Thursday, April 17, 2014

Death of manufacturing not yet

Ross Gittins

Few things about the economy are worrying people – particularly older people and those from Victoria and South Australia – more than the decline in manufacturing. But many of our worries are misplaced, or based on out-of-date information.

For instance, many worry that, at the rate it's declining, we'll pretty soon end up with no manufacturing at all. And everyone knows that, unlike other states, Victoria's economy is particularly dependent on manufacturing.

But Professor Jeff Borland, a labour economist at the University of Melbourne, has written a little paper that sheds much light on these concerns.

It's true that manufacturing's share of total employment in Australia is declining. But this is hardly a new phenomenon, which suggests the end may not be nigh. Half a century ago, manufacturing accounted for a quarter of all employment. Today it's 8 per cent.

And almost none of that dramatic decline is explained by a fall in our production of manufactured goods. The great majority of the fall in manufacturing's share is explained simply by the faster growth of other parts of the economy, particularly the service industries.

It's true, however, there's been a (much less dramatic) decline in employment in the industry over the years. Employment in manufacturing reached a peak of 1.35 million in the early 1970s. Today, it's about 950,000. Of the overall loss of 400,000 jobs, about 200,000 occurred during the '70s, about 100,000 in the recession of the early '90s and the rest since the global financial crisis in 2008.

Many people would explain this decline in terms of the removal of protection against imports in the '80s and the very high dollar since the start of the resources boom in 2003. But, in fact, the great majority of it is explained by nothing more than automation.

How do I know? Because if you look at the quantity (or real value) of manufactured goods we produce, it reached a peak as recently as 2008, and has since fallen by just 6 per cent.

Nowhere have the machines of the computer age replaced more men (and I do mean mainly men) than in manufacturing. Is this a bad thing? It would be a brave Luddite who said so.

The consequence is a change in the mix of occupations within manufacturing, the proportion of machine operators, drivers and labourers falling by 10 percentage points since 1984, with the proportion of managerial and professional workers increasing by about the same extent. The proportion of technicians and tradespeople is little changed.

But there's also been a change in the types of things we manufacture, with the share of total manufacturing employment accounted for by textiles, clothing and footwear falling from 11 per cent to 4 per cent since 1984, while the share accounted for by food products has risen from less than 15 per cent to more than 20 per cent.

The share of transport equipment (cars and car parts) is down, but the share of other machinery and equipment is up by much the same extent.

The next thing that's changed a lot since 1984 is the location of manufacturing in Australia. Then, almost 70 per cent of manufacturing employment was located in NSW and Victoria; today it's down to 58 per cent. Then, NSW had more manufacturing workers than Victoria; today they have 29 per cent each. (Bet you didn't know that.)

But if the big two states now have smaller shares, which states' shares have grown? The two we these days think of as "the mining states". Western Australia's share has risen to 10 per cent, while Queensland's share has almost doubled to 21 per cent. (Bet you didn't know that.)

So far, South Australia's share of national manufacturing employment has fallen only a little to 8 per cent.

This tendency for manufacturing's distribution between the states to become more even over time, plus the much faster growth of other industries, has made all states less dependent on manufacturing for employment, as well as narrowing the gap between the most dependent (SA on 10 per cent of its total employment) and the least (WA on 7 per cent).

Whereas in 1984 Victoria depended on manufacturing for 21 per cent of its jobs, today it's 9 per cent. (See what I mean about out-of-date information?)

Victoria's more dependent on the health industry (12 per cent) and retailing (11 per cent), with almost as many jobs in professional services as in manufacturing.

The wider conclusion is that, though the faster growth of other industries has made all states less dependent on manufacturing for jobs, this doesn't mean manufacturing's dying. Its actual output hasn't fallen much, though it's using a lot fewer workers to produce that output.

The unwritten story is there've been big changes in what Australia's manufacturers produce: less stuff that relies on protection against imports and more stuff that fits with Australia's comparative advantage.

You see that with food products – including things such as wine-making – now being the biggest category within manufacturing, employing 20 per cent of all manufacturing workers.

You see it also in the growth of manufacturing employment in the mining states – a spillover from the resources boom.

Manufacturing is undoubtedly suffering from the recent high dollar. But, apart from that, it's in good shape. It has shed some fat and is fitter and wirier than it has ever been, better able to survive in a harsh world. 


One voice on free speech

by Janet Albrechtsen

AS Australia debates the repeal of section 18C of the Racial Discrimination Act, let me introduce you to two Canadians.
One is a champion of progres­sive causes, the other is a staunch conservative. One played a critical role in setting up the first of the human rights commissions in Canada, the other was hauled ­before these same human rights commissions for writing things that caused offence to a few ­Muslims.

