THE State Budget is based on the delusion that primarily competing on low cost provides the basis for reducing unemployment and restoring broadly based prosperity. If only it were true or so simplistic.
This delusion threatens to dig SA so deeply into a lowcost hole that we’ll never be able to get out of it.
We run the ever-increased risk of a low-cost driven downward spiral in our economic structure, activity, employment and living standards.
The world is full of nations, regions, cities and indeed billions of workers with much lower costs of land, wages, taxes and anything else you care to list.
Competing on low cost is a race that we cannot win. It is a race we should not enter.
Take the centrepiece of this Budget, the removal of stamp duty on a number of business transactions. If it’s such a “good” idea all other states will copy it and we will be back where we started.
Indeed the Australian Chamber of Commerce and Industry has already praised the SA policy and demanded that it be extended nationally.
The same reality applies to all other low-cost initiatives.
Yet it seems, we have a Government and an Opposition – a policy elite – and, of course, a bunch of business interests that remain obsessed by the idea of competing on lower and lower costs as the only way forward for SA.
It’s the economics of the madhouse. The politics of the desperate.
The better way forward is, of course, to compete on innovation, invention and sustainability, high skill and high performance, world-class infrastructure and services, focused networking and clustering, equity and inclusiveness. The low-cost delusion needs to be cast into the rubbish bin of history, along with the ideas of the flat earth society and the alchemists.
Meanwhile, the rich get richer and the Grange and cigars are out at the Property Council as the unemployed and underemployed continue to increase. STEWART SWEENEY,