Published 03-09-2020
| Article appears in August 2020 Issue

AI GROUP CALLS FOR STRONGER ECONOMIC RECOVERY PLAN

02-09-2020

As manufacturing acclimatises to the “COVID normal”, challenges such as disrupted supply chains, unstable staff retention and lower financial bottom lines persist.

As a result, Australia’s industry association Ai Group has pushed the Federal Government for stronger recovery strategies for the whole of Australia.

The August release of Ai Group’s Australian Performance of Manufacturing Index (APMI) indicate “broadly stable conditions” for the manufacturing sector overall nationwide.

However, Ai Group acknowledges the results among the big manufacturing states were divergent, with Victoria’s economy contracting relatively more than the others.

The continuing COVID-19 restrictions in Victoria have definitely impacted on its higher-than-average economic contraction compared to other states.

As we enter spring, daily COVID cases in Victoria are no longer in triple digits. The first day of September saw 90 new cases – good news for the Victorian Government, which is relying on strict lockdowns to control the spread of infection.

During September’s Parliament session, Premier Daniel Andrews’s request for an extension of Victoria’s state of emergency was ultimately granted at a reduced period of six months – half of what was originally proposed.

This reinforces concerns about the negative impact of lengthy COVID restrictions, particularly surrounding the closure of businesses.

Since early August, the state has been under Stage Four lockdown. This involves curfews between 8pm and 5am across metropolitan Melbourne in a bid to further curtail COVID community transmission.

The use of face masks for Victorian residents and businesses is also compulsory.

Meanwhile, some 13,000 tradie jobs have reportedly disappeared across the state, sliding seven per cent from pre-COVID levels. Overall consumer spending has reportedly dipped 22 per cent with cafes, fashion outlets and leisure spending among the worst hit.

On a national level, Australian consumer spending has dropped between three and five per cent.

“While the manufacturing sector held on to recent gains with activity broadly stable in August, manufacturers from Victoria, which accounts for about 25 per cent of the national economy, sunk bank into negative territory in the month, in line with the introduction of severe restrictions on businesses and as local consumer demand was hit hard by the stay-at-home orders,” says Ai Group Chief Executive Innes Willox.

Premier Andrews has announced further consultation with businesses and communities as part of Victoria’s roadmap to recovery towards “COVID normal”. The plan to re-open the state is expected to be unveiled in early September.

“We know every Victorian wants certainty about the future – for them, for their family and for their work,” he said.

“Workplaces will need to look very different as we found our "COVID normal". By working with business we’ll make sure that can happen practically and safely.”

The announcement was supported by Victoria’s Minister for Industry Support and Recovery Martin Pakula.

“We’ve said from the start that supporting our businesses will be crucial as we re-build – that’s why we’re bringing them to the table as work continues on our future roadmap,” he says.

“Over the next few days, we’ll be talking through our COVIDSafe principles to ensure busi-nesses can survive, adapt and most importantly, open up safely.”

Included in Ai Group’s own proposal to government for strong economic recovery are:

-A clear return to business strategy that allows businesses and their employees to be ready for how and when activity can resume.

-Boosting employment, skills, employability combined with wage support for new apprentices and trainees.

-The increase of entrepreneurship, innovation and funded multi-partner industry training hubs, along with improved funding for vocational education and training.

Ai Group wants resources freed up to complement the JobKeeper and JobSeeker payments they believe have kept the economy going through the economic crisis.

The group wants the Government to demonstrate what success looks like, and to indicate what clear, evidence-based outcomes it is seeking to achieve.

In addition to business impacts, “the Government should adopt a balance of risk approach and, while taking health advice, give fuller consideration to other implications of lockdowns including on domestic violence levels, mental health, suicide rates, higher youth unemployment and long-term unemployment,” Willox says.

“The risk-oriented approach should mean the removal of blanket COVID restrictions.”

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