none
none

2017 A YEAR OF UPHEAVAL

08-03-2017
by 
in 

By statistical measures, Australian manufacturing started 2017 on a modest upswing. The Australian Industry Group’s Performance of Manufacturing Index for January was 51.2, marking a fourth consecutive month above 50 and so of expansion – though the index was down 4.2 points from December.

Such indicators are useful, but they don’t give the whole picture. In particular, they don’t illuminate the challenges facing manufacturers in the year ahead.

This will be a year of upheaval as the remaining two carmakers, Holden and Toyota, prepare to cease production in October. And even before the expected heavy job losses begin, the $155 million Growth Fund that is supposed to help supply-chain firms invest, diversify and grow has run out of cash.

The shutdown of the car industry, which has already begun with Ford’s closure late last year, will have ramifications for the wider manufacturing sector and across the economy. Modelling by the University of Adelaide indicates that up to 200,000 jobs are at risk, with a $29 billion hole ripped in GDP.

It is no secret that I believe this disaster need not have happened. The carmakers were goaded to leave. The question now, however, must be how we respond to the crisis.

The automotive industry in this country has always been the great reservoir of technological capabilities for Australian manufacturing, and a locus of innovation. How do we preserve those capabilities and attract new investment, so that the hundreds of supply-chain firms can diversify into other kinds of manufacturing? How do we preserve high-skill, high-wage jobs?

These questions can’t be answered unless the Government takes an active role in responding to the challenge. There is no invisible hand that will magically create new opportunities and shift people and skills into new industries.

So far, the Government’s response has been woefully inadequate. The two major elements in the Growth Fund – the Automotive Diversification Programme and the Next Gen Manufacturing Grants Programme – are already fully allocated. And the Next Gen Manufacturing Grants Programme, which was by far the largest element of the scheme, wasn’t available to most automotive supply chain firms in any case, because the guidelines stipulated that the vast majority of these firms were not eligible to apply.

The Growth Fund claims to include $30 million for worker retraining, but that is entirely made up of money set aside by Holden and Toyota. There is nothing from the Commonwealth.

This must change, and Labor is willing to work with the Government in doing everything possible to assist the manufacturing sector through this difficult time of transition.

The work that must be done is not only about the response to the immediate crisis.

Australian manufacturers know that surviving in a globalised marketplace means obtaining a competitive advantage by offering quality products that give customers value for money.

That is why we need a strong national innovation system, but the National Innovation and Science Agenda only restored a mere fraction of the $3 billion cut from science, research and innovation programmes in the 2014 budget. We must repair the innovation system, so that advanced manufacturing in Australia will continue to thrive.

Senator Kim Carr is the Shadow Ministry for Innovation, Industry, Science and Research.

Related news & editorials

  1. Senator Cash
    15.11.2017
    15.11.2017
    by      In
    In October, the last Australian-made Toyota and Holden cars rolled off the assembly line at Altona and Elizabeth. For thousands of workers who have made Australian cars – and the families and communities that have supported them – this was undoubtedly an emotional time.
    The International President... Read More
  2. Senator Kim Carr
    02.11.2017
    02.11.2017
    by      In
    Sovereign capability in an industry doesn’t emerge out of a vacuum, nor does it grow on a tree.
    It is just empty rhetoric to rely on the concept of natural advantage. Sovereign capability needs to be built, and then maintained, often over a long period of time. Acquiring this capability requires... Read More
  3. Senator Kim Carr
    16.10.2017
    16.10.2017
    by      In
    Earlier this month, the last Australian-built Camry rolled off Toyota’s production line at Altona in Victoria. And shortly, the last Australian-built Commodore will emerge from Holden’s assembly plant at Elizabeth in South Australia.
    This is not only the closure of two factories. The shutdown of... Read More
  4. Senator Lee Rhiannon
    16.10.2017
    16.10.2017
    by      In
    The Australian automotive industry is at a crossroad. One path continues on a trajectory of decline, with skills and jobs losses, the other path forges a new path of stability, workers’ rights and innovation.
    Climate change is impacting on the automotive industry, with a necessary shift away from... Read More