Month: March 2009

As Kermit the Frog famously sang “It’s not easy being green”. Well, it certainly isn’t if you’re a politician. Green policies may be popular and they may even win you votes. But the flipside is that such policies usually come at a price to the consumer and the taxpayer. So the temptation for politicians is to find a way that will make them look green without actually hurting anyone.The Australian government’s policy towards the car industry is a good example.

The Commonwealth’s car plan was built around three policy objectives: to strengthen Australia’s industrial base, help the environment, and support jobs. None of these arguments hold up to closer scrutiny. In fact, all that the Rudd Government’s car plan amounts to is an old-fashioned, protectionist industrial policy, neatly hidden behind a giant green smokescreen.

Committing $100,000 of taxpayer money to saving each job in the car industry was already a prodigious waste of money but this will look cheap compared with the cost of nationalising Holden. In time, Australians will come to rue the day Rudd decided to treat the car industry as an issue of systemic significance.

A strong car industry would be an asset to the Australian economy only if it stood on its own two feet. Relying on government support is no substitute for building good quality and good value cars for which there is market demand.

There is something irresistible about measuring things, especially when it comes to country comparisons and international rankings. Yet not all measurement is scientific, and not all statistics really broaden our understanding.

It is time our politicians stand up to the highway robbers of General Motors and protect Australian taxpayers. And it would be far better to help Holden’s workers directly rather than handing out money to an American company on the brink of bankruptcy.

What a miserable place Australia must be if it finds itself behind a bankrupt economy and a country left ungovernable by the financial crisis. However, we may feel a bit better because Australia did not need to be bailed out by the IMF, nor did our capital cities see rallies of angry citizens which recently brought Dublin to a standstill.