Duplicity on jobs and loans – politics as usual

The Australian Workers Union federal secretary, Paul Howes, wants you to subsidise his union membership numbers, implicitly claiming that AWU jobs are more important than other jobs. He did it successfully in lobbying for taxpayer funds for steel companies and now he's trying to repeat the act in the aluminium smelting business.

Of course Howes doesn't put it like that, but like every lobbyist claiming to be "special" and therefore deserving government assistance, well, we're all "special" when we want a share of the public purse.

It's Howes' job to try to maintain AWU membership numbers so his lobbying is entirely understandable. The current bout around the shaky future of aluminium smelting is couched in broader terms of defending manufacturing and the now-usual blaming of the resources industry for the strong Australian dollar as that suits the AWU's purpose. What it tends to overlook is that while the strong Aussie is hurting, global aluminium prices are down anyway and smelting in this country has long enjoyed extremely generous government subsidies through cut-price electricity.

Before feeling too much sympathy for Paul Howes' lobbying, next time you receive an electricity bill in New South Wales or Victoria, remember that part of that bill effectively is a subsidy for making aluminium and, therefore, AWU jobs at the plant.

The electricity deal for Alcoa's Port Henry smelter expires in 2014. As well as the plant's electricity being subsidised by other consumers paying full price, there are greenhouse issues for those who care about such things as Victoria's dirty brown coal is driving the very energy-intensive business.

The way the subsidy business generally works in any form of protectionism is that the favoured group gets money that would otherwise be spent on something else. There is always a greater cost of protectionism than meets the eye - the "something else" misses out.

So the current angst about jobs at Alcoa is not the simple matter Howes and the aluminium lobby is trying to suggest. But that's normal too.

If you have a mortgage, you're part of a very powerful lobby group that pushes its own interests at the expense of the nation's broader welfare. As usual, the whole discussion about interest rates is centred on home mortgages – not all the other forms of borrowing. The politicians on both sides buy into this circus and ignore the rest, pressuring the banks on home loans with the potential result of pushing up the cost of small business loans.

The banks, again like everyone else, play their own political games and spin their stories to suit. There is zero public focus on the cost of money for businesses while the mortgage market holds the spotlight.

What we should be looking for and encouraging is political leadership that is able to look through all the pleas of lobby groups and govern in the best interests of the overall nation. It's rather hard to find that though.