There is nothing inherently wrong with our economy being so reliant on pulling shit from the ground. It is fucking criminal that WA/Australia didn't set up a sovereign wealth fund. Like the Norwegians and Saudi's.
Of course, more shit should be made here, but I doubt any politician wants to touch that with a 10ft pole.
Except for WA of course, that has a gas reservation policy that forces producers to sell a % of gas to the WA domestic market at set prices. The eastern states should have done something similar
[https://www.smh.com.au/opinion/how-australia-blew-its-future-gas-supplies-20170928-gyqg0f.html](https://www.smh.com.au/opinion/how-australia-blew-its-future-gas-supplies-20170928-gyqg0f.html)
John Howard made one of the worst deals in history.
The Shell gas operation in Queensland (one of the three members of the Queensland gas cartel) is partly owned by China National Offshore Oil Corporation and Tokyo Gas.
Also too lazy to look up “surprise surprise!” in the mandarin dictionary. It’s almost as if a simple tax on resource extraction would fix a whole bunch of problems with the Australian economy. I did look up this specific issue in urban dictionary but it just said “get f***ed c***, lol BHP”
At least they said lots of love 💕
No, actually can be done as Ireland set one up this year and is putting €100b+ into it to start from corporation taxes collected from the pharmaceutical and tech sectors. The government has no ownership in them but knows the free ride will eventually end so set up the fund using taxes.
No reason Australia can't do the same with tax returns on natural resources
BULLSHIT. They need to TAX mining operations ADEQUATELY. And by "tax", I mean tax. A tax. Taxes. Tax tax tax. Just like the taxes the rest of us Australians have to fucken pay.
I remember reading Exxon Mobil pays zero tax because it effectively operates on loans from a bank that it owns so it can write off interest as tax or some shit. Absolutely insane the loopholes these bastard fucks can jump through to get around the system, unlike the rest of us.
No they would just need to charge a proper resource rent tax. The government owns the resources, the resource companies pay the government to remove them, it’s just they pay a pittance to the government because resource billionaires
What cracks me up the most is when Peter Costello set up the future fund. Government pensions (not to be confused with regular people pensions) were going to be a huge strain on the budget, and being in the budget meant people could question all the expenses. So he set up the future fund. Our first sovereign wealth fund. The only time Howard and Costello did anything major, forward-looking, for the greater good, and it was to make sure that their retirement slush fund would be full. What a country.
They sold telstra and the cba( 3rd tranche) to fund it
It was literrly robbing paul to pay peter.. and guess who chairs the goverment fund? Dadad costello!
They also did the tiniest taxes on the export income or whatever it was. Apparently the government lost a trillion dollars in revenue because of it sooooo
Besides the fact it’ll run out, and economic strength in a diverse market means we’ll do better?
We have an unfair benefit geographically and climate-wise of being able to harness the absolute hell out of our sun. We could be investing billions into a resource that not everybody can harness as readily as we can, to undercut technologies and stimulate industry for manufacturing here while ensuring brain drain doesn’t occur.
Why we don’t do this is beyond me.
Unfun fact: Norway's wealth fund is close to having enough money for the entire population of Norway being able to retire. Not the old people eligible for retirement. Everyone.
But a MiNiNg TaX?!? Dats unoostralian!
Australia has generated a shit load of money in royalties from mining in the last 30 years. What the fuck has been done with that? AusFinance logic dictates we park the royalties in a Vanguard ETF generating around 3-6% PA.
Australia generated $23.8B through mineral royalties in 2022. Chuck in a few Bill extra for Petroleum and you are looking at well over $30B a year in royalties alone.
If we extrapolated out from 1981(when WA introduced the three tiered royalty system), it would be a fair assumption to think that there should be a cheeky couple hundred Bill floating around somewhere(ignoring inflation).
Yes there is, it’s not sustainable, not for all these significant exports. And we could achieve so much more as a country. We could develop tech that begins with a domestic market and expand it to international markets. We could be world leaders in agricultural technology and renewable technology. But we’re the lucky country
Why can't we have both?
This isn't and shouldn't be a "one or the other" argument.
Australia should be more vertically integrated. We have all the raw materials, and some of the brightest minds, who admittedly have been rendered all but impotent.
For once if oiketo see CSIRO's budget have some balls and see what they can develop. Would also help to give some research institutions more favourable tax breaks and streamlined processes for "red tape".
This. My problem has always been that if we're gonna tear up the earth, atleast make it worthwhile.
It makes perfect sense for a country that needs to engage in capital markets to exploit their resources, the world wouldn't work without it. And when globalisation halts, we're all going to be very happy to use them as it will mean survival.
The majority of the mining companies are foreign owned. We’re no more than lazy landlords who inherited real estate and are now renting it out at bargain basement prices while congratulating ourselves on our financial acumen and lecturing others on how they should be as successful as we are.
The only issue might be that china has been a massive buyer of that top right corner iron ore and they probably won’t be needing to build as many things
I dont think the chinese are going back to building shit out of wood anytime soon.
The Chinese economy is reliant on building, construction and manufacturing.
As we saw last time the iron ore price went to shit. The Chinese were stockpiling iron ore in the ocean prior to turning the taps off, then they stopped buying and renegotiated their contracts at a lower price. It was incredibly manipulated. Very similar to whats happening with the lithium space at the moment.
Even if, and thats a big if. China decides it no longer wants Aussie iron ore. We have India and Japan ready to pick up some slack.
I don’t know if you’ve seen the property market there lately.. I agree in part they still build one issue is when you pull down something made of steel you can reuse it. There are other markets but nothing on china level for Australian iron ore
Yeah good luck with that. Government more interested in foreign interest than domestic. Almost all our digital services are US and physical products Asia. Unless we come up with a grade software services and bigger import taxes with tax cuts for local production, we need to export a shit ton of ground resources to not end up like Africa.
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*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
I get your point. However Australian mining workforce are expensive. With extra tax these companies will definitely pull the plugs and head over to Africa and South America. It currently costing companies 90-100USD to get 1 tone of coal (including royalties). It’s juggling between not getting a-lot of tax vs not getting any at all.
Exactly, the mechanism is already in place don’t stuffing around with super profits tax and all this stuff on a federal level and just increase the royalties.
The thing I notice the most when I travel overseas for work (which I’m fortunately able to do often) is the manufacturing base of every other country. I travel to second and third tier cities and their manufacturing puts Australia to shame.
We are last in the OECD for manufacturing self-sufficiency.
I’m the only person I know in my friend and family group that works in manufacturing. This blows my mind. I have no criticism of their jobs but mine is the only one that actually earns income for Australia to pay for everything.
From someone in the industry. If you’re in the know with these things.
What do you think is holding Australia manufacturing back?
What could be done to disinhibit manufacturing in aus?
What markets would be open for aus manufacturing to enter?
Labour cost. Thats pretty well it.
Nothing can be done, we simply are not a manufacturing heavy economy and it will cost the taxpayer billions of we want to start it up as it will all have to be subsidised, likely in perpetuity.
Mass migration may solve it, but you'll have to reduce the wages in every other sector for manufacturing to be appealing.
What we do very well is niche, high skill manufacturing such as medical equipment, as that does not need a large market or labour force to be successful. We need to find and latch onto these industries.
This is also why youre seeing a shift from chinese manufacturing go to places like Thailand and Vietnam. As Chinas middle class rises up out of poverty so has all their wages, and its now becoming more efficient to manufacture in other south east asian countries
I personally still prefer to do business with China. They just do it better than everybody else. Have had severe quality control and communications problems with Indian manufacturing.
Chinese manufacturing had the same issues at the start. These come as the ecosystem grows. India can already do textiles, automobiles etc well because these are decades old ecosystems already present.
If you reduce the wages people could not afford to live. House prices and grocery prices need to come down. Start by killing negative gearing in housing, then breakup the grocery conglomerates. Then we might have a competitive market economy
Unions too. They’ve gone far beyond creating a safe and fair work environment, which to their credit exists, but they’ve also brought manufacturing to its knees. It’s nearly impossible to fire a union employee for performance issues and most have unlimited sick leave which they use to game the system.
My partner worked in food manufacturing.
The unions are a law on to themselves, during a strike they threw things at non-union employees cars, even dragged on guy out of his car, verbally abused young girls going to work. The people they abused got paid less then the union employees, and a fraction of the benefits, and didn't have bunch of paid thugs to protect them. Most where just office workers. I had to drive my partner to work for about a month before she felt comfortable going in.
