Holden is an iconic brand for Australians, it has been a major part of our heritage and our motor sport history and means a great deal to many Australians over several generations, beginning with the first Australian built car – the 48/215 in 1948, or more commonly known as the FX. But after 69 years of manufacturing cars (2017) and providing jobs for Australians, Holden will close its doors in this country, displacing a major part of Australia’s workforce. In my point of view, the unemployment aftermath will eventually plunge this country into a severe economic recession and an even more tragic housing collapse.
So, if you are reading this and saying that maybe, just maybe, I am exaggerating the seriousness of the situation, think again!
Who is to blame for Ford, General Motors Holden and I would not hesitate to also include Toyota leaving our shores for greener pastures?
No, it’s not anyone in particular, but all of us as a collective, by our over zealousness to invest in negatively geared property rather than our manufacturing industry. Intoxicated by a global free market, we lost control of our economic independence and left ourselves open to the whim and beckon of off-shore company executives.
Citibank’s 2006 plutocracy analysis “investment advisory memo” stated of the US, UK, Canada and Australia – “the rich take an increasing share of income and wealth over the last 20 years, to the extent that the rich now dominate income, wealth, and spending in these countries.” The top 20 per cent of households accounted for 68 per cent of total income and the bottom 40 per cent, just nine per cent when the memo was written. The situation became worse when the same document looked at wealth distribution – it was loosely accepted that two per cent of the population controlled more than 90 per cent of the world’s wealth.
With that mind-set, the last two generations of Australians grew up in an instant gratification credit card era of the ’80s, ’90s and 2000s where money means everything and anything else long and short term is not as important. A selfish generation, aided by surreptitious coercion from our big banks, pushing up house prices and wages, encouraging credit debt, loans on the purchase of expensive imported SUVs and sports cars and done nothing for by ignoring Australian made products. The wealthy became focused on greedy profit making without realising the consequences of building wealth with borrowed money in a country that is today almost devoid of a manufacturing industry.
I am pointing to the same people who run our business networks, including councils, government and public institutions, who believe in ‘global warming’ without having the courtesy to learn about sun-spot activity or even show some scepticism at climatic patterns over the last one million years. Who choose to buy imported hybrid cars over the local product, preferring small and flimsy Japanese and Korean imported automobiles instead of Australian built or assembled cars for their fleets. Even the federal government last week ordered 20 BMW high security series 7 luxury sedans (at $525,000 each) for the G20 conference, rather than Australian equivalents from Toyota or Holden. To place Holden’s demise in perspective, politicians who didn’t want to subsidise the motor industry should have a good hard look at other world governments, which put in five times the amount of assistance (e.g. German government contribution to Mercedes) than we do with our car manufacturers.
The tragedy of it is, when our top four banks collectively earn over $30 billion in profits after tax, no government at any time over a half century took on the responsibility to tax the financial institutions a collective 10 per cent per year to inject into the country’s manufacturing industry.
Australian governments have been weak in protecting our manufacturing over the last 50 years. Ensuing prime ministers from all political leanings lost sight of the big picture when it came to Australian manufacturing, by allowing the sale of so called ‘troubled manufacturing businesses’ to overseas conglomerates and now, we are losing the last of our car manufacturing and auto parts industry.
Had authorities legislated a long time ago to at least make it mandatory for all federal government departments, state governments and councils to purchase Australian built cars for their fleets and at the same time, ban all imported cars under $50,000 into Australia, then we would not be facing this crisis now.
This and many other governments in Australia are obsessed with having surplus budgets at any cost, including at the expense of its workforce. In fact, most countries work on deficits for the good of keeping the economy ticking over, because that is what they are voted in for – securing a nation’s survival through employment and responsible consumerism.
Take for example the USA, where government fiscal easement (printing money) is taking that country out of the economic mess. Despite the treasury racking up $17 trillion in debt (compared to Australia’s $50 billion deficit), they still subsidise the American auto and manufacturing industry with cold hard cash.
Unfortunately, the Abbott government will go down as the one that killed off Ford, Holden and possibly Toyota – for what? Just to balance the books short-term and score a triple A rating from Moody’s or Standard and Poor’s!
After it’s all over – and mark my words, 2017 is being predicted as the beginnings of another global recession in which, unlike the last big one, no government will be in a realistic position to be able to do anything about – Ford gone, Holden about to cease operations and who knows what will happen at Toyota, we in Australia shall experience an unprecedented economic meltdown. When interest rates are over 6 per cent, people are out of work and can’t pay their mortgage or rent, can’t fill their car with petrol or pay for public transport, can’t afford to eat healthily, buy clothes, heat or cool their living space or send their kids to school because there is no work and the dole/pension is below the poverty line as it’s not equal to the minimum wage – in desperation, people will turn to a life of crime to feed their lot at any cost. The knock-on effect will cause share/property invested superannuation nest eggs to diminish, more factories to close, the service, tourism and restaurant industry in tatters. Workers will lose their jobs and the final blow will come when the housing industry and property prices collapse.
The banks will lose billions of dollars in profits and the whole economy will go down the abyss – all because the federal government of the time could not find the $150 million subsidy a year to save Holden, but did find $8.8 billion to contribute to the Reserve Bank’s coffers … gratis.