High cost of help

Yesterday afternoon we got an email from Federal Industry Minister Kim Carr, claiming the Liberals were set to cut industry assistance for the automotive and textile, clothing and footwear sectors, following comments from Shadow Treasurer, Joe Hockey.

“Comments by Mr Hockey today that the Opposition would look seriously at cutting industry assistance to Australian manufacturing should send a collective shiver down the spines of the one million workers and their families whose livelihoods depend on this vital sector,” thundered the release.

It then went to quote Hockey from an interview on the ABC.

“This is something that needs to be looked at seriously if you are going to improve productivity in Australia…,” Joe told the interviewer.

It’s outrageous, I know.

Just a day after Kevin Rudd made his bold pronouncement that Australia should increase productivity growth from 1.4% to 2% by 2050, the Shadow Treasurer appears to have been “caught out” making an incredibly obvious point – if the Government was really serious about improving productivity, the hundreds of millions of dollars paid to these struggling sectors each year would have to be very seriously assessed.

But Carr took the trouble to put out an angry statement declaring that the Opposition was setting out to kill off these sectors and thousands of jobs.

“This speculation about cuts by the Liberals undermines confidence and investment and has the potential to send industries offshore, costing Australian jobs,” Carr said, ignoring the fact that the Opposition isn’t actually in a position to make any changes to industry assistance, and isn’t likely to be for years, if this year’s election goes as predicted.

Of course, that’s what it comes down to – this is an election year, and taking the other side’s statements and jumping to conclusions will be a regular feature of politics this year.

And let’s be clear – the fact that these two sectors employ a lot of voters means neither party is going to even think about suggesting cuts to industry assistance, whatever Carr might say.

Which is a shame, because Hockey was dead right. We do need to reconsider the levels of assistance to two sectors that are, unfortunately, shrinking at a rapid rate.

Surely this money could be used in a more productive way – to reform the education or health sectors, or build more infrastructure or fund more research and development activities and innovation programs.

Less scaremongering and more long-term thinking is needed.

Just don’t expect to see it this year.