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Securing Australia's manufacturing future

19 December, 2013

Australia has a strong manufacturing history and will have a strong manufacturing future, according to Minister for Industry Ian Macfarlane and the Prime Minister Tony Abbott.

In a joint media release Wednesday (18 December), the government announced a wide-ranging industry initiative comprising targeted support for regions impacted by the wind-down of Holden's manufacturing operations by 2017; reviews of the South Australian and Victorian economies; and development of a National Industry Investment and Competitiveness Agenda which will focus on Australia's strengths, create jobs and exploit our competitive advantages.

"Transitioning from heavy industrial manufacturing to higher value added production calls for a national, strategic response rather than a piecemeal one based on hand-outs and subsidies," the government said in a statement.

"The Federal government understands that South Australia and Victoria have acute pressures due to the departure of Holden and Ford.

"Still, they are not alone and Australia's manufacturing industry faces challenges across the board.

"Industry policy in Australia must become proactive to ensure that our manufacturing industry is competitive and incentivised to create jobs and investment.

"We will deliver support for the workers and communities impacted by the recent automotive closure announcements but will do so based on state specific economic recommendations so that scarce Budget resources can be deployed to grow the economies in both states.

"To support the reviews, the Federal government's response will include the development of a $100 million growth fund to support economically responsible initiatives in regions facing pressure in their manufacturing sectors.

"The fund will support business and research and development opportunities and will complement the direct support available to Holden workers as part of existing Commonwealth and Holden support schemes. We will also work to ensure that automotive workers have their skills and competencies recognised and certified.

"The fund will be administered by the Department of Industry and commence in 2014/15. The fund will provide:

Support for existing component manufacturers in Victoria and South Australia to adjust their business output or business model to non-automotive and overseas customers, or who commence or expand export activity;
Grants to existing and/or new businesses that establish or expand manufacturing operations in South Australia or Victoria, with preference for those businesses that employ former automotive workers; and
Grants to aid the commercialisation of research and development in the automotive component manufacturing sector, leading to new products or processes

"The final design of the fund will be informed by the outcomes of the reviews, consultation with the South Australian and Victorian governments, and advice from the review panels," the government announced.

"The Australian government will contribute $60 million to the fund and the Victorian government will contribute $12 million. The remainder will be drawn from the South Australian government and our expectation is that Holden will make a contribution.

"GM Holden has indicated it has set aside at least $100 million for costs relating to the wind-down of its Australian manufacturing obligations. Holden workers will also be eligible for employment support with a Job Services Australia provider as part of the Automotive Industry Structural Adjustment Programme.

"Two reviews of the South Australian and Victorian economies will commence immediately and report to the government in February 2014. The outcome of the reviews will support the work of the COAG Industry and Skills Council.

"The reviews will develop support plans that are local, practical and take into account challenges facing South Australia and Victoria.

"Both reviews will be chaired by Industry Minister Ian Macfarlane. They will include MPs and industry leaders in the South Australian and Victorian business communities.

"The reviews will look at ways to boost the competiveness of the South Australian and Victorian economies by:

Encouraging investment and innovation in high growth sectors in the affected regions;
Further investing in infrastructure to boost productive capacity;
Where appropriate and cost effective, relocating Commonwealth public service functions to the affected regions.
Considering the most pressing concerns of the shipbuilding industry;
Supporting the diversification of automotive supply chain companies; and
Supporting the training and redeployment of workers displaced by closures.

"Australian government infrastructure investments in both states could also be brought forward should the State governments agree and where projects are 'shovel ready'.

"More than $1.5 billion has been set aside for South Australian infrastructure projects over the next six years and $6.5 billion for Victorian projects. We will continue discussions with the Victorian and South Australian governments to determine suitable projects that could be fast-tracked.

"The government wants to see Toyota continue manufacturing in Australia and exporting. Australia must develop a plan for the future if we are to sustain and grow our manufacturing industry for the future. Our challenges are greater than the departure of key automotive players and affect all states and territories.

