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Strong support for taskforce report

31-08-2010
by 
in 

 

Richard Reilly … ‘encouraging’

The Federal Government has accepted in principle most of the recommendations of a taskforce charged with finding ways to support the nation's manufacturing sector.

And unions, industry groups and small business are also backing the vast majority of the 41 recommendations contained in the government taskforce report.

Prime Minister Julia Gillard says the Government supports most of the report's recommendations but rejects suggestions to look at setting up a sovereign wealth fund and a domestic reservation policy for gas.

The report has called for large structural changes to the manufacturing industry in a bid to help the sector tackle the impact of high Australian dollar, low productivity and the booming Asian market.

The taskforce warns the Australian economy may become overly reliant on the mining boom should manufacturing continue to decline.

"Investments in plant and equipment, managerial expertise, supply chains and skills take time to develop and mature; they are not readily replaceable and sometimes they are not replaceable at all," the report said.

"When the mining boom ends, and in fact well before that, when the construction phase ends and the resource requirements fall back, we cannot afford to face a vacuum that takes ten or twenty years to fill."

Ms Gillard says a strong manufacturing industry is vital to Australia's future "in the days that lie beyond the resources boom".

"It provides working people with jobs, good blue-collar jobs," she said.

A Manufacturing Leaders Group will be established to help the government implement its response to the recommendations.

Australian Council of Trade Unions secretary and taskforce member Dave Oliver said the report marked the start of a process to improve conditions for local manufacturing.

"This is a blueprint or a road map for the future and it will only succeed if we continue to engage constructively and work together," Mr Oliver said.

Peter Strong, chief executive of the Council of Small Businesses of Australia, said the small business sector has also welcomed the Federal Government’s report, which recommends an industry-specific stimulus program and other incentives for SMEs.

And Richard Reilly, chief executive of the Federation of Automotive Products Manufacturers, a sector hit badly by the recent downturn in manufacturing, also welcomed the report in principle and said its recommendations were "encouraging".

The Australian Industry Group also said the report was a "vote of confidence". The organisation's regular manufacturing surveys show the industry has been in decline for more than a year, with consecutive monthly retractions.

"While the sector faces a unique coincidence of global, structural and cyclical pressures, the report proposes that Australia capitalises on its considerable strengths and builds new sources of strength to position the sector to take advantage of emerging opportunities," chief executive Innes Willox said in a statement.

The AIG Group was a part of the taskforce which created the report.

Mr Willox says on top of the high Australian dollar, the industry is facing several well-known challenges.

"High input costs, particularly around energy, slow productivity growth," he said.

Mr Willox says the impacts of the carbon tax must be monitored and countered if Australia is to remain competitive in the global market.

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