Publications

A billion here, a billion there, and soon we’re talking about real money. But how could we make the money figures our politicians are throwing around more comprehensible?

Europas Industriepolitiker könnten auf einer Zeitreise nach Australien besichtigen, welchen Effekt eine Dauersubventionierung der Autoindustrie auf deren Wettbewerbsfähigkeit hat. Nach Jahrzehnten, in denen sie Autos aus der automobilen Steinzeit produziert haben, gibt es wohl zumindest für GM Holden kein Zurück in die Zukunft. Nur wer sagt es dem Premierminister?

It takes a degree of chutzpah to hand over big subsidies to the car industry only to claim that this was a great environmental achievement. It’s the political equivalent of having your cake and eating it.

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.