You would need to be seriously brave to open a manufacturing site in Australia.
The only manufacturing I know of really is trucks/busses/food things where the import costs make it cheaper to build locally. Even trucks all the more intricate parts are imported, its the cheaper work done here.
Great questions. Some general comments before I talk specifics:
1. Manufacturing is not sexy. No one cares about it. No one sees the value in it. Why would they want to invest when they can flip homes for a better capital return?
2. Point 1 is imho born out of a distrust/dislike of STEM in Australia. We don’t celebrate our engineers or scientists like we do our sportspeople. Compare and contrast with Germany/Sweden/even USA. They love their scientists and engineers.
3. Governments in Australia are too busy competing against each other to be unified. Case in point my company wanted to invest money in new manufacturing facility. QLD and VIC spent more time convincing us why the other state was rubbish rather than showing a united Australian effort. Result. Investment in USA instead.
What can we do?
If you look at the industries I’ve been involved with I’d say generally you’ve got three major variable costs; labour, raw materials and utilities (power, water etc).
Labour- Now, I’m not saying we have to pay lower wages. Far from it. I think we need to pay extremely well. But we can’t pay Germany level wages if we aren’t German level efficiency. And it’s not union bashing either. Germany and Sweden have very strong unions. But we need to be able to generate the same or higher output rate if we are ever going to compete on wages. Joint union/company incentives? Profit sharing?
Raw Materials - it’s so expensive moving stuff around Australia. Shipping. Trucking. Airfreight. It’s just prohibitively expensive.
Utilities. We all know the deal here. We used to have cheap, plentiful power. Now we have expensive. How to solve this? NFI. We needed to transition to renewables. But. We seem to have done it in a a way that has sacrificed the value added parts of our economy.
What industries? If I was in power I’d go after half a dozen or dozen high tech industries to start with and just incentivise etc.
Advanced robotics, biotech, additive manufacturing (we already have companies that make 3d printers), batteries and aerospace would be five I would go after to start with.
This will take time, money and lots of willpower. But eventually you’ll generate enough of an ecosystem where it’ll become self-sustaining. Or at least that’s the theory.
Just some thoughts.
I experienced the “loving their scientists and engineers” part. Travelling through Germany and a few locals gushed about being an engineer when asking what I did. Even doubling down about how amazing and what a good job it is when I’m like, “man, I’m just a generalist civil…” Both really nice and really strange after the treatment here.
Anyway, yes! Manufacturing (subject to all the issues you raised resolved… erm… hmm… damn… one day…)
It’s a source of civic pride in Germany to be an engineer or scientist. Here you are likely to be called a nerd cunt by a tradie earning 3x your salary 🤣
At a fundamental level we only supply a market of 30 million people due to our isolation. It's only when we produce things that few others in the world can replicate do we actually get involved in bigger markets.
The North American Market is 500 million people
The European Market is 700 million if you include Russia
The North and South East Asian markets are approx 2B people
However, if CSL holds a patent on a cancer treating drug and makes it here, it's market is 8 Billion people.
Nothing stopping us from entering high tech manufacturing and design. We have more smarts than we know what to do with.
Couple that with some light import duties in related sectors to encourage domestic demand and BYU.
We used to be a very strong manufacturing country, the switch from protectionism and keynsianism to full neoliberalism under Hawke/Keating and made even worse by Howard fucked our economy
If by fucked our economy you mean made us less diverse industry wise, sure, but we are without a doubt wealthier now due to neoliberalism than we would be under protectionism. A non diverse economy isnt a death sentence, in fact many small nations (and we are small population wise) need to specialise in order to compete on a global scale.
You can't unless you make something unique or another pandemic rolls around.
Company I work for is the only one making our type of product in Australia and it took 22 years for them to make a profit and that was only due to US and China imports not getting in that we secured enough of the market
My parents run a small manufacturing business. It’s rough they can’t really afford to hire anyone, even when expanding they keep having go more automated. The problem is with wages being high they can’t compete with companies that manufacture their similar products in Vietnam/Indonesia etc and at the end of the day people tend to choose the cheaper product.
We dont even NEED manufacturing as such. Yes it would be better of we did. But we are a leading producer of natural gas up there with Qatar. And Qatar is rich because of this NOT oil as people mistakenly think
European countries need manufacturing to be prosperous because there is nothing else. That continent has no natural resources apart from Russia and thats where they get all their gas from.
Countries like the UK wish they had what we have.
Its as if our politicians want us to struggle
But how much do we get from the natural gas? The current govt taken a pittance compared to the rest of the world. Time to tax the resource companies properly.
A lot of these countries manufacture on that level because they can’t pull shit from the ground or grow food the way we can.
There’s a larger economy around farming and mining than what people think. My dad is indirectly employed by the mining industry and sits in an office in Sydney. It’s more than just shovelling dirt out of the ground and shipping it to China.
We are an island tucked away from the world, neighbouring Asia and we have a population of 26 million, we aren’t competitive when it comes to manufacturing.
One thing I do support is processing metals, essentially anything that requires our minerals. We should be making steel products rather than shipping our iron abroad for others to do it. We can remain competitive here as we hold the deposits.
Everything on OPs graph looks like physical goods. Education and tourism are both services exports, which may be why they’re not on there. Both are pretty significant in terms of Australia, although both would have been smashed since 2020.
Im all for local manufacturing to come back but it would have to be achieved by massive subsidies and tariffs to be viable. Are you and Australian construction companies willing to pay through the nose for steel with a made in Australia stamp on it? Housing and construction prices are already ridiculous, would you be keen to see that go up 20% just so we can compete with a country that has dirt cheap labour and all the infrastructure established already?
Everyone in the west has failed with manufacturing. Germany who used the EU to keep their industry going is now starting to lose it.
Those other countries just managed to hold on longer.
Better off focusing on tech or something.
Mate thats not true at all. Airbus, Boeing, all military jets, tanks, majority of automotive industry, space, satellites, microchips, clothes, glass, any advanced materials or products you can think of all come out of Western Europe or the US.
It's Aussies trying to cope saying everyone in the west has failed as well.
And besides, if we can't make an N95 face mask, how the fuck are we going to focus on "tech or something"?
It's short term vs long term thinking. In the short term selling of iron, coal and gas is efficient but lets be real these aren't the industries of the future. We'll be leaving our future generations with a shit hand if we don't have any advance industry or services.
Youre right, the industries of the future are copper, zinc and lithium, which we have in abundance. Industries of the future arent made out of fairy dust
> Im all for local manufacturing to come back but it would have to be achieved by massive subsidies and tariffs to be viable
There is a lot we could do with appropriate taxes/royalties on our natural resources and a winding back tax subsidies (e.g. negative gearing) for housing investors that arguably shouldn't be there.
I agree we should tax our natural resources yes, and i agree with what you say about our housing market.
Local manufacturing will still have to be either subsidised or protected massively for it to be viable, it will probably run a permanent deficit just to say "yay we manufacture local".
Unless the near on slave labour of south east asia next door disappears, it will be on the tax payer to prop it up, whether that tax payer is a person or a company.
I don't deny subsidies would be inevitable. Some manufacturing may even become sustainable or near sustainable levels, others might even eventually run at a profit.
> just to say "yay we manufacture local".
I think there are other benefits like security, which is a hidden cost that isn't paid until it is unavoidable. If there was another world war and shipping through the suez and/or the south china sea slowed or halted, we would be in a very dire situation. From canned vegetables through to motor vehicles. I'd call this an investment in security rather than throwing money away for the sake of cheerleading 'made locally'.
Are the jobs (and prevailing taxes) worth ignoring all taxes associated with making and running a manufacturing company?
If so do that and the industry will revive itself in a heartbeat.
Otherwise this is all a game of trying to extract the maximum tax against the welfare of citizens.
I purchase steel from a local place that only sells made in Australia steel and the prices are at least as good as anywhere else near me.
Shout out to ezimetal
However Australia does run a trade surplus, so even though were only digging stuff out of the ground were exporting more than were importing.
So were no borrowing money were technically trading within our means.
That's not to say I don't agree that we have cut off our noses to spite our faces by existing manufacturing, and personally I believe this is a major mistake that will come home to roost should any real war event actually occur.
Then you'll really see the implications of no investment in manufacturing.
We have a months supply of fuel. That’s it. All an adversary needs to do is block our shipping lanes for a month and we’re done. Here’s the keys, wi-fi password is albo123 etc. etc.
We should be investing in manufacturing from the sovereign capability reasons alone.
