You have got to admit it: this is some government. When Tony Abbott became Prime Minister on September 7, he proudly announced that ''Australia was open for business''. It met with so many hurrahs, he repeated it. No new federal government has had such a run of bad economic news since the Scullin government formed power in October 1929, just two weeks before the Wall Street crash.
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The key difference, though, is the economic troubles afflicting the Abbott government are all self-inflicted. Holden's decision to go last November was precipitated by Treasurer Joe Hockey taunting the car manufacturer to make up its mind. The next day Holden announced it was going. It put pressure on Toyota to do likewise, even though it had made a fair go of exporting its cars and enjoyed a bigger production run. In fact, Toyota was doing everything the government economic advisers within the Productivity Commission wanted: exporting, innovating and producing a family car - the Camry - that was popular. It was indeed ''hip to be square''.
It is not clear if the Abbott government did enough to secure a long-term commitment from Toyota. The three car makers will be closing up by the time the next federal election comes around. However, the fall in Ford's sales and the attendant redundancies of 300 workers last week might mean that it may close down even earlier.
One wonders how Abbott's ideological godfathers, B.A. Santamaria and John Howard, would make of the perishing of the car industry. Both became ardent protectionists when Australian industry was threatened.
The amount of hot air over this industry, whether it be in the form of official government inquiries, reports, consultative architecture or advisory boards, is monumental. No industry has been exposed to more official scrutiny. Now, in the space of a few months, the car industry is gone. Make no mistake, Australia has lost one of its most advanced, high value-added manufacturing sectors. Parts of Adelaide, Melbourne and Geelong where the car plants and component firms were clustered, will take a long time to recover.
Most economists and commentators shrug their shoulders and dismiss concerns that as many as 50,000 jobs will be lost. Those who say it either had previous appointments with the Productivity Commission, are free trade advocates or cosy with the neoliberal agenda.
For 40 years the Productivity Commission and its earlier forms, the Industry Commission and, before that, the Industries Assistance Commission, has feasted itself analysing the protection and assistance the car industry enjoyed and why it was always going to be in their minds economically inefficient. It was triumphant years ago in convincing politicians that assistance to the car industry be transparent and take the form of subsidies rather than tariffs.
In its latest report, the commission took the line that no extra assistance to car manufacturers was warranted. The final report is still due. It is all academic now and the focus has moved to when the Coalition government will scrap the 5 per cent tariff on new cars along with the tax on luxury cars. Australians will soon be able to enjoy cheaper cars, period. Of course they won't have one bit of local content. So who cares?
Well, many, including old Australia and those with a concern for where this country's economy is going, will not take comfort at what has happened. The idea that the displaced workers and displaced capital will find employment elsewhere is put forward more in hope rather than reality. One thing for sure is that they will never have the same jobs and the same pay they once had. Those commentators who take a blithe view of things such as letting a big chunk of your manufacturing go overnight should re-examine how Margaret Thatcher's market fundamentalism destroyed Britain's manufacturing industry and split the country into two halves.
Alex Millmow teaches economics at Federation University, Ballarat.
