As long-time readers will know, my favourite economic commentator is Ross Gittins from Fairfax Media. Gittins writes about the economy without fear or favour and speaks a vast amount of sense amongst the nonsense being spouted by people who should know better.
The weekend before last, Gittins titled his article Why the jobs will come, though we can’t say where
in response the widespread reaction to the Toyota manufacturing shutdown in Australia in 2017.
I won’t quote Gittins to revisit my 2013 rant
about government money propping up inefficient industries but suffice to say Gittins is not a fan of ‘industry policy’ which he rightly derides as ‘disguised protection of favoured industries, amounting to propping up losers rather than picking winners’
Gittins also, rightly, derides the moronic urgings of the Opposition leader, Bill Shorten for the Government to pony up with their ‘jobs plan’.
As Gittins says:
‘Has everyone suddenly turned socialist? Do they imagine we live in a planned economy? It amazes me that people who spend their entire lives living in a market economy don’t have a clue about how market economies work. Well, let me give you one: market economies are driven by market forces, not governments.
Those silly people demanding to see the government’s ”jobs plan” and concluding that, unless it successfully pursues such a plan, few if any future jobs will be created, seem to assume the economy works like a glove puppet: unless the government sticks its hand in the puppet and moves it, nothing happens.
If you want to know in which particular industries or occupations the government plans to ensure new jobs are created – which winners the government has picked – the answer is: none. It’s leaving the market to determine all that.’
So what should the Government, any government, actually DO according to Gittins?One is to borrow as much as necessary to provide our businesses with adequate public infrastructure and ensure existing infrastructure is used efficiently through such things as appropriate pricing.
Another is to ensure our education and training system – from early childhood to postgraduate – is doing enough, and is effective enough, in raising the skills of our labour force.’
And Gittins concludes:
‘I don’t know where the jobs will come from this time, but I’ll give you a hint: virtually all of them will be in the services sector. How can I be so sure? That’s where virtually all additional jobs have come from for the past 50 years.’
Stop the panic everybody. Just get on with the job of making this country more efficient and please stop asking governments to prop up failing industries.