RS> You might care to consider that its actually much more likely to
RS> be someone who does work for themselves and had done that without
RS> a government handout, who is more likely to think its quite mad for
RS> the government to be handing people cash to start a small business.

BB> I can't say that I agree with the argument that you and Phil are
BB> having, but I was thinking about the economy the other day, on the
BB> back of the abysmal trade deficit figures that have been recently
BB> released, and it would seem that Australia will ALWAYS be in debt,

I think this one is just missing the point rather about how modern
economys work. Just like almost all business have some debt, its
not some outrageous inditement of an economy that it has some debt.
Corse its another matter when the debt is far too high.

BB> as we never seem to eat into the capital that we have borrowed,
BB> but can only just manage the interest re-payments.

Thats a load of rubbish too. In the runup to the last federal election,
the federal government had NO nett foreign debt at all. Note that thats
a different matter to countrys debt. But a hell of a lot of the countrys
debt has actually been incurred by the likes of Bond and Skase and stuff.
Mostly those lenders have done their dough too.

Quite a bit of the new debt is stuff like the amount of capital that
the likes of Optus have been importing to put in their phone system.

BB> I was wondering just how we could overcome this, and maybe if the
BB> government threw some real money into export ventures and actively
BB> helped any company that was exporting goods that meant a return
BB> for Australia, then we may be able to trade our way out of debt.

Its a lot more complicated than that. In fact if you take the whole of
asia, the fastest growing sector of world trade, we actually export to
the whole of asia about 150% of what we import. We export half as much
again the value of what we import. We have a positive balance of trade
with almost all of them, In fact if you lump mainland china and HongKong
together we have a positive balance of trade with all except Brunei and
ratios of 150% to 200% with the biggest ones like Japan and Korea.

And the government has been spending money encouraging exports for
ages, decades, too. There are a raft of handout schemes for exporters.
As far as Phils desires for handouts are concerned you can get handouts
for a wide variety of stuff ranging from the cost of training people in
the background of the country you want to concentrate on to even stuff
like fares etc in some circumstances.

Corse whether that makes all that much sense on small business is another
matter entirely. Our total exports to asia are in the $33B class. I cant
see that even giving Phil a $1M handout would make much difference to that
sort of export figure. Even if he has some miracle of engineering waiting
for a handout to commercialise. And those handouts are available now anyway.

BB> This would have to be done at a Federal level so that there was
BB> equity for everyone, but it seems like a reasonable thought.

I think its all missing the point rather more than somewhat. I think
whats actually needed is stuff like was done with the car industry,
tariff schemes which encourage local manufacture and export of stuff
like car engines etc. Many people dont realise that the biggest export
of what the statistician rather quaintly calls 'elaborately transformed
manufacturers' is actually car engines. And the percentage of manufactured
exports has actually doubled under the federal labor government too.

BB> I know that there are some tax concessions available now for
BB> exporters, but if the government gave much greater allowances,
BB> even for a time - 10 years for example, I feel that it would
BB> be a great benefit to the country.

I'm not convinced myself. What we are actually seeing is the bulk of
manufacture is moving offshore to the low labor cost countrys like
Indonesia and mainland china. Its not just Aust, its happening right
around the world, the US included. It just aint generally possible to
piss against the wind of that sort of major change in the fundamentals.
It just never going to be possible to do say textile clothing and footwear
at the low price end of the market at the low labor costs that mainland
chinese are prepared to accept. Its doomed mate, and cant be automated.

There is a very real potential for value adding on our very competitive
metals industrys, flogging fully manufactured car engines instead of
just steel and aluminium billets. We have a very pronounced competitive
advantage on that stuff. Ditto stuff like coal mining etc.

BB> I am living in Queensland and this state is nearly debt-free (will
BB> be debt-free by the middle of the year) and it feels very, very good.

Its an extremely old fashioned way to operate tho Brad. Almost no one
does it like that on say a house to live in anymore. For a damned good
reason, it doesnt make much sense.

Yes, Joh did leave a legacy of financially responsible state government,
certainly left the utter financial fiascos of the southern labor states
like VIC, SA and WA for dead. But that doesnt mean that no debt at all
makes much sense.

And part of the reason QLD can do that is that they have always had a
vastly out of kilter proportion of federal funding on a per head basis
which the states like NSW and VIC couldnt have. QLD has been subsidised
by those other stated for decades on the federal money, which happens to
be a very very large proportion of a states budget.

BB> It would be wonderful if all Australians could have the same
BB> confidence that we have here.

Yes, but its just not possible, everyone cant be subsidised, someone
has to be the subsidiser.

BB> What do you think of the idea?

Dont like it |-)

--- PQWK202