George Campbell (NSW, Australian Labor Party) Share this | Hansard source

I meant it through the chair. I am sorry, Madam Acting Deputy President, but Senator Patterson was interjecting continuously while I was making my remarks. Not only did the Labor government at the time implement those industry plans; it put in place a manufacturing council. The manufacturing council did a stocktake of all our manufacturing industries—a collaborative effort between the workforce, the industries and the manufacturers—and developed strategies for improving that manufacturing base. In addition to radically restructuring the way in which we produced goods in this country by abolishing demarcation practices, by introducing flexibility in the workforce and by increasing productivity, which was not done without pain, that process also radically helped create a situation where, in the early nineties, our export of manufactured goods started to grow.

The proof of the pudding is in the eating. I do not want to be quoting a lot of figures as others have done in this debate, because it simply confuses people at the end of the day and the figures do not really mean that much. But if you want to get the message of what has happened, it is in one simple set of figures. Between 1983 and 1996, our manufactured exports grew by 14.8 per cent. Between 1996 and 2000, they grew by 5.1 per cent. Between 2001 and 2006, they grew by 1.8 per cent. So all of the effort, all of the energy, that was put in in the eighties to lay the foundation for a more diversified economy, to lay the foundation within which our manufacturing industries could grow and thrive, has been nullified over the life of this government.

This government does not have and has never had a belief in the manufacturing sector. We have been living, as everyone knows, on the resources boom. No-one knows how long it will continue. We did not expect the terms of trade to collapse by 10 per cent in 1986 but it happened, and it happened overnight. Workers had to take a wage cut as a result of it. Workers had to take a wage cut because the terms of trade had collapsed. We will be essentially facing the same set of circumstances again in the years 2010, 2011, 2012 or whenever it is likely to come along. Something that we have to be concerned about is the narrowness of the Australian economy. It is an investment, which is in the national interest, to ensure the economy is diversified. The only way in which you can diversify it is through our manufacturing sector.

I am not one who sees China or India as being threats. I believe that, if we handle it properly, if there were some creative thinking in this country, it could be a real opportunity for our manufacturers to position themselves as part of the supply chains to both those countries, to select key niche areas in those industry sectors. We have the expertise and the skills to be able to play a role, to do that effectively and, as a result, to substantially boost our manufacturing involvement in the global economy. So we should not necessarily see them as a threat; we should see them as an opportunity.

But this government does no thinking at all about what it should be doing in that area. One of the problems is that we have a department of industry that is simply a service department. It is like Centrelink. It hands out buckets of money and industry grants to various companies for various programs which it has had running for a long period of time. I am not arguing that some of those programs are not worth while; they are worth while. But I think some of them are quite dubious in terms of what they deliver; nevertheless, if some companies get a benefit out of it then obviously they are worth while. But the department is a policy-free zone when it comes to thinking strategically about the future.

I have consistently sat at estimates hearings and questioned officers of the department about their ideas for the development of various industries and what they were doing in terms of innovation in certain sectors. You hardly got a murmur out of them about their ideas in that area. It is partly because the real thinking about what happens in manufacturing occurs in the Treasury department; it does not occur in the industry department at all. If there is going to be growth in the manufacturing sector in this country, then we have to seriously look at the way in which the current department of industry is structured and restructure it to ensure that it not only delivers the program but does some critical thinking in terms of strategies and ideas for the future of manufacturing.

Manufacturing is critical. If we are going to be part of the global economy, it is critical for us to grow our manufacturing sector. Innovation is one of the key areas of doing it. What has happened to innovation? If you look at our expenditure on R&D, I think we are in the bottom third of the OECD countries. We are below a number of developing countries on our spend on R&D—I think it is about 0.67 per cent as opposed to what is argued should be the level, around 2.5 per cent. All of the European countries are growing their expenditure on R&D while we have been going backwards, because we do not see the significance of being able to position ourselves in the marketplace. If we want our companies to operate in the global economy and operate effectively, then broadband service is going to be critical. We have been hearing the debate in this place about broadband for a number of months now. I just hope the Minister for Communications, Information Technology and the Arts has got it right—I do not think she has—because the significance of that decision in our capacity to play a role in the global economy is going to be of very great substance to our economy, and to the ability of companies to operate real-time in their positions within the global chain.

Other speakers have mentioned the number of companies we have in this country who have very significant opportunities opening up to them. I know of one little company in Victoria that is making biodegradable packaging out of cornstarch—an enormous product. What has it had to do? It has had to take its manufacturing to Europe because it cannot get the support of the infrastructure here to operate effectively. Now, that is only one. We had a company up in Lismore called Permadrive that developed a way of harnessing the braking power in trucks. I have actually sat in a truck with no engine in it and been driven up the street of Lismore as a demonstration of how it could operate. They got a contract with the American army. Has the Australian Army bought their product? No, it has not. But the American army has seen the value of it. I understand that company is struggling to survive because we are not prepared to put the effort into ensuring that they survive in that marketplace.

What did we do as a government? I tell you what we did—two representatives of the company were on their way to Detroit to negotiate the deal with the American army, and we made a decision and withdrew the Austrade commissioners out of Detroit. The two representatives turned up there and there were no Austrade commissioners; they had been taken home as a money-saving exercise. They had to go back to Los Angeles to do the negotiations where Austrade still had a representative. That is the sort of thing that occurs because there is a lack of strategic thinking about what we need to do to be able to succeed globally in manufacturing. We need to adopt policies that will position our manufacturers in the global marketplace and where they are able to build collaborative arrangements with China, with India and with other countries, who are the emerging engine rooms of production at the current moment.

We have made a lot in this country about the free trade agreement with America, in particular about what that was going to mean for Australian companies in getting access to government procurement in the United States. I have not heard—and I have asked a number of people—either industry or government get up anywhere and tell us of one contract that an Australian company has won to supply goods or services to government in the United States since that agreement was signed. I do not think we are likely to hear about one in a very short period of time, because that is a process that is guarded zealously. We in fact suffer from the reverse in this country. We have a predisposition for our officers involved in government procurement to get overseas as quickly as they can. The purchases are overseas because they get a holiday at the end of it—well, it is seen as being a holiday.

I think we need to look seriously at our procurement policies. We ought to ensure at the end of the day not that we are giving an unfair advantage to our companies but that our companies have a fair opportunity of being able to participate in bidding for government procurement. Government procurement in this country, if you take state and federal governments, is worth something like $50 billion a year, which I would suggest is a significant basis upon which you can grow manufacturing companies and get companies into the global marketplace with new products, new goods and new services. But we do not use it strategically or wisely in terms of how it can become a driver of development of our industries.

As I said, this issue is not a new issue. It is an issue that has been the centre of debate certainly for the workers I have represented as a union official over many years, and the people I still try to represent as a senator in this place. It has been an issue of debate about what the role of manufacturing should be in the Australian economy. It has always become an argument on whether it did or did not get resources adequate for growth, and it has always lost the debate to either the agricultural sector or the mining sector.