This morning, Steve Austin from 612 ABC Brisbane interviewed me regarding Toyota’s departure and the demise of car manufacturing in Australia:
How will Toyota’s departure affect the local economy?
I reiterated a number of points I’ve made previously, including in my post from yesterday:
Queensland Economy Watch 
Queensland will fare much better than Victoria and South Australia. I really feel for them.
Yes, I expect many of the workers in the industry will face a tough time finding other jobs.
Yes, I think Leith Van Onselen is probably right in pointing out the difference between job losses resulting from the collapse of a service industry such as Ansett – where the operations must employ local workers regardless of who owns it, allowing many of them to be absorbed by competitors – and a tradable one such as the soon-to-be-former car manufacturing industry, where the jobs will head offshore.
Gene, what do you think of the statement made by Leith…
“In Australia’s case, manufacturing output is already down to 7% of GDP, the lowest in the OECD and equal with Luxembourg. With cars gone that will shrink towards 5% very quickly. So when one asks if it matters that we won’t be making cars any longer, it’s not an easy question to answer because no developed economy has ever tried to thrive without an industrial base. In relative terms, that’s where we’re headed.”
It certainly seems an interesting question to ponder.
It certainly is an interesting question, HH. Given the de-industrialisation trend we’ve faced, I think the best policy has been to not resist it, but to allow the economy to adapt to it, as we’ve done. That said, none of us has a crystal ball and can be sure it will all end well. As a country though, we’re pretty lucky we’ve got a lot of coal and iron ore to export to help us earn the foreign exchange we need to import the manufactured goods we need from elsewhere.
Agree, we are fortunate to posses such vast mineral wealth. I hope some of the proceeds flow through to poor old Victoria, they might need it more than we do up here.