Tariff cuts to proceed

Yes they can. As an Economics major, I'm sick of hearing all this tariff crap. Tariffs are only short term, people only understand one language. That's money.

A tariff may keep someone in a $40,000 job, but will generally cost the government about $200,000 when the costs are considered. The people receiving the money will lobby for it and it will get the vote because it seems like a good idea in theory and the money is spread out so people don't feel they're losing.

Tariff's simply subsidise ineffective production and it leads to the economy being much worse off. You people here should be thankful tariffs exist.

A Falcon/Commodore would cost about $140,000 if it was completely Australian owned/made. There's no such thing as an Australian car anymore because consumers got it cheaper when other people did it.

Same with Australian t-shirts. Would you happily pay $90 for a t-shirt which you could get the same quality Chinese one for $20? Most people would say no, but then would say that Australian jobs moved to China is a bad thing.

Bunch of hypocrites I say. Take a look around your house and see how much of it is there because of oversea's manufacturers. I'd say close to 99%. If Australia closed off trade, it would be us that would bear the brunt.

About tariffs. Instead of you paying $140,000 for a Falcon, the government picks up the bill for the remaining $100,000. Most people favour this because the cost is so spread out, but it just harms Australia in the long run.

Some tariffs are good, but Australia is going nuts with their 17th century mercantilist approach. I say cut the tariffs further.

[SB076]

Originally Posted by Shounak

A tariff may keep someone in a $40,000 job, but will generally cost the government about $200,000 when the costs are considered. The people receiving the money will lobby for it and it will get the vote because it seems like a good idea in theory and the money is spread out so people don't feel they're losing.

We are not talking about one job, we are talking about 10,000's which will effect 10,000's possible more. Explain how a tarrif costs the government $200,000

Originally Posted by Shounak

Tariff's simply subsidise ineffective production and it leads to the economy being much worse off. You people here should be thankful tariffs exist.

Can you explain the manufacturing process and why Australia is ineffective?

Originally Posted by Shounak

A Falcon/Commodore would cost about $140,000 if it was completely Australian owned/made. There's no such thing as an Australian car anymore because consumers got it cheaper when other people did it.

Again can you explain how you came to a figure of $140,000. As an economic major you would know about supply and demand and that a $140,000 XT Falcon/Equip Commodre would not sell. There might not be such a thing as an all Aussie car, but there is certainly an aussie industry.

Originally Posted by Shounak

Bunch of hypocrites I say. Take a look around your house and see how much of it is there because of oversea's manufacturers. I'd say close to 99%. If Australia closed off trade, it would be us that would bear the brunt.

Who is talking about closing off trade? We are questioning why some overseas governments are able to effective tarrif, but we cant - sure they don't always use that terminology. If you want a level playing field, conditions must be the same across the board, this includes conditions, legislation and wages - this is not the case - so what is wrong with attempting to even the playing field?

Originally Posted by Shounak

About tariffs. Instead of you paying $140,000 for a Falcon, the government picks up the bill for the remaining $100,000. Most people favour this because the cost is so spread out, but it just harms Australia in the long run.

How do you come up with these figures?

[Fordman1]

Originally Posted by Shounak

A Falcon/Commodore would cost about $140,000 if it was completely Australian owned/made.

What ??

How did you come up with that number ?

Explain and "flesh out" the reason for that dollar value please.............

I'm about to run, so I'll answer this in full later. But govt spending generally has inefficiency losses of 4-10 times the amount received. So with all the costs associated, it would be cheaper just to pay these 10,000 workers cash than to subsidise the industry. Of course that's unrealistic, but govt spending is the most inefficient spending there is.

Australia is ineffective if the world can do the same job cheaper. Same reasoning applies to MG Rover. They couldn't keep their heads above water in the US. It got bought by a Chinese company and now they're up.

$140,000 is a figure I read the Commodore would cost without subsidies and it's not that farfetched. When you consider just how much of the so called "Aussie" cars are produced overseas, it makes sense.

The $35,000 you pay for a car is heavily made up of govt spending that made it so cheap.

You're right abt S+D, that's why the Aussie car market wouldn't last without protection.You have the govt artifically shifting the supply at our expense.

