Saturday, August 9

National building blocks for Australian enterprise

There is a veritable multitude of opportunities in the current low interest rate environment for industry policy to advance the nation’s capability by way of government borrowings to fund a variety of industry partnerships with later opportunities for export spin offs, particularly into our Asia region.  
What is needed I think is a long term plan for the nation in determining what industries have the greatest  potential for assistance and to make available publically the underlying assumptions that justify such projects so that it forms a national narrative  subject to public scrutiny.   

What can be expected from the government, is an industry paper detailing assumptions about future anticipated gains in productivity and improved workplace participation and income that would exceed the cost of borrowing. Those assumptions should also be subject to audit scrutiny to afford continuing good governance. My thoughts are such large scale investment, much more that could be properly justified by our small market would be necessary, possibly also involving some further concessions, in order to be competitive, but whose recoupment would be ensured with further joint ventures. Hence I think we can overcome our limited market size in Australia with investment in facilities supportive of the wider market incorporating our neighbouring region, particularly China. This, of course, involves some risk and inevitable revision, but the risk of dong nothing is much greater.

What I envisage is a five pronged policy framework which might conceivably involve, (A) Feasibilities into industries to attract initial concessions with long term productivity gains assessed in excess of the cost of borrowing (B) building or manufacture of facilities funded from government debt, (C) operate and then develop into a private public system, (D) recoupment of seed funding and transfer of some ownership to joint ventures, (E) subsequent spin offs and export of systems or further joint ventures. Bear in mind the Chinese government are already using joint ventures with foreigners for many of their investments and manufacturing facilities.

Probably the industries where we have the largest opportunities are in agricultural processing and in- bound tourism.  By way of example our facilities in relation to inbound tourism are underdeveloped and could be funded thorough large scale improved infrastructure. But other Industries should not be overlooked such as utility networks, telecommunications, transportation systems -tollways, expressways, airports, rail, shipping, waste management facilities, health, education, finance, environmental pollution control, building low-cost housing and eco-tourism.


susan said...

Although I have no knowledge of the Australian economy, your ideas appear to be based on sound principles that could be usefully applied to most governments with which I am familiar. I'll hope your national leaders are paying some attention to your suggestions, Lindsay.

Lindsay Byrnes said...

Thanks Susan
I noticed a similar article today by Catherine Livingstone, who is chairperson of the Business Council of Australia. I sent off an endorsing letter to the AFR.
Best wishes