INDUSTRY: by Peter WestmoreNews Weekly
Sophie Mirabella's vision for manufacturing in Australia
, October 1, 2011
The shadow minister for manufacturing and innovation, Sophie Mirabella, has highlighted the need for new government initiatives to help Australian manufacturing industry to survive and flourish.
Speaking to the National Press Club recently, she warned of “a deep, widespread and prolonged pessimism about the state of Australian manufacturing”. She said: “There is mounting awareness in the community that, if recent trends continue, then it will not be long before we lose our strategic, indigenous capacity to ‘make things’ in this country.”
Her speech was delivered amidst warnings of the imminent collapse of manufacturing in Australia, under the impact of the high dollar, soaring prices of energy (particularly electricity), and fierce competition from low-cost producers in Asia, particularly China.
She highlighted the disastrous decline in manufacturing in recent years, saying that during the course of the last 39 months, Australia’s monthly manufacturing survey suggested that manufacturing activity has contracted on 26 separate occasions.
She said: “As a comparison, the equivalent indexes show that manufacturing at a global level has expanded for 26 consecutive months. At a country level, there have been 25 successive months of expansion in the USA, 23 in Austria and 21 in the Netherlands, just as some examples.
“Here in Australia, more than 100,000 jobs have been lost in the sector over the last three years.
“Our rate of manufacturing production has not only begun to stall, but gone backwards. In a listing of industrial production for 42 countries in the most recent issue of The Economist, we were ranked 41st, in front only of Greece.”
Notwithstanding that food-processing is Australia’s largest manufacturing sector, she said that last year the country became a net importer of food and groceries for the first time in living memory.
In Australia, employment in manufacturing has fallen in five of the past eight quarters. But globally, it has risen for 21 successive months, or seven straight quarters.
“It is a rarity now for a week to pass without stories of further manufacturing closures and job losses, and warnings that Australia is at increasing risk of becoming simply a mining, services and welfare economy — and opening ourselves to the considerable risks that this would invite.
“And, as if all of that isn’t already enough, our manufacturers are now being asked to look down the barrel of the introduction of a carbon tax,” she added.
Mrs Mirabella criticised the statements made by former Labor Prime Minster, Paul Keating, who said manufacturing was an “old industry”, has “moved to the East” and makes for “an economy with a brown, fat underbelly”.
She observed: “In other words, in his view, there’s absolutely no need for anyone in Australia to be employed in manufacturing. We should effectively turn our backs on the million Australians who work in the sector, and just let it all be shipped off to Asia.”
She called for governments to be honest and to squarely face up to the challenges that Australian manufacturing now confronts.
She said: “It’s time for a fresh vision for a sustainable manufacturing base in this country. I genuinely believe there is a positive and viable future for Australian manufacturing.
“I say this because, fundamentally, Australian manufacturers are efficient, innovative and, all things being equal, competitive. Manufacturing is an integral part of a modern, industrialised economy and is too important to lose.
“When people tell you that Australian manufacturers are big polluters, that they are part of old and outdated industries, and that they put lead weights in the saddlebags of our economy, it’s clear they have no real understanding of the importance manufacturing has to the wider economy.
“It’s not just that one million Australians are employed in manufacturing; it’s also the innovation and the value-add that is ignored.”
The shadow minister then outlined an alternative vision for the future of manufacturing, based, in part, on what comparable countries in Europe, the United States and Asia are doing.
After visiting hundreds of manufacturing plants around the country, she declared that “the view that government should abandon any specific focus on industry policy out of the fear of being labelled protectionist is shallow”.
She continued: “Indeed, there is nothing protectionist about making sure that capable local industries have the same opportunities as foreign companies to compete and grow. And any good government should strive to foster clear and fair market incentives through robust competition, as well as a stable economic environment which encourages industry to invest and to employ Australians.
“While governments can’t necessarily do a great deal to directly combat the substantial and ongoing problems caused by our high dollar, they do have the power to recognise the distortion of our own domestic market through the unlawful dumping of foreign goods, as indeed the World Trade Organisation (WTO) makes clear through its Anti-Dumping Agreement.”