Saturday, 18 April 2009

Steel - and carbon !

Two decisions seem to be running in tandem in Australia at present. How to save the steel industry - and whether to press ahead with a " cap and trade " carbon reduction scheme.

One school of thought demands that Australian steel be used in major infrastructure projects - and yet to exclude others would clearly be embracing " protectionism " - something we are told brought on the " Great Depression " of the 1930's.

The problem is defining " fair competition ". Australian steel can compete on a level playing field, but in the present economic climate there is every chance that other countries will try dumping surplus production on world markets at cost - and sometimes even below cost.

But - in all fairness - wouldn't our steel industry go after a world order on similar terms if the opportunity offered ?

Our proposed " cap and trade " carbon reduction scheme has degenerated into little more than a " dog's breakfast " !

The guy who the government chose to conduct an enquiry - Professor Ross Garnaut - is now having second thoughts and thinks we might be wise to defer it to a later time.

Garnaut suggested a higher target. The government cut that in half - and yet the Greenies are screaming for an impossible level that would be economic suicide if implemented. There is absolutely no consensus on a carbon reduction level - and that seems a clear recipe for a bad decision !

There is an old adage that says - " When in doubt - don't ! "

The best plan would be to defer any carbon decision for twelve months - when the world economic picture will be clearer !

And without embracing protectionism - make sure the present anti dumping legislation on our books is rigorously applied and enforced.

With a bit of luck and a following breeze - we might survive and reach better times !

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