SPCA workers are cannon fodder in a different war

Something very dangerous is happening within the debate over the government's decision not to 'co-invest' $25 million to upgrade SPC Ardomona's Shepparton plant.

SPCA workers earning around $50,000 a year are being used as cannon fodder in the Abbott government's war against a legitimate enemy – the construction unions that have pushed up construction costs and engaged in corrupt activities.

What is at risk now is what should be a large growth industry – innovative packaged fruit products with strong export outlooks. The industry around Shepparton looks likely to be shut down to allow the Abbott government to present a united front against the union moment (A rogue Liberal spills the beans on SPCA, January 31).

These two matters must be untangled and treated separately. Lives, families and communities are being risked in one sector to pay for the sins of another. While this decision was justified in terms of SPCA's 'excessive' enterprise bargaining arrangements, the company's workers are already receiving pay well below the average manufacturing wage ($67,000), and far below general full-time weekly earnings of $74,000, as Fairfax's Ben Schneiders documented last week.

The wages issue is a smoke-screen. This government does not, in principle, have anything against careful co-investment to stimulate job creation. That can be seen clearly by looking at its actions elsewhere – and the $100 million 'Economic Growth Plan for Tasmania' is a case in point.

That plan helped the Abbott-led Coalition pick up three seats in Tasmania at the 2013 election, and was blithely waved through by media commentators. After all, Tassie's unemployment rate of 7.7 per cent is the nation's worst, right?

Well, sort of. Member for Murray Sharman Stone points out that the Shepparton region has an unemployment rate of 8.5 per cent. Her figures come from disaggregated data from Centrelink covering the City of Greater Shepparton areas. 

Without co-investment from state and federal governments, SPCA is unlikely to put in $90 million to upgrade its facilities, which is why taxpayer-funded top-ups of $25 million were offered by the state Coalition government and the previous federal Labor government.

If the investment does not go ahead, local unemployment will – according to Stone – rise by around 5000 people and hit around 11 per cent.

A wide range of critics of the SPCA scheme have claimed that it is never right to give money to a private company to encourage it to invest in an area that it thinks will be profitable in the long run.

But then the government is not consistent on that point. Yesterday it announced a co-investment deal with Tasmanian fish farmer, Huon Aquaculture – under the aegis of the 'Economic Growth Plan for Tasmania' – in which $3.5 million of federal taxpayer dollars are being used to upgrade machinery in just the way SPCA wished to do, augmented by $1.5 from the state government.

In a statement it said: "The project will provide the equipment to process fresh fish, as well as smokehouses and other machinery for boning, skinning, portioning and mincing. It will also extend the existing factory building, car park and effluent treatment facilities."

Put this deal alongside the SPCA plan and the 'co-investment' proportions are roughly similar – SPCA planned to put in 64 per cent of the jobs-creating investment, whereas Huon plans to put in 58 per cent (see table below).


Graph for SPCA workers are cannon fodder in a different war

There has been a great deal of tub-thumping about SPCA. Is that because it doesn't fall under an official government jobs program in the way the Huon plan does? If so, an umbrella plan should be formulated forthwith.

When I spoke to Stone early today she said funding the Huon scheme but not SPCA was "deeply hypocritical".

"You can't argue processed fish is more valuable to the economy than processed fruit," she said. "They are both important.”

Asked whether there had been any blow-back from party colleagues over her strident stand on SPCA, Stone said: "None at all, because the party agrees with me entirely. This decision wasn't the majority view of cabinet, I know that for a fact." 

She added: "This is about the leadership team wanting to draw a line in the sand for a full-scale war with the unions via the Royal Commission."

Stone is only one backbencher, and she is talking about her own electorate. However, the vigour with which she is pursuing the case of the growers, factory workers and supply chain workers associated with SPCA is extraordinary.

If there is to be a full-blown conflict between the construction unions and the Abbott government, making the SPCA workers 'collateral damage' in the way Stone describes it is unconscionable.

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Wrong again, Rob.
Your statistics include the elevation of highly paid mining jobs and skilled occupations which vastly increases the averages. Award wages are a much more reasonable matter as they take out these factors. Wages are 58% above award! nine weeks holiday and 13 rostered days off. Now that is clear union abuse but if CCA want to pay it then fair enough. However, it's not governments that provide handouts, it's tax payers, and as most tax payers don't pay enough to cover what they receive it then comes down to business to foot the bill. The reality is that business does not want its taxes frittered away on supporting the excesses of trade unions and incompetent company directors.

Tend to agree about the stats Ron. If the average is 67K we are in real trouble. PY year accountants after 4 years study in a suburban firm aren't being paid that much - surely there should be a small premium for the study in the wage?

You are kind of (deliberately) missing the point. Whether the average wage is $74,000, or the average manufacturing wage is $64,000, or even $55,000, the point remains - $50,000 is not over the top and not a case of the unions ensuring their members get paid ludicrous amounts.

And for the Government to boast they will not help business with handouts, whilst doing so with other businesses, is also pointed out.

I wonder how much the Government will pay when 5000 extra people are receiving unemployment benefits in the Shepparton region, how much income tax they miss out on from 5000 workers, and how much less tax they will make as business in the area dries up due to a massive reduction in the income of the population in the area?

But at least they showed those unions who is boss! And punished 5000 people for either being in a union, or daring to sell to a company that has union workers. What a tough guy Abbott is.

