Australian Made

One of the more prominent topics of discussion brought about by the coronavirus pandemic of 2020 is Nationalism. Defined as ‘the identification with one’s own nation and support for its interests, especially to the detriment or exclusion of the interests of other nations’.

Over many recent years the focal point of debate on this topic has been on the latter part of the description above, in the last 5 weeks the former part has taken centre stage.

All of a sudden the popular push for globalization has been turned on its head. The idea of borders has gone from being socially unacceptable to being heavily reinforced and absolutely essential for survival in some cases. Many have willingly requested to be locked within the borders of their home. The question of where would we be without borders in this pandemic is obviously quite frightening.

When real fear is placed upon us how quickly our ideology turns. Some, you might say, haven’t changed their opinion at all, and this is also correct. Have modern Australians always been wanting a return to a more nationalist economy and ideology? I’d say in essence yes, but I’ll qualify this.

For me the term nationalist is the problem. It is used as a label of sorts in the digital realm mostly by those with an agenda (usually monetizing their opinion) to encompass other more nasty characterizations like racist, xenophobe or bigot.

You can certainly identify with your own nation and support its interests whilst being open to all cultures and welcoming to immigrants who have come to your country for a better life. This is important, the vast majority of immigration occurs because people are looking to become a part of a country and a system which is better for them and their future. In fact it is near on impossible to appreciate other cultures if you do not have a foundational cultural reference from which to draw on. Australian's are far more inclusive than most of the nations on the earth.

So I don’t believe the majority of Australians are racist, xenophobes or bigoted at all. I believe a very noisy minority has tried to silence any view that appears against unfettered globalism, utilizing identity politics to gain a social justice following. They have had some success, for literally no one wants to see others persecuted. The mainstream media has in most part fanned these flames as they too have been lazing away in their bubble.

This though has only succeeded in sending most underground, not really altering their stance, but not wanting to be outspoken for fear of ridicule and in some cases more extreme measures like physical threats, de-platforming and even potential job loss. Such is the scale of the debate lock-down we’ve witnessed. Hence most say nothing. They do speak however, when the warm blanket of anonymity shields them, like at the polling booth. The problem with shutting down these debates with sanctimonious ridicule is the false sense of advantage. Nothing can be achieved when two extreme sides of an argument make little or no effort to understand the other, hence we are where we find ourselves. Too far left or right, and you're in the gutter.

The argument is varied and wide on globalism. Some argue that it has dragged millions of people out of poverty, which depending on your perspective is true. Others argue it has only taken these same people out of the frying pan and into the oven, which is also true depending on your perspective. There are many shades of grey. My problem is certainly not with bringing prosperity and independence into the lives of those who have never had it, my issue is with handing increased dominance and power to oppressive regimes to impose even more tyranny on the people they govern, and possibly on the rest of the world.

The coronavirus pandemic has given us a unique opportunity to shut down the noisy minorities trying to stifle and remove intelligent debate to suit their agenda. I believe we need to re-categorize what it means to love your country, at least in social circles. Sure no system is perfect, but the way of life which Australia provides for its citizens is exceptional when you look at world standards. This has been achieved through its various governance and economic systems and most importantly, through its ideology, all of which was established and fought hard for, a very long time before you and I were born.

Is there anything wrong with respecting and vouching for this? Absolutely not. Is there anything wrong with wanting to build on this and form an even greater sense of what it really means to be Australian? Absolutely not. Unfortunately the label that some want to impose on everyone with this view is that of a rather shallow deplorable example of extremism. As is with everything in life at the moment as seen through the cultural paradigm that is social media, there are multifaceted layers here which are suffering the perils of ignorance and confirmation bias.   

I recently thought of the Australian Made labels during a discussion about a Facebook Group advocating for the return of Australian manufacturing which has seen its number increase enormously in the past 4 weeks. I have to admit, I haven’t seen this label on anything in a retail store or anywhere for that matter since the late 1980’s, possibly early 90’s. Not to say that it wasn’t there, I just haven’t seen it. Just as we haven’t really seen our manufacturing sector slowly disappearing in the past 20 years, until now.

These labels use to be quite large and easily spotted so I always innocently wondered as a child, why do we need to put Australian Made labels on things? Isn’t everything made here? Why would we bring those toys here on a boat? And now being a father, my 7 year old son sometimes inquisitively likes to look at the labels on products in search of contrast and has more than once asked me rather angrily ‘Why is everything made in China daddy??!!’ , and I've struggled to answer him.    

