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The three pillars of manufacturing reform for 2013

25 March, 2013

In the past year, there has been significant progress made on some reforms to support Australia's manufacturing sector, notably in the anti-dumping area.

Manufacturing Australia (MA), a business coalition of Australia's biggest manufacturers, congratulates those in government and opposition parties, as well as wider industry who have helped realise these reforms.

But in an important year for the future of Australia now is not the time to pause for reflection.

Manufacturing is the value-adding lifeblood of a balanced Australian economy. Through job creation, import replacement and maximising the value of our natural resources, manufacturing delivers tremendous benefits to the nation.

MA members share a common goal: to create and retain Australian manufacturing jobs, by growing our sector and working with governments and stakeholders to address the challenges facing many manufacturing industries. This will be achieved through broad innovation, good policy and workplace flexibility.

"We stand for a fair level playing field, a sound commercial and regulatory environment that attracts investment and a representative voice to raise the calibre of national debate on the issues affecting the sector," Sue Morphet, Chairman of Manufacturing Australia, said.

MA advocates sensible, strategic public policies that encourage Australian manufacturing to grow the sector's capacity, create jobs and maximise the value returned to all Australians.

An MA delegation led by Morphet and several of the member CEOs travelled to Canberra recently to meet with senior politicians from all parties and ask they commit to working in partnership with the Australian manufacturing sector to address three new pillars of reform that will make a profound difference to the competitiveness and sustainability of Australian manufacturing in 2013 and beyond.

The MA policy manifesto, Australia's Manufacturing Advantage, outlines three key policies that can make a real difference to the competitiveness and sustainability of Australian manufacturing.

"Through smart policy and strategic investments, our sector can in the next decade directly and indirectly create 100,000 new jobs and drive a manufacturing resurgence throughout rural, regional and outer-suburban Australia," Morphet said.

MA intends to continue working with the Australian federal and state governments, as well as industry, to ensure fair and appropriate industry policies, and to secure the future of this sector.

Three pillars of manufacturing reform for 2013

1. Australia's energy advantage

Australia is an energy and resources superpower. Currently our domestic energy policies largely fail to capitalise on our energy advantage. Unlike countries that identify and exploit their natural advantages, Australia is squandering its own.

MA believes that Australia can seize its energy advantage by: creating a domestic gas market that enables value-adding manufacturing alongside gas exports; ensuring electricity reforms prioritise maintaining Australia's energy advantage; making the renewable energy target a percentage, not an absolute number; and removing the disadvantage of introducing a carbon tax that is not consistent with our trading partners.

2. Restoring fair trade

Australia is a trade-orientated economy which has prospered over the last 30 years by pursuing an open trade agenda.

Mismanagement of open trade can easily lead to unintended consequences such as dumping and exclusion of domestic manufacturers from domestic markets. This undermines fairness and limits growth and development in domestic manufacturing.

MA is seeking fair outcomes for trade exposed industries which will operate within World Trade Organisation guidelines and allow Australia's manufacturing sector to grow.

MA has identified three priority areas for action by federal and state governments: overhaul coastal shipping regulations to ensure Australian manufacturers are not disadvantaged; strengthen anti-dumping powers to stop predatory dumping and circumvention of dumping duties by foreign importers, address currency manipulation and provide redress against subsidies to foreign manufacturers; and strengthen industry participation schemes to remove "gaming" and ensure they meet their intended aim of boosting Australian involvement in major projects.

3. Investing for manufacturing growth

To grow Australian manufacturing, two significant obstacles must be overcome.

First, industry, governments and communities alike must shift the perception that manufacturing in Australia is a "sunset" industry whose future will be marked by continued decline. Second, government policy settings should recognise and address unfair barriers currently placed on domestic manufacturers.

MA has identified five priority areas for action by federal and state governments: maximise competitiveness through investment in infrastructure; promote research and development; strengthen industry-linked training to up-skill Australia's manufacturing workforce; increase the flexibility of Australian manufacturing workplaces; and strengthen regulations that stimulate demand and remove the burden of regulations that do not.