Brent, these are taxpayer funds the government is handing out. A grant to SPCA is for the upgrade of private plant and equipment, no benefit or tangible return to the taxpayer. Why can't they borrow the money, at least there will be a tangible return. I know some will say the workers will keep their jobs, but that's not guaranteed, as we now understand with Holden. If anything, it's the farmers I feel for.

The point is CCA can afford to pay 100% of the cost, so why are the governments expected to stump up $50 million, with no or little return on the taxpayer funds. And this is the problem, everyone is going around in circles on this issue blaming who they want.

1. Stick to award payment and conditions.
2. CCA put up 100% of the capital needed by SPCA, it's a private business.
3. Borrow money from the governments, show a tangible return.

We wouldn't be having this discussion if the above was followed, so why can't it. Why does it always come down to virtual blackmail, give us the money or we shut the doors.

The most important point that we must keep in mind is that canned fruit industry will never be sustainable if the average salary is $50,000. It cannot be sustainable simply because there are many similar, "innovative", companies around the world where the average salary is much lower. It might be surprising for many Australian that some of those companies are not in rural 3rd world countries, they are in the US and Europe, (western European countries to be precise).
If your opinion is that the government should have helped in this case to avoid unemployment then in line with this opinion the government should help every struggling business in Australia. Do you think this is a sustainable policy? I doubt it.

So you are expecting CCA to fund something that has dubious profitability and will reduce their share prices?
I'm sorry, but I seriously doubt an American company will reduce their profitability and share prices to invest in Australia purely for the sake of keeping a region employed. You seem aghast that Government should invest to look after its people, and suggest it is the role of overseas enterprise to do so.
I doubt it. The Government have a greater responsibility to look after its citizens than overseas companies I would suggest.
And you are totally missing the point that the Government DOES use taxpayer to fund MANY other businesses and industries - some are mentioned in the article, and others are not (mining receives $4.5 billion in assistance from the tax payer every year, yet it is a VERY profitable business, it definitely does NOT need $4.5 billion of our money). So what makes SPC and Shepparton a special case that they are not worthy of assistance? Is it just coincidence they are more unionised than Cadbury or that fish company?

There is no way that manufacturing in Australia can compete in terms of costs with overseas. Unless we pay employees $1 per day, it is never going to happen. So every company that manufactures here is doing so at their own expense whilst helping our country by providing jobs and paying taxes. This is why they get assistance and breaks. To demand that companies manufacture here and reduce their profitability, whilst also demanding that they do everything to increase their share price, is very contradictory and unrealistic.

Interesting to note also that the Government did NO impact studies on their decision - ie, investing $25 million versus 5000 extra unemployed, less income tax, more welfare payments, greater likelihood of other businesses in the region going belly up with such a high unemployment rate etc, they just responded immediately and angrily. I'm not saying the economic impact is worse than investing $25 million, just that they didn't even bother to study the matter before responding.

Brent, I'm sure you motives are the highest, and I agree that the SPC situation is very sad in many ways. But your arguments depress me. Deja vu. Theyr'e the same as I heard over and over in UK in the 1970's as local self-interest groups demanded govt subsidy, to prop up cot-case manufacturing business that had been failing for years - cheaper to prop than see them close then pay the welfare, etc. Yeh, but no. That path embeds the rot. By definition you punish the success to maintain the failure. They went to far as to NATIONALIZE shipbuilding to make sure the rescue was successful. Total fiasco. Everything failed under the rescue for the same reason it failed before - bad business model; appalling work practices; deep-seated non-entrepreneurial thinking. Korea etc took the lot. With SPC, if it could succeed, CCAmatil would do it themselves. No company wants govt interference if it can avoid it. Like Ford and GM, I'd reckon CCA want out and this conivet thing is a game.

I wouldn't know whether a stupid Enterprise Agreement (now immutable) between aggressive unions and feckless managers is the root of the problem, but it might be. You say "$50k (salary) is not over the top" but by definition, if the business is going bust paying it, IT IS OVER THE TOP. My skilled secretary and some teacher friends make less than that. Just how much "should" a cannery worker make? Obviously, less than they're making for their productivity.

We have to live with reality. Govts can rob Peter to pay commercial Paul, but that path would be into a bog. Best to bite the bullets. If SPC can't live without a subsidy it must die. From that, given nous and drive, can be rebirth. The alternative is that old British model - to expensively prop up the corpse for a while, till the eventual trip to the cemetery.

Brilliant Comments and totally agree with your comments again Mark. No nonscence straight talking the way it is advice. None of the BS we read from the diplomats in journalism these days or the ignorant rants from opposition politicians or the lack of knowledge from the rest.

They do offer financial assistance. But this government has altered the rules. They want taxpayers money show us why.

I'm not a member of Cabinet, but I can guess that the topic of workplace agreements took centre stage, as did the impact of any decision they make. The majority dismissed SPCA submission, that's what happens in a democracy. The other thing that happens in a democracy is those that are on the rough end of the pineapple complain. Remember the only person to speak about these agreements was the minister for industry, and he outlined that wages and conditions enjoyed by workers exceeded industry award. Management are probably trying to put a package together themselves, while unions are not saying a word. It's a fair bet that the minister is right.

You see Brent I don't mind helping others, as long as they also help themselves. The government is taking the same approach. Why can't these workers stick to industry award!