Market-driven cheap goods produced on epic scales in countries such as China using economical labor costs which many consider to be slavery, or one notch above, in factories with little or no regard for the environment, have been flooding our retail outlets and online stores for the past 2-3 decades. If you don’t believe this regime is abusing human rights to produce goods don’t take my word for it, just Google ‘Foxconn Nets’. Factories with nets surrounding them to catch suicidal jumpers trying to escape their life whilst at work.

Things may have improved in Shenzhen since 2011 though, marginally. From Business Insider Australia May 8, 2018; 

“One worker in charge of wiping a special polish onto the LCD screen told The Guardian that she handles 1,700 iPhones everyday, or about three screens each minute for 12 hours a day, 6 days a week. Others, with more difficult jobs like fastening chip boards, take up to a minute per iPhone, or about 600-700 per day.”

All is well though because you just got the latest but mostly the same iPhone with a better camera, and Apple is now worth $1 Trillion. Foxconn is actually known as one of the better employers.

Cheap goods have artificially lifted our standard of living in western societies so we feel content, while the price for that contentment is human rights abuses being committed on a scale hard to imagine. Well, I’m afraid all is not well and the past 6 weeks have exposed this. Australia desperately needs to start making more things again, simple.

How do we do this? No, how do we actually do this, where do we start and can we start immediately?

I’ve heard great debate recently about the underlying problems around manufacturing here in Australia, surprisingly as most believe, it’s not all about labor costs. The fundamental problem with kick-starting our capacity to produce more goods, according to some commentators, is actually energy costs.

We need to get the cost of power down, way down, and we have the capacity to do this. Renewables should be continually developed and implemented when they become cost effective, but we also need action now. I have no idea about the best way to achieve this reduction in price, but I would simply suggest to get the best minds in the field together to make something happen. Fast.

Reducing the price of energy for everyone will also be very beneficial to the economy. Petrol prices have dropped dramatically in the last week to around 85 cents per litre, pricing which we haven’t seen regularly since the year 2000. Most people will face the inevitability of earning less in the future due to these lockdowns, a fall which is cushioned when essential items are cheaper.

While on the subject of the year 2000, in that year, four out of the top five selling cars in Australia were made here. Including the Holden Commodore at number one, and the Ford Falcon in second spot. In 2017 the last passenger car produced in Australia rolled off the line. How things can change in a flash. 

The natural environment should always be a vital part for consideration of any new development in the energy sector. But are we inadvertently creating far more environmental problems by allowing countries such as China, who care little about destroying the planet, to dominate manufacturing?

There are two or three stage heavy logistics involved alone. With raw materials like iron ore being shipped on an unfathomable scale, passing the other cargo ships on their way here delivering the end products.

April 23, 2009 a report on new research by the Maritime Industry revealed that in one year, a single large container ship can emit cancer and asthma-causing pollutants equivalent to that of 50 million cars. The low grade bunker fuel used by the worlds 90,000 cargo ships contains up to 2,000 times the amount of sulfur compared to diesel fuel used in automobiles. These ships have 109,000 horsepower engines that endlessly spin 24 hours a day, 280 days a year. The engines themselves are actually extremely efficient, the issue is with the fuel.

1 Cargo Ship = 50 Million cars

To put this into perspective, Australia has 19.5 million cars registered on our roads (31 Jan 2019). 

Surely the balance of removing the need for some of these immense container ships from the seas will easily account for any additional emissions from more power plants, without even factoring in the potential for less need for power plants in China. Not to mention reducing the international air freight pollution. I’m just an observer though, and I may be wrong…

And for those of you who love to shop online for bargains, Amazon delivers around 2.5 billion packages a year and in early 2018 Amazon had shipped 5300 shipping containers between China and the USA alone under it's recently established logistics arm.        

Here are some important facts to consider aside from the environmental concerns;

Domestic manufacturing advantages

- Positive press. Choosing to manufacture at home can set your company positively apart, and the Made In Australia stamp can be a valuable marketing tool. (even more so now)

- Higher labor standards. Generally speaking, Australian manufacturers have higher and better-enforced labor standards to protect the well-being of workers.

-Positive perception. Because the Australian public tends to perceive Australian-made products as being of better quality than products manufactured overseas, they are more willing to pay more for them.

-Faster fulfillment times. By going with a domestic manufacturer, there’s a good chance you’ll experience a quicker turnaround time than you would by outsourcing your product overseas.

-Reduced shipping costs. Provided your product is intended for the domestic market, you won’t incur the hefty transport costs and customs fees that come with having your product shipped from overseas.

