Broadband deal better late than never

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$46b for Aussie broadband, Straits TimesNo one needs to be told that we in Australia are entering a serious recession due to the world financial crisis. Few need reminding that the crisis was generated in the USA, by unfettered free markets reinforced by the sanctity of the profit motive and sheer greed within the business sector.

We now have a worldwide crisis from which Australia is not immune. We face the spectre of two years of declining production and trade, and rising levels of unemployment. Few would disagree that we need a process of economic revival to address the worst impacts of recession. The question is what form the stimulus should take.

To address this we need to move beyond blaming greedy bankers and businessmen for the recession. It takes two to tango. We need to look at other factors too, in particular profligate consumption and minimally controlled consumer credit. That factor is as much apparent in Australia as subprime housing loans were in the USA.

The decade of growth that Australia experienced prior to the current crisis was fed by a consumption frenzy. Consider the growth in 'McMansions', household goods, must-have fashion, SUVs and more. This was fed in turn by an almost subprime credit system — no deposit, no interest, no repayments for two years. It was all about growth in employment, production, trade, storage, transport, and retail of consumer goods.

All of this at a time when we have seen a substantial crisis in our health system, a deficit of doctors, nurses and other medical staff, problems in education and training from pre-school through to university, a decline in public and affordable housing, unacceptable growth in homelessness, and an unsustainable decline in infrastructure including roads, railways, communications and other social infrastructure related to our health and wellbeing.

So while the recession is, on the one hand, a harbinger of pain and suffering for large numbers of Australians, at the same time it is an opportunity to address serious problems that have arisen in the past and to ensure our future wellbeing.

In that regard, the Government should be congratulated on its multi-billion dollar infrastructure spending program, the largest feature of which is its National Broadband Network announced yesterday. It will likely cost in excess of $40 billion but will have long-term benefits for manufacturing, trade, business, employment, education, health, and many other areas.

The broadband strategy may have arrived a few years late, but the current government cannot be blamed for that. Besides, better late than never.

Infrastructure spending in relation to schools and other aspects of education, housing, health and transportation are also crucial to Australia's future prosperity and wellbeing. These infrastructure projects will take one or two years to get underway, and longer to have their maximum impact.

In the intervening period the government has embarked upon its multibillion dollar cash handouts to boost consumption spending and give some form of impetus to employment. This needs to be seriously questioned.

There is little point in spending billions of dollars of government money to promote a return to profligate consumption, which is the cause of Australia's predicament in the first place, and is also a major contributor to the failure to address more important areas of our long-term wellbeing.

Regardless of what governments do we will face at least two years of hard conditions, so why not use that time to undertake fundamental restructuring of the economy, especially the employment sector?

We have had far too many people employed in wholesale and retail and banking, as well as in finance and credit, when we desperately need child and aged care workers, nurses and medical workers, teachers and the like.

Many people from the finance industry already have university degrees. It takes a further 18 months to gain a teaching diploma and become a teacher. It takes several months or more to train aged and child care workers. So why not finance retraining? This will help structurally change the economy for long-term benefit.

Official spokespersons say that a couple of hundred million dollars is being directed at retraining. That is insufficient. It needs to be several billion.

Of course a cash handout stimulus package will be more popular than two painful years of restructuring. I prefer the latter, but I'm not facing an election in 2010.


John WicksJohn Wicks is a retired senior public servant who is voluntary advisor on social justice to the St Vincent De Paul National Council in Canberra. Read some of his papers here.

 

Topic tags: john wicks, stimulus package, infrastructure, national broadband network

 

 

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Existing comments

This bloke has it very wrong. Rudd has it wrong. Fixing computer speed will do nothing, in 8 years the technology will have moved on. Typical government bungling. The welfare state, the massively over paid medicos and the armchair academics on huge super payouts are the problem. Guilt is finally hitting home, start giving something back fat cats.
Ian James | 08 April 2009


Ian, 8 years behind in 8 years time is better than being 16 years behind if little is done about our broadband infrastructure. This is the equivalent of sewering and paving our cities after WWII, for the common good.

Mind you, it would be excellent if the fat cats started giving something back as well!
tundern | 08 April 2009


Obviously Ian James has not read John's article. John points out quite clearly that the problem lies with the last decade of consumption frenzy and the previous government's inaction in major infrastructure development. Sure, the government needs to spend plenty on these needs and is attempting to do so. as John says "Broadband deal better late than never". It is to be hoped that the Rudd government gets on with the other pressing projects "better late then never".
David Smith | 08 April 2009


Perhaps Comrade James could calibrate his grizzles? Maybe offer some content to the - obvious enough - point that technologies do keep changing?
endee | 08 April 2009


Agree with all that has been said, except the paragraphs on retraining! In particular on those to be 'trained' in the teaching and caring fields.

Many in finance, banking, and the whole area of 'Business, Robbery, etc' (as J F Archibald called it in the Bulletin), are university graduates in 'Administration'; how to make sure the human resources being managed can be made to produce , What?

Teaching and caring require a different ethos, a background of studies in all the ways of humanity and the different modes of expression of ideas. In addition they require a lengthy induction into the social mores of the teaching and caring professions; 'Professional Practical Knowledge'
.
This is why the training of teaching and caring professionals have, before they begin to practice, the period of induction into the profession.

This requires time and careful supervision. It cannot be compressed, force fed or reduced to an easy to follow recipe!

john W McQualter | 08 April 2009


I totally agree with investing money into infrastructure and retraining, but please don't let it be a bandaid measure. Let this be long term. We have great potential in Australia, let's keep it going.
Philippa Jayne Boyington | 08 April 2009


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