STRENGTHENING THE TEN POINT PLAN (TPP) - HOW?

1. DECIDE WHAT THE SOCIETY IS TRYING TO ACHIEVE

The TPP is trying to cover both a very wide field (Australia's economy and society generally) and a relatively narrow field (the difficulties facing manufacturing industries) simultaneously.

For example: The TPP is on strongest ground in dealing with the practical issues affecting manufacturers such as: dumping; requirements for 'fair' trade; training needs; and distortions in the tax system.

However the TPP is also trying to deal with the overall policy context, where there remains considerable scope to strengthen its position - examples of which are outlined in Attachment C.

And the TPP's recommendations are focused on manufacturing. For example of the 14 industry sectors suggested for review by task forces (p43), 10 involve manufacturing. And tradable services, the fastest growing segment of the economy and of global trade, received no attention.

As with a firm which tries to address many different markets at the same time, there is a danger of not succeeding in any of them. The Society needs to decide what it is trying to achieve - and organize itself accordingly.

Alternative suggestions follow for how the TPP might be enhanced if the Society decided to focus (a) on Australia's economy and society as a whole or (b) on manufacturing industry.

2. METHODOLOGY FOR MOVING TO THE NEXT MILESTONE

In brief it is suggested that the Society (eg through a new Queensland branch) could:

• seek critique of the TPP from persons with reputations in each of the key themes / issues in TPP (eg as discussed in Section 3 below). Critique should NOT be sought mainly from supporters. Critique should also be sought from others interested in the general area;

• then

[if the Society is to deal with the economy and society generally - Option A] establish a task force for each of the TPP's said key themes / issues charged with (a) assembling a knowledge base related to its theme (one far broader and deeper than the information that Society members have about practices affecting manufacturers) and then, from its particular viewpoint, (b) assessing the whole situation and (c) developing proposals separately for initiatives which could be taken by community and business leaders and by governments;

[or - Option B] establish (a) a task force to refine the strengths of TPP related to practices affecting manufacturers and (b) a task force to strengthen TPP's policy context by collecting and incorporating much more background information about the said key themes / issues;

• convene a forum to present, and integrate, the work of the various task forces.

In more detail, the methodology for Options A and B might be as follows.

(A) A Methodology for a Whole-economy-and-society Option

The TPP involves many different themes / issues which are drawn together into a plan, each of which is a complex subject in its own right.

There is considerable scope to improve on the TPP in detail - as indicated in Attachment C.

The Society might produce a version that is stronger (ie better 'detailed' and more substantive) and more likely to be widely acceptable to persons with different goals and interests by (a) breaking the subject matter it is dealing with into the key themes / issues involved, (b) having different expert groups examine the Society's general goal in detail from each of those specialized viewpoints simultaneously, and then (c) amalgamating a result.

A logical set of key themes / issues in relation to TPP is suggested in Section 3 below.

(B) A Methodology for a Manufacturing-industry Option

If the Society's goal is to deal in depth with the issues affecting manufacturing industry and employment, strengthening the TPP would become a much less demanding task.

As noted above the TPP is on fairly firm ground in dealing with issues of professional practice affecting manufacturers. Establishing a task force to concentrate on deepening and improving the professional polish of those aspects would be one obvious move.

At the same time, the Society could (a) develop linkages with complementary bodies to help in refining the policy context for the manufacturing specific initiatives and (b) establish a policy context task force to collect a lot more information about the eight key themes and issues suggested below, and to refine the TPP's general policy arguments on that basis.

3. MAJOR THEMES AND ISSUES IN TPP

Key themes / issues in relation to TPP which could be addressed in more detail to strengthen its proposals might be as follows:

• economic and community goals (ie what should Australia be trying to achieve?).

Current economic policies strongly emphasize increased productivity as measured in dollar terms as adjudicated by consumer purchasing preferences. However:

• such goals lead to various distortions (eg can lead to a 'casino' economy, where the goal is to make money without socially useful production; or can lead to the financial system (with its intrinsic instabilities) dominating over the 'real' economy);
• other community goals may not be easily achieved (eg equity; environmental goals; security given its requirement for 'real' production rather than paper outcomes)

There is a substantial literature which contains ideas about what might be wrong with adopting current goals. In particular, from a manufacturing industry viewpoint, one might note Fingleton's In Praise of Hard Industries arguments ( http://www.fingleton.net/).

Also it was recently argued that 'economic rationalism' does not ensure morality (Croke G. letter to Australian, 21/7/01). This (while it does not suggest an alternative) highlights the vital need for the moral sentiments which Adam Smith saw as the foundation for a 'free' market. Similarly it has been pointed out (eg by National Competition Council) that National Competition Policy requires adopting competition subject to a 'public interest' test - but that competitive models have been applied indiscriminately (and induced social costs) because of a lack of real work on what the 'public interest' is.

• future economic environment - ie what are current trends in, and the probably future of, the global / national (manufacturing?) economy?.

As noted in Attachment C (a) any realistic strategy must start with such an assessment (Section 3) (b) it seems likely that the advocates of 'economic rationalism' took an overly simplistic approach to a very complex situation - and thus failed to identify complementary initiatives which needed to be taken (Section 6) and (c) there are important changes which have not been taken into account in TPP - and thus a risk of falling into a similar trap.

• global competitiveness of Australian (manufacturing only?) enterprises and industry clusters (ie how competitive are Australian enterprises, and what is required for such competitiveness).

This needs to involve more than TPP's consideration of relative costs (as noted in Attachment C - Section 5). For example, a focus on industry clusters is important because of (a) the increased recognition that it is the effectiveness of industry clusters (rather than individual enterprises) that matters most (b) the shift by governments into an emphasis on intervention in this sphere and (c) the scope which exists for private / public partnerships.

• fair trade and investment - ie do current regimes and practices produce outcomes which are desirable, and how might they be adjusted?

TPP already contains useful insights in this area, but there is a large worldwide debate about this subject which undoubtedly means than there is a lot of yet untapped material.

• the role of government (ie what should governments do in relation to (manufacturing?) industry and employment?).

As TPP points out recent policies have been based on a liberal market approach ('economic rationalism'). However the Society needs to do more work in this area because there are other alternatives (eg what has been called Third Way politics in the UK) which have not been mentioned in TPP, and (as noted in Attachment C - Section 6) there is potentially much more to a critique of 'economic rationalism' than yet included in TPP.

• under-employment - which is a much more general theme than un-employment as it considers not only those without a job but those whose jobs are of poor quality and badly paid - and who thus become the working poor. Thus the implied community goal might not be just a 'job' but a 'good job'.
• the current account - which also needs to look in detail at financial systems (not just at trade) because arrangements in national / international financial systems, such as investment, impact on the current account and on the capital account.

As noted in Attachment C (Section 7)  there is much more to consider than yet mentioned in TPP;

• regional development - which is a theme / issue that is not addressed in any depth in TPP but probably needs to be, because this is a source of a great deal of other concern about the impact of current economic policy regimes