-Flexible payments options. While international manufacturers often accept only a few payment methods, and in some cases, require full upfront payment from Australian companies, domestic manufacturers almost always offer flexible financing terms.

-Better ability to “mind the shop.” Businesses who choose a domestic or even local manufacturer are much better able to see firsthand how a facility operates and see how their product is produced.

-Greater IP security and development. Australia has some of the strictest intellectual property rights protections in the world, so manufacturing a product domestically may decrease the chances of intellectual property theft. Australians easily have the ability to be on the cutting edge of manufacturing development is areas like robotics and automation.

-National Identity. Being proud of where we live and who we are as a people in Australia appears to have diminished in recent times. Drastically ramping up production of locally made goods is sure to boost the collective moral and foster a greater sense of identity.  

International manufacturing disadvantages

 - Cultural divides. Differences in cultural norms may be difficult to navigate and language barriers may complicate effective communication.

-Limited oversight. Without hiring a third party or making a trip to the facilities, there’s no way to keep an eye on how the facilities are run or to witness the production of your product. And the vast majority of consumers do not really know what it takes to make their $7 Kettle from Big W. 

-Increased shipping costs. When products intended for domestic sale are manufactured overseas, shipping costs rapidly mount to transport them to market.

-Though experienced overseas manufacturers are experts in helping their domestic customer mitigate these costs, customs are an important part of the equation in choosing whether to have a product manufactured at home or overseas.

-Less secure intellectual property rights. Without the stringent protections of intellectual property laws, it’s more likely (though still uncommon) that your idea might be stolen.

-International pandemics shutting off the supply chain of key goods. 

Intellectual property (IP) is a big deal when it comes to producing products or services, not just from the original idea but from the know-how created in the production process. In recent years here in Australia we have been missing out in building our fair share of IP in many sectors due to globalization. From retail, digital, energy, industrial, automotive to even media, arts and culture. In light of the profound events of 2020, can we really afford to keep losing this IP, and the wealth and security it generates, oversees?  

The importing and consumption of Film and Television shows, streaming services etc mostly from America, has handed an enormous advantage to the very few, who make most of the content we consume. An issue which creates economic and cultural identity issues on a grand scale. And most people just say, ‘well Australian stuff is rubbish’. In some respects they are correct and we are certainly not operating at anywhere near our potential in this sector. Governments control a lot of the creation of content in Australia as they fund it, and this is a big part of the problem and yes that includes some programs on commercial networks.

Serious commercial realization is not high on the agenda when the seemingly endless flow of money comes from the taxpayer, who unwittingly isn’t expecting a return…

Australia also uses taxpayer dollars to fund major international entertainment corporations who produce portions of their Film or TV series in Australia.

The absurdity of this obvious, picture this; Mercedes Benz is developing and producing a new car, they come to Australia with their own people to design and build only a part of the vehicle, then they take the rest back to Germany to finish it and take it to market. They agree to allow a select group of suppliers from here to help, but no one in senior roles. Mercedes receive millions and millions of Aussie taxpayers dollars in funding to do just this. As a major investor in the car and subsequently the brand, the Australian taxpayer receives no recoupable percentage, develops little or no real IP and they get to pay full price to purchase the car once its done and imported back here!

This in a round about way, is what is happening in the Film and Television industry. Governments being run by bureaucrats behind the scenes, claim economic benefits and multipliers from these taxpayer funded investments which are invented by commissioned ‘independent’ reports.

The real jaw-dropping part is, neither the bureaucrats nor the politicians are being transparent about the actual full amounts of taxpayer dollars being gifted. So the public cannot ascertain if the claims from the government are true or false. Much of the economic benefit then needs to be considered to be generated by the government funding, so it's basically stimulus. Little or no stability or viability of jobs is created, and this has been exposed massively through the recent lockdowns. But of greatest concern is the opportunity cost of such a diversion of Australian money into private oversees hands, which is enormous.

Reports based on international studies where governments are far more transparent around Film and Television tax incentives, reveal that the claims of enormous economic benefits are false or misleading and that, as any person with common sense can see, the benefits are short term and actually funnel mostly to the multi-billion dollar entertainment corporations and to the politicians and bureaucrats feathering their nests.

This is exactly the type of behavior from our governments that needs to be drastically reduced or better yet, eradicated immediately. I don’t have any magic bullet solutions for reviving Film and Television production in Australia, but I do know we need really serious reform.

So how and where can we get factories and businesses producing Australian Made again? No magic bullets from me here either but I do have a couple of suggestions I feel are worthy of debate and further exploration.

