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Detroit lessons for South Australia

By Malcolm King - posted Wednesday, 14 August 2013


Recycled Prime Minister Kevin Rudd recently announced a change in fringe benefit taxes that will add $1400 to the cost of a company car. This comes at a time when Holden is trying to convince its Detroit bosses (good luck) that it can turn a dollar out of making and selling cars in Australia. It's poor timing. Barring a miracle, Holden will be gone by the end of 2016.

I am starting to sound like Cassandra outside Agamemnon's castle, but in Port Pirie north of Adelaide, there is deep concern about the future of the smelting operations run by Nystar. If the Belgian giant can't get its $350 million redevelopment financed and approved, it will pull out. The company one employs 700 local people and another 2500 jobs feed off the smelter operations.If Nystar goes, Port Pirie goes with it.

It's a hypothetical but if Holden closes and Nystar pulls out, the state would lose millions in revenue but even more seriously, it would directly throw 3200 people out of work and the knock on effect would push another 10,000 people to the wall.

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The state could handle it but the social dislocation would be on a par on what has happened in Detroit. It means long dole lines and all of the attendant social problems caused by dashed expectations. There would be a massive interstate exodus of workers as banks foreclosed on mortgages.

There are rumours that Adelaide Brighton will move its cement and white clinker business offshore because of high costs and the still relatively high dollar. Adelaide Brighton employs 1600 people and 586 of those are based at Port Adelaide. It recently bought a 30 per cent stake in a Malaysian cement business for $US29.7 million ($A28.59 million). Will Adelaide Brighton go? It's too early to say.

South Australianeeds to pull its finger out now and cut the camping expeditions.

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About the Author

Malcolm King is a journalist and professional writer. He was an associate director at DEEWR Labour Market Strategy in Canberra and the senior communications strategist at Carnegie Mellon University in Adelaide. He runs a writing business called Republic.

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