The onset of the current pandemic has highlighted some structural problems that have been evident in the Australian economy for many years, but the trauma that the virus has induced also gives us the opportunity to rethink a number of formerly entrenched policy directions. Hopefully some inflexible ideological positions on future economic strategies have been loosened, but it is not clear for how long. The central role that Federal and State Governments are now playing to support the economy, I argue, should be continued into the rebuilding phase that will inevitably follow the current emergency.
In particular, a bold and imaginative industrial policy should be developed to guide the economy and the wider society into a new and more productive era. The rapid growth of a number of nations in East Asia has demonstrated the capacity of industrial policy to create rapid economic and social transformations, and similar approaches are now being followed in Europe, and in a more limited way too, in the United States. This overseas experience is evaluated in some detail and the lessons that can be learned are noted. Faced with the key issues of climate change and growing levels of inequality, as well as the inevitability that in future we will be facing an increased incidence of instability and crises of various kinds, there is much here for Australia to ponder, and I review some earlier industrial policy initiatives in this country and suggest ways in which these may be revived. The fostering of innovation will be a key ingredient here, and success will depend upon the constructive reform of the universities and other research institutes, and the strengthening of the entire education and training system to meet the demands of the new digital economy.
The growing percentage of jobs that are precarious in various ways also presents a particular challenge, but the future of the Australian economy and society – and perhaps even the future degree of social stability – will depend on our ability to create large numbers of good, well-paid and secure jobs. A revival and expansion of the manufacturing sector can play a major role here. The digital revolution offers serious challenges as does the development of more sustainable and low emission industries, but recent studies have suggested ways in which the transformation to a renewable future can in fact create more good jobs and allow the development of some important new industries. It is argued that we need to create a new organisation to oversee and develop a new approach using industrial policies, to harness government efforts and develop new forms of collaboration with the private sector.
Throughout the paper I argue that it will be essential to recognise that government needs to play a central role in planning, steering and coordinating new initiatives, and this will mean abandoning the discredited tenets of neoliberalism as we move to a future in which it will be more possible to use thoughtful economic policy, as Keynes put it, for us “to live wisely, agreeably and well”.
An industrial policy for Australia: Economic and social priorities in a post-neoliberal and post-coronavirus era | John McKay
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Author: John McKay
Title: An industrial policy for Australia: Economic and social priorities in a post-neoliberal and post-coronavirus era
Series: Fabian monograph
Publisher: Australian Fabian Society
Place: Melbourne, Victoria
Printed by: lulu
Design: Céline Lawrence