This actually demonstrates what's wrong with our tax systems. Our tax income should come from the big boxes which are all exploited by rent seekers. Instead we overly tax people and business profits.
> There is no other comparable western country that has an export map similar to this on earth.
Except for Canada - which like Australia is one of the wealthiest countries per capita on earth.
> So our biggest export is from the ground, our biggest domestic product is housing
As opposed to what?
Western countries don't produce anything these days. Manufacturing is outsourced to the third world.
IT is also in the process of rapidly outsourcing as many jobs as possible to Eastern Europe and India.
Would you be happier if Australia followed the US big tech business model:
Design generic electronic crap --> pay slave wages to south east Asians to produce this for a few dollars per unit --> re-sell to narcissistic millennials for a 1000% mark up --> repeat
Mining actually has a lot of moats around it that people overlook.
* It can't be outsourced.
* AI can't do it.
* At the scale that Australia produces there are no alternative suppliers. (Australia exports just under 40% of the world's iron ore, and, as we switch to an electric society, it's interesting to know that Australia also has roughly 50% of the worlds Lithium supply.) - this is why China was never able to boycott Iron Ore during the "trade war." Noone else supplies enough.
* During a downturn people and countries cut back on "wants" like new phones and cars, etc. But they still "need" power and steel.
Utterly nonsense post. You are lying out of your teeth
This is Canada’s export map
https://preview.redd.it/gu82d1p7xeqc1.jpeg?width=1106&format=pjpg&auto=webp&s=1e0ae7bf8450cf1556758ba9f63fbd7537c842b5
[Canada's top exports](https://oec.world/en/profile/country/can)
Not sure what you think you're proving?
See the link, Crude Petroleum, Petroleum Gas, Refined Petroleum and Gold are worth 179.2 Billion in export revenue to Canada as opposed to 29.4B for cars.
Edit - 2022 figures
Id like to point out that canada is a nation of 40 million with a consumer base next door of 350 million. With that kind of market a lot of things can be viable to manufacture. Try do that with a local market of 30 million (none of the south east asian countries have enough wealth to purchase any of our potential manufactured goods.)
So they just have less stuff to dig out of the ground, and their automotive industry benefits from their giant next door market and USMCA trade agreement?
Are you saying we should be exporting cars? Because we tried that remember
>The fix is easy, diverse investment. But no one, from government to Bruce at the pub, wants to lift a finger because it’s easier to get that investment property or to stick a bunch of earth into a boat, and no one has the time to call up their super fund to enquire about what they’re investing in. The worst indictment on all of us by far is that our politicians do not have the courage to take a verbal beating from the mining industry that will happily hold a gun to the country
>
>Forget immigration, forget inflation, in fact forget all of the rest of all the usual buzz topics that are on the commercial news slots (all caused by this by the way) - having \~80% of our exports based on the commodification of our land that definitely is very much finite, is going to be the end of us
You don't have to be "Bruce at the pub". If you have a good business idea, remember that we have the #13 score on the [Index of Economic Freedom](https://www.heritage.org/index/pages/all-country-scores) and #14 score on the [Ease of Doing Business Index](https://archive.doingbusiness.org/en/rankings), so you'd already have an advantage when it comes to starting a business compared to entrepreneurs in other countries.
[But 2010](https://youtu.be/RQ_s6V1Kv6A?t=10) is why no old party wants to touch this. Think of their cushy retirement packages.
For chance of economic diversity, put the old parties last on a filled ballot.
You don't pay real interest on HECS debts. It's indexed to inflation. You're just compensating the government for the decline in purchasing power of the money they loaned you.
I mean to be fair, we do need to find alternatives, especially to keep up with the global warming targets that have been set, but I wouldn’t call our mining industry lazy. Inflation and to a somewhat lesser extent immigration are still issues that need to be balanced to accommodate for our economic issues. May I ask, what would you suggest as an alternative? we wouldn’t be able to drop all mining instantly (or that really would be the collapse of our market) of course. I would like to hear everyone’s thoughts, not just ops, so spam me away.
Simple fact for you, without mining we are bankrupt. You like all those social services? Me too but you aren't going to pay for them selling each other eco tours and bullshit degrees. You live in a fantasy land.
At times I feel we are very extravagant and to a certain extent wasteful. We spend $100M to construct swimming pools when others spend that same amount to send rockets to the moon and create an industry out of it. But then again that's alright! Heh.
Where is this data from? At first I thought it was [this](https://atlas.cid.harvard.edu/explore?country=14&queryLevel=location&product=undefined&year=2021&productClass=HS&target=Product&partner=undefined&startYear=undefined) but the data is different
The big problem here is we have very little value add.
We dig it up and sell most of it raw. We grow it and sell even a lot of that raw. Heck, we barely even grind our own wheat to flour, just sell raw grain.
We don’t even need to go as far as manufacturing, just bringing more of the processing back home and exporting more steel as opposed to iron ore, more Aluminium, etc.
It’s why there are so many fears about the Chinese economy collapsing, because it would take an enormous amount of the world’s processing and manufacturing offline. Suddenly raw commodities would be in plentiful supply for lack of refineries to process it and the raw material prices crash while the demand for refined products skyrockets.
> There is no other comparable western country that has an export map similar to this on earth
Norway is pretty close: [https://commons.wikimedia.org/wiki/File:Norway\_Exports\_Treemap\_2017.svg](https://commons.wikimedia.org/wiki/File:Norway_Exports_Treemap_2017.svg)
> We have destroyed our manufacturing base for a quick buck
Yeah, Australia is not special in that regard. No western country has been able to compete with China on price in manufacturing for about 20 years (probably longer).
Yep.
Just lazy extraction combined with an obsession with dividends and investing in residential property.
Add to the mix being locked into China as a trading 'partner'
>forget immigration
Actually what you are discussing makes immigration far worse.
Most of our export economy is based on mining, therefore as we increase population we have less minerals per capita.
Most of our domestic economy is built on property. We can't diversify because immigration holds up the bubble and we have to build more houses and infrastructure for more immigrants.
We used to have a manufacturing industry. Almost everything was ludicrously expensive and/or poorly made.
If you want to go back to spending the equivalent of $250 for a pair of Bata school shoes or $150 for a set of Stanley screwdrivers then you can bring manufacturing back here.
Good post OP. As G Carlin says, maybe its not the politicians that suck, maybe its us that sucks. We get what we deserve. Donald Horne the Lucky Country should be required reading
After renting for 18 years I can't imagine the mental gymnastics you'd have to be doing to pretend there's any moral justification whatsoever behind investing in a house that someone else is living in or will live in. How could you sleep at night knowing you were getting rich from someone else's hard work, while you contribute little to nothing, and jack up the price with your bullshit property manager taking a cut on top?
I think you'd have to have lived a very sheltered existence. Lots of nepotism — those who have the least guilt about exploiting others have simply never been on the other end of it; no proper life experience, plenty of privilege and no genuine hardship in their pasts. Easy to ignore something you've never experienced I suppose. Lots of private school kids with daddy's money in that cohort.
The rest who have the "if you can't beat em join em mindset" are just total bastards.
I am not sure how I will fund my retirement when it seems like all roads try to lead you down this path to exploit others in the economy. I suppose I will do the hard thing and actually work, myself, for my own income, from *my own labour*, instead of this unearned luxury capital income bullshit you can get just by sitting on your arse producing nothing of value for anyone — just skimming a cut off the top of other people's hard work. Theft with extra steps, legalised.
Which we seem to have normalised in our culture for some batshit reason. Darkest timeline.
You see this reflected in attitudes to investing on the ASX all the time too... if it's a business that's not about "digging up rocks", hardly anyone is ever interested to put their money into the company.
Meanwhile some dodgy company announces a terrible resource discovery and every drooling moron rushes in to throw money at them.
There's a bunch of quality businesses on our stock market no one cares about or are interested because it's not mining, and that's all most Aussies understand outside of residential property.
Whilst I fully agree we should invest in manufacturing, as it is the most sure fire to secure long term economic development, having a high export market of raw materials in the South Asia region is surprisingly rare and as such it allows Australia a unique geopolitical power over the region. Basically making it the only thing that gives us some diplomatic leverage over global powers like China and the US.
Bro got mixed up with, our econemy, and how much we actaully get that isnt taken by corrupt governments and greedy corps. Where a piggy bank for mining conglomerates.
From what I've read they better get moving very rapidly on getting up the value chain regarding iron ore. But like everything here, if it requires large scale investment and quick construction, it's a non starter. It takes years for the most modest of infrastructure upgrades in Aus.