Regional Centres

Australia has enormous untapped potential in its regional areas, particularly the ones reasonably close to our major cities and transport hubs. For decades our small towns have been struggling to survive and have been actively seeking support from governments to get people to move back to the country.

Regional centres generally have excellent economic environments to foster development in manufacturing. With available land and resources, uncomplicated logistics, lower cost of living and more than willing local governments. If we can get cheap clean power to these areas also, then it seems fairly likely we can produce products at a reasonably competitive price point. It certainly is a good place to start the discussion. 

Market Forces

Should we even allow the market to decide? Well the state of manufacturing in Australia before the pandemic was very poor. Our high cost of both living, and doing business has made us basically uncompetitive.

Company directors all over the nation have a primary duty to please their shareholders and increase dividends. Growth, growth more growth! This perpetual need to increase margins has led to a major dependence on oversees imports, which has in turn been very bad for Australia’s ability to produce a greater share of its own goods.

The recession we are about to see will no doubt bring about desperately needed reductions in the prices of property (buying and renting). Big reductions in the price of fuel have already been seen and this is likely to continue. Getting the price of power down will cover off these big three necessities. So our cost of living will no doubt reduce significantly in the next 12 months.

Potentially we will be able to produce products more competitively than before, providing the cost of establishing or reviving manufacturing isn’t exorbitant. Though I doubt even with all of this playing out perfectly, we will even come close to competing with China and its communist regime, as we don’t allow their labor standards and our environmental restrictions are far greater.

So the lesser of two evils then, sensible government intervention is required. Firstly through reforming tariffs on imports, getting the price of power down and providing favorable conditions for investment-particularly local investment. Free trade agreements as we are so painfully discovering, are not free. Actively trying to balance practical levels of imports, whilst preserving favorable diplomatic relationships with a renewed local manufacturing sector, should be an economic philosophy moving forward.

I have been wondering if there is a blueprint from history we can reference. Australia thrived after the Great Depression and World War II in the 1940’s and 1950’s, should we look back and see how it was done and try to replicate some of the methods? There is certainly good evidence to suggest that it was our manufacturing sector which dragged us back into prosperity along with Keynesian methods of economic policy. Whilst times are of course vastly different, some basic things don’t change. 

We’ve already seen enormous moves from the Australian government to prop up the economy during this pandemic, throwing an extra $300 Billion at welfare. Moves that have raised eyebrows across the board, leaving many of us wondering how is it the government can just hand out that amount of cash. The big question is - will they have any moves left to reboot once the world presses play again. 

The issue of local manufacturing comes down to perspective and collective sentiment. If Australian’s want to start making and buying Australian products again, they will. Particularly if a favorable business environment promoting Australian Made is re-established. Right now we are being shown the errors of our ways by relying far too heavily on other countries to prop up our standard of living, and in turn allowing the birth of issues like the housing affordability crisis. The coronavirus pandemic has swiftly demonstrated these international relationships can become null and void in an instant.

We’ve been asleep at the wheel. Years and years of unhinged growth in the property market, everyone basically living on borrowed money, excess materialism brought about by cheap goods and pretending that everything will always be fine, has now come home to roost.

The doomsayers are right, eventually it will rain. Well its actually bucketing down now, but there is great hope for we get the chance to make the adjustments required to get back on track and provide a better future for Australia. We are smarter and more capable than we think, the great test of our generation is now upon us.

There really is nothing wrong with looking back to find a way forward, from Wikipedia;

“The Anzac spirit or Anzac legend is a concept which suggests that Australian and New Zealand soldiers possess shared characteristics, specifically the qualities those soldiers allegedly exemplified on the battlefields of World War I.”

“These perceived qualities include endurance, courage, ingenuity, good humour, larrikinism, and mateship. According to this concept, the soldiers are perceived to have been innocent and fit, stoical and laconic, irreverent in the face of authority, naturally egalitarian and disdainful of British class differences.”

There is an absolute need to be a part of the global community with healthy give and take but balance is not something you find, it's something you create. Australia exists today because of the outlook, values, morals, goals, and customs shared and evolved by its people - individuals believing in, and encompassing the collective spirit, which is otherwise know as culture.

It is the diversity of the individual cultures of the world that makes it so extraordinarily beautiful, it is the ignorance to the existence of that diversity that can make it very ugly.     

I’m extremely proud and blessed to be an Australian and I want the best for my nation, this must not become a country where you are ridiculed for saying that. I feel safe in the knowledge that those unashamedly brave young Anzacs would have agreed.

Christopher A Boyd