Coca-Cola the latest to run out of gas in South Australia

//Coca-Cola the latest to run out of gas in South Australia

Coca-Cola the latest to run out of gas in South Australia

28 February, 2017

Nick Cater

Courtesy of the Australian

 

News that Coca-Cola will be closing its Adelaide bottling plant was greeted with the Premier’s customary shrug.

“Well, we’ll fund a career and transition service,” Jay Weatherill told radio listeners last week. “For each worker it’ll be about $2500 for training.”

Job training is Labor’s regular prescription on these occasions, the panacea to soothe the pain of a state in decline.

Education and training, unsurprisingly, is a growth industry in South Australia; 17,000 jobs have been created in the sector since Labor came to power 1½ decades ago, jobs that are either paid for or subsidised by government.

Some 15,000 more South Australians have found employment in a sector the statisticians call administration and safety. The Australian Bureau of Statistics defines their jobs as “the setting of policy; the oversight of government programs; collecting revenue to fund government programs; creating statute laws and by-laws; and distributing public funds”.

The number of South Australians employed in these two government-funded sectors alone now exceeds those employed in manufacturing. Some 15,000 fulltime jobs in manufacturing have been lost since Labor assumed government in 2002.

Coca-Cola joins Kimberley Clark, Bridgestone, Mitsubishi, McCain Foods, GM Holden, Sheridan, Alinta, Schweppes, Arrium and a long line of other employers that have gone out of business or simply decided to call it a day.

Manufacturing has declined everywhere, but in South Australia it has fallen further and faster. More than 10 per cent of Australian manufacturing jobs were in the state when Labor took power. Today it’s barely 8 per cent and falling.

It is tempting for those living in more prosperous states to dismiss this de-industrialisation as SA’s peculiar misfortune. But it serves as a warning; the private sector’s decline relative to the public sector is a significant national trend. So too is the growth of public sector wages, which have been growing faster than those in the private sector since the financial crisis.

Lopsided growth in the jobs market contributes to the structural deficit; the private sector is not growing fast enough to satisfy the revenue demands of government which, as Robert Menzies was fond of reminding us, “spends nothing that the people have not earned and entrusted to it”.

You have to feel sorry for Scott Morrison; the federal Treasurer has been lumped with the burden of reducing public spending, yet he has precious little control over profligacy in other jurisdictions. A modest fall in headcount in the commonwealth government since the Coalition came to power counts for little when it’s boom time for public servants in the states and territories.

The ranks of those on a government pay cheque have mushroomed in every state except Tasmania since the onset of the fin­ancial crisis

The number of Australians working in state and territory public services will pass the 1.5 million mark this year, an increase of 152,000 in eight years. The wage bill has grown at twice the rate of inflation from $77 billion in 2007-08 to $114bn last year. Victoria — wouldn’t you know it — is the worst offender, with a 19 per cent increase in headcount and a 31 per cent rise in payroll.

The growth defies economic logic; state public servants in SA are now the third highest paid in the country, earning more on average than their counterparts in NSW and Victoria, where the cost of housing is considerably higher.

Hopes of restoring private sector growth to the SA economy under the state’s current policy settings are, to put it mildly, somewhat dim. Weatherill’s 50 per cent renewable energy target has given SA the most expensive and least reliable energy in the country.

BHP chief executive Andrew Mackenzie warned last week that the expansion of the Olympic Dam mine that could revive the state’s fortunes was unlikely to go ahead without a secure supply of energy.

“Let’s talk about affordability, reliability and emissions reduction, as opposed to having some secondary target about just having more renewables, which might deny you all three,” Mac­kenzie told journalists in London.

One might have expected some contrition from the Premier when he spoke to journalist David Penberthy on 5AA the next morning. Not a bit of it.

“It’s a coal company,” said Weatherill. “So let’s put this in context, they do have a dog in this fight — they have an interest in protecting the coal industry.”

The Premier’s conspiracy ­theory will do nothing to dispel the sense of growing despair in South Australia; it will only strengthen the conviction that the government has lost the plot. Mackenzie, in Weatherill’s grassy knoll scenario, was speaking as a stooge of Big Coal, not the chief executive who has to bank a $US105 million ($136m) loss for three weeks’ lost production because the lights went out.

Such practicalities no longer seem to bother Weatherill, whose monomania about renewable energy appears to have destroyed his capacity for rational thought. His rhetoric comes straight from the pages of Green Left Weekly.

“The future is renewable energy … there is no future in coal … you can say it all day and all night but there’ve been 10 coal-fired power stations that have closed — only a couple in South Australia, but 10 across the nation in the last 10 years.”

Reliability of supply was “a red herring”, said Weatherill. The blackout last September was caused by “a massive cyclone”, a second blackout was caused by “another massive more local storm” and the third earlier this month “was a balls-up by the Australian Energy Market Operator”.

With the skill of a talkback presenter who has learned to deal with outlandish callers, Penberthy decided to wrap things up.

“Thanks very much for joining us on 5AA Breakfast,” he said.

“It is always somebody else’s fault, isn’t it?”

2017-02-28T10:44:13+11:00 February 28th, 2017|