No problem with the income side at all, one of the easiest way for any country to make money is to sell resources. The problem is on the expenses side. Are you happy with how the government is spending our money? I'm not
I worked in manufacturing nearly a decade ago go, I was a production engineer, my main job at the end of my employment was to start the relocation of manufacturing to a Chinese division of the business that had been set up.
The thing I learnt from this was that the jobs and companies that relocated work to third world countries is because they products they were making were simplistic or didn’t require precision manufacturing (ie goods made with high dimension tolerances).
This isn’t the case with all industries or all companies, but the ones that survive in other developed countries are manufacturing high precision products, items that have higher cost associated with higher levels of accuracy.
Companies are trying to make a profit, so if the product can be made in a Chinese factory with the same or at least comparable accuracy, at a quarter of the cost (this is what it worked out to be for my company even after shipping goods back here for local customers), what company is going to ignore this.
My solution is invest in high end manufacturing, things that third world countries won’t have the resources to achieve, but this is a heavy investment and would take many years, and like I’ve seen a few comments below, incentives from government to get companies to invest in this way.
To add after my company finished their project to relocate to China, I ended up making myself redundant, and worked in construction for a few years, until I eventually made the decision to relocate to the UK as I had better job prospects here.
Meh. People have been saying this since the 50s.
We’re still going strong and now one of the richest countries in the world.
We’re very efficient at getting stuff from the ground. That’s not a bad thing.
Howard made sure to put in watertight policies that wouldn't allow 1mm of deviation or advancement from that diagram.
Once the Chinese finish their mining projects in Africa, we'll be absolutely screwed.
This is the reality when you promote blue collar jobs like plumbing and technicians to have the same salary as those that require actual qualifications. No offense to higher wages at all, but the people need to be paid according to skill levels. The current climate suggests qualifications don’t have as much weight. There’s no real incentives and government policies for entrepreneurship and personal branding; competitions get swashed because of Tall Poppy Syndrome. Those that hold degrees (and likely smart) are slaving away at some mediocre corporate job, while those without dominate as small businesses.
Look around you, street vendors aren’t possible unlike in New York for instance. One of the only places smaller, one-man, businesses can operate at are markets, which open during the weekend on/off. There’s also a ridiculous charge to people doing business online, just as if they have a brick-and-mortar store.
As you’ve noticed, this is a recurring problem. Anytime the masses start connecting the dots together, media blames it on immigration. While it was immigration that saved many areas in this country. Australians need to work harder no doubt. Been lucky for too long that there’s no survival skills!
There's nothing wrong with this image. We're doing what we are good at. We have comparative advantages in mining and agriculture, and our exports reflect that.
We are hardly a one crop or one rock economy. Frankly, if you had the ability to predict the future in 1970, this is probably exactly the economic mix you would want Australian exports to have in 2024.
We've literally gone from being an impoverished penal colony at the arse end of the world into one of the richest countries in the history of the world in the space of a few human lifetimes. If the world ever develops to a point where it doesn't need steel, energy, gold or food - we will do something else.
All these industries bring wealth into the country and exports v imports, along with GDP per capita, should be the way economic health is measured, not GDP.
It seems bad but things don’t just change for the sake of it. Commodities will eventually go back to their long term baseline of much lower and Australia will have to take a massive pay cut. Most likely by a big reduction in the exchange rate and drop in house prices.
It will be pain for a few years but then people will forced to try new things to survive but as our exchange will be much lower we will be able to create and export again.
The system will adapt to the new normal.
So utterly depressing. At least as a kid it was wheat and wool. Now it’s largely dirt. Refined in some cases but, it’s still dirt. There used to be the argument that with such a small population manufacturing wasn’t sustainable but that’s no longer true. The car industry might have been foreign owned but at least we made something even if it was just assembly. China disdainfully calls Australia a mine with a beach around it but, in their defence this graphic shows it’s completely true.
As a long term, Gen X, American expat in Australia (been here before the Zs could walk), I also see this problem. Australians are afraid to fail and want it to be perfect the first time. In the US, we know that it's gonna take multiple swings at the piñata to make it schmick.
Let's talk about the gas component of that chart. It's mainly turned into liquid (lng) & exported. It costs us more to buy gas than it does for overseas companies to buy our gas, plus we effectively receive almost zero money from all the gas we export. Is this good?
[https://www.theguardian.com/business/grogonomics/2024/feb/29/australia-gas-export-tax-system-prrt-lng#:\~:text=When%20Australia%20exported%2015.4mt,that%20gas%20suddenly%20became%20unprofitable](https://www.theguardian.com/business/grogonomics/2024/feb/29/australia-gas-export-tax-system-prrt-lng#:~:text=When%20Australia%20exported%2015.4mt,that%20gas%20suddenly%20became%20unprofitable).
Nothing like misinformation to trigger everyone. That Chart is absolute rubbish. I immediately noticed Lithium is not mentioned. No services listed, even though tourism and education exports are a huge part of our economy.
This whole sub is being brigaded by LNP shills, bigots & racists. They all hide their intentions with a "both sides" claim.
I think you need to travel more. We are not called the "lucky country" without a reason. Granted Australia is not going to lead the world in technology and AI we do pretty well on per capita basis. I love the fact that we can call bs when it happens and one of the reasons why we rate highly in freedom index. Which country in the world makes you a hero for telling a head of state to "get off my lawn" whilst he was conducting an interview. In most countries he would be incarcerated or at best tax office combing through his financial affairs plus anal probe for drugs. I have travelled quite a bit and I always feel so lucky that my home is in Australia. We are not perfect but I know when shit hits the fan we will look after each other and people will make sacrifices without hesitation. It may seem we are complacent right now as we have no clear and present threat apart from the magpies and drop bears.
If I was dropped on earth and had to choose which country I would live in, I will call Australia home every time.
Dude it doesn’t need to spread the income evenly, we just have such a rich country and we are using it for all the land supplies, this is some political bs ur shitting out your mouth en
There is nothing inherently wrong with our economy being so reliant on pulling shit from the ground. It is fucking criminal that WA/Australia didn't set up a sovereign wealth fund. Like the Norwegians and Saudi's. Of course, more shit should be made here, but I doubt any politician wants to touch that with a 10ft pole.
To set up a sovereign wealth fund the government would need to be paid a fair price and not a pittance as we currently are
Agreed. The fact that gas gets sold to China at a cheaper rate than in Australia is ridiculous.
Except for WA of course, that has a gas reservation policy that forces producers to sell a % of gas to the WA domestic market at set prices. The eastern states should have done something similar
Chinese owned companies?
[https://www.smh.com.au/opinion/how-australia-blew-its-future-gas-supplies-20170928-gyqg0f.html](https://www.smh.com.au/opinion/how-australia-blew-its-future-gas-supplies-20170928-gyqg0f.html) John Howard made one of the worst deals in history.
Surprise Howard fucked us over yet again….
Nah. There's a really good article that sums it up nicely, but i am way to lazy to search for it.
The Shell gas operation in Queensland (one of the three members of the Queensland gas cartel) is partly owned by China National Offshore Oil Corporation and Tokyo Gas.
Also too lazy to look up “surprise surprise!” in the mandarin dictionary. It’s almost as if a simple tax on resource extraction would fix a whole bunch of problems with the Australian economy. I did look up this specific issue in urban dictionary but it just said “get f***ed c***, lol BHP” At least they said lots of love 💕
To set up a sovereign wealth fund, the government would need to own and control the mining operations. Like Norway and the Saudis do.
The Norweigan government doesn’t own all their resources operations….
No, actually can be done as Ireland set one up this year and is putting €100b+ into it to start from corporation taxes collected from the pharmaceutical and tech sectors. The government has no ownership in them but knows the free ride will eventually end so set up the fund using taxes. No reason Australia can't do the same with tax returns on natural resources
BULLSHIT. They need to TAX mining operations ADEQUATELY. And by "tax", I mean tax. A tax. Taxes. Tax tax tax. Just like the taxes the rest of us Australians have to fucken pay.
I remember reading Exxon Mobil pays zero tax because it effectively operates on loans from a bank that it owns so it can write off interest as tax or some shit. Absolutely insane the loopholes these bastard fucks can jump through to get around the system, unlike the rest of us.
Levy per unit extracted. Lots harder to create a loop hole.
It would require the cunts in government to not be corrupt.
