The news today is that Woolies is considering ending its agreement with SPC Ardmona for locally canned fruit.
Understandably this has led to a fresh out break of the old debate – whether it is patriotic or the right thing for Woolies to do – and the related skirmish – whether it is the duty of Australian consumers to eat Australian tinned fruit.
The Glass Pyramid is deeply concerned when these ‘red herring’ debates take place because they completely miss the point that the only reason Australian industry and workers are struggling to survive is because a massive reverse tariff is imposed on ALL Australian workers and industry when the government and RBA/APRA allow the exchange rate to be driven through the roof by torrents of unproductive capital inflows.
Our trade rivals in Europe, Asia and the Americas are driving unproductive capital to our shores in the largely successful attempt to drive our exchange rate higher and theirs lower.
They do it blatantly and have done so for years yet our politicians and policy makers DO NOTHING and instead stand by as yet another industry or factory shuts its doors.
Below are the comments made by a Glass Pyramid operative at Macrobusiness this morning on this important issue. Follow the links to read the comments in response.
Frank is quite correct.
No one should be expected to make a purchase on any basis other than price unless they choose and have the means to do so.
The issue is whether Australian production can ever hope to compete while the exchange rate is being driven upwards by the future eaters in the capital cities sucking in unproductive capital inflows by the boat load.
Tell those useless bludgers clustering in the capital cities that they can’t access the NIRP/ZIRP capital flows from our trade rivals to play property speculator and the exchange rate will start to fall as the flows dry up.
Tell those gooses down in Canberra if they want to run deficits via the facade of “bond sales” they are only allowed to sell their government bonds to registered Australian citizens rather than foreign central banks and other plunder funds and the exchange rate will start to soften. Paying for funds what Australian cities are willing to accept might cool their spend thrift ways a fraction. (Note: Deficits for the most part should be directly monetised by the RBA anyway)
Tell those sell out Oz merchants (like the Robb-er) that we do not allow mere transfers of title offshore of agricultural land, infrastructure or other significant capitla assets – instead we will only allow joint ventures up to 49% foreign ownership with oodles of skill and technology transfer and the exchange rate bloating inflows will slow.
The only protection Australian production needs is from the unproductive capital inflows that are distorting our exchange rate.
Now if Frank also supports unrestricted unproductive capital inflows then he might warrant a finger wagging but if all he is saying that working families should be allowed to buy lowest possible cost given our demented and dysfunctional approach to international capital flows and monetary systems then he is quite right.
The real finger wagging should be reserved for all those who are not calling for APRA to direct the banks to reduce their usage of offshore borrowing to support mortgage operations for existing property to ZERO. We are talking hundreds of billions of dollars of job exterminating upward pressure on our exchange rate.
What are you talking about?
“..No one should be expected to make a purchase on any basis other than price unless they choose and have the means to do so…”
You are free to make a choice based on quality if you wish to do so. That is what I meant by ‘unless they choose and have the means to do so’.
Producers are already liable for the quality of the food they sell pursuant to any number of bits of law – If you want more laws or more enforcement because you think that producers are lying or selling unfit product that is fine as ensures that consumers are getting accurate product information.
But that has nothing to do with the point that Frank is making – which is that “do the right thing” implies you should just buy Australian even when the local item is more expensive or inferior.
Even if the Australian product is substantially identical and the only difference is something trivial like the ‘attractiveness’ of the packaging people should be free to buy exactly what they choose to buy.
We want Australian business to produce goods that people want to buy even if they don’t know they are Australian products. A bit like people going to see films because they want to and not because they know that half the cast is Australian.
All we can do is try to make sure Australian business is not facing a playing field tipped against them from the get go.
If you want to support Australian industry the single most important thing you can do is to demand an end to the exchange rate manipulating currency war unproductive capital inflows that are killing productive businesses and jobs right across the nation and forcing people to try for employment in those industries that are making a mint throwing the country under the bus.
You can buy as a patriot and for the other reasons you have given but you are ignoring the fact that the majority Australians DO NOT buy for those reasons and wishing it were different is a hopeless cause.
If you want to make a real difference to purchasing decisions quickly you have to remove the effective tariff that is imposed on all Australian labour and production by an exchange rated bloated on unproductive capital inflows.
But that means telling the banks to stop gorging themselves on the currency manipulating capital exports from the currency warriors – our trade partners and telling the government to stop selling Australian Government Bonds to foreigners. The sale of govt bonds offshore is particularly daft as it is not as though it results in any ‘extra $AUD’ entering the country – All it does it push up the exchange rate and tempt the government to clock up an even larger debt because the yields are lower.
Do just those two things and the difference to our exchange rate might mean a few more industries, factories and jobs are saved.
Is it really too hard to say NO to cheap off shore credit that is being extended for the express purpose of manipulating the exchange rate in favour of our competitors?
Pfh007 – you’re probably not a diplomat – but, you are completely correct re the distortion to our economy due to the numerous ill effects of these unproductive capital inflows. Judging by some of the responses that you are getting, it appears that many people on this site , and undoubtedly the majority of the gen pop, have little idea what the true societal costs of this Ponzi Scheme are.