You don't need a level playing field to be ahead. China have created the most unlevel playing field, but it will come to bite them in the proverbial soon enough. A level playing field is not required. Tariffs are bad for a country, but necesary to a point.

I'll get into that later.

Originally Posted by Barraxr8

What ??

How did you come up with that number ?

Explain and "flesh out" the reason for that dollar value please.............

That was an estimate based on an entirely Australian made/built/designed Commodore. I'll see if I can find the article.

Like said above, it doesn't allow for foreign sourcing of major components and assumes everything is done inhouse.

[Fordman1]

Originally Posted by Shounak

$140,000 is a figure I read the Commodore would cost without subsidies and it's not that farfetched. When you consider just how much of the so called "Aussie" cars are produced overseas, it makes sense.

I'm calling BS on $140,000 until I see the dollar for dollar justification for it.

[Carby]

Originally Posted by |||

I'm used to it

I have no problem with companies coming here and employing locals. I don't have a problem with Australian companies selling their goods on the world market. In fact I love both those things. The more the better I say.

I do have a problem consumers being penalised because the government decided that two particular American companies deserve special treatment in the car industry. I love Fords and have owned quite a few, but Ford & GM should be able to fend for themselves. If the only thing Ford & GM have to offer the market is that they are a few grand cheaper than the imports then they have real problems. Make decent cars and you wont need protection.

Now this is the type of head in the sand attitude that really irks me. Why pick on the 2 American car makers? - does not Toyota benefit as well from tariffs esp. their 4wd that attract less tariff than a sedan. Also we are not in a level playing field there are high tariffs in a lot of the Asian countries and also there labour costs are cheap (due to not enjoying the same working conditions of a western world.)

Australia will become a service country much like Island Holiday destinations, and it is because of dopey fu*king policy as mooted and supported by brain dead drongos!

[xbgs351]

Originally Posted by SB076

I have no doubt that there are shortages of certain skills - however that is not to say these shortages are across the board. We are finding the opposite of what you are finding - presumably because we are requiring different skill sets. FYI the SA state and Fed government are setting up funds to try encourage buisness to re employee former Mitsubishi workers, curently I beleive the figure is around $30 Mil

According to the ABS the definition of employement changed in 2001
http://www.abs.gov.au/ausstats/abs@.nsf/7d12b0f6763c78caca257061001cc588/c9268f9db356d154ca256a950080b3e3!OpenDocument

Changed slightly to be aligned with the rest of the world. Try looking at the difference in the unemployment rate between the quarter before and the quarter after and you will see how little the change in definition meant.

[sleekism]

Originally Posted by Shounak

I'm about to run, so I'll answer this in full later. But govt spending generally has inefficiency losses of 4-10 times the amount received. So with all the costs associated, it would be cheaper just to pay these 10,000 workers cash than to subsidise the industry. Of course that's unrealistic, but govt spending is the most inefficient spending there is.

Australia is ineffective if the world can do the same job cheaper. Same reasoning applies to MG Rover. They couldn't keep their heads above water in the US. It got bought by a Chinese company and now they're up.

$140,000 is a figure I read the Commodore would cost without subsidies and it's not that farfetched. When you consider just how much of the so called "Aussie" cars are produced overseas, it makes sense.

The $35,000 you pay for a car is heavily made up of govt spending that made it so cheap.

You're right abt S+D, that's why the Aussie car market wouldn't last without protection.You have the govt artifically shifting the supply at our expense.

You don't need a level playing field to be ahead. China have created the most unlevel playing field, but it will come to bite them in the proverbial soon enough. A level playing field is not required. Tariffs are bad for a country, but necesary to a point.

I'll get into that later.

Where is the evidence of "$140,000 Falcons".
If this is true than why as protectionism increased to it's heights with 85% local content and import quotas did the purchase price of cars continue to fall as apercentage of average income to about 40 weeks of average wages or a guesstimate of around $40,000 for a base Falcon in todays money?

You are taking the comparitive advantage theory too literally and too simplistically. In a classroom it is easy enough to say "let us only manufacture what we are good at" but in the real world this is absolute stupidity ignoring the effect of exchange rates (a base model Falcon cost less than a base model Mazda 626 a decade ago) and the sheer logisticsand timeframe involved in turning the some 100,000 people, 100's of companies and tens of billions of dollars invested in local car manufacturing into what we have a comparative advantage in AT THIS TIME.