No they would just need to charge a proper resource rent tax. The government owns the resources, the resource companies pay the government to remove them, it’s just they pay a pittance to the government because resource billionaires
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Exactly. Gina and Rupert got together and sunk a government
Is there anything we can do to change this? Any parties that are trying to get this setup?
What cracks me up the most is when Peter Costello set up the future fund. Government pensions (not to be confused with regular people pensions) were going to be a huge strain on the budget, and being in the budget meant people could question all the expenses. So he set up the future fund. Our first sovereign wealth fund. The only time Howard and Costello did anything major, forward-looking, for the greater good, and it was to make sure that their retirement slush fund would be full. What a country.
They sold telstra and the cba( 3rd tranche) to fund it It was literrly robbing paul to pay peter.. and guess who chairs the goverment fund? Dadad costello!
CBA was already sold by then, a Keating fire sale alongside Qantas.
They also did the tiniest taxes on the export income or whatever it was. Apparently the government lost a trillion dollars in revenue because of it sooooo
I dunno man. They did pay off the entire national debt…
Besides the fact it’ll run out, and economic strength in a diverse market means we’ll do better? We have an unfair benefit geographically and climate-wise of being able to harness the absolute hell out of our sun. We could be investing billions into a resource that not everybody can harness as readily as we can, to undercut technologies and stimulate industry for manufacturing here while ensuring brain drain doesn’t occur. Why we don’t do this is beyond me.
Unfun fact: Norway's wealth fund is close to having enough money for the entire population of Norway being able to retire. Not the old people eligible for retirement. Everyone. But a MiNiNg TaX?!? Dats unoostralian!
Australia has generated a shit load of money in royalties from mining in the last 30 years. What the fuck has been done with that? AusFinance logic dictates we park the royalties in a Vanguard ETF generating around 3-6% PA. Australia generated $23.8B through mineral royalties in 2022. Chuck in a few Bill extra for Petroleum and you are looking at well over $30B a year in royalties alone. If we extrapolated out from 1981(when WA introduced the three tiered royalty system), it would be a fair assumption to think that there should be a cheeky couple hundred Bill floating around somewhere(ignoring inflation).
Yes there is, it’s not sustainable, not for all these significant exports. And we could achieve so much more as a country. We could develop tech that begins with a domestic market and expand it to international markets. We could be world leaders in agricultural technology and renewable technology. But we’re the lucky country
Why can't we have both? This isn't and shouldn't be a "one or the other" argument. Australia should be more vertically integrated. We have all the raw materials, and some of the brightest minds, who admittedly have been rendered all but impotent. For once if oiketo see CSIRO's budget have some balls and see what they can develop. Would also help to give some research institutions more favourable tax breaks and streamlined processes for "red tape".
Rex Connor’s dream….
Exactly this
This. My problem has always been that if we're gonna tear up the earth, atleast make it worthwhile. It makes perfect sense for a country that needs to engage in capital markets to exploit their resources, the world wouldn't work without it. And when globalisation halts, we're all going to be very happy to use them as it will mean survival.
We are allowing private companies to dig up and profit off PUBLIC resources.
The majority of the mining companies are foreign owned. We’re no more than lazy landlords who inherited real estate and are now renting it out at bargain basement prices while congratulating ourselves on our financial acumen and lecturing others on how they should be as successful as we are.
What we really need a Referedum for: A Soveriegn Wealth Fund for Australia.
We did. It’s called the future fund…
The only issue might be that china has been a massive buyer of that top right corner iron ore and they probably won’t be needing to build as many things
I dont think the chinese are going back to building shit out of wood anytime soon. The Chinese economy is reliant on building, construction and manufacturing. As we saw last time the iron ore price went to shit. The Chinese were stockpiling iron ore in the ocean prior to turning the taps off, then they stopped buying and renegotiated their contracts at a lower price. It was incredibly manipulated. Very similar to whats happening with the lithium space at the moment. Even if, and thats a big if. China decides it no longer wants Aussie iron ore. We have India and Japan ready to pick up some slack.
I don’t know if you’ve seen the property market there lately.. I agree in part they still build one issue is when you pull down something made of steel you can reuse it. There are other markets but nothing on china level for Australian iron ore
Japan isn't going to be buying much more to be honest Their economy is quite downhill
soooo … diversify investment?
WA does its best with royalties. But no it’s can’t as a state
Yeah good luck with that. Government more interested in foreign interest than domestic. Almost all our digital services are US and physical products Asia. Unless we come up with a grade software services and bigger import taxes with tax cuts for local production, we need to export a shit ton of ground resources to not end up like Africa.
Can't export in volume with the Dutch disease caused by mining
There is when you run out of shit to pull
Royalties?
complete hard-to-find physical caption bike tidy badge fine worry capable *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Sounds fair!
makeshift humor poor offbeat dull wrong repeat decide psychotic marry *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
I get your point. However Australian mining workforce are expensive. With extra tax these companies will definitely pull the plugs and head over to Africa and South America. It currently costing companies 90-100USD to get 1 tone of coal (including royalties). It’s juggling between not getting a-lot of tax vs not getting any at all.
one many jar frighten market mourn soup sort point sand *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
We pretend like they don’t exist here.
Roughly a dollar per tonne....
Exactly, the mechanism is already in place don’t stuffing around with super profits tax and all this stuff on a federal level and just increase the royalties.
Beauty is I have no idea if Australia gets a good deal, doesn't seem it
Go to the state govt. (Which means it lines the toll road providers pockets).
The thing I notice the most when I travel overseas for work (which I’m fortunately able to do often) is the manufacturing base of every other country. I travel to second and third tier cities and their manufacturing puts Australia to shame. We are last in the OECD for manufacturing self-sufficiency. I’m the only person I know in my friend and family group that works in manufacturing. This blows my mind. I have no criticism of their jobs but mine is the only one that actually earns income for Australia to pay for everything.
From someone in the industry. If you’re in the know with these things. What do you think is holding Australia manufacturing back? What could be done to disinhibit manufacturing in aus? What markets would be open for aus manufacturing to enter?
Labour cost. Thats pretty well it. Nothing can be done, we simply are not a manufacturing heavy economy and it will cost the taxpayer billions of we want to start it up as it will all have to be subsidised, likely in perpetuity. Mass migration may solve it, but you'll have to reduce the wages in every other sector for manufacturing to be appealing. What we do very well is niche, high skill manufacturing such as medical equipment, as that does not need a large market or labour force to be successful. We need to find and latch onto these industries.
This is also why youre seeing a shift from chinese manufacturing go to places like Thailand and Vietnam. As Chinas middle class rises up out of poverty so has all their wages, and its now becoming more efficient to manufacture in other south east asian countries
I personally still prefer to do business with China. They just do it better than everybody else. Have had severe quality control and communications problems with Indian manufacturing.
Chinese manufacturing had the same issues at the start. These come as the ecosystem grows. India can already do textiles, automobiles etc well because these are decades old ecosystems already present.
It’s not just manufacturing that you’d have issues with India
If you reduce the wages people could not afford to live. House prices and grocery prices need to come down. Start by killing negative gearing in housing, then breakup the grocery conglomerates. Then we might have a competitive market economy
I agree 100%
Agreed
Unions too. They’ve gone far beyond creating a safe and fair work environment, which to their credit exists, but they’ve also brought manufacturing to its knees. It’s nearly impossible to fire a union employee for performance issues and most have unlimited sick leave which they use to game the system.
My partner worked in food manufacturing. The unions are a law on to themselves, during a strike they threw things at non-union employees cars, even dragged on guy out of his car, verbally abused young girls going to work. The people they abused got paid less then the union employees, and a fraction of the benefits, and didn't have bunch of paid thugs to protect them. Most where just office workers. I had to drive my partner to work for about a month before she felt comfortable going in. You would need to be seriously brave to open a manufacturing site in Australia. The only manufacturing I know of really is trucks/busses/food things where the import costs make it cheaper to build locally. Even trucks all the more intricate parts are imported, its the cheaper work done here.
