Albanese promises a new manufacturing economy for Australia

by Joe Montero

It appears that Australia’s prime minister is shifting towards greater interventionism to repair Australia’s economy. Does this mean neoliberalism has ended for Labor? Or does it mean something else?

Labor’s proposed Future Made in Australia Act it is claimed, is a package to do just this, and it even boasts that a part that will see significant government investment to rebuild Australian manufacturing, which will create thousands of new jobs and provide an opportunity to move towards a sustainable low carbon economy.

Image from ABC News

These are big claims. But does the hype stand up to close examination? While id does provide recognition for the need for much more direct government involvement in the economy, and this is good, it will likely fail to may deliver.

Saying this might sound harsh. Consider this though. Spruiking for Future Made in Australia, Anthony Albanese has connected the plan with he calls a global “revolution” of governments putting their hands on the scales to support domestic businesses. The role model is the United States and Joe Biden administration’s Inflation Reduction Act (IRA), used to pump a trillion American dollars into the pockets of Wall Street. It was supposed to deliver a low carbon economy. It didn’t work because those who received the funds used them for other purposes.

“We need to be willing to break with old orthodoxies and pull new levers to advance the national interest … combining market tools with government action,” Albanese said.

What we have of the detail is the angle that everything lies in using public resources to make corporate investors happy enough to invest in the Australian economy. It means continuing the key element that defines neoliberal policy, which means, no major break from the past.

Secondly, Australia’s economy is so integrated with that of the United States that taking an independent course of action would be very difficult. Doing so would invite retaliation from Washington. This is especially true in the current geopolitical climate. Retaliation came when the Curtin government tried its own course after World War Two and the Whitlam government did something similar in the 1970’s. Without adequate preparation for countermeasures this will happen again.

Faced with a deepening economic crisis and the growing unpopularity of the traditional two party system, there is an effort to find a way to make government policy more palatable, while the corporate world becomes ever more dependent on government support to survive. Future Made in Australia looks like a recipe to do just this.

This fund is designed to provide investment funds for big business. It lays bare the form of government intervention. Where is the investment in government owned enterprises and government control over how the money handed to the private sector is used?

There is nothing intrinsically wrong with assisting private business, so long as it fits into a national plan. A plan based on what the government will do to overcome the failure of the corporate investor driven economy to meet the needs of society. Future Made in Australia is not this.