Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Hansard source

I support the motion. I am concerned that the government's decision with regard to the procurement of these two vessels entirely from overseas suppliers without Australian industry being given the opportunity to even tender, suggests an approach to industry policy which we have seen reflected in so many decisions by this government to date. The most powerful comparison of course is the government's approach to the automotive industry, but we have also seen it in the food processing industry, in other transport areas and we have seen it in the statements by the Treasurer about his view that support for building industry capabilities is really a version of corporate welfare. We have seen it argued by the Treasurer that the government's job is not to level the playing field. There is almost an acknowledgement that the playing field is not level, but the government's attitude—the attitude of the North Shore Sydney bankers that run this government—is that governments should not intervene to level the playing field.

We have, essentially, an approach to industry policy which demonstrates a profound ignorance of the way in which manufacturing works and the requirement to sustain manufacturing capabilities in an advanced industrial country such as ours—an attitude that is not held by any other advanced industrial country. These are not the rules the Americans use. These are not the rules the Europeans use. These are not the rules the Japanese use. These are certainly not the rules that a country like China would use. We have this abstract notion that, somehow or other, Australia will not be able to be competitive or be capable of providing these industrial skills because of cost disadvantages or productivity or whatever the argument happens to be—it varies from place to place. But in essence there is a neoclassical assumption that, in a perfect competitive market, Australia does not measure up. That is, of course, nonsense, because, in real-world economics, the textbook theories of the university seminar just do not apply. In the real world, in terms of strategy and social and political constraints, particularly when it comes to defence procurement, those perfect competitive market scenarios simply do not apply.

This government is trying to suggest that our economy is not able to provide economic diversity in its way of life or its economic capacities and that we should concentrate on mining, tourism and agriculture—this idea that we can be a farm, a quarry and a beach. The reality is very different, because all competitive advantage is built. In every country in the world, that is how it works. You actually have to go out and develop the strategic capabilities. They come about as a product of real investment, real innovation, the development of new technologies, education, research, building industrial clusters and ensuring that the appropriate networks are in place so that you have the advantages that build upon experience. The reality of real-world economics is that, the more you do things, the better you get at them. This notion that we can somehow or other just go offshore and get, off the shelf, a major defence platform, and that will not have any real consequences for Australia, is something that I very strongly reject.

Last Thursday I was at Hoffmans in Bendigo. Hoffmans is an advanced engineering firm that has been attracted to Bendigo as a direct result of government support. It has taken over part of the Thales plant, which used to be ADI. It has renovated equipment and developed skills and is able to participate in the ship repair work that is so important for the Collins class submarine. There, on the floor—it was wrapped up, ready to be delivered—was the drive shaft for a Collins submarine, developed out of Bendigo. Those capacities are built, developed by a large number of people working cooperatively together to ensure that we are able not just to build ships but to repair them. Those capacities can only be developed as a direct result of government action and ingenuity and innovation to have the capacities of our workforce developed in Australia. Shipbuilding is at the cutting edge of science, technology and innovation. That is why it is so important—just like in the automotive industry—that governments invest in these capacities, so that we can constantly adapt, design new solutions to problems and ensure that we have the very best kit this country is able to produce and the skills necessary to ensure a way of life for many thousands of people.

I reject the notion that is often put on the other side, that this is all about job creation. It is about the development of this nation and ensuring that we can do things independently of other people, particularly in defence industries, in times of acute crisis, when we will not be able to rely on other people, when we have to rely upon the capacities in this country. That is why I find this attitude so extraordinary, where the government tries to suggest, 'Oh, we'll look at it in the future; we'll try to do something in the future.' When they had the decision before them, they took the option to offshore the jobs, offshore this particular contract, rather than saying, 'As part of the ongoing process, we need to develop the capacities in this country so that we have the skills and the technological applications to do the things necessary for this country and, in times of real crisis, we can sustain them.'

We know how innovative shipbuilding is. We know that the manufacturing sector benefits enormously from it in skills development, new applications, new discoveries and high-performance capacities. It can only do that if the Australian government works with industry to ensure that those skills are able to be developed. I take the view that this government essentially wants to turn its back on manufacturing. This government has a notion, in terms of the model economic theory, that it does not really matter. That is a position which essentially is economic vandalism. If the government were genuinely committed to our naval strategic plan, we would be in the business of ensuring that these crucial industries were developed so that the skills were kept in Australia. This is the attitude—this reckless North Shore Sydney merchant banker attitude—that cost us the automotive industry. This is the attitude where the government has turned its back on food processing. This is the attitude where the government now seems to be in the process of turning its back on advanced ship manufacturing and ship repair. It is to the long-term detriment of this country that such an attitude is pursued by this government, and it is not just— (Time expired)