A nice editorial from the man who has invigorated the AFR:
When it comes to economic management, publicity hungry Australian Workers Union boss Paul Howes is often worryingly similar to the jingoistic Bob Katter. Mr Howes hit the airwaves yesterday with a silly attack on the Reserve Bank of Australia, and the nutty suggestion that it should control the dollar.
He and his union comrades are rejecting two of Australia’s most important economic reforms of the past three decades: the Hawke-Keating government’s floating of the dollar in 1983 and the bipartisan acceptance in the 1990s of a politically independent central bank focused on maintaining low inflation. Mr Howes’s real complaint is that the fortune of workers in the iron ore and coal industries is not being matched by those in the old, protected manufacturing industries.
The commodity price boom generating Australia’s biggest wave of mining development is also driving the dollar higher, putting a squeeze on manufacturing. But Katter economics and a return to protectionism and exchange rate manipulation is a muddle-headed response. Rather than criticising the RBA, Mr Howes should be chastening the union officials who sabotaged efforts to restructure car parts maker APV Automotive Components, putting their own members’ jobs at risk.
While old-guard unions try to hold on to old-economy manufacturing jobs through hard-line militancy, there are plenty of new employment opportunities in an economy where joblessness is hovering near historic lows of about 5 per cent.
As we reported yesterday, Western Australia is screaming out for hospitality workers to help service the state’s massive mining boom amid a 4.1 per cent jobless rate. Restructuring is never much fun for those who have to be restructured, but there is nothing to be gained by denying economic reality rather than adjusting to it.