This is the most important consideration TIME. 3 years ago Ford was turning a healthy profit. 10 years ago an exported Camry or Commodore made a healthy profit. It could decades and countless billions to turn our automotive industry into a apparatus of the mining industry and givenpast history the minig boom will be well and truely over by then.

Tariffs are about insuring against "Dutch Disease" which is strangling our manufacturing sector. Would sale of local cars be so low if the Aussie dollar was back to 70 cents to a U.S. dollar?? What is going to happen when the mining boom ends and the price of imported goods increases?? Even before the mining boom ends we are going to face the appreciation in Chinese/Thai currency etc.

The key to economic success is MANUFACTURING.

Britain used to be the sweatshop of Spain.
Germany used to be the sweatshop of Britain.
Japan used to be the sweatshop of the United Sates.

Does anybody notice a pattern. All these nations started out as low cost supply nations for a wealthy country. They developed a manufacturing base devastated the host nations and as they developed they overtook the host nation economically.

China is the next example mark my words. They are stockpiling Coal, investing in renewable energy (thanks to the Three Gorges dam they will close half a dozen coal fired plants in the Chonqing region) and most importantly against free trade agreements they have kept their currency artificially low in order to be artificiall competitive.

One more point. Does anybody know that Australia was exporting Territoty's to Thailand for a time. When Australia signed a free-trade agreement with Thailand exports of Commodores and Territorys began to Thailand. Soon after however Thailand changed their tax laws effectively pricing our cars out of competition to protect their locally built.

So this is the level playing field?? Thailand exprots some 150,000 cars to Australia per year with NO TARRIF from a subsidised by the Thai Government industry while we are effectively banned from exporting to the Thai market.

Logic anyone??

[SB076]

Originally Posted by Shounak

I'm about to run, so I'll answer this in full later. But govt spending generally has inefficiency losses of 4-10 times the amount received. So with all the costs associated, it would be cheaper just to pay these 10,000 workers cash than to subsidise the industry. Of course that's unrealistic, but govt spending is the most inefficient spending there is.

Australia is ineffective if the world can do the same job cheaper. Same reasoning applies to MG Rover. They couldn't keep their heads above water in the US. It got bought by a Chinese company and now they're up.

$140,000 is a figure I read the Commodore would cost without subsidies and it's not that farfetched. When you consider just how much of the so called "Aussie" cars are produced overseas, it makes sense.

The $35,000 you pay for a car is heavily made up of govt spending that made it so cheap.

You're right abt S+D, that's why the Aussie car market wouldn't last without protection.You have the govt artifically shifting the supply at our expense.

You don't need a level playing field to be ahead. China have created the most unlevel playing field, but it will come to bite them in the proverbial soon enough. A level playing field is not required. Tariffs are bad for a country, but necesary to a point.

I'll get into that later.

No problem, but remember we are discussing tarrifs (not government spending - I assume you are talking about R&D which is a seperate topic all together and relates to all industry)

Australia isnt uncompetitive (ineffective) the conditions we operate under (many set by the government) need to be adhered to, but these come at a cost.

So you agree that the Aussie car market wont last without protection, therefore are you suggesting we abandon the market - or do you have another idea?

The conditions set by China might come back and bite them, but how - if we dont have any industry to compete in the future.

[SB076]

Originally Posted by xbgs351

Changed slightly to be aligned with the rest of the world. Try looking at the difference in the unemployment rate between the quarter before and the quarter after and you will see how little the change in definition meant.

2% by taking the March 2001 figures into account

[|||]

Originally Posted by Carby

Now this is the type of head in the sand attitude that really irks me. Why pick on the 2 American car makers? - does not Toyota benefit as well from tariffs esp. their 4wd that attract less tariff than a sedan. Also we are not in a level playing field there are high tariffs in a lot of the Asian countries and also there labour costs are cheap (due to not enjoying the same working conditions of a western world.)