I heard there are only 2,000 odd workers to be effected as a result of job loses, where did you get 5,000 from. As I said, governments can't keep spending taxpayer dollars on companies that won't help themselves.

Secondly, your initial statement is similar to the Holden dilemma. If CCA believe SPCA is unprofitable, there is no guarantee that SPCA will remain, even if funding was available.

As I have said before WHY DO UNIONS BELIEVE THESE WORKERS DESERVE MORE THEN OTHERS. Enough has been said, and the unions have kept quite through this issue, well it now time for them to put up or shut up and back off.

Colin the award used to be the minimum wage for an industry - also the other side of the argument why do employers want to change awards - your argument is all should stick to them warts & all yes??

Roy,

Can you explain to me how you arrived at the fact that "canned fruit industry will never be sustainable if the average salary is $50,000" ? You do go on to say that you are comparing this to US and western European countries.

I don't believe you are comparing apples and apples. Have you factored cost of living? Do you realise that Australia ranks as one of the highest in the world?

http://www.dailytelegraph.com.au/news/nsw/cost-of-living-in-australia-is...

I have no issue with the Abbott government not handing out money to CCA to upgrade capability in the SPCA plant. But I don't believe that wages per employee is the driving factor behind this decision. My view is that it's the chronic under-investment of private companies into their manufacturing capability. Do we really believe that manufacturing plants that are in excess of 15-20 years old can compete with the manufacturing plants you refer to in the US and western Europe?

This is not a left/right wing concept. Let's just get to the facts.

Kryt

at $50000 a year, the income tax is about $8000. For 5000 workers, this is 40 million a year less income tax for the federal government.
New start allowance is about $13000 a year, For 5000 workers, this is 65 million a year more payment from the federal government.
So the closure of the SPCA will directly cost federal government 105 million dollar a year.
I assume Mr. Abbot will put those unemployed workers in working for dole programme.

Last name RON,
Mate if you think CCA wanted to willingly pay then I think you are mistaken.
Mind you CCA should have fought the union on the premise of closing the joint down as is happening now??
Some of their enterprise agreement's are , wet place allowance , cold allowance , container allowance, allowance for holding a first aid certificate , and wait for it "
A BRIGHT CAN ALLOWENCE? " what?
Redundancy payments 104 weeks??, with age loadings 60 yrs 20%, , 20 days unused sick pay, should I go on? I think you would have got the idea by now.
I understand that there is /are a lot more to it than that , but that in essence is a big part i why we are not competitive.
ANYWAY we all know that statistics can lie as in creative accountancy.

So Ron, are you happy to see the workers, their communities and the local farmers and small businesses pay the cost of the excesses of those trade unions and management incompetences ? Wouldn't it be preferable to keep SPC running (here in Australia) producing product that we all need and at the same time haul the union excesses and bullying back under control ?

I would rather see government funds be used to assist farmers in unusual natural events - eg droughts rather than see money given to profitable companies for unprofitable areas of their business. I am confident the farmers were well aware of the potential of supply to one of their major customers.

Yes Cheryl,
Management has a lot to answer for.
Anyway hasn't CCA made something in the order of over $500 ml ? it's their business let them put up the money.

An arrogant and bullying lecture, arrogantly put, and every bit as stupid as it reads.

Most people wrongly believe that "free" trade works. Like financial deregulation, it in fact does not. Rather like a frog being slowly warmed up in water, the steady undermining of our standard of living by sell-outs and sweatshop coolie labour exploitation overseas seems a spectator sport (especially as many goods become quite cheap). Then something unpleasant (like the GFC) happens, suddenly causing lots of aspirationals to be sacked, then brutally evicted from the houses that they'd told themselves they owned. Like walking off a cliff, the climb up is pleasant and restful, gentle breeze, butterflies fluttering, soft grass underneath, excellent views ... it's only the final step over the edge that presents sudden problems. Ask the Greeks, Spaniards, Americans, Irish, etc.

Devaluation alone will not maintain growth, let alone rebuild industry. It must repeat must be partnered with interventionist industry policy. If people like Abetz and Abbott predominate, that is certainly not what we will have.

Cutting wages and conditions will destroy living standards, as Abetz and Abbott and Robert intend. It will also destroy tens of thousands of small businesses that live or die with the industries the Noalition is so anxious to destroy.

While various issues are affecting the performance of manufacturers, ensuring a minimum size through tariffs and other protections is essential for an industry base to exist. As the AWU noted "in order to invest in and implement innovative change, firms must survive in the near term - i.e. you can't innovate if you're dead.” You want to see our future as the Noalition would have it? Look to the fate of the ordinary people of Spain, Europe, the U.S. or Britain.

We Need Protection - the tariff barriers and interventionist industry policy that so threatens the comprador class.

Yep look after farmers so Coles & Woollies can rip them off instead of Unions

SPC is a large growth industry - but not without a $50m co-investment from the Government?