"Therefore I will Chair a Taskforce comprising the Treasurer, Industry Minister and Minister for Trade and Investment to develop a National Industry Investment and Competiveness Agenda which will make recommendations to the government by the end of June 2014," Macfarlane said.

"I will also consult closely with my Business Advisory Council, Chaired by Mr Maurice Newman AC, in the development of the Agenda.

"We are determined to be a government that makes decisions in a considered way, with the best advice and in the national interest. We will move quickly to support the more urgent needs of South Australia and Victoria, but must deliver a longer term national plan for change and growth.

"Work is already underway to reduce red tape and taxes which stifle business and investment. We have completed a Free Trade Agreement with South Korea and are advancing further FTAs for the benefit of Australian businesses and the economy.

"Therefore, the Taskforce will focus on potential measures to promote national competitiveness and productivity including:

Economy wide measures to boost the competitiveness of Australian manufacturing and lower the costs of doing business, such as options to reduce the costs of energy and regulation on Australian businesses;
Options to encourage innovation, including employee share schemes, support for research and development and commercialising good ideas;
Options to accelerate the development of productivity enhancing infrastructure;
Options to encourage the growth of small to medium businesses; and
Economy-wide incentive mechanisms to boost investment in Australia

"Still, the government understands that the best thing we can do for business in Australia is to reduce costs and lower taxes.

"No country has ever taxed its way to prosperity. Similarly, no country has ever subsidised its way to prosperity.

"We will do what we can to ensure the workers and businesses of this country have a strong, profitable, viable and competitive future.

"We will do what we can to ensure that Holden and Ford workers move from one good job to a better job when they leave those companies in 2016 and 2017. That means ensuring they get the best possible economy in which to move.

"government's essential task is to get the fundamentals right: that means low, simple and fair taxes; stable and predictable policy settings; prudent, frugal and effective administration; efficient services and strong infrastructure.

"Legislation to repeal the carbon and mining taxes has passed the House of Representatives. If the Senate passes the legislation as its first order of business next year, 2014 can be better for Australian businesses across the board."

