facilitating growth, and whether taxpayers are getting value for money.
Once the word “defence” is attached to such spending, those sorts of questions tend to be forgotten very quickly.
Re Defence hardware . . . . how much to be spent on Diplomacy??
I’m not completely against it, but why only on Defence? There are reasons why we might want a manufacturing base, but they can’t be justified by rational economic theory. That’s ok, rational economic theory doesn’t actually exist in the real world.
But this looks a lot like picking winners, which seems to be anathema to the Liberals at least, isn’t it?
You could spend that money productively, on something, I don’t know, like a first world NBN!
To paraphrase “Patriotism is the first refuge of the politically bereft” but one could nominate a dozen projects which would produce more jobs, cost less and benefit the nation (and its people, especially the young – remember them??) than a redundant and useless weapons platform.
Anyway, given the lack of investment in agile & innovative technology over the last generation or two (since the last gasp of neocon ThatcheReaganonomics – how oddly & inexplicably coincidental!)we’d have to buy the tech to use the things, never mind the stuff that goes bang.
Makes a neat distraction from Grand Mal’s other present problems too?
China has nukes and we are a conventional force who “relies” on and acts for Uncle Sam all we are doing is setting ourselves up for a surgical strike as a warning to the sheriff.. An actual attack on the USA would release the hounds but we are collateral to the “exceptional” citizens of the new Rome..Yanks by proxy is a very dangerous position to be occupying in the ongoing game of Pivot being played out in our region..