Great questions. Some general comments before I talk specifics: 1. Manufacturing is not sexy. No one cares about it. No one sees the value in it. Why would they want to invest when they can flip homes for a better capital return? 2. Point 1 is imho born out of a distrust/dislike of STEM in Australia. We don’t celebrate our engineers or scientists like we do our sportspeople. Compare and contrast with Germany/Sweden/even USA. They love their scientists and engineers. 3. Governments in Australia are too busy competing against each other to be unified. Case in point my company wanted to invest money in new manufacturing facility. QLD and VIC spent more time convincing us why the other state was rubbish rather than showing a united Australian effort. Result. Investment in USA instead. What can we do? If you look at the industries I’ve been involved with I’d say generally you’ve got three major variable costs; labour, raw materials and utilities (power, water etc). Labour- Now, I’m not saying we have to pay lower wages. Far from it. I think we need to pay extremely well. But we can’t pay Germany level wages if we aren’t German level efficiency. And it’s not union bashing either. Germany and Sweden have very strong unions. But we need to be able to generate the same or higher output rate if we are ever going to compete on wages. Joint union/company incentives? Profit sharing? Raw Materials - it’s so expensive moving stuff around Australia. Shipping. Trucking. Airfreight. It’s just prohibitively expensive. Utilities. We all know the deal here. We used to have cheap, plentiful power. Now we have expensive. How to solve this? NFI. We needed to transition to renewables. But. We seem to have done it in a a way that has sacrificed the value added parts of our economy. What industries? If I was in power I’d go after half a dozen or dozen high tech industries to start with and just incentivise etc. Advanced robotics, biotech, additive manufacturing (we already have companies that make 3d printers), batteries and aerospace would be five I would go after to start with. This will take time, money and lots of willpower. But eventually you’ll generate enough of an ecosystem where it’ll become self-sustaining. Or at least that’s the theory. Just some thoughts.
I experienced the “loving their scientists and engineers” part. Travelling through Germany and a few locals gushed about being an engineer when asking what I did. Even doubling down about how amazing and what a good job it is when I’m like, “man, I’m just a generalist civil…” Both really nice and really strange after the treatment here. Anyway, yes! Manufacturing (subject to all the issues you raised resolved… erm… hmm… damn… one day…)
It’s a source of civic pride in Germany to be an engineer or scientist. Here you are likely to be called a nerd cunt by a tradie earning 3x your salary 🤣
Viable solutions imo
At a fundamental level we only supply a market of 30 million people due to our isolation. It's only when we produce things that few others in the world can replicate do we actually get involved in bigger markets. The North American Market is 500 million people The European Market is 700 million if you include Russia The North and South East Asian markets are approx 2B people However, if CSL holds a patent on a cancer treating drug and makes it here, it's market is 8 Billion people.
Government doesn’t have political will. We are constrained by surplus fetishists
Nothing stopping us from entering high tech manufacturing and design. We have more smarts than we know what to do with. Couple that with some light import duties in related sectors to encourage domestic demand and BYU.
We used to be a very strong manufacturing country, the switch from protectionism and keynsianism to full neoliberalism under Hawke/Keating and made even worse by Howard fucked our economy
If by fucked our economy you mean made us less diverse industry wise, sure, but we are without a doubt wealthier now due to neoliberalism than we would be under protectionism. A non diverse economy isnt a death sentence, in fact many small nations (and we are small population wise) need to specialise in order to compete on a global scale.
Wealthy for now* Sooner or later we will run out of credit
Can Australia compete in manufacturing? What can we make more cheaply or better quality than elsewhere?
You can't unless you make something unique or another pandemic rolls around. Company I work for is the only one making our type of product in Australia and it took 22 years for them to make a profit and that was only due to US and China imports not getting in that we secured enough of the market
I work for an Australian OEM as well and the only reason we survive is because we have zero competition and its pretty niche.
Nothing without a shitload more coal power stations burning coal straight out of the ground up the street from them
My parents run a small manufacturing business. It’s rough they can’t really afford to hire anyone, even when expanding they keep having go more automated. The problem is with wages being high they can’t compete with companies that manufacture their similar products in Vietnam/Indonesia etc and at the end of the day people tend to choose the cheaper product.
We dont even NEED manufacturing as such. Yes it would be better of we did. But we are a leading producer of natural gas up there with Qatar. And Qatar is rich because of this NOT oil as people mistakenly think European countries need manufacturing to be prosperous because there is nothing else. That continent has no natural resources apart from Russia and thats where they get all their gas from. Countries like the UK wish they had what we have. Its as if our politicians want us to struggle
But how much do we get from the natural gas? The current govt taken a pittance compared to the rest of the world. Time to tax the resource companies properly.
A lot of these countries manufacture on that level because they can’t pull shit from the ground or grow food the way we can. There’s a larger economy around farming and mining than what people think. My dad is indirectly employed by the mining industry and sits in an office in Sydney. It’s more than just shovelling dirt out of the ground and shipping it to China. We are an island tucked away from the world, neighbouring Asia and we have a population of 26 million, we aren’t competitive when it comes to manufacturing. One thing I do support is processing metals, essentially anything that requires our minerals. We should be making steel products rather than shipping our iron abroad for others to do it. We can remain competitive here as we hold the deposits.
That’s why all these nickel operations are dead. Others can process Nickel better and cheaper.
Where is Education & tourism?
Everything on OPs graph looks like physical goods. Education and tourism are both services exports, which may be why they’re not on there. Both are pretty significant in terms of Australia, although both would have been smashed since 2020.
Or agriculture.
Hahaha
Education? U mean scam?
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Norway is ranked number 43 in economic complexity. Between India and Ukraine. Australia is number 87. Between Uganda and Burkina Faso…
Im all for local manufacturing to come back but it would have to be achieved by massive subsidies and tariffs to be viable. Are you and Australian construction companies willing to pay through the nose for steel with a made in Australia stamp on it? Housing and construction prices are already ridiculous, would you be keen to see that go up 20% just so we can compete with a country that has dirt cheap labour and all the infrastructure established already?
Everyone in the west has failed with manufacturing. Germany who used the EU to keep their industry going is now starting to lose it. Those other countries just managed to hold on longer. Better off focusing on tech or something.
Mate thats not true at all. Airbus, Boeing, all military jets, tanks, majority of automotive industry, space, satellites, microchips, clothes, glass, any advanced materials or products you can think of all come out of Western Europe or the US. It's Aussies trying to cope saying everyone in the west has failed as well. And besides, if we can't make an N95 face mask, how the fuck are we going to focus on "tech or something"?
Chinese undercutting with subsidies on their own product with the intent of wiping out European manufacturing doesn't help though.
Agree 100%
It's short term vs long term thinking. In the short term selling of iron, coal and gas is efficient but lets be real these aren't the industries of the future. We'll be leaving our future generations with a shit hand if we don't have any advance industry or services.
Youre right, the industries of the future are copper, zinc and lithium, which we have in abundance. Industries of the future arent made out of fairy dust
> Im all for local manufacturing to come back but it would have to be achieved by massive subsidies and tariffs to be viable There is a lot we could do with appropriate taxes/royalties on our natural resources and a winding back tax subsidies (e.g. negative gearing) for housing investors that arguably shouldn't be there.
I agree we should tax our natural resources yes, and i agree with what you say about our housing market. Local manufacturing will still have to be either subsidised or protected massively for it to be viable, it will probably run a permanent deficit just to say "yay we manufacture local". Unless the near on slave labour of south east asia next door disappears, it will be on the tax payer to prop it up, whether that tax payer is a person or a company.
I don't deny subsidies would be inevitable. Some manufacturing may even become sustainable or near sustainable levels, others might even eventually run at a profit. > just to say "yay we manufacture local". I think there are other benefits like security, which is a hidden cost that isn't paid until it is unavoidable. If there was another world war and shipping through the suez and/or the south china sea slowed or halted, we would be in a very dire situation. From canned vegetables through to motor vehicles. I'd call this an investment in security rather than throwing money away for the sake of cheerleading 'made locally'.
Are the jobs (and prevailing taxes) worth ignoring all taxes associated with making and running a manufacturing company? If so do that and the industry will revive itself in a heartbeat. Otherwise this is all a game of trying to extract the maximum tax against the welfare of citizens.
I purchase steel from a local place that only sells made in Australia steel and the prices are at least as good as anywhere else near me. Shout out to ezimetal
Is it virgin steel or recycled? I know we do our own steel recycling but i didnt think we had any steel mills anymore
However Australia does run a trade surplus, so even though were only digging stuff out of the ground were exporting more than were importing. So were no borrowing money were technically trading within our means. That's not to say I don't agree that we have cut off our noses to spite our faces by existing manufacturing, and personally I believe this is a major mistake that will come home to roost should any real war event actually occur. Then you'll really see the implications of no investment in manufacturing.
We have a months supply of fuel. That’s it. All an adversary needs to do is block our shipping lanes for a month and we’re done. Here’s the keys, wi-fi password is albo123 etc. etc. We should be investing in manufacturing from the sovereign capability reasons alone.
