Mangled Thoughts

Don Smallgoods, a long standing Australian manufacturer, has just now announced it is closing two plants, the Altona factory in Victoria and the W.A. Spearwood plant. The explanation given is the Company has been sustaining losses over the last few years, and the cause is that it is not economic to produce in Australia.

Destroyed capital is unrecoverable. Existing regulations already wipe out capital, and this is before Co2 taxation is imposed. Some other famous companies that have shutdown production in Australia because of the same reasons include:

ICI, Hoechst, both in the late 1980’s. Heinz - mid 1990s. BHP shutdown loss making operations in the 1990’s.

Loss-making is capital liquidation. ICI and Hoechst were blunt with Prime Minister Hawke that the reason for why their Australians firms were finished; taxation of capital. They told him and Keating, “Laissez faire”, get off our backs or we have no alternative but close down. Hawke and Keating ignored this warning and wiped out multi-billions of dollar in production. Not that the “Right” are any better.

Costello alone, through the ATO, didn’t get off the backs of investors and entrepeneurs. He multiplied the burdens and intensified those already in place when he was elevated Treasurer.

The burden is two-fold. Regulation, and direct taxation.

Regulation is compromised of two destructive aspects. It is also a tax. It also saps, cripples and then completely blows apart the capacity of entrepeneurs to run firms successfully. The IPA and CIS failed the Liberal Party in this too, because of their defective economics - oh alright, atrociously bad economics, and compounded by their overall incompetence. Their treatment of regulation consequently reduces to, ’so long as it is the right sort of regulation, it is good and even necessary’.

Australians’ living standards, income, are being greatly reduced. Try: sliced and diced, then fried into cinders. There are no incomes without capital, and they cannot be increased without capital accumulation.

Before Co2 taxation, the Statists in the Liberal Party and those in the ALP have accomplished compulsory capital demolition. Then, one never entertained the daft notion they have brains. A single, mouldy peanut they are all hooked into, yes, but even a sliver of a brain? Sir, not even a lonely neuron.

We have the explanation as to why it is not economic for the Don Smallgoods firms to produce in Australia.

In the meantime, the heads of the company are burning the candle into the small hours trying to discover whether they can direct capital into production of other goods, in rural Victoria. I’m not betting it can be done.