POLICY PROSPECTS FOR AUSTRALIAN MANUFACTURING

NICK CHAMPION MP.
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2 years ago
POLICY PROSPECTS FOR AUSTRALIAN MANUFACTURING
NICK CHAMPION MP
Thanks to the Australian Steel Institute for hosting the Australian Steel Convention.
I welcome the opportunity to spell out Labor’s vision for Steeling Australia’s Infrastructure
The Government’s role in relation to industry and industry policy has been something our country has grappled with since federation.
An early example of this is the procurement of Australian steel for one of Australia’s most iconic steel structures.
Australia’s “coathanger”, the Sydney Harbour Bridge is one of Australia’s most well-known land marks.
It is the world’s largest, but not longest steel arch bridge.
When the tender went out for the Sydney Harbour Bridge, the New South Wales Government required tenderers as far as it was practicable, to specify materials be manufactured in New South Wales.
While the overall tender went to an English firm, Dorman Long and Co, the New South Wales Government was committed to Australian content.
And while the exact percentage of Australian steel in the bridge is somewhat opaque, we know approximately one fifth of Sydney Harbour Bridge is made from local steel.
It was a demonstration of a Government that was aware that its projects should support local industries and local jobs.
Unfortunately this type of commitment to local industry has not been replicated by the Turnbull Liberal Government.
This year we have celebrated the 85th anniversary of the Sydney Harbour Bridge.
In a separate anniversary that isn’t being celebrated, today marks the 4th anniversary of the Abbott Turnbull Government being sworn into power.
And it is two days short of two years since Malcolm Turnbull was sworn in as Prime Minister.
These anniversaries mark a period in our political history that has primarily been marked by uncertainty.
Uncertainty for business.
Uncertainty for workers.
Which has created uncertainty for the economy.
Uncertainty that impacts on investment, productivity and progress.
Your industry, the steel industry, has directly felt the impact of this uncertainty having had four industry Ministers in four years.
In contrast, Labor opposition team has remained stable and committed to a secure future for Australian industry.
Like the Sydney Harbour Bridge, Senator Kim Carr is a permanent feature of Labor’s policy making for manufacturing. As Labor’s Shadow Industry Minister his ongoing fight for Australian manufacturing is iconic.
He is clearly the most experienced Member of Parliament when it comes to industry policy, having held Industry portfolios during our terms of opposition and during the Rudd and Gillard Government.
He will make a triumphant return to the industry portfolio as Labor’s Innovation Industry Science and Research Minister.
And Bill Shorten has had a positive relationship with industry both when he led the AWU, as he leads the Opposition and that will continue when he leads the country.
These relationships help drive Labor’s commitment to certainty for metal manufacturing and fabrication.
This commitment was demonstrated in the lead up to the 2016 election when Bill Shorten set out a plan for Australian Metal Manufacturing.
We did this because Labor recognised the value of Australian steel production and fabrication.
We did this to provide certainty of policy and of process.
In a world replete with uncertainties, the industry needs a stable, supportive, reliable and predictable partner in Government and that’s what you will get with a Shorten Labor Government.
Beyond the key issue of certainty are the challenges of energy, procurement, R&D and the currency.
Possibly the most pressing issue for your industry at the moment certainty of energy supply
There has been much said about energy security in Australia.
However the Turnbull Government is not taking action to provide predictable pricing and security of supply to business.
They have had four years and they are only now thinking about energy security.
Governments must ensure firms have reliable access to the energy they need to operate effectively.
The energy crisis caused by soaring domestic gas prices cannot be allowed to continue.
Australia has the biggest gas fields in the world.
But we have worsening shortages of affordable gas.
This is a result of a mismanaged energy market.
The gas crisis has compounded the chaos that is the national electricity market.
To help remove uncertainty the Finkel review recommended a legislated Clean Energy Target.
If only the Turnbull Government could overcome their internal divisions, to have certainty of investment.
If they fail on the CET we will have another 12 months of uncertainty and an investment strike that will last for years.
We are willing to work with the Government on this.
There must be a clear bipartisan national energy policy in order to ensure supply, price stabilisation and the decarbonisation of our electricity sector.
A policy that gives industry the certainty you need.
Returning to the example of Sydney Harbour Bridge, another area where Government can make a real difference is through procurement policies.
At a State level both South Australia and Victoria have implemented policies designed to ensure Australian companies get a fair go when bidding for Government projects.
This approach shouldn’t be limited to those States.
The Commonwealth undertakes numerous projects that rely on steel.
For example the Governments major rail projects announced in the Budget.
These rail projects must provide opportunities for Australian industry.
Where possible the carriages should be made in Australia from Australian steel and the tracks you are travelling down should be made from Australian steel.
Because every dollar you spend on work from Australian firms ripples through the economy and drives overall economic growth.
Of course Commonwealth projects do not just cover ships and rail infrastructure.
Government funded building works should provide local opportunities and help deliver local jobs and local economic activity.
For example the Edinburgh Air Base in my Electorate has had over $1.8 billion spent on infrastructure in the last 10 years.
We need to make sure Australian suppliers are getting a look in for these sorts of projects.
We will need to see what the new procurement rules the Turnbull Government were forced into, actually deliver for industry.
Labor won’t need to be forced into a commitment to Australian industry.
Bill Shorten and Labor are committed to Australian companies getting a fair opportunity in Government funded projects.
Another area of policy I would draw your attention is the R&D Tax Incentive.
The Government commissioned the ‘Three F’s review of the incentive which has reported to Government.
The Government has sat on the review for a year without responding.
So there are some areas for concern.
On example of this is imposing a $2 million cap on the amount firms can claim as part of the refundable offset.
And an intensity test, under which firms would only receive the incentive on their R&D above a defined intensity threshold.
This proposal assumes the proportion of a firm’s budget allocated to R&D is a measure of the effectiveness of its R&D activity.
This doesn’t recognise the value of critical value of R&D no matter how much is spent.
As a country we had an innovative vision when we embraced the Sydney Harbour Bridge.
We need to ensure Government continues to foster that innovative vision by continuing to support R&D appropriately.
That is why Bill Shorten has recommitted to our goal of three per cent of GDP being spent on Science and R&D.
Finally, while there are some areas where Government has more control there are some challenges that government cannot directly control.
With regards to the Australian Dollar, I don’t know many people who predicted the Australian dollar would have jumped to the level it is currently at.
The exact level of the Australian dollar is an uncertainty the Government cannot change.
But when challenges arise due to the fluctuating dollar Government must work with industry to address these matters.
The Government must not allow foreign companies to exploit fluctuations in the dollar and dump products in Australia at the cost of local industry.
When the dollar was at 1.10 US it was bad for our exporters.
The high dollar was bad for Australian manufacturers in many ways.
However, it did provide a unique opportunity for industry to import capital infrastructure from overseas at comparatively cheaper prices.
Enough was not made of this opportunity by our nation and too many businesses missed the chance.
So in summing up Government must be there to provide certainty for industry.
And Government must support industry when unforeseen challenges arise.
A Shorten Labor Government will provide that certainty from a policy setting.
It is something I am committed to.
Because, when we are building Australia’s next project, we need to think about the example set with the tender for the Sydney Harbour Bridge.
The Government must back local industries.
Australia’s current and future Government funded projects should have the goal of much more than one fifth Australian content.
For the sake of local jobs, for the sake of local industry and for the sake of the Australian economy Australia’s future icons should be Australian made.

ENDS
Resources AWU Clean Energy Metal Manufacturing Steel Institute Sydney Harbour Bridge