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wayne roberts | Friday, December 20, 2013, 12:14 PM
Free trade agreements are part of the reason we are in the position we are given the off shore tariffs piled onto Australia products when we allow imported goods with little to no tariffs. When is the governemnt going to take its head out of the sand and push for fair and measured trading agreements that do not sink Autralian industry. I have not seen a great deal of comment from the Union movement given they bear the responsibility for making us so uncompetitive.
Bert Stahr | Friday, December 20, 2013, 12:56 PM
Nothing in Australia will prosper until we get rid of the Communists who control everything our work force does. The unions (communists) put such wages and conditions on the employers that as farmers, manufacturers, miners, you name it Australia cannot compete with the rest of the world. Unions(communists) then use the work place health and safety acts to at least treble the cost to the employer. Example 1. A crew goes to a site to do a job, say a 1 hour job. The inductions alone can take 4 to six hours. The hirer must pay for this time. A L.L. employee told me that in order to move a crane through an onsite fence the union safety officer demanded that the gate be opened and closed by Traffic Control. The crane driver, dogger and supervisor were required to wait for 2 hours while a traffic control crew was made available to open the gate and shut the gate after the crane had passed thru. The traffic control crew was paid the minimum 4 hours for call out. There were several men waiting for the crane who also had to be paid waiting time as was the crane crew. This is but one illustration of what goes on all over Australia all of the time. This is why everyone who can is leaving Australia. Take some time and talk to the onsite workers out of hearing of the unions(communista). For you disbelievers that the Biggies are not leaving check out Olympic Dam 40B gone, a W.A. Port 17B gone, the Woodside gas project +45B gone, Ford, gone, GMH, gone Electrolux, gone. Gove Alumina Gone. These are just the main ones. Now the Fed Govt is going to support unproductive secondary industries to the tune of about 100B. If an industry cannot survive without government support it is worthless from the beginning. Where do you think the 100B is coming from? I'll tell you, from the pockets of those people remaining in this country who are still capable of making an unsubsidized profit. Unionism(communism) works until the other guy runs out of money. By the way, the policy of the Labor Govt is socialism. The word Socialism wasn't coined until the turn of the 19th century and socialism is the policy of the communist Party. Therefore a vote for labor is a vote for communism, the tragedy is that this is unknown to most. For those unbelievers read the Political history of Collinsville.
Lou Furbadamo | Friday, December 20, 2013, 8:34 PM
Where’s the old Aussie fighting spirit, that tackles threats head on and not cowardly runs off to some obscure niche or protective crack in the wall? Usurped by our victorious Cricket team? Notably, I contend there’s nothing seriously inferior with local car manufacturing that can’t be readily Government fixed, with standard international assistance and a greater market share! So why throw the abused baby out with the dirty bath water and risk total industry melt down at the hands of grasping nuovo incompetents? But auto industry cut & run, abdicating views & spinsters have won over the new Liberal Gurus, not through experience, logic and good sense. But false hope & miserly Xmas Scrooge , opportunism short changing the former 500 Million Package, down to a paltry, insulting 100 Million transition. Incredibly, shut down protagonists haven’t proper understanding or insight into the importance of the industry, the flow on effects, disastrous long term unemployment, nor impact on the economy and budget debt. So how can they now confidently declare that we’ll be far more successful at future new "select" industries & ventures Unimpressive Budgie & Cockey want to expediently count on all those promised, delusional, nebulous, pie in the sky, designing differentiated, niche, innovative, trendy new age, unsubstantiated, wish and a prayer, “ Con” Jobs and Oh yes! The discredited mining boom merchant Doctor. O’nri La’ Boom Boom, who promised the Mining boom was sustainable and the solution to our problems lay with his China Century Yellow Butt Wipe Paper. All foolishly premature ejaculation, misguided and mostly Wong! Wong! Wong! Cause, we’ve been going “exemplary backwards” ever since, despite shedding hopeless, mass economic despots "Juliar and Virgin Budgeteer Suwanee"? The Coalition Gurus should heed SA’s Jay Badweatherdill on the likely prudence and success of their intended industry abdication on a dopey whim and monkish prayer? After all, Jay now appreciates just how futile, unsuccessful and costly this transition crap and job creation spin has been with the ex-Mitsubishi Clovelly Park Fiasco. And minor Mitsi was a relatively inconsequential blip, compared Big Bangers Holden and Ford! Poor depressed Jay, keeps hyper ventilating and fruitlessly warning, “It’s not that simple! It’s not that simple!” He would know! He now unenviably presides over the worst industrial malaise, debacle and “near junk bond state finances” and doesn’t want another Titanic auto collapse to make things far worse. When, one third of retrenched Mitsi workers are still unemployed and those in “work” report it inferior to previous pay & conditions. There’s