It will be interesting to see if the Prime Minister survives the Nationals Textiles fiasco. There is no doubt that he has been made vulnerable by selectively offering Government support to a company that, like so many other businesses, has fallen on hard times as a direct result of the policies of his Government, as well as alternative Governments. He certainly seems to have dug a bit of a hole for himself and must anxiously await the outcome of creditors’ meetings to see if there is any action likely to be taken against directors of the company chaired by his brother. All of which, of course, is absolutely no help to those workers who have lost their jobs as a result of the company’s collapse, or those small business operators who continued to supply the company in good faith while it was, evidently, insolvent. But there are three issues arising out of this debacle deserving of closer scrutiny.
Firstly, there is the issue of directors and executives being able to access large payments to themselves just prior to a company’s declared insolvency. We are frequently learning of corporate chief executives receiving multi million dollar salaries, only to learn that they have been presiding over a company that has lost millions in shareholders funds during the term of their management. In the case of National Textiles, it appears that executives and directors were able to be paid entitlements under contracts for services, while it must have been evident to them that the company was going to fold. Somehow, these people must be able to justify their action to themselves, although, it seems to us, that they are standing on shaky ground morally. More so, when what is missing from the company’s accounts are the payments due to workers under statutory obligations, such as superannuation, long service leave etc. How the failure to provide for the legal entitlements of workers, before payments to directors and executives, is not an offence against the law is a mystery to us. We understood that it was this sort of practice that has seen Mr. Skase living in exile on Majorca and Mr. Bond living in exile in a Western Australian gaol. Moreover, since National Textiles has received a staggering $27 million dollars in Government subsidies in the last three years and it is now claimed to be worth only $24 million dollars, isn’t there a case for investigation here?
The second issue relates to the Government’s intervention in the affairs of this company. Critics of the Government suggest that its intervention was prompted by the fact that the company’s Chairman is the Prime Minster’s brother. This “my brother’s keeper” scenario has gained credibility because the Deed of Arrangement, acceptance of which, according to the Prime Minister, is a pre-condition to the Government putting in funds to pay workers’ entitlements, effectively excludes examination of the conduct of directors and executives which might lead to prosecution under corporation law.
But why should Australia’s already overburdened taxpayers have to fund the legal entitlements owing to workers by a company when that company’s executives and directors have failed to properly provide for those payments as required by the law? That surely is the critical issue. What in the world is the Government doing paying the debts of a commercial enterprise that goes down the gurgler? The answer to this question, according to the Prime Minister, is that National Textiles is a victim of the Government’s macro economic reform and therefore, the Government is obliged to assist companies, and their retrenched workers, who suffer as a consequence.
This will be news to thousands of farmers around Australia whose livelihoods have been decimated, and whose lives have been destroyed, by successive Governments’ pursuit of the fantasyland known as “the level playing field”. So obsessive is Canberra about this illusion, that there has been a consistent, bi-partisan commitment to policies that are supposed to take us in that direction, but which, at the same time, destroy Australia’s traditionally robust economy and the lifestyle of those in the bush, who still produce more than half of the nations’ export income. The artificially maintained Australian dollar makes commodity exports more expensive to our customers and imports into our markets less expensive, thus working to the detriment of our export industries and our balance of payments. Yet this, we are told, is good for us.
The most bizarre aspect of this latest piece of Government folly, though, is the fact that a healthy Australian company, in an industry that cannot compete against the sweatshop products of low wage and industrially neanderthal countries, is denied protection against those imports by way of tariffs. Once upon a time, under Governments that we are now encourage to think of as being economically ignorant, Australian industries enjoyed tariff protection against sweatshop imports. Thus, Governments received revenues, by way of tariffs, while at the same time, protecting the jobs of Australian workers against competition from countries with traditions of exploitation of workers, including child labour. Governments prospered too, by way of taxation collections from employed workers and profitable companies.
Enter the magic pudding of “the global economy” and “economic rationalism”. Tariff protection against unfair imports from countries with industrial slavery is now withdrawn and, as a result, Australian companies begin to make adjustments. Try and buy a shirt made in Australia now. Pelaco, Van Heusen, Gloweave, Paramount, Bond; you name it, they have all gone offshore. It suits them, of course, since they are able to do their own thing industrially, no longer terrorised by Australian unions. But Australian jobs disappear. Moreover, we now have to import products once manufactured in Australia, to the detriment of our balance of payments. For those companies that want to keep trying, the Government is there to help out. For National Textiles, that help amounted to $27 million dollars in three years. For the textile, clothing and footwear industry generally, the sum defies imagination. Added to the direct costs of assistance is the increased cost of unemployment benefits to the thousands of Australians who have been forced out of work by Governments anxious to give their jobs to Indonesians, Koreans, Malays, Thais, Indians or someone else. With an unemployment rate in Newcastle of 14%, it is unlikely that many of the retrenched National Textile workers will find work in a hurry.
It takes a special sort of person to be able to describe this as economic “rationalism”. Only a self-deluded politician could do it. For us in the real world, it would be best described as economic lunacy. The trouble is, we think, that politicians have lost touch with the people who produce wealth, the workers, farmers and small business people, and only rub shoulders with the people who have wealth, monopoly capitalists, exploiters, speculators and manipulators. We need to be thinking about how we can get people into Parliament who will represent us, rather than represent parties that have betrayed the country.