Personally, if "innovative fruit packaging" is profitable, CCA and SPC will invest in it regardless of whether the government contributes, as the difference will only be a lower ROI. If SPC requires the government's largess to return a profit, then the profit comes from the $50m capital depreciation and not real revenue

If I can follow the debate regarding the proposal SPC Government support it appears to lurch between worker entitlements and the logic of direct government assistance to a manufacturing operation.
Re worker entitlements it appears that the Government is seeking that SPC workers give up some of their entitlements. Fair enough if that helps the company and supports the financial basis of government assistance. However in doing so it might be good if Government members show leadership and give up some of their entitlements. Many of those Cabinet Ministers arguing against SPC workers are still entitled to life time pensions.These were negotiated in the good times of a distant past and are not attainable today.
Re Government assistance to SPC it seems logical that this country needs a development fund to provide equity to business affected by the $A, quantitative easing, manipulation of the Chinese currency etc. etc. Forget grants and cheap loans. Rather equity into businesses by a national fund properly managed on behalf of taxpayers seems a sensible solution.
If we learnt anything from the GFC and the policies of major International Governments it was to take equity in struggling businesses and sell out when conditions improved. Even the Irish government worked that out.
Finally and importantly it is important to remember that the Howard Government paid back most of our Commonwealth debt by selling public assets. To pay back our current growing debt we now need to start acquiring assets as they are cheap and affected by cyclical factors. SPC seems to fit into that category.

We need to acknowledge that SPC is already well established hence why does it need further government assistance. Likewise if the parent company is making adequate profits then again why the assistance. Government assets are infrastructure based - not really tinned fruit. The SPC issue is complex because of the high dependency of the community and associated industries. But this is a possible signal of an opportunity for another group.

Good point - the government should also look at their own taxpayer funded entitlements. How did they give themselves a massive pay rise over the past few years - just pointing to an unaccountable committee that made the decision. Then there is The Senate - aka "the house of review" that failed to insist on business case review of the the "commercially" designated NBN - and for this they should definitely face some consequences for not doing their jobs.

John,
I am all for our Gov;t helping people like our farmers etc , but NOT rich foreign owned companies such as ACC
Why should they get rich at our the taxpayers expense.
I see nothing wrong in cheap loans as a means to help our farmers but not sure about people like ACC

Yep lets not subsidise big business by discounting fuel taxes, guaranteeing deposits .........

In some way Rob, you do have a point. However like most of your points, they are quickly swallowed up by left wing rhetoric.

This it's not just about wages Rob, it's about these agreements that are agreed to and signed by unions and management. SPCA just happened to be the next company to put their hand out for money. It's always been an easy way out for management, sign the bloody things and lets keep the peace, the government will give us money when and if we need it.

Abbotts changed the rules, you sign these agreements, that your problem. But then my problem is that 80% or more of the workforce in Australia can live within the award, so why is that remaining 20% or there abouts different.

This whole thing blew up when the Victorian government effectively banned Lend Lease and Leighton holdings from government contracts because of these sweetheart deal, as they were called, were costing the government up to 25% extra on building projects. Holden was the final nail in the coffin, seeking $150 million to stay trading. However it appears a decision was made in Detroit, before the proposal was rejected, that closure of the plant was a done thing.

Where do you stop. I feel for the workers at SPCA and the farmers supplying the plant, so is the answer, we give SPCA $50 million (state and commonwealth) and send a message that all's ok and unions can continue to seek higher then award wages and better award conditions for their members, the government will help out in need with tax payer funds. No it's time for the unions and management to do their bit for Australia's economic wellbeing. I am not asking for third world wages, just stick to the award you fought so hard to get.

As you said the workers of SPC shouldn't have third world wages. SPC problems would be solved if the average salary of SPC's employees will be equal to the salary of employees, working in similar industry, in Germany for example. Currently the income of SPC's employees is much higher.

Sharman Stone is right. If the government is 'doling' out free money or even cheap loans to Huon Aquaculture and Cadburys it is a disgrace. Who do these public purse bludgers think they are ? This is not communist China or Russia. The government should not be co-investing in any companies The suggestion that government has to invest in businesses to encourage employment and generate taxes would make Mao, Lenin and Castro all very proud. Is this how far Labor has poisoned our thinking ?

Ahh,..........I thought Tony was Liberal?

The thing is Rob has never managed anything but spends his life writing dribble of a socialist nature. He does not understand that SPC is badly managed and has been allowed to become so high cost and with low productivity that if it fails that the way it should go. Just as the component manufacturers for the auto industry will have to adjust so will the orchardists, Farming will not disappear as a consequence. Maybe it will return to be a cooperative venture with no unions involved..

Good on ya Graeme you've actually worked in the last 50 years producing something of tangible substance to provide for the family ?

Rob,
I thought it was a war against mendicant big businesses who engage in cartel activity by getting into bed with big unions to create barriers to entry for potential competitors. If there are "strong export outlooks" for " innovative packaged fruit products" (and I take you at your word) then why is this transnational corporation got its hand out for government money?
If there is a market for this product then the job of government is to create circumstances in which any number of competitors can flourish. It is not the job of government to pick favourites by cashing up one entrenched operator with sclerotic management practices who has failed to make provision for the renewal of its plant and failed to market its innovative product (as you call it). This will ensure more, not fewer, jobs for the people of the region.

Coca Cola Amatil is a profitable company, why isn't offering to repay the moneys over say 10 years with the an interest equal to the REBA rate?Does it really make sense to subsidise the US formula controlled company?

Maybe the Government should save SPC but put a diabetes tax on soft drink!

Not mentioned here is the jobs required after the investment. The plant now has 1,200 jobs. One might expect a good portion of this labor to replaced by capital and machinery - then how many jobs will the new operation have? I tried to look this up.

