Abbott pinned his free-market colours to the mast at an important speech at Davos earlier this month – the premier annual gathering of the world’s economic and business elite.
The former Roman Catholic seminarian urged attendees to become “missionaries for freer trade” and fight protectionism whenever and wherever it may raise its ugly head.
Free trade was a well-trodden path to wealth creation, he explained. “Over time, everyone benefits because, in a global economy, countries end up focusing on what they do best. A more global economy with stronger cross-border investment eventually helps everyone because it generates more wealth and ultimately creates more jobs.”
This is very true.
And, as it turns out, Australia is not very good at canning fruit.
Putting his words into action, Abbott last week successfully stared down a three hour bid in cabinet by Nationals colleagues to secure a $25 million taxpayer handout for the embattled fruit cannery, SPC Ardmona.
Free trade and the rigours of globalisation are perhaps the primary reason why SPC’s factory – which must pay far higher wages than in competitor countries – is unprofitable. That, and it seems Australians don’t much fancy tinned fruit any more.
SPC’s cannery in Shepparton employs about 3,000 workers, but it has been operating at a loss of more than $400 million in recent years, according to local Liberal member Sharman Stone.
It’s only natural to worry about the loss of Australian jobs.
But a job in an unprofitable company is a job already lost.
The same applies to jobs that only exist due to subsidies, such as “Green jobs”.
The only way to create jobs is through the efforts of profitable companies.
As Abbott told Davos attendees: “You can’t have strong communities without strong economies to sustain them and you can’t have strong economies without profitable private businesses.”
“After all, government doesn’t create wealth; people do, when they run profitable businesses.”
Some on the left rail against profit, but how many jobs would we have without profitable businesses?