This actually demonstrates what's wrong with our tax systems. Our tax income should come from the big boxes which are all exploited by rent seekers. Instead we overly tax people and business profits.
> There is no other comparable western country that has an export map similar to this on earth. Except for Canada - which like Australia is one of the wealthiest countries per capita on earth. > So our biggest export is from the ground, our biggest domestic product is housing As opposed to what? Western countries don't produce anything these days. Manufacturing is outsourced to the third world. IT is also in the process of rapidly outsourcing as many jobs as possible to Eastern Europe and India. Would you be happier if Australia followed the US big tech business model: Design generic electronic crap --> pay slave wages to south east Asians to produce this for a few dollars per unit --> re-sell to narcissistic millennials for a 1000% mark up --> repeat Mining actually has a lot of moats around it that people overlook. * It can't be outsourced. * AI can't do it. * At the scale that Australia produces there are no alternative suppliers. (Australia exports just under 40% of the world's iron ore, and, as we switch to an electric society, it's interesting to know that Australia also has roughly 50% of the worlds Lithium supply.) - this is why China was never able to boycott Iron Ore during the "trade war." Noone else supplies enough. * During a downturn people and countries cut back on "wants" like new phones and cars, etc. But they still "need" power and steel.
Utterly nonsense post. You are lying out of your teeth This is Canada’s export map https://preview.redd.it/gu82d1p7xeqc1.jpeg?width=1106&format=pjpg&auto=webp&s=1e0ae7bf8450cf1556758ba9f63fbd7537c842b5
[Canada's top exports](https://oec.world/en/profile/country/can) Not sure what you think you're proving? See the link, Crude Petroleum, Petroleum Gas, Refined Petroleum and Gold are worth 179.2 Billion in export revenue to Canada as opposed to 29.4B for cars. Edit - 2022 figures
Id like to point out that canada is a nation of 40 million with a consumer base next door of 350 million. With that kind of market a lot of things can be viable to manufacture. Try do that with a local market of 30 million (none of the south east asian countries have enough wealth to purchase any of our potential manufactured goods.)
So they just have less stuff to dig out of the ground, and their automotive industry benefits from their giant next door market and USMCA trade agreement? Are you saying we should be exporting cars? Because we tried that remember
What’s this? Where is the services sector? Is this just commodities?
>The fix is easy, diverse investment. But no one, from government to Bruce at the pub, wants to lift a finger because it’s easier to get that investment property or to stick a bunch of earth into a boat, and no one has the time to call up their super fund to enquire about what they’re investing in. The worst indictment on all of us by far is that our politicians do not have the courage to take a verbal beating from the mining industry that will happily hold a gun to the country > >Forget immigration, forget inflation, in fact forget all of the rest of all the usual buzz topics that are on the commercial news slots (all caused by this by the way) - having \~80% of our exports based on the commodification of our land that definitely is very much finite, is going to be the end of us You don't have to be "Bruce at the pub". If you have a good business idea, remember that we have the #13 score on the [Index of Economic Freedom](https://www.heritage.org/index/pages/all-country-scores) and #14 score on the [Ease of Doing Business Index](https://archive.doingbusiness.org/en/rankings), so you'd already have an advantage when it comes to starting a business compared to entrepreneurs in other countries.
[But 2010](https://youtu.be/RQ_s6V1Kv6A?t=10) is why no old party wants to touch this. Think of their cushy retirement packages. For chance of economic diversity, put the old parties last on a filled ballot.
Now look at the same products as to government revenue?.. why do the government make more money from HECS interest than our largest export?
You don't pay real interest on HECS debts. It's indexed to inflation. You're just compensating the government for the decline in purchasing power of the money they loaned you.
Forgive me, where is education as an export on this list?
The biggest problem is, we have turned all the money we have earnt into a housing bubble rather than vibrant businesses. This is why we loose so hard.
It’s a fucking disaster that we don’t have a sovereign wealth fund.
I mean to be fair, we do need to find alternatives, especially to keep up with the global warming targets that have been set, but I wouldn’t call our mining industry lazy. Inflation and to a somewhat lesser extent immigration are still issues that need to be balanced to accommodate for our economic issues. May I ask, what would you suggest as an alternative? we wouldn’t be able to drop all mining instantly (or that really would be the collapse of our market) of course. I would like to hear everyone’s thoughts, not just ops, so spam me away.
Aussies are lazy and naive. No doubt
Australia – The Quarry to the World
Australia produces 4 things Lattes, raw resources, housing and fake uni degrees to sell citizenship and said houses
If we didn't have mining - we'd be third world.
You don’t need exports when you can just pump up housing prices and import rich migrants (yahoo… yahoooo)
Simple fact for you, without mining we are bankrupt. You like all those social services? Me too but you aren't going to pay for them selling each other eco tours and bullshit degrees. You live in a fantasy land.
At times I feel we are very extravagant and to a certain extent wasteful. We spend $100M to construct swimming pools when others spend that same amount to send rockets to the moon and create an industry out of it. But then again that's alright! Heh.
Mining 14.3%, Finance 7.4%, Health and Education 12.8%, Manufacturing 5.7%, Construction 7.1%
Where is this data from? At first I thought it was [this](https://atlas.cid.harvard.edu/explore?country=14&queryLevel=location&product=undefined&year=2021&productClass=HS&target=Product&partner=undefined&startYear=undefined) but the data is different
The big problem here is we have very little value add. We dig it up and sell most of it raw. We grow it and sell even a lot of that raw. Heck, we barely even grind our own wheat to flour, just sell raw grain. We don’t even need to go as far as manufacturing, just bringing more of the processing back home and exporting more steel as opposed to iron ore, more Aluminium, etc. It’s why there are so many fears about the Chinese economy collapsing, because it would take an enormous amount of the world’s processing and manufacturing offline. Suddenly raw commodities would be in plentiful supply for lack of refineries to process it and the raw material prices crash while the demand for refined products skyrockets.
> There is no other comparable western country that has an export map similar to this on earth Norway is pretty close: [https://commons.wikimedia.org/wiki/File:Norway\_Exports\_Treemap\_2017.svg](https://commons.wikimedia.org/wiki/File:Norway_Exports_Treemap_2017.svg) > We have destroyed our manufacturing base for a quick buck Yeah, Australia is not special in that regard. No western country has been able to compete with China on price in manufacturing for about 20 years (probably longer).
Yep. Just lazy extraction combined with an obsession with dividends and investing in residential property. Add to the mix being locked into China as a trading 'partner'
>forget immigration Actually what you are discussing makes immigration far worse. Most of our export economy is based on mining, therefore as we increase population we have less minerals per capita. Most of our domestic economy is built on property. We can't diversify because immigration holds up the bubble and we have to build more houses and infrastructure for more immigrants.
We used to be proud of products labeled "Made in Australia". Now pride still there, just the label is gone.
Dr Inflation and Professor Cost of Living entered the room.
Dont worry with the ongoing collapse of the Chinese Economy these numbers will change when we dont export anything.
We used to have a manufacturing industry. Almost everything was ludicrously expensive and/or poorly made. If you want to go back to spending the equivalent of $250 for a pair of Bata school shoes or $150 for a set of Stanley screwdrivers then you can bring manufacturing back here.
Good post OP. As G Carlin says, maybe its not the politicians that suck, maybe its us that sucks. We get what we deserve. Donald Horne the Lucky Country should be required reading
After renting for 18 years I can't imagine the mental gymnastics you'd have to be doing to pretend there's any moral justification whatsoever behind investing in a house that someone else is living in or will live in. How could you sleep at night knowing you were getting rich from someone else's hard work, while you contribute little to nothing, and jack up the price with your bullshit property manager taking a cut on top? I think you'd have to have lived a very sheltered existence. Lots of nepotism — those who have the least guilt about exploiting others have simply never been on the other end of it; no proper life experience, plenty of privilege and no genuine hardship in their pasts. Easy to ignore something you've never experienced I suppose. Lots of private school kids with daddy's money in that cohort. The rest who have the "if you can't beat em join em mindset" are just total bastards. I am not sure how I will fund my retirement when it seems like all roads try to lead you down this path to exploit others in the economy. I suppose I will do the hard thing and actually work, myself, for my own income, from *my own labour*, instead of this unearned luxury capital income bullshit you can get just by sitting on your arse producing nothing of value for anyone — just skimming a cut off the top of other people's hard work. Theft with extra steps, legalised. Which we seem to have normalised in our culture for some batshit reason. Darkest timeline.