If there are say 600 jobs on offer at the new facility, instead of the 1,200 then this just may translate into half of the indirect 3,200 jobs that would go if the plant was shut. So with this math that would be 600 + 1,600 = 2,200 jobs anyway on the line even after upgrade. ?

In this case why must the government shield the shareholders of Coca-Cola Amatil from the loss or investment, or shift of funds from dividends to this investment?

Robert. the labour party could have turned the area into a special trade zone, that would require legislation to mandate, a lower company tax rate. They didnt, so one can only assume that lower company tax rates are anathema, to labour.

Now that CC amital own SPC, then why dont they expand production?

By the way, whats happening to the three coal mines that are being closed in NSW due to the labour rights, corrupt involvement.

LEFT right bullshit, is crap, for people that dont think. It is just to supply poor journalists with a controversy to write about. Bloody lazy.

We need journalists that encourage people to think about how Australia can move into the 21st century.

If SPC is a viable business in a great industry with great potential, Coca Coca will fund it. Why is there even discussion about a big profitable company wanting taxpayer money?The detailed analysis of the granular issues misses the main point. The sooner we return to free enterprise and the end of corporate welfare, the better. Government (and journos who live in a different world from the rest of us) should get back to reality.

I am surprised with all of the CCA-SPC comments that no one has asked the question did CCA really expect to get a Government hand out, or was it all a furphy to give them an excuse for shutting the plant down? As has been suggested CCA would have found it is much harder to run a food manufacturing plant than to run a soft drink manufacturing plant. I would even guess there would be a much bigger profit margin in soft drinks and a lot more water used than in processing food. My years as a chemical formulator can see that this might be what has happened. I feel the situation could be that CCA has found the type of manufacturing done by SPC is not to its taste, and they want out. It would not look good to just close it down so why not create a situation where you can blame the Government.

Like others I hope the plant can be saved but not with tax payers money. Perhaps for this to happen it will need the growers and the staff who know the industry joining and making a take over offer. They could run the business as a food manufacturing factory should be run.

The SPCA employees are not "cannon fodder", or victims of friendly fire. They are victims of a methodical perversion of an (anti)-industry policy. So far, all industries denied government assistance have had employees who union members.

A union member in the eyes of our government is equal to some dollar value in donations to the ALP. An unemployed employee is no longer pays union membership fees. Defunding the ALP, by weakening unions is the real goal of this industry policy.

There is a paradox in such an approach. When a person is at home he is a hard working Australian family struggling to make ends meet, worthy of welfare support. When the person is at work, he is a lazy parasite, destroying the sustainability of industry. What make this strange is that the third major role for this person is voting.

Alan, You cite some of the tricks that the current government may be doing to the unions. When Julia was in power she did similar tricks by loading all the IR tribunals etc. with union appointees. Tit for tat, Australia loses.

One big problem here is that the unions are running SPCA and bleeding it for all they are worth and as someone suggested, CCA may want out and the government is a convenient and almost willing scapegoat. The culcha wars go on forevva. lol.

Not quite tit for tat Keating helped set the unions up as did labor in Victoria for the sell offs - Howard & Kennett respectively tagged teamed in fresh and beat up a weakening opponent.
Bottom line unless you have millions & lobbying power - worker or small business in getting screwed.
ACCC = Big Business Buddies - happy to see self regulation, like letting the kids loose in Cadbury's and saying please don't touch the chocolates

Abbott had better have a clever Plan B here, would be total economic vandalism to see further orchards ploughed under.

Let them close it. Pay out all of their workers at their entitled rates. The government can legislate and take the site back off them - they don't want it after all. Call it theft - or pay them a nominal amount - no one else will. What's a factory in Shep worth??? $500K be plenty. Then they can loan $100M over ten years @3% to some farmers Co-op to retool it and run it in opposition to CCA. Re-hire all of the staff they want/need to run the new plant - might only be half of them. But as the factory is still running there is no loss of employment in the district. Probably only 200 or so of those that do not get picked up by the new employer can go on schemes to retrain and get benefits - whilst keeping their payments from CCA. After 12 weeks they can get the rock and roll. Only loser out of that is CCA. Fed money at 3% is cheap. Prefer they loaned my money to farmers than gave it to a company making $200M pa....

It is not the role of a government to save private enterprises!

In a real market economy, the role government shall only best to play to facilitate providing an efficient infrastructure, an ethical business condition without major entry barrier and fair competition of an industry. In a market economy, firms compete and ineffective & incompetent enterprises will eventually go out of business. If an industry is profitable, enterprises will invest & enter the industry.

I would think the government will waste money in subsidising those ineffective companies and incompetent workers like SPCA. I would think they will sooner or later go out of business for not being competitive.

Fair to say, the government still needs to play a role in situations where market wide risk is high. The most profound example is the rescue of the AIG by the US government & the FED. But the US government did not hand the funds out free and the US government had eventually been paid back most of the money after selling the equities of AIG.

The agricultural sector is important to us, both the government & ultimately the tax payers like us will be paid off eventually (tangibly or intangibly) if the industry gets out of a crisis. Though the type of vehicles and instruments to help out the farmers are yet to be discussed and debated. No doubt the goal is to help out an industry that will pose a high risk to lives but not to benefit only a small group of people or enterprises.

So I don’t think SPCA is qualified for any assistance that is worthy a discussion.