More important, though, is what unites them: a passionate and longstanding defence of free speech in a country that became increasingly comfortable with mothballing humanity’s most basic human right. Both men are firmly opposed to laws that allow those pursuing identity politics to leverage the power of the state to shut down views they don’t like.

Now in his 80s, Alan ­Borovoy, the  founder of the Canadian Civil Liberties Association, helped push for the creation of human rights commissions in Canada in the 1960s and 70s in his then job at Canada’s Labor Committee for Human Rights. In ­recent years, Borovoy has also ­become a critic of how these commissions have overreached.

A Canadian-born writer on everything from theatre and music to politics and demog­raphy, Mark Steyn was the subject of complaints made to three human rights commissions in Canada for 18 articles he wrote about Islam in Maclean’s magazine between 2005 and 2007. Those actions against Maclean’s led the Canadian federal government to support a private member’s bill to repeal section 13, the hate laws provision, of the Canadian Human Rights Act.

If it sounds familiar, it is. In 2011, when the Australian federal court ruled Herald Sun columnist Andrew Bolt was prohibited from publishing a view that contravened section 18C of the Racial Discrimination Act, a similar push to defend free speech began here. In opposition, the Coalition promised to repeal section 18C. Now in government, keeping that promise is proving more difficult.

Debate in this country has ­become polarised between those on the Right who regard the individual right to free speech as more important than identity group rights and those on the cultural and political Left who cannot bring themselves to genuinely commit to free speech of opponents. And somewhere in the mushy middle, some Coalition members, especially in marginal seats, have gone wobbly about ­repealing section 18C. No matter where we sit, it’s worth noting what two very different men, who both supported the repeal of ­Canada’s section 13, have to say.

First, some background. Why did Canada, a country with a long history of political correctness ­cemented into its laws, repeal its federal hate law? Borovoy told The Australian that human rights commissions started falling into disrepute: “I don’t like quoting Karl Marx with such approval,” he laughs down the phone from Canada, “but the legislation (that set up the HRCs) contains the seeds of its own destruction.”

Whereas HRCs started out ­applying fairly well-defined prohibitions against certain types of discrimination, when hate laws became part of their ambit, and hurt feelings became the meas­urement of laws, it turned into a “very risky ball game”, says Borovoy. “You are running a terrible risk that someone’s thin skin could be the limit of someone else’s free speech.”

Sure enough, Borovoy says, human rights commissions overreached in very public cases. Steyn agrees: “No one minded this stuff when it was just being applied to some Holocaust denier sitting in his bedsit writing some unread screed that he was Xeroxing and sending out to his friends.

“But when those same laws are suddenly being applied to ­Maclean’s magazine — it’s mainstream, it’s big-selling, it’s the dentist’s waiting-room magazine; Maclean’s magazine is basically analogous to Andrew Bolt’s ­Herald Sun — then people here went ‘Wow, this is crazy stuff’.” Borovoy says that defining what is hate speech became an impos­sible task. While he would have taken a different position about laws that targeted incitement of imminent violence, “ ‘hatred’ was too fraught with ambiguity”.

And Borovoy warns that the same ambiguities arise from our legislation that uses words like ­“offend, insult, humiliate or ­intimidate”.

Drawing on Canada’s experience, Borovoy says: “You wind up losing a lot more than you’re trying to nail. That’s the guts of it.” Steyn agrees. And he warns that you can’t be a little bit pregnant on this. “You can’t say we are going to take out ‘offended’ (from section 18C) but keep ‘humiliated’ … You’ve got to say this kind of emotional lawmaking is not law — it’s phony law, it’s ersatz law, it’s pseudo law.” While Borovoy says the Left “didn’t surface very hard to try to rescue section 13”, Steyn says you have to distinguish between the cultural Left and the political Left.

Left-wing newspapers and novelists eventually became offended by the reach of the federal hate law when it started to impinge on their rights. Steyn recalls one of the complaints against him involved a book review he wrote where he discussed fictional characters in a novel. “The novelists didn’t like that,” he laughs.

But he is scathing of the political Left’s opposition to repealing section 13. He notes one exception, Liberal MP Keith Martin, who describes himself as the “brown guy”, meaning a person of colour. “Martin was the only member of the Liberal Party caucus who took a principled political stand in favour of freedom of ­expression.” Steyn says Martin was mocked and jeered: “Why are you — the so-called ‘brown guy’ — getting into bed with not only extremist right-wing nutters like Mark Steyn and Ezra Levant, but also a bunch of anti-Semites and white supremacists?”

Alas, the point of free speech is not that the brown guy and the white supremacist are on the same side. As Steyn says, “It’s that the brown guy recognises that the white supremacist is allowed to have his own side. Nobody needs freedom of speech for people we agree with.