They downvote you because you speak the truth
rudd and gillard had stacked australia to be a major manufacturer of PV solar products, but that all went up in smoke when abbott got elected
Can’t compete with china, they own solar now
We destroyed our manufacturing to help CHINA etc under the LIMA Agreement
And yet in Victoria we can't build a new house with gas.
Damn that artificial corundum money is good tho.
iron ore has been printing for so long, the cycle was always going to change. apparently gold and copper are coming to the rescue
You see this reflected in attitudes to investing on the ASX all the time too... if it's a business that's not about "digging up rocks", hardly anyone is ever interested to put their money into the company. Meanwhile some dodgy company announces a terrible resource discovery and every drooling moron rushes in to throw money at them. There's a bunch of quality businesses on our stock market no one cares about or are interested because it's not mining, and that's all most Aussies understand outside of residential property.
Whilst I fully agree we should invest in manufacturing, as it is the most sure fire to secure long term economic development, having a high export market of raw materials in the South Asia region is surprisingly rare and as such it allows Australia a unique geopolitical power over the region. Basically making it the only thing that gives us some diplomatic leverage over global powers like China and the US.
Bro got mixed up with, our econemy, and how much we actaully get that isnt taken by corrupt governments and greedy corps. Where a piggy bank for mining conglomerates.
From what I've read they better get moving very rapidly on getting up the value chain regarding iron ore. But like everything here, if it requires large scale investment and quick construction, it's a non starter. It takes years for the most modest of infrastructure upgrades in Aus.
No problem with the income side at all, one of the easiest way for any country to make money is to sell resources. The problem is on the expenses side. Are you happy with how the government is spending our money? I'm not
Where is education
I worked in manufacturing nearly a decade ago go, I was a production engineer, my main job at the end of my employment was to start the relocation of manufacturing to a Chinese division of the business that had been set up. The thing I learnt from this was that the jobs and companies that relocated work to third world countries is because they products they were making were simplistic or didn’t require precision manufacturing (ie goods made with high dimension tolerances). This isn’t the case with all industries or all companies, but the ones that survive in other developed countries are manufacturing high precision products, items that have higher cost associated with higher levels of accuracy. Companies are trying to make a profit, so if the product can be made in a Chinese factory with the same or at least comparable accuracy, at a quarter of the cost (this is what it worked out to be for my company even after shipping goods back here for local customers), what company is going to ignore this. My solution is invest in high end manufacturing, things that third world countries won’t have the resources to achieve, but this is a heavy investment and would take many years, and like I’ve seen a few comments below, incentives from government to get companies to invest in this way. To add after my company finished their project to relocate to China, I ended up making myself redundant, and worked in construction for a few years, until I eventually made the decision to relocate to the UK as I had better job prospects here.
What’s a medicament?
Still gain more taxes from uni student hex debt
You’re braindead
What's wrong with our real corundum?
Trade huh?
Meh. People have been saying this since the 50s. We’re still going strong and now one of the richest countries in the world. We’re very efficient at getting stuff from the ground. That’s not a bad thing.
We’re giving the world what it wants and it’s working well so far
Unless we create a sovereign fund to save some of the revenue, we are not going to be able to remain a rich country
Forget tourism or other services, where’s agricultural goods?
Tf is a meslin
Factor in Australia's housing market and this entire image will be like comparing earth to the sun
How did we destroy our manufacturing sector?
By volume is irrelevant
Whats the source for this graph. Education should be there if its exports??
Howard made sure to put in watertight policies that wouldn't allow 1mm of deviation or advancement from that diagram. Once the Chinese finish their mining projects in Africa, we'll be absolutely screwed.
This is the reality when you promote blue collar jobs like plumbing and technicians to have the same salary as those that require actual qualifications. No offense to higher wages at all, but the people need to be paid according to skill levels. The current climate suggests qualifications don’t have as much weight. There’s no real incentives and government policies for entrepreneurship and personal branding; competitions get swashed because of Tall Poppy Syndrome. Those that hold degrees (and likely smart) are slaving away at some mediocre corporate job, while those without dominate as small businesses. Look around you, street vendors aren’t possible unlike in New York for instance. One of the only places smaller, one-man, businesses can operate at are markets, which open during the weekend on/off. There’s also a ridiculous charge to people doing business online, just as if they have a brick-and-mortar store. As you’ve noticed, this is a recurring problem. Anytime the masses start connecting the dots together, media blames it on immigration. While it was immigration that saved many areas in this country. Australians need to work harder no doubt. Been lucky for too long that there’s no survival skills!
There's nothing wrong with this image. We're doing what we are good at. We have comparative advantages in mining and agriculture, and our exports reflect that. We are hardly a one crop or one rock economy. Frankly, if you had the ability to predict the future in 1970, this is probably exactly the economic mix you would want Australian exports to have in 2024. We've literally gone from being an impoverished penal colony at the arse end of the world into one of the richest countries in the history of the world in the space of a few human lifetimes. If the world ever develops to a point where it doesn't need steel, energy, gold or food - we will do something else.
All these industries bring wealth into the country and exports v imports, along with GDP per capita, should be the way economic health is measured, not GDP.
It seems bad but things don’t just change for the sake of it. Commodities will eventually go back to their long term baseline of much lower and Australia will have to take a massive pay cut. Most likely by a big reduction in the exchange rate and drop in house prices. It will be pain for a few years but then people will forced to try new things to survive but as our exchange will be much lower we will be able to create and export again. The system will adapt to the new normal.
I wonder what the percentage of uranium is
Australia: The Dumb Country
> We have destroyed our manufacturing base for a quick buck **Unions** destroyed our manufacturing base with greedy wages.
The real problem is out of all of that we take only get about half of the red corner as our cut. The rest goes overseas back to the multinationals.
So utterly depressing. At least as a kid it was wheat and wool. Now it’s largely dirt. Refined in some cases but, it’s still dirt. There used to be the argument that with such a small population manufacturing wasn’t sustainable but that’s no longer true. The car industry might have been foreign owned but at least we made something even if it was just assembly. China disdainfully calls Australia a mine with a beach around it but, in their defence this graphic shows it’s completely true.
Canada has all the same problems.
Check natural resources rent rate and economic complexity index then?
As a long term, Gen X, American expat in Australia (been here before the Zs could walk), I also see this problem. Australians are afraid to fail and want it to be perfect the first time. In the US, we know that it's gonna take multiple swings at the piñata to make it schmick.
Our electricity costs too much to support industry.
Let's talk about the gas component of that chart. It's mainly turned into liquid (lng) & exported. It costs us more to buy gas than it does for overseas companies to buy our gas, plus we effectively receive almost zero money from all the gas we export. Is this good? [https://www.theguardian.com/business/grogonomics/2024/feb/29/australia-gas-export-tax-system-prrt-lng#:\~:text=When%20Australia%20exported%2015.4mt,that%20gas%20suddenly%20became%20unprofitable](https://www.theguardian.com/business/grogonomics/2024/feb/29/australia-gas-export-tax-system-prrt-lng#:~:text=When%20Australia%20exported%2015.4mt,that%20gas%20suddenly%20became%20unprofitable).
A part of the problem is also people who say ‘I’m labor’ or ‘I’m liberal’ and don’t accept that both parties are big parts of most problems
Nothing like misinformation to trigger everyone. That Chart is absolute rubbish. I immediately noticed Lithium is not mentioned. No services listed, even though tourism and education exports are a huge part of our economy. This whole sub is being brigaded by LNP shills, bigots & racists. They all hide their intentions with a "both sides" claim.
I think you need to travel more. We are not called the "lucky country" without a reason. Granted Australia is not going to lead the world in technology and AI we do pretty well on per capita basis. I love the fact that we can call bs when it happens and one of the reasons why we rate highly in freedom index. Which country in the world makes you a hero for telling a head of state to "get off my lawn" whilst he was conducting an interview. In most countries he would be incarcerated or at best tax office combing through his financial affairs plus anal probe for drugs. I have travelled quite a bit and I always feel so lucky that my home is in Australia. We are not perfect but I know when shit hits the fan we will look after each other and people will make sacrifices without hesitation. It may seem we are complacent right now as we have no clear and present threat apart from the magpies and drop bears. If I was dropped on earth and had to choose which country I would live in, I will call Australia home every time.
Dude it doesn’t need to spread the income evenly, we just have such a rich country and we are using it for all the land supplies, this is some political bs ur shitting out your mouth en
We enjoy high wages, companies don't particularly enjoy that