Did you know that the farmers recieve less than 20 cents for the fruit that goes into a $3.50 can.

Well, it took all of 5 full years.
After bailing out practically the entire global system with trillions of dollars, guarantees etc. (we are all familiar with, so why go on in detail), the Australian Oligarchy has decided "entitlements"(whatever that means really) Are Not Sustainable. Wow, hides like rhinos.
Currently its SPC work practices. Next, or concurrently, any and all welfare recipients. Then the poor, then the middle class. They will be blamed for their predicament.
Choices don't matter in a rigged system; or a truly random one. But you will be blamed anyway.
I cannot take this country seriously. Tragic, yes, seriously, no.
Take a look at ABC's FactCheck regarding Kevin Andrews to highlight that contention.
To conclude, am I to accept that below average wage cannery workers are destroying Coca Cola and the nation with agreements they themselves signed.
Straight out of the late 80s/early 90s play book.
Living standards are about to drop, continuously from here on in, but because of advanced technology, automation and developing country pay rates, not "entitlements".
Playing the blame game is for passive acceptance of Globalisation theory, TPP etc. if you can't make it work for you, it's "your" fault.
Seen it all before.

Martin, Every coin has 2 sides. Globalisation makes us richer as we buy Asian goods made with Asian economy of scale and Asian wage rates. Cars, TV's, etc are much better - but much cheaper - than 20 years ago. But all else being equal it loses us jobs. Early in the piece we have the option of buying Asian, or buying Aussie at twice the price - and WE buy Asian! "But I can't afford to buy Aussie" is often the cry. Well, we are truly richer than the last generation, and we certainly could have afforded to buy Aussie, but wanted all the other things that buying Asian would release cash for - so we stoppped buying Aussie, then the factories closed, our sons can't learn a trade, etc. WE DID IT. It's not a capitalist conspiracy.

With our current mindset, manufacturing in this country has not a hope of competing. Witht he complicity of Rudd/Gillard the Unions have gone backwars since Hawke/keating. There is excessive regulation at every govt level. Starting anything up must feel like wading through mud. Why would you bother? Legions of paid nuisances telling you you can't do things. EIGHT WEEKS for my local council to tell me I can't put up my choice of fence, and another 8 weeks as they hum and hah over a succession of options because we are in a Heritage Area (just the past 20 years). A whole delicious new industry of regulation, all negative. they don't help me put up my fence, they sit there and say NO. My ground floor office, the same for 30 years, has 3 rooms and rapid egress. Since 2005 I need - a fire plan, 3 extinguishers and a yearly inspection. We have gone mad. Business pays for this rubbish every day. We are strangling initiative.

Living standards in this country MUST DROP because we've spent the mining boom money (and more, with increased borrowings) and what we sell hs gone down in price and what we buy is going up (the falling dollar). That is not a conspiracy, it's ARITHMETIC. We need to stop bitching and FIX IT.

Mark, thanks for an interesting response.
I agree with much of what you say, although some of it up to a point.
Are you saying that if I buy an "emerging market" TV, I will be richer? I would have thought making the TV, and selling it, would only be capable of doing that. If you meant living standards may rise because of cheap goods, why that's true. But owning an ipad won't pay the mortgage, food, rent etc.
Yes, cheap goods import deflation. Remember, globalisation lowered the barriers for foreign goods and the path of least resistance was chosen, as was known, and hollowed out industry. It was never about Aussie made or even patriotism. To my knowledge, that doesn't constitute a "conspiracy", just adherence to the dogma of globalism. Beyond dispute and not even controversial as a fact.
As far as blaming the victim goes, that a tried and true method.
Do you think "Spin", PR firms or "perception management" is a conspiracy? Or doesn't exist. Or perhaps you think it just doesn't happen in this country?
We live in a late stage of capitalism; that of global monopoly. Lots of losers, a few winners. That's why public opinion must be manipulated to accept ends antithetical to the general population. Mark, please, this is 101 stuff.

I even gave an exact example via FactCheck. No mention of that.
You say FIX it. I say FIX what? The problem needs to be defined first, and SPC is a contrived example of what the problem isn't.
Globalism, Advanced Robotics, Automation, 3D printing, all of which is fascinating, is causing the anxiety now the boom is over. So let's be honest about it. No matter what SPC does, it won't compete against a Robot cannery in Thailand, the Oligarchs don't want tariffs etc, so the only way is down, for standards of living. On that, we agree.

Martin and Mark,

As I have posted elsewhere...
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Reading between your lines, it seems that you think the perpetrator of these supposed wealth distribution crimes, is Capitalism or Globalisation?

Perhaps.

There is one fundamental premise of Capitalism which does not exist in the global system, which is the basis on which the proper functioning of the system rests.

The price signal is false.

Unilaterally false.

This statement raises a number of supplementary questions.

Who's to blame? what price signals? where is this going on? how long has this been happening? what can we do to stop it? blah blah blah.

All roads lead to central banks and fiat money.

The primary price signal in the economy is that of money.

That is why governments and banks seek to control it.

It is the manipulation of this signal plus the fact that under fiat money fractional reserve banking system, the creation of credit and debt is effectively not limited, that wrecks natural order, natural balance.

If you are looking for a suspect upon which to press charges...

Central banks & fiat money.

