NIALL McLAREN Broadening the Base.

Jun 10, 2019

Allan Patience argued cogently for a substantial change in left-wing political economy: Labor has been trying hitherto to interpret the neoliberal world in various ways; the point however is to change it. A robust public sector is urgently needed to compete against a rapacious private sector. He suggested a number of ways this could be done but we need to make sure we have the financial means to do it. ..The whole art of Conservative politics in the 20th century is being deployed to enable wealth to persuade poverty to use its political freedom to keep wealth in power.

At present, this country’s industrial base is being hollowed out: we are the only G20 country without an indigenous car industry and, due to the Abbott-Hockey changes, we don’t make engines of any sort now. But we could. I own shares in Australian companies producing iron, lithium, cobalt, nickel, copper, vanadium and rare earths. Without exception, their products are shipped overseas for refining, leaving us with no industrial base. Why? Because of neoliberal capitalism.

Meantime, Mr Trump is set on restricting European car imports on the spurious grounds of “national security.” Our national security apparently doesn’t count. However, with the political will, this could be changed very quickly, at no significant cost. Let’s look at a few examples.

The vanadium redox battery is a reality. Developed by Australian researcher Maria Skyllas-Kazacos in the 1980s, it can be built much bigger, cheaper and more effective than the lithium pack provided to South Australia. China is presently building a 200MW (800MWhr) vanadium battery as a trial. Using Australian vanadium. We could have done that with just 10% of the annual $5billion subsidy handed to fossil fuel companies.

The present drama over Adani’s Carmichael mine could have been averted entirely if we had developed our huge thorium deposits as the basis for a production line of safe, clean and much smaller thorium reactors. China and India are working hard on these; the country that first produces them on a commercial basis will be knocked over in the rush. Small reactors, say as large as those powering nuclear submarines, can be built as prefabricted units and assembled where needed after being transported on railway lines. It isn’t path-breaking science. The liquid fluoride thorium reactor (LFTR) is inherently safer than the uranium cycle and has many other advantages, not least of which is that Australia has some of the world’s largest deposits of high quality recoverable thorium (at present, it is mined as a by-product but, because it has no industrial use, it has to be buried again). We have the knowledge and technical capacity to beat our Asian neighbours to this market but our politicians would rather take coal to parliament than bother themselves with something cleaner and more effective.

We have a number of large, abandoned car factories. With a small proportion of one year’s handout to fossil fuel miners, we could build a lithium battery factory and start to design small, light-weight runabouts for urban use, to replace the gas-guzzlers clogging our streets. Combined with a few dozen solar panels on your home, you could have essentially free transport to and from work and the shops. We don’t make solar panels but China is practically giving them away, and they want lithium batteries, so it would be mutually beneficial.

We have committed to spending $50billion on a dozen untried French submarines although it isn’t at all clear what they will actually do. It has been suggested they could patrol the South China Sea, although what they would patrol for is never explained. We don’t need submarines, they have no defensive role and we have, or should have, no offensive ambitions in our neighbourhood, particularly against our biggest trading partner. It’s worth remembering that if Australian convential submarines can reach China, theirs can reach us and theirs can carry cruise missiles. The money could have been spent on building fleets of small, high speed patrol boats, perhaps based on Australia’s world-class fast catamarans, or hydrofoils. Armed with drones and surface-to-surface missiles, we could get ten times the bang for one tenth of the bucks.

The same goes for the breath-takingly expensive F-35, a futuristic air superiority fighter sold to this country when there is nothing in the region for it to be superior to. If Indonesia ever gets its Sukhoi-30 fighters, they would be a formidable force except this 30 year old design can’t reach the bits of Australia that count, even if they wanted to (and there is zero evidence that they do). At a projected $85billion lifetime cost of the F-35, we would have been far better off to have joined Indonesia and South Korea in their joint fighter program. What we should have done, of course, is what Israel did years ago: develop an indigenous drone industry. If we had cooperated with Indonesia, which has its own aircraft industry, the Philippines, New Zealand and other Pacific states to develop drones suitable for patrolling vast areas of ocean, we wouldn’t need submarines or F-35s. But we didn’t do it. Israel did, and that nation of barely 8million people has cornered the market in small to medium surveillance and attack drones. They had the political will but, of course, we didn’t. Similarly, Sweden, with a population of 10million, produces its own fighter, the very capable Saab JAS 39 Gripen. Meanwhile, we sold our aircraft factory to Boeing, which makes bits and pieces for export.

How would all this be financed? Quite easily. First step: stop subsidising fossil fuels. Second step: compel companies to pay tax on their turnover, not their artificially-engineered “profits.” Michael West has an excellent series on Australia’s major tax-avoiders, companies with a total turnover of something like $380billion which pay precisely no tax. Third, put a small tax, say 1%, on all money borrowed overseas to fuel the absurd and dangerous bubble in real estate. Fourth, a tax on empty properties. Five, a sovereign wealth fund, similar to Norway’s, based on a resource rental tax. At just $1.00 a tonne, Western Australia’s iron ore exports alone would generate nearly half a billion a year. That’s a lot better than the 25c royalty which was struck in 1967, and apparently remains in force today. And a lot less than the royalty Gina Rinehart gets for ore mined and transported through her (leased) properties in the Pilbara. Six. What else could we do? Oh yes, now that we don’t have a car industry, what about a carbon tax on imported internal combustion engines? At, say, 50c per cc of engine capacity, that would generate something north of $3billion a year, and would encourage people to make the shift to our own lithium-based electric cars to be financed by the tax. Think of all the money we’d save by not importing fuel from Singapore, now that we’ve closed most of our refineries (which, by the way, are all well within reach of cruise missiles launched from conventional submarines loitering 100km off-shore).

None of this is difficult. All it requires is that we stop trying to interpret the neoliberal world in various ways and start changing it. But how likely is this? Aneurin Bevan took a dim view:

The whole art of Conservative politics in the 20th century is being deployed to enable wealth to persuade poverty to use its political freedom to keep wealth in power.

Niall McLaren is an Australian psychiatrist, author and critic, although not necessarily in that order.

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