Australia will become a service country much like Island Holiday destinations, and it is because of dopey fu*king policy as mooted and supported by brain dead drongos!

American/Japanese/Dutch/whatever. My point was that there is no Australian company manufacturing cars here.

If employees in the car manufacturing industry feel that they can't compete because their wages are too high maybe they should take a pay cut. I'd rather they did that than force me to pay thousands extra for a new car simply because I don't like their current models on offer.

[SB076]

Originally Posted by |||

American/Japanese/Dutch/whatever. My point was that there is no Australian company manufacturing cars here.

If employees in the car manufacturing industry feel that they can't compete because their wages are too high maybe they should take a pay cut. I'd rather they did that than force me to pay thousands extra for a new car simply because I don't like their current models on offer.

hmm lets see 30,000 workers take a $10 an hour wage cut, or you pay an extra $2700 for your brand new Holden Epica Keep in mind those workers either directly or indirectly support your business as well.

The issues effecting automotive industry isnt simply our wages, as has been said before there are numerous issues that need to be addressed - which to be honest cant be addressed, therefore there needs to be tarrifs (or some form of protection)

[4Vman]

There have been many things that have impacted the cost of manufacturing over recent years, for EG: the switch from a 40hr week to a 38hr week meant the labour cost for manufacturing went up 2.5% over night...
That's a significant hike in one hit.

[|||]

Maybe we should just protect all the industries in Australia. Everyone can have a great paying job no matter how good their finished product is and the government can look after everything else.

Its working great in North Korea from what I hear. LOL.

[sleekism]

Originally Posted by |||

Maybe we should just protect all the industries in Australia. Everyone can have a great paying job no matter how good their finished product is and the government can look after everything else.

Its working great in North Korea from what I hear. LOL.

It works even better in Japan and the European Union those basket case economies!!

Until all countries have the same currency, the same minimum wage, working conditions, OH&S and environonmental standards than free trade will never be free.

[xbgs351]

Originally Posted by SB076

2% by taking the March 2001 figures into account

Where did you pull that figure from?

[SB076]

Originally Posted by xbgs351

Where did you pull that figure from?

Yep that could have been a mistake I was looking at the long term unempolyment levels as a percentage of unemployed The website doesnt state a comparison for direct unemployment, it simply states the changes that were made in regards to definitions (including that of "unempolyment")

Tarrifs are not to protect previous unemployment levels that are IMO to protect industries and jobs in the future.

[sleekism]

Originally Posted by SB076

Yep that could have been a mistake I was looking at the long term unempolyment levels as a percentage of unemployed The website doesnt state a comparison for direct unemployment, it simply states the changes that were made in regards to definitions (including that of "unempolyment")

Tarrifs are not to protect previous unemployment levels that are IMO to protect industries and jobs in the future.

Exactly one of the great criticism of Australia is that we are a very selfish people only concerned with what affects ME and only thinking in the short term.

Visiting China and Europe opened my eyes. It seems every second word from a Chinese is "China" and they are always considering the long term prosperity of China. We however always talk about "me" and how Government policies affect "me".

I say suck it up and take the 10% tariff. Either pay the extra tax on your Hyundai so 100,000 people can be skillfully employed contributing billions to our economy and exports or you can pay extra income tax for the 100,000 people on the dole.

An extra $1500 on a POS Hyundai is a small price to pay for the tens of billions of dollars and tens of thousands of jobs our local industry generates.

[SB076]

Originally Posted by sleekism

Exactly one of the great criticism of Australia is that we are a very selfish people only concerned with what affects ME and only thinking in the short term.

Visiting China and Europe opened my eyes. It seems every second word from a Chinese is "China" and they are always considering the long term prosperity of China. We however always talk about "me" and how Government policies affect "me".

I say suck it up and take the 10% tariff. Either pay the extra tax on your Hyundai so 100,000 people can be skillfully employed contributing billions to our economy and exports or you can pay extra income tax for the 100,000 people on the dole.

An extra $1500 on a POS Hyundai is a small price to pay for the tens of billions of dollars and tens of thousands of jobs our local industry generates.

