Sunday, June 26, 2011

Nation Building

It has always been my hope that our national government would eventually awake and start to do a bit of "strategic planning" for and on behalf of the nation.

The point of which is to develop an integrated plan to guide national development. I can't recall any serious long term planning activity by any of our governments - Liberal or Labor - State or Federal - since the 1970's. That is why we so obviously lag the rest of the neighbourhood.

But apparently we are happy to go off nation building in Afghanistan and Iraq.

Perhaps there are excellent reasons why the national obsession is with selling houses to each other and digging minerals up for export. But I don't know what they could be.

The housing story was once a get rich quick scheme - but more recently has become a noose for people who paid too much.

And given that our two biggest exports are iron ore and coking coal I would have thought that some of these raw materials could be directed toward developing a real local steel industry. Instead our local industry is a shadow of its former self and China has steel coming out the wazoo - while prices continue to rise.

Surely a succession of smart thinking governments would have planned for a mix of mineral exports and local value added production. Perhaps even in a ratio like 80:20. Another half dozen export oriented steel mills would create a lot of jobs across regional Australia.

But it seems that is too hard. And clearly impossible for the State governments who think the state boundaries are on the outskirts of their capitals.

And I suppose the history of resource based nation building is not so successful anyway.

If you look at the Portland aluminium smelter then you will see that this "congealed electricity" manufacturing process uses brown coal generated electricity at around 1.4 cents/kW/h and has been doing so since 1986. Nice deal if you can get it.

Its entire product is exported - so that is good but the only thing that keeps it going is the hyper-low electricity price - and don't even mention the carbon impacts.

And the North West Shelf Venture has been underway since the mid 1980's and currently exports around 1400 million tonnes of Liquefied Natural Gas - which earns the partners about 3.27 cents/litre. A nice little earner for the JV partners but why isn't the nation receiving a market price?

And what will Australian's do when this resource is exhausted - shouldn't we be using this gas to reduce our coal dependency?

If the nation's export performance can only be successful by subsidising multi-nationals in these types of ventures then we definitely need to start thinking about some real nation building.

What say you Minister?

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