Manufacturing, the Australian dollar and what, if anything can be done about it.

But at the same time Courtis tells us, what everyone who is watching the international monetary scene, knows full well - the days of the US dollar as the medium of international trade are coming to an end.

America is burdened with debt, debt that will never be repaid in current dollars. Therefore, businesses that can write their contracts in other currencies, or more significantly in gold or other tangible commodities such as soybeans, are doing so. China is propping up the US dollar, and although it seems certain that China will continue to do that for the immediate future, there will be a price to pay at some point.

There is nothing the Commonwealth Government  can do about the international monetary system. We will have to adjust as events unfold. But there are things it could do which could make the survival prospects of Australian manufacturing much brighter.

At the top of the list is the seriously negative impact of Canberra’s labour market laws. Fair Work Australia has become a millstone around the neck of every business, and its repeal would provide new hope for the future for every business facing bankruptcy.

Next comes the repeal of the most onerous tax laws. The most damaging tax by a country mile is the capital gains tax. John Howard tacitly recognised the damage it was doing when he exempted small business from its impact.

What John Howard did for small business, the current government could do for the manufacturing sector. The gold industry was saved in the 1970s by exemption from company tax and from tax on dividends paid to shareholders.  This is something else the current government could do for manufacturing.

Most of the things that governments do increase costs and burden industry. The carbon tax is just another example of the destructive impact of government delusions. We are told the carbon tax will increase employment and underwrite the growth of new industries. If this were true, why not set the carbon tax at $200, rather than the $23, which is the current proposal, and really speed up economic activity in Australia?

The record of Australian Government involvement in the defence industries, notably submarine construction and naval ship building, is so bad that people refuse to believe the numbers involved. We are looking at many hundreds of millions of dollars of pure waste.  Government withdrawal from these activities would be a huge benefit.

Therefore, there are things that the Australian Government can do which would benefit the manufacturing sector. In the past, industries such as gold mining and viticulture have enjoyed special tax concessions, and today both those industries are important export earners.

So the Opposition Committee chaired by Sophie Mirabella, which is inquiring into these matters, should look at the history of government support for beleaguered industries, and draw some useful lessons as a result of their inquiries.