the real proof of their Transitional Bull? Despite incentives, all they’ve mostly attracted is Gov. Institution relocation, which are future cost burden, not revenue and wealth generators! The miniscule private industry that’s moved in, after six years, employs just a hand full of people, compared to thousands who lost jobs? So much for all their hyped “jobs of the future”? But the failure score is already on the board with pressing unemployment risen from 4% to predicted 6.25% plus, for much longer & sustained periods & massive deficit blowouts. How can a respectable nation go from prediction of surplus this year, to hopeless deficits for the next ten! The clueless PM. should infamously Rhodes Scholar the cost of extra unemployment benefits for his tens of thousands of needless unemployed and the hit to tax revenues & confidence? Compare that to his paltry 400 million “scrooge’d” auto saving? He deludes “Old Jobs for new Jobs”! I say “Old jobs for No Jobs & bugger all new industry!” He claims “he doesn’t want to throw good money after bad! But that’s exactly what he’s aggravating by burying existing “old” industry. Someone should whisper in the dill’s, ear that he’ll have to pay the extra looming billions! Unimp
Mike Azzopardi | Tuesday, December 24, 2013, 7:48 AM
The price of all the following steel, Electricity,Gas,Worker compensation and the Tax system Makes manufacturing a product in Australia to Expensive. Australia can not wait and hope the AUS Dollar goes down and stays down. Manufacturing is a 10 year to 20 Year plan it requires certainty to be able to move forward.Only the Government can give small manufactures that certainty. Australia requires a tariff system that gives us small manufactures a fare go. The cost of all the material and government charges is to high.I do not feel its the wage cost.
alf | Monday, January 13, 2014, 11:57 AM
You are all right, but answer me a question if the dollar is reduced in value to make us competitive it will have to be on par with the China yan around 60 cents, exactly what do you think will happen when the unions can`t buy their glass of beer for the same price as before, or Penny Wong and the dead Duck have the value of all their pensions reduced, I can see strikes, industrial destruction, and further wage demands being made like there is no tomorrow. For this country to survive they have to shown the light,if not then shown the door. Communism is dead it died years ago or have they not been told yet by their union bosses.
Former Auto Worker | Monday, January 20, 2014, 5:07 PM
It appears to me that the government (old and new) have written off manufacturing for services and agriculture. Latest FTA with Malaysia means they sell cars to Australia NOW with no tariffs. Yet Holden can't export a Cruze to Malaysia until 2017. That agreement is a clear statement that the LNP will not even give our manufacturing a fair go! (ALP also made similar agreements when they were governing.)
Alf | Tuesday, January 21, 2014, 9:42 AM
You will all have to do now what I am about to do ,And that is to move off shore, I see nothing else as an option Government wont help and has no ideas of their own and are totally impossible to talk to, To survive I see no alternative. These bloody unions and their Commo leaders are killing our futures not just us but our childrens.
Former Auto Worker | Tuesday, January 21, 2014, 10:29 AM
Alf. That is what we did in 2012. I had thought the LNP in government may improve the situation but there are no signs yet that we made the wrong decision. With present conditions, the $A would have to drop a long way for us to rue our decision. Alf if you are correct regarding a lower $A leading to more industrial strife? Well that is an even scarier thought!
john | Tuesday, January 21, 2014, 10:37 AM
Before you go raving on about commo's and unions, watch the following YouTube link, and then tell me it's all the workers' fault Alf. Then, pack your shit up and piss off and exploit people in a cheap country. Who knows, you might even be able to use child labour? That is until they bring Unions in to stop it. http://www.youtube.com/watch_popup?v=Lvl5Gan69Wo
Former Auto Worker | Tuesday, January 21, 2014, 11:27 AM
John, I can't speak for Alf but I have never blamed 'the workers'. However, I do have doubts about the leaders of some unions and whether their actions are in the best interests of their members. When I was a union member I was warned for not taking a long enough tea break (double what was in the EBA). When managing a factory, the union prevented their member from getting flexible work hours to care for her child. (She needed an earlier start time, outside of the the EBA agreement. I agreed, the union didn't.) And then there is Craig Thomson... was he good for HSU members? Something needs to be done on this front at the same time as the government needs to be clever as to how they support industry. We can't stop GM from profiting in China, we could have made sure that in turn for local support they generated a specific return in our country. The experience and education I received through the auto industry have made me self sufficient. I don't know how our children's children will get the same opportunity.
alf | Tuesday, January 21, 2014, 4:31 PM
John I have never ever said it is the workers fault , my only comment here is that it is a well proven fact you do not stand up and be counted when the Unions Commandos give an order, They and I mean the greater majority of unions are run by Left wing hardliners that have led this country into the ground with petty demands.