Illustration: Pat Campbell
It was poetic that one of the darkest times for the Australian economy came almost 30 years to the day that the Australian dollar was floated. One milestone merged into another.
The impending and irreversible closure of Holden has been partly attributed to the high value of the Australian dollar. It was not that Australian car manufacturers could not win exports so much as Australian consumers were saturated with almost 60 models, and they voted with their feet; anything imported was perceived as being of far better quality.
We are a patriotic nation, except when it comes to buying things we make. Where does this mentality come from? After 20 years of economic reforms, pleasing consumers seems to matter a lot more than enriching the country with a productive base. With a mentality like that, along with the free play of market forces, it was only a matter of time before the major car manufacturers pulled the plug.
All that came to fruition once the flow of public assistance was reduced. It is now only a matter of time before Toyota packs up.
Yet we still have the productivity commission deliberating over what level of assistance should be accorded the car industry. By the time it issues its draft report in March, there may be no viable car industry intending to stay in this country.
There is no sentimental attachment to Ford and Holden among the young. And their parents, who once prized their Ford or Holden, have graduated to European or Japanese sedans. Collectively, there is a shrug of the shoulders.
When you ask economists, too, about the closure of Holden, it's rationalised away with much shuffling of feet. Everyone knows that those affected by Holden's closure will never be able to replicate the same job quality and salary.
When Kerry O'Brien recently queried former treasurer and prime minister Paul Keating about the negative aspect of ending tariff protection in the 1990s, his subject looked a little peevish. Keating responded, a little disingenuously, that the displaced workers found better jobs in the new streamlined economy. There was no evidence that they ever did. There were losers and they were not compensated by the winners.
When you remove an integral part of your manufacturing sector, the effects downstream are both profound and sustained. The Labor Party believes that, ultimately, 200,000 jobs might be lost because the Abbott government stripped the automotive industry of half a billion dollars in support.
That's probably a gross estimate, but it is certainly a punishing psychological blow to an already stumbling economy.
That $500 million might turn out to be loose change given the social and economic damage that is going to ensue in South Australia and Victoria from Holden's decision. You might even say the first job losses are already in the works; there will no more retooling and reinvestment going on in the automotive industry from tomorrow.
The timing of the decision, just two weeks before Christmas, seems remarkably heartless. However, it appears to have been brought on by the Abbott government's mishandling of the issue.
Treasurer Joe Hockey's outburst on Tuesday about how fortunate Holden had been to receive taxpayer assistance, and his call for GM to level with the government about its true intentions, brought about an avalanche.
So much for Hockey's announcement, when the Coalition won the election, that Australians should reward themselves with a joyous and peaceful Christmas. It's anything but now.
Alex Millmow is a senior lecturer in economics at the University of Ballarat.