Wednesday, 15 May 2013
Matters of Public Interest
I want to talk today about the importance of a strong, diverse and resilient economy—an economy that capitalises on our national strengths with an unerring focus on protecting and creating Australian jobs. I also want to talk about how being a country that makes things is integral to achieving all of this.
Despite dominant perceptions that Australia is being kept afloat by Chinese resource contracts, manufacturing is a significant contributor to our economy. In my home state of Tasmania, it employs over 15,000 people and contributes over 15 per cent of the state's economic activity. We have a strong regional manufacturing presence on the north-west and a solid industrial hub in northern Bell Bay, which is home to Rio Tinto's aluminium smelter and a number of other large industries. In the south, boat builder Incat recently secured contracts for a world-first, high-speed passenger ferry powered by LNG turbines in South America and a new super-ferry in Denmark. I am pleased my colleague Senator Carol Brown and the Labor candidate for Denison, Jane Austin, recently led a delegation to Canberra to discuss plans to secure Australian defence contracts for Incat. If Tasmania secured just five per cent of the Defence Force's planned equipment budget, this would inject up to $500 million into the state's economy.
Of course, high-quality, world-class manufacturing operations like Incat can be found in every state of this country. In fact, despite significant challenges last year, the contribution of the manufacturing sector to the Australian economy was a considerable eight per cent of GDP. Another great strength of manufacturing is its capacity to invigorate other local sectors. When a factory opens, retail, hospitality and other services follow with accompanying boosts to local primary production, utilities and construction. Some experts have estimated this powerful multiplier effect at a ratio of one to five. That is, each manufacturing job generates five more in other sectors of the economy.
In 2012, manufacturing contributed around $106 billion to the national economy and directly employed more than 950,000 people—around four times the number employed in mining. In addition, many resource sector jobs cluster around small, localised areas, while the hallmark of manufacturing is its impressive geographical breadth and diversity. But this is not about manufacturing versus mining; nor is it a question of which offers more to the country. It is about recognising that we need to build a diverse economy if we are to maintain our strong fundamentals and protect ourselves from future global volatility. Sadly, the manufacturing sector is facing some very serious challenges. As China expanded its manufacturing output dramatically over recent years, global production swelled and prices fell in turn. At the same time, increased demand for resources saw our dollar hit historic highs, making it even harder for Australian manufacturers to compete globally. Add to this global post-GFC uncertainty and you can see this has been a near-perfect storm for struggling Australian manufacturers. More than 100,000 manufacturing jobs have been lost since the start of the global financial crisis, despite the fact that the Australian economy as a whole has gained 960,000 jobs. Proud family businesses that have been serving their customers for generations have closed their doors, and local communities that have been built on a strong manufacturing heart have been devastated.
At the moment, we are at a risk of catching Dutch disease, where an increase in resource sector activity goes hand in hand with a debilitating contraction in manufacturing. If we are too reliant on resource dollars, we risk further vulnerability to global shocks and reduced ability to rebound if resource investment wanes. History tells us that if we do not act now to protect manufacturing, it may take decades to get back, if we do at all. I am proud that this government has committed to finding a way forward for the sector and saving Australian jobs. In October 2011, the Prime Minister's Taskforce into Manufacturing was formed with members from industry, unions, government and the R&D community. Their findings, reported in August last year, were both sobering and hopeful. They reiterated the unique combination of global, structural and cyclical forces that is placing so much pressure on so many Australian manufacturing businesses. They also pointed to the fact that this pressure could prevent the sector from capitalising on future opportunities, potentially leaving the economy as a whole weaker, narrower and more vulnerable. But they also voiced optimism about future opportunities for the industry and its place in the wider economy—opportunities that derive from our proximity to Asia and from our proven, practical problem-solving ability. They highlighted the potential to supply mining, construction and defence, as well as the opportunity to build capacity in niche, knowledge-intensive areas such as medical and scientific equipment, pharmaceuticals, aerospace and advanced materials. They also pointed to the ability to leverage off this government's successful Clean Energy Future and National Broadband Network policies.
This government responded in the form of the forward-thinking, billion-dollar Plan for Australian Jobs. The plan lays the foundations for future growth and prosperity, whatever the future may hold. It encompasses practical, achievable solutions to help manufacturing to survive this time of transition and thrive well into the future. Importantly, we have made a strong commitment to back Australian firms to win much more work at home. New laws will require any project worth more than $500 million to show that it is taking steps to help Australian businesses win work. Global companies with projects over $2 billion will need to involve competitive Australian companies in their global supply chains. And a new Australian industry participation authority will oversee Australian industry participation plans. We are also taking steps to protect Australian products from the unfair practice of dumping, where overseas goods are sold in Australia at prices below their normal value. We have also appointed a new Automotive Supplier Advocate to boost sales of Australian-made cars to government and business fleets.
On the export side of the equation, we will establish 10 industry innovation precincts to bring together the expertise of industry, business, universities, researchers and experts. The precincts will work to achieve the innovations our businesses need to succeed in the future, turning new ideas and inventions into lucrative contracts. We will also help our small- to medium-sized businesses grow and create new jobs by providing $350 million in new funding and by improving tax arrangements to stimulate more private sector investment. A further $27.7 million Enterprise Solutions Program will help Australian businesses bid for public sector contracts, and we will expand Enterprise Connect, which offers businesses practical advice on improving their operations.
This is a serious plan from a government that is serious about Australian jobs and a diverse economy. In stark contrast to this coherent and thoroughly-consulted roadmap for the future of manufacturing, the coalition has offered nothing but negativity and gripes. It is glaringly obvious that the coalition plan is to not release any policies that go beyond fuzzy platitudes and self-evident proclamations. Despite calling manufacturing a pillar of the community, they have released precious little information about how they plan to keep it upright against the prevailing winds of international competition, the high dollar and global instability. What we do know is that Mr Abbott has long committed to slashing the funding that supports our vital automotive industry by $500 million by 2015, and to cutting it completely after that. This reckless plan threatens the livelihoods of more than 250,000 workers and threatens to relegate Australian-made cars to the annals of history. We also know about Mr Abbott's 2010 plan to shut down the successful Enterprise Connect program, which has helped thousands of businesses across the country to make practical improvements to their operations.
We on this side of the chamber will always look after the workers who built this country and who generate the wealth and prosperity that make us great. Only a Labor government will provide the support and assistance necessary to look after decent manufacturing jobs and to ensure that workers receive the respect and pay and conditions they deserve. Nobody should believe for a second that the coalition has the interests of manufacturing workers at heart. It will rip the guts out of the sector in a short-sighted, ideologically motivated, slash-and-burn austerity frenzy that will cripple our nation's competitiveness and destroy good Australian jobs. We must remain a country that provides good, productive jobs for our people. That means continuing to be a country with a solid manufacturing base—a country that makes things.