Bruce Baird (Cook, Liberal Party) Share this | Hansard source

I agree with the member for Denison’s statement and acknowledge what an outstanding member of parliament Mr Jull is. On behalf of the Standing Committee on Economics, Finance and Public Administration, I present the committee’s report entitled Australian manufacturing: today and tomorrow—Inquiry into the state of Australia’s manufactured export and import competing base now and beyond the resources boom—together with the minutes of proceedings.

Ordered that the report be made a parliamentary paper.

I would like to commend the economics committee secretariat, particularly Stephen Boyd, Sharon Bryant, John Hawkins and Andrew McGowan, for their excellent work on the preparation of this report. The world in which Australia’s manufacturing sector currently operates is changing. Australian manufacturers need to become more innovative, flexible and efficient to survive and prosper in markets that are increasingly globalised and diverse. Manufacturing is a key component of the Australian economy, with manufactured exports presently accounting for around 20 per cent of exports in total—on par with services and agricultural export shares. In most industrialised economies, over the past 20 years the services sector has outpaced the manufacturing sector due to the evolution of industrialisation and higher living standards. But what often goes unnoticed is the continued growth in manufactured output and exports.

The massive scale of industrialisation in China and, to a lesser extent, India has manifested itself in a worldwide demand for resources that outstrips supply. As Australia is a mineral-rich nation, China’s voracious demand for resources has led to elevated terms of trade and a surge in the value of the Australian dollar since around 2003. While the resources boom has opened opportunities for some Australian manufacturing industries, the appreciating exchange rate accompanying the boom has reduced the competitