Wednesday, 16 July 2014

Lost the contract?

There is an almighty row going on here because a local company did not get the contract to supply non-combat boots to the army.
Oh woe is us! The jobs have gone overseas! Well, that seems to be the case.
The question of course is whether the government should support Australian businesses - at all cost. Just as successive governments have been propping up the "car industry" for years should they now prop up other industries as well?  If, in doing so, they spend money we do not have then will they be criticised? If, in doing so, they fail to spend money on health, education, welfare and the environment will they be criticised?
It is of course a no-win situation.
I am one of those who believe that the money spent propping up Australia's car industry was wasted. We should have acknowledged years ago that our population is not large enough to support a car industry. Forget Holden and cross the Ford and start seeking new and diverse manufacturing outlets? No, we couldn't do that. The unions were too powerful. They wanted to keep things just as they were - only with ever increasing "pay and conditions". It couldn't last.
The same thing has occurred in the footwear industry. A friend of ours was the chief accountant for a major footwear manufacturing business. He warned the management that they were in danger of going under. He put facts and figures in front of them. He told them where they could make savings without compromising the product. They didn't listen. Two years after he retired they went bankrupt - for the very reasons he said they would. He met one of the senior managers just afterwards and was told, "We should have listened."
It was too late.
I suspect that the same is true of the company which wanted the defence contract. The product they offer might be good but if an equal product is available elsewhere for a lesser price then a cash strapped government is going to take it. This is especially true if the Senate keeps blocking measures which are supposed to get our Budget back on track.
People wonder why this is necessary. They point to the way things are done in other countries. There is a difference between us and many other countries. Put simply, their debt is internal and ours is largely external. We need to pay off as much as we can as soon as we can because we don't owe the money to Australians. We owe money to international entities and they are going to call in the debts.
It is something nobody in politics is mentioning right now.

1 comment:

virtualquilter said...

"It is something nobody in politics is mentioning right now."

It is something the government need to be screaming about to get the message out there.