Guilty on all counts.
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The link below is to a quite recent book which I have read, which greatly enhanced my understanding of the global fiat money complex and the role that debt, credit and government play.

I can highly recommend it, and based on your posts (above and historic), I am sure the two of you will enjoy it.

Link is attached: http://digamo.free.fr/duncan12.pdf

KS

KS
Thanks for the link.
Had a quick peruse. Looks excellent.

Just re read your post KS, and for the record (can't speak for Mark of course), but certainly capitalism, I have no problem with, and any intimation that I do might be interpolation.
I maintain we don't have capitalism of much of a fashion. Like I say, we are in the monopoly stage and it aggressively asserting itself. To say what we have now is capitalism is like saying India was capitalist because of the East India Company.

Hi Martin,

No worries and thanks for the clarification.

A good description of our global 'system' is, fiat crony capitalism.

KS

Oh please folks lets have a good at hand outs & similar industry stimulations
- mining industry fuel concessions
- 1st home buyers & other building industry stimuli
- banking guarantees
Now ask yourself who actually benefits - which end of town - not the butcher, baker & candle stick makers end that's for sure

What a nonsensical article!
First of all, why would the taxpayer be willing to bail out a major company like CCA?
Second, CCA has a number of options of how to deal wit SPCA, they can raise additional capital from shareholders if necessary, they can borrow capital, and they can sell the cannery.
Third, most of the workers at the cannery are unskilled labourers, which suggests that a wage of $50k is considerably over the top, even before we look at all the other benefits. The minimum wage in Australia is currently $16.37, so wages over $20/hr are too high for unskilled work!
Fourth, comparing a small grant to a privately owned company with the rejection of a bail-out request from one of the largest companies in Australia, is ridiculous! This is not to say that I agree with the $1.5m grant to Huon Aquaculture, which had been approved by the previous government.
Fifth, Sharman Stone's outrage appears to be motivated by concerns over her own future, rather than that of a few cannery workers and growers in the region.

Wages are too high, but houses are not - interesting. Following your logic most poor and young Australian's will be living in tents, and at the rate this Govt is throwing various industries onto it's ideological fire, probably on the dole as well.

$25m co-payment towards an industry that has been gutted by the high Australian dollar, the benefits of which, thanks to the MRRT the likes of Gina were the main beneficiaries of, or $80m in welfare transfers to the 5000 employees (not including an ancilary layoffs in local businesses also sent to the wall) likely to be pushed onto the dole for the next year and however many years after that.

Yes, Stewie, wages are too high for unskilled labour!

Also, before you jump in with your guns blazing, a brief search of real estate in Shepparton would have shown that you buy houses from as little as $150k.

However, apart from all this, SPC is wholly owned by a large and very profitable parent company. If CCA wishes to disconnect from SPC, it can do so by offering SPC for sale and letting another operator run it. A farmers and workers Co-Op may be in a much better position to run the business and make it profitable. Companies sell of underperforming businesses on a regular basis.

Yup - large multinationals constantly selling under performing businesses on a regular basis, and are happy to invest in minor brands, just look at how the once thriving brand of Blue Tongue beer has been so encouraged and sponsored. I remember CCA coming to my home town and buying the local soft drink producer: "Oh yeah, we'll invest in the brand and guarantee local jobs." Webster's soft drinks bottled it's last bottle of creamy soda less than six months later.

The mere fact that CCA have kept SPC alive this long is an act of almost unfathomable corporate charity, way beyond any reasonable expectations based on past experience. Probably the political bunfight that would have engulfed the company had it attempted to close it under any other pretext, would have been far to unpalatable for it.

Oh they could sell it off to the growers or a co-op (Oh... damn - that's right the boomers corporatised most of the countries co-ops and gave themselves the shares), just like all those other manufactures have been doing to unprofitable businesses in the Australian economy... only they haven't. They're been closing them down and shutting the doors for good - once the knowledge in an organisation like that is dissapated it is very hard to rebuild it with the snap of the fingers you're suggesting in our high currency environment - otherwise an already shrunken Australian manufacturing sector wouldn't still be contracting at a world beating rate.

What incentive do you think CCA has in maintaining a regional producer at one of it's subsidiaries, in a country where it's leaders are too stupid and wrapped up in their own hubris and self importance, to realise that they're caught in the middle of an international currency war?

This lies at the heart of SPC's unprofitability, its been gutted by the Australian dollar, like every manufacturing industry in Australia has been gutted. It hasn't been gutted by its workers, it's been gutted by our lazy indolent politicians, aided and abetted by ignorant self interested segments of the electorate, the like of which you are a shinning example.

What is your brilliant suggestion to combat our newfound uncompetitiveness? Devalue wages and labour - in an economy that has been allowed to have run away local inflation for nearly a decade, that have inflated the cost of basic services to astronomical levels, cunningly hidden behind a cloak of tradable goods (imported) deflation.

Frankly I'd half like to see the sort of wage deflation policies you're advocating, nothing like cutting off your nose to spite your face - how long do you think we'd be able to maintain those high house prices that form most of your wealth in such an environment? Oh, unlike your dismissive suggestion that those plight of those SPC workers to take a pay cut, I'm sure you'd fight tooth and nail to ensure the Govt did everything possible to protect your house prices, or guarantee your cash savings in our imperilled banks.

Yep love your sentiments Trudi - after it is only a few cannery workers and growers in that region.
They are insignificant in the scheme are they not?