I agree not to mention that if all those involved in the auto industry lose their
jobs the flow to other industries (retail, building, service, tourism, etc) will be massive) China will not always be cheap

[vztrt]

Originally Posted by SB076

I agree not to mention that if all those involved in the auto industry lose their
jobs the flow to other industries (retail, building, service, tourism, etc) will be massive) China will not always be cheap

China is having issues with inflashion, higher prices in manufacturing for companies and living items as well.

[sleekism]

Originally Posted by vztrt

China is having issues with inflashion, higher prices in manufacturing for companies and living items as well.

Exactly China is going to have to pass on the costs of rising energy costs and believe it or not a SKILLS SHORTAGE!

[SB076]

Originally Posted by vztrt

China is having issues with inflashion, higher prices in manufacturing for companies and living items as well.

After the second world war Japan was considered the place to manufacture goods on the cheap - it was cheaper than locally produced product but was commonly refered to as Jap crap. Today Japan is one of the most expensive places to manufacture goods. The cost of manufacturing goods in China will increase as their standard of living increases

[vztrt]

Originally Posted by SB076

After the second world war Japan was considered the place to manufacture goods on the cheap - it was cheaper than locally produced product but was commonly refered to as Jap crap. Today Japan is one of the most expensive places to manufacture goods. The cost of manufacturing goods in China will increase as their standard of living increases

Vietnam is now considered the new China (well in terms of ferrous and non-ferrous metals) as well as India who have managed to lower their manufacturing cost. But after being over there I can see why.

[xbgs351]

Originally Posted by sleekism

Exactly one of the great criticism of Australia is that we are a very selfish people only concerned with what affects ME and only thinking in the short term.

Visiting China and Europe opened my eyes. It seems every second word from a Chinese is "China" and they are always considering the long term prosperity of China. We however always talk about "me" and how Government policies affect "me".

I say suck it up and take the 10% tariff. Either pay the extra tax on your Hyundai so 100,000 people can be skillfully employed contributing billions to our economy and exports or you can pay extra income tax for the 100,000 people on the dole.

An extra $1500 on a POS Hyundai is a small price to pay for the tens of billions of dollars and tens of thousands of jobs our local industry generates.

It isn't like it is just 10% extra on the price of Hyundai, it is essentially 10% on the price of every car including Australian cars.

[FTE72]

It extremely shortsighted of people to think that the decline of manufacturing in Australia is anything but seriously scary. After we have driven all the local manufacturers off shore to the developing nations, it will be a very short timeframe (5-10 years) and prices of most consumer goods will double. Developing economies ALWAYS GROW. INFLATION.
As for China, well the US of A is already trying to drive up the value of the Yuan to protect what remains of there own manufacturing(mostly based in Mexico, Irony anyone?) so the flood of cheap imports will not always be so cheap.

[4Vman]

The chinnese "advantage" is already starting to diminish, they've worked out they can ask allot more for their stuff than they currently do, prices are on the rise, along with their booming ecconomy their std of living is also rising creating more pressure on their own manufacturing costs.
We need to ensure the Australian manufacturing industry can survive because if the aussie dollar keeps falling then opportunies will open up here again for us, i just hope there's enough businesses still around to turn to...

[xbgs351]

XE Falcon $60,000 (in current terms after taking inflation into account.)
BG Falcon $36,490

XE --> Tarrifs at 57.5%-->$25500 to be internationally competitive.
BG--> Tarrifs at 10%-->$32841 to be internationally competitive.

[sleekism]

Originally Posted by 4Vman

The chinnese "advantage" is already starting to diminish, they've worked out they can ask allot more for their stuff than they currently do, prices are on the rise, along with their booming ecconomy their std of living is also rising creating more pressure on their own manufacturing costs.
We need to ensure the Australian manufacturing industry can survive because if the aussie dollar keeps falling then opportunies will open up here again for us, i just hope there's enough businesses still around to turn to...

Exactly but if we offshore our manufacturing and the Aussie dollar falls than it will be virtually impossible to ever get the manufacturing sector back.

It took decades to build our automotive sector while the rise in the dollar is a recent phenomenon.

[xtremerus]

Shounak
The pot calling the kettle black there. To do your Economics Major, your education was subsidized/paid by the taxpayer. HECS doesn't cover all costs.
What is the difference in helping industries?