The other day the Raff read a snippet in a leading national newspaper that the Treasury saw the hollowing out of Australia’s manufacturing industry as a bit of a concern. Crikey, this is something most of us have worried about for over a decade. Has the current crop in Treasury just figured this out in 2011? This is probably all you can expect from the current inept team running the county. It’s a pity the only focus is stripping the wealthy to give to the poor, sometimes deservedly so. Government better figure out that the resource sector is relatively small in terms of the actual number of bods needed.
The unemployed and disenfranchised are going to stay that way as Labor waves good by to jobs across the water; gone and probably permanently. The very long-term outlook for Australia is gloomy without champions emerging for the manufacturing sector; at this point in time there are none in the spotlight.
Any of Henry’s readers who read the last Raff Report - linked here - will not have been surprised at the recent pessimistic economic data from the US. New orders for durable goods peaked months ago. Depending on the item, orders lead industrial production by 6-9 months. This means that manufacturing is yet to soften further before a recovery and the US unemployment level is set to remain stubbornly high.
The Raff notes with interest that the share price charts of most major miners not listed on the ASX, but listed in London look as though the trough is passed. These companies include ENRC, Kazakhyms and Antofagasta; these are large miners. If the London and European fund managers are back buying these names again that is a good sign for the market which is no doubt buoyed by the too familiar China and India growth story.
Prices of commodities are highly leveraged to marginal changes in demand or supply. The Raff has recently returned from a 6-day visit to Malaysia, 5 of which were spent in the jungle visiting an area where illegal miners are making a good fist of gold mining. However, of particular interest were new iron ore mines and teams of Chinese seeking to do deals. Dense jungle covers many hidden secrets that are starting to be uncovered. Malaysia has iron ore and coal, is more favourably located closer to China than Aussie producers. The extraordinary high prices for bulk commodities will not last forever, yet the current Aussie Government is relying upon resources for Australia’s future. Instead of worrying about set top boxes for pensioners, perhaps it might be better to figure out a strategy to save and build Australia’s manufacturing base?
The Raff is heartened to keep hearing that climate is going to be brought under control; what utter bollocks. It is difficult to get a fair debate because many prominent livelihoods that depend on various government grants for supporting climate change, and where politicians dishonestly push for a new tax to balance budgets. Every geologist knows that climate has been changing ever since earth developed a climate. If one was only to consider CO2 as the enemy, then the only debate is how much of that gas is being produced by mankind. Perhaps we should ask how much is produced from marine and terrestrial volcanic activity? What is the impact of sunspots?
There are many questions that need to be answered concerning the allocation of blame for rising CO2 levels. In the long term the human race will only be a footnote in the history of the world, assuming there is anyone around to write it, perhaps equivalent to two layers of thick paint at the end of a 20-metre pathway.
This is not to say that the Raff believes that humans should add to pollution caused by natural events. Rather than tax the bejesus out of all us, perhaps a practical approach is more appropriate. Consider this; so far, only once this year, the Raff has driven his 1983 Range Rover into the countryside. Over several days four wheel drive and low ratio were needed for less than 10km for a total distance of 900km. Nearly 100% of annual mileage is used between home and the station for a 40-minute train ride into Sydney. The waste is massive with short driving hauls chewing up 11mpg (21.6 litres per 100km); the average on open road is 15.5mpg with a maximum sometimes of 17mpg.
At least the underside of the Raff’s car is caked with mud that needs hosing off. The sides and back of the vehicle are scratched by bushes and trees. The same cannot be said of the vast number of 4X4s clogging up the parking bays in the local shopping centre, or used to taxi kids to school. To be fair, a small number of these vehicles are used to tow trailers etc that are too heavy for a Commodore or similar car to tow safely.
If the Government was fair dinkum about CO2, the Raff’s car should be banned; yep pure and simple, if a gas guzzling behemoth is not being used principally for what it was made for, then it probably should not be registered. The focus is on exhaust emission but the cost of imported fuel is largely ignored in the debate; if only Australia was self-sufficient in automotive fuel. Just imagine the balance of payments without coal and iron ore exports?
The Government does not have the fortitude to regulate vehicle ownership. Instead, It’s easier to impose a tax argued on what is being perceived, and marketed as a terrible danger, namely CO2 as the sole cause of climate change . Instead, all eyes should be on H2S because that’s a gas that will kill us all above a critical level.
So what’s the Raff going to do about his old Rover? The vehicle has 330,000km on the clock, and despite being in excellent mechanical condition is perhaps worth a mere $3.500. Here in lies a problem for owners of similar vehicles; it simply does not pay to do anything until the old jalopy fails to proceed or is otherwise written-off. A good solution would be to allow registration of 4X4s for very short periods, perhaps by the day to haul a boat, or by the week for family holidays.
Many police vehicles are fitted with number plate recognition where unregistered vehicles and drivers without a licence are identified and removed from the road. Controls already exist to enforce short-term registration of vehicles.
The Raff’s solution is to buy a used Lexus 200, and mothball the guzzler between times that it is the appropriate method of transport. The payback on slashing the day-to-day fuel consumption will probably be around 4-5 years; and this beats the loss from the depreciation of a new vehicle driven from the showroom.
For most families owning a large 4X4 makes no sense whatever. But very short-term registration makes a heap of sense. Forget CO2, let’s take direct action and cut Australia’s imports of light crude and refined fuel.