It is not the role of a government to save private enterprises!

Unfortunately the government has taken the initiative that it is not in the role of the government to protect them either. The problem with SPC began some time agao when they asked for special help against dumping and emergency short term tarrifs to help protect the fruit growers and the industry. This was possible under the free trade agreement. The government decclined their request. Yes perhaps the company is unionised too much and there needs to be changes but all things need to be looked at. Perhaps the government should have called it compensation for their trade policies.

If this government is to be consistent why is it handing out diesel rebates to the big mining conglomerates?

Trucking companies pay a diesel tax to pay for the damage that they cause to the roads.Heavy mining machinery and farm machinery arent operating on public roads.The issue is consistently misrepresented.

Ah! So we pay our petrol tax because of the damage we do to the roads? Rubbish!

Fuel excise - petrol or diesel - is a means of raising revenue. Note how Graham carefully failed to mention that its cost is tax-deductible for businesses.

Obviously the first step in introducing competitive neutrality between road and rail is increased investment in the interstate rail network, which in 1999 was estimated would yield up to nine dollars in benefits for each one dollar invested. Yet the continuing investment imbalance of 18:1 (which under Abbott the Hun may become infinity at the Commonwealth level) and such subsidies as the Off-Road Diesel Fuel Rebate is moving further away from competitive neutrality.

Graham didn't mention that either.

Rob articles on SPCA are right on the ball,
Ken suggestions make sense
with Grant postings these are a good indication about what is happening in Australia's workplace and round the world.

SPCA shows all the contradictions of two speeds wage war(flexibility and re-skilling vs wage growth) facing a super VL specialist(mobile factory floor and tax differentials).

Australia real unemployment rate is 20 to 25% on standard OECD calculation methods and the level of under employment(people not using their skills or working less hours than they wish to) in Australia is between 25 and 33% on OECD calculation methods.

The next wage growth is not sustainable without us manufacturing the next Airbus A4xx or the first Spatial Station to Alpha Centaurus, or being the next South Korea or Chinese big Tech groups development.

Our Strengths in Mining skills, markets and finance industries thanks to the super in part, can only take us to some places, as our population increases,
We have to be able to grow the cake !
...and to do that create new job opportunities and bring down our transport costs.

Trudi. With over 70% of the vote at the last election, I am sure she can't sleep at night, thinking about her future. Wake up you rusted on LNP supporters. Not everyone who disagree with you is a left winger. As for the government motivation, I think I will go with Sharman Stone that it is all about starting a fight with the unions. But of course, most of you now better than a party insider or are cheering on the sideline anyway.

I have not seen so many comments from supposed experts on whether government should provide assistance to SPCA. From what I know of typical canned fruit and vegetable cost structures the cost of raw material in a can generally is well above the cost of labour/case and excess union backed labour hourly rate should not be the problem currently stated. Concerns of long worker holidays does not consider the fact that fruit packing during the season can be a 6-7 days/week job, and the extra days worked are given back off season. Keeping the canning and sterilising functions of the SPCA plant working year round with new products could make a big difference. Baked beans and other products already take up some of their off season slack. Back in the 70's the local Tatura irrigation research institute came up with ways to mechanically harvest fruit growing on trellises and outlined ways of introducing intensive dairy farming (cattle fed in sheds) for the region. Only a few SPCA growers have introduced trellises, and with good results. Intensive dairy farming has not been considered here but it is going well in New Zealand. Milk out of 10,000 cow intensive dairy farms in Arizona USA is selling in their super markets at 50c/litre compared to ours at $1-2/litre, depending on supplier. I only introduce milk because 30 yrs back SPC did make a quality canned milk with supply from local dairies and utilising equipment in their own plant. With demand for dairy products in Asia now high this could become another offseason line. Previous resistance of grower unions and growers themselves have led to little effort to adapt to a changing market which is potentially effecting their pockets now. If we are going to put money into the undoubted future of the food industry, it should be with industry designated research assistance to improve crop and product yields on the land and in plant that enable lower priced finished goods that can begin to attract local & overseas investors. Many can still see Australian agribusiness as having a future in the Asian Century.

Agreed that is a good start, a case of moving from pepsie the sweet drink to shares in pepsie the cow, good derivatives and you can milk your investment rather than get milked by the tax man with special tax exemption zone as Ken mentioned in area critical for new business development, the food industry is one of them.

Unfortunately can't see the brains to develop strategic policies on our legalmentarian benches, a lot of them will just gobble the wrong advice(and they are many lining up) eagerly.

One can only criticized wages, but not having flexibility and skills in farm, food business or manufacturing alike with the right incentives at the right place is more critical sometimes, then we get high wages and high returns and more jobs.

Well done. A balanced account, where at least the value of our capacity to be part of the food chain is weighed in a credible manner

If Ms Stone is so concerned about the welfare of those who elected her, she should either Cross the Floor or resign from the Liberal Party and become an Independent. Given that she apparently romped home last time round with a 70% vote, then the threat of her doing either should galvanise the Govt.

That she stays in the Liberal party shows where her real allegiance lies.

Its not unusual for a coalition backbencher to speak out on a local issue.As for cabinet numbers well thats conjecture.But reading Grace Collier today its apparent that the SPC enterprise bargaining agreement is a shocker and both SPC and the union are being economical with the truth.