“He (Martin) was the only ­Liberal member of the House of Commons to say this is crazy stuff, we shouldn’t live in a world where, if you disagree with a newspaper columnist, it becomes a court case,” Steyn says.

Steyn then makes a point aimed squarely at our debate in Australia: “You always need a couple of individuals like that to break the institutional position which says we need these laws, that without these laws there will be jackboots marching up and down the highway.”

That argument was made in Canada. It is also made in Australia, as critics of the Abbott government describe repealing section 18C as a fillip for bigots and a ­retrograde step for human rights.

But where are those brave ­individuals? Is there just one Labor MP with a genuine commitment to free speech? Where are the cultural warriors on the Left willing to defend Bolt’s right to free speech? Where is our own Borovoy, a man who understands that “freedom of expression is the grievance procedure of the democratic system”?

While we wait for intellectually honest members of the Left to emerge, Steyn says we must also relentlessly push back against the jackboot bigotry claims. “You have to say ‘You’re insulting Australians’, just as we said: ‘You’re ­insulting Canadians saying that.’ We’re not people who have a dark, fascist totalitarian past — Canada and Australia are two of the oldest, settled, constitutional societies on earth. They haven’t gone through third empires and fourth republics, and all the other stuff. People can be trusted to ­decide for themselves.”

A frequent visitor to Australia, and due here later this year, Steyn has watched with disappointment the debate over ­section 18C. He says that Canada’s cultural Left eventually supported the repeal of section 13 in a way he thought would be repeated here. “They said, ‘Well, obviously we find Steyn a totally disgusting and ­repulsive figure and we want to emphasise how much we dissociate ourselves from him BUT this is not compatible with a free society and Canadians should be able to decide for themselves on these matters’.

“I thought it would go that way with Andrew Bolt. That people would say, ‘Well, Bolt is a repellent creature BUT …’ Yet from my understanding from the debate in Australia no one on the Left has got to the BUT.” Sadly, Steyn is right that, for ever larger groups on the Left, identity group rights trump the rights of freedom of expression.

Once the campaign in Canada to repeal section 13 had won over the people, only then did politicians feel comfortable in following. Steyn says free speech is not something people demonstrate in the streets over. “It’s not one of those visceral issues. It can seem dry and abstract. The success we had was that by the end it didn’t seem dry and abstract. It seemed real and something with practical consequences.”

In Canada, the defenders of free speech also succeeded by turning the tables on the Left. Steyn praises Ezra Levant, ­another writer hauled before a human rights commission, for the strategy.

“The Left tried to de-normalise us, to marginalise us,” he recalls. Levant and others succeeded on putting those who supported the laws — who were, by and large, part of the establishment, people appointed to HRCs, people who wore Orders of Canada on their lapels — on the ­defensive. The ­debate was won by arguing the hate laws were not needed.

“The success we had in Canada was in putting those in favour of the law on the defensive — ­making them look like the ­weirdos and the control freaks and against genuine human rights.”

Steyn says that’s where the meter must move in Australia, too. “I might have to fly in and do it ­myself,” he says, pointing out the ridiculous irony in a group of establishment grievance mongers thinking they are vulnerable if contrarian columnists can say what they want about them. “The idea that they represent a state ideology that should be protected from criticism ought to be absolutely repulsive to people.”

So, has Canada become a haven for bigots without section 13? Of course not. Which makes the retreat by some Coalition MPs even more disappointing. While Steyn understands that Coalition MPs are worried about being depicted as anti-human rights, he, too, laments that “on the squishy Right there is a fear that identity group rights are more fashionable and you risk making yourself look like an old squaresville if you get hung up on free speech”.

And that’s the real danger in Australia. Between a Left that is utterly indifferent to free speech and an opportunist, unprincipled Right, there are not a lot of people willing to take a stand for free speech these days.


WA Senate: Labor Senator Louise Pratt attacks 'deeply homophobic' and 'disloyal' running mate Joe Bullock

West Australian Labor Senator Louise Pratt has conceded defeat in the Senate election, as she unleashed on her running mate Joe Bullock.

Senator Pratt said it was a devastating blow for Labor to be reduced to one Senator out of six at the election and described Mr Bullock as homophobic.

"It is a blow to progressive voters that I would be replaced in the Senate by someone who I have known for many years to be deeply homophobic, to be anti-choice, and has recently emerged disloyal to the very party he has been elected to represent," she said.

"I had pointed this out on many occasions that Labor was at risk of losing a second Senate seat here in WA, and I am ashamed that a factional power grab was privileged over principles, deeply held by an overwhelming number of party members and indeed Western Australians more broadly.  "It goes to the heart of the need for reform."

In the run-up to the election, Mr Bullock apologised for comments he made about Senator Pratt's sexuality and for describing her as a "poster child" for causes such as gay marriage.

