BCA promotes big government and the corporate state

In the AFR this morningBCA head Catherine Livingstone makes a heady call for the restoration of the corporatist state.  She says,

Our approach calls for an investment in sectors with current significant strength to ensure they retain their capacity for sustainable job creation. Strong as they are, these sectors are at risk of losing their global advantage if we don’t pay close attention.

Government has a role, for example, in fostering new and emerging sectors such as biotechnology and advanced manufacturing through industry-led R&D, developed in collaboration with the research sector.

We also believe it is the proper role of government to do what it can to facilitate the transition of manufacturing sectors which are facing profound competitive challenges from low-cost economies. These sectors should be encouraged to innovate and have unnecessary regulatory barriers removed.

Had government collaborated with the automotive manufacturing sector a decade ago, to facilitate the transition to a business model based on supplying niche products into global supply chains, we may now have a viable sector.

There is so much wrong with this. Government will never be the saintly philosopher king gently guiding the ignorant in the direction that is necessary.  It will always act out of political motives.  If Ms Livingstone thinks the government was detached from the motor industry she is deluded.  The Button Car plans of the 1980s were not the first or last such interventions.  These sought to push the industry in certain product directions but more importantly heavily influenced the employment, R&D and locational policies that eventually caused the industry’s demise. 

The sectors to be encouraged by government would not be those that the wise bureaucrat was in our best interests – even if such a person existed.  They would be negotiated by politicians anxious to use patronage for political purposes and adding that they would have “regulatory barriers removed” as well is simply a sugar coating for a corporatist approach that would bring waste on the scale that the industry policies of yore brought. 

 

Ms Livingstone adds

Government already has a role in the market through regulation, taxation, foreign investment controls, competition policy, publicly funded R&D and education. Its actions and inaction in these areas affect sector competitiveness:

•Australia’s emissions reduction policies were designed without an understanding of their likely impacts on sectors. This has had unintended consequences for jobs and competitiveness.

•A detailed understanding of the transport and logistics sector would have anticipated that cabotage restrictions would make it cheaper to ship some goods from Asia to Australia than it is to ship them around the Australian coast.

So, what we are suggesting is that government’s role needs to take better account of the circumstances of different sectors in the world in which they are now operating, and place greater emphasis on facilitation and co-ordination.

Everybody knew that cabotage imposed excessive costs.  Some vainly thought the policy and negotiations with unions would reduce these costs and create a world class shipping industry.  Others did not care but simply wanted the union support for political conservation of subsidised workers.  Whether the goals were noble or pure cupidity does not matter.  The outcome will always be excessive costs and failure. 

And to suggest that more attention to the carbon abatement policies could have allowed that cake to be kept and eaten, shows a profound misunderstanding of the policy.  Forcing the use of an inferior good (wind etc) must always involve a payment by someone and in the end it is the consumer that will cop it.  Even the theoretically more efficient tax policy involved (as is inevitable) a tax  and a redistribution to the less well off whose votes are more numerous.

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13 Responses to BCA promotes big government and the corporate state

  1. outsider

    Her second year undergrad paper deserves a C, and a stern look from the marker. Such people must have been sleepwalking these past seven years…how could reasonably sentient beings fail to notice the poisonous role government played in the waste we see all around us, not least because one side is owned lock, stock and barrel by people with kindergarten views of wealth creation and the role of markets?

    Spare us especially the sage oversight myth, look at CSIRO. Government is a giant ship that cannot find its stern from its bow, and where the compass can be recalibrated at will to suit the fairy tale du jour that has seized the imaginations of the better paid sailors. She’s playing to the audience, and must have loved Joe’s stillborn $20 billion health research white elephant.

  2. Arguably, the freest market on earth right now (since Apple’s virtual monopoly disappeared) is the mobile app market. Just imagine for a moment government getting involved. Even amongst leftist techies, the idea would be ridiculous. Governments are so far behind that they haven’t even thought of it yet. It is a great example of a free market in action. Governments could only serve to ruin it.

  3. Andrew

    •Australia’s emissions reduction policies were designed without an understanding of their likely impacts on sectors. This has had unintended consequences for jobs and competitiveness.

    FMD, UNINTENDED?????

  4. .

    Government has a role, for example, in fostering new and emerging sectors such as biotechnology and advanced manufacturing through industry-led R&D, developed in collaboration with the research sector.

    We also believe it is the proper role of government to do what it can to facilitate the transition of manufacturing sectors which are facing profound competitive challenges from low-cost economies. These sectors should be encouraged to innovate and have unnecessary regulatory barriers removed.

    Did they actually ask any biotech companies or their investors?

  5. Alfonso

    Ah, a hatch of crony corporatist Statists. We could have a Dutch auction where an industry bids for taxpayer money and legislative support.

  6. mundi

    I still remember going into R&D of an Australian lock making company, who at the time had their R&D budget 100% subsidised. The government determined it knew the direction that would surely be successful.

    No one there had any clue of what to do. They spent thier time tearing down foreign made machinery trying to think of ways to make it better. Once the dollars stopped not only did the R&D shutdown but the entire process was moved to Taiwan where the real innovators were.

  7. johanna

    Australia’s emissions reduction policies were designed without an understanding of their likely impacts on sectors. This has had unintended consequences for jobs and competitiveness.

    Snap, Andrew. I couldn’t believe that I was reading this.

    The consequences are entirely intended – to punish the fossil fuel sector and all those who use its products.

    95% of Livingstone’s paper could have been written by Kim Il Carr or one of his acolytes. What nonsense.

    Why are our business lobby groups so much in the thrall of greenies and statists?

  8. struth

    Once the noun “council” is used you got problems.

  9. .

    struth
    #1412152, posted on August 11, 2014 at 10:49 am
    Once the noun “council” is used you got problems.

    God’s truth, truer words have never been spoken!

  10. DaveA

    We could have a Dutch auction where an industry bids for taxpayer money and legislative support.

    Like a funding model which calls on the crowd to source funding, to kickstart business initiatives.

  11. Art Vandelay

    In my experience, the business lobby groups in Australia are intellectually mediocre and are pure rent-seekers. Many are staffed with ex-public servants who don’t have the education or skills (ie, an understanding of economics) necessary to represent the best interests of their members.

  12. Hugh

    Is she keeping the seat warm for Heather Sellout?

  13. Major Elvis Newton

    Government has a role, for example, in fostering new and emerging sectors such as biotechnology and advanced manufacturing through industry-led R&D, developed in collaboration with the research sector.

    Such a noble ambition.

    These emerging sectors require people with real intellectual horsepower. It’s a pity then that the average Australian is barely functioningly literate.

    Most tertiary aspirants do not study courses that would be pre-disposed to such industries.

    Where does the BCA presume these people will come from?

    Compounding this is that very few jobs are actually created. I don’t need 350 people titrating reagents to produce a better fertiliser.

    What to do then with the morass of over-educated and under-qualified graduates and low-skilled migrants?

    The public service perhaps?

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