Senator Pratt, who was speaking to the media in Perth, said the Senate result was also a "very difficult realisation" for her.

"While the count is continuing, it is increasingly clear that the ALP will not hold its second Senate seat here in Western Australia," she said.

"However, the prospective loss of Labor's second seat at this election is most difficult for those Australians who needed the assurance of a stronger Senate in order to hold back the Abbott Government."

Mr Bullock was parachuted into Labor's number one spot on the ticket for the re-run election.

Senator Pratt said she told the party's national secretary and the national executive that she did not believe Mr Bullock had the capacity to lead the ticket.

"I and others warned that placing him above me on the Senate ticket would reduce Labor's chances of holding two Senate positions and ultimately we know that these warnings were not heeded," she said.

"Over the last few years, we have faced situations in the party where factionalism and the power of factions has ridden roughshod over the party and the leadership's capacity to make the right decisions on pre-selections and, on occasion, on policy.

"The exertion of power by too few is eroding public trust in the ALP and in unions.

"This is especially the case here in WA where ordinary branch members represent just a fraction of the overall state executive in Lower House pre-elections and have no representation at all in Senate preselections."


Cane toad fight: Scientists teaching goannas to avoid eating toxic pest

Scientists are reporting early success from a study in Australia's far north designed to reduce the impact of cane toads on native wildlife.

The program aims to teach goannas, one of the species that has been hardest hit by the cane toad invasion, not to eat the toxic pests.

Over the past few months, scientists and Aboriginal rangers have fitted radio-tracking devices to over 40 goannas at Oombulgurri in the remote East Kimberley.

The team, led by Georgia Ward-Fear from Sydney University, has been monitoring the reptiles' movements and offering them small, less toxic cane toads to eat, which may make them sick but will not kill them.

"Basically we're trying to expose the goannas to non-lethal doses of toad toxin just before the front arrives and hopefully they'll learn that it's not a good thing to attack and eat," Ms Ward-Fear said.

"Ultimately, it's to buffer populations of goannas from the full impact of cane toads.

"As the toad front comes through, you get this really large mortality - bang - in a week or two weeks, there are goanna bodies everywhere as we've seen across the Top End."

The unusual approach, known as "Teacher Toads" is a joint project between Sydney University, the West Australian Department of Parks and Wildlife, and the Balanggarra Rangers.

"Clearly you need good scientific research to back up any management option you try and here we are really trying to explore that concept of taste-aversion learning," said the Department's Dr David Pearson.

Cane toads spreading across northern Australia

Cane toads crossed the border from the Northern Territory into Western Australia five years ago.

Volunteers have been trying to slow down their spread across the Kimberley, but the scale of the problem is massive.

Lee Scott-Virtue of the Kimberley Toad Busters, a Kununurra-based community group, estimated they have collected and euthanased close to 4 million toads.

"Each female can lay between 30,000 and 35,000 eggs twice a year," she said.

But, the group has had trouble convincing government to continue supporting their efforts.  Last year, the group's funding was not renewed, and Ms Scott-Virtue and her husband are now funding the effort on their own.

"The reality is if you can mitigate the impact of the first wave of toads by reducing their numbers, it gives the native wildlife an opportunity to become wary of the toads," she said.

The West Australian Government said it has invested $7.8 million in cane toad research and on-ground activities since 2008.

But, in a statement, it said it was now investing in areas where the biggest difference can be made, including the goanna radio-tracking program at Oombulgurri.

Millions of taxpayer dollars have been spent on trying to find a biological control measure to stop the toads in their tracks, but so far the toads are winning.

They are now travelling five times faster than they used to, heading west across the Kimberley at about 50 kilometres a year.

"There's been quite a bit of work done by CSIRO looking for a suitable pathogen that would affect toads and not native frogs, and they were unable to find anything - so at the moment there is no light on the horizon in terms of biological control for toads," Dr Pearson said.

Researchers pleased with successful results

Ms Ward-Fear said many of the goannas in the program at Oombulgurri were already learning that cane toads do not agree with them.

"We are finding that goannas that have had a non-lethal dose of toad toxin are avoiding the baits in future trials, so it seems to be that we are eliciting a kind of taste-aversion response which is what we're looking for," she said.

The researchers hope to prove the concept works so it can eventually be rolled out on a bigger scale.

Dr Pearson from the WA Department of Parks and Wildlife acknowledged it would be challenging.

"It would be expensive. You'd have to breed toads which is an interesting thing in itself," he said.

"And, you'd need to come up with some means to distribute those toads in areas where the predators were.

"I'd like to see the situation where we can preserve pockets of those predators through the landscape so they have the ability to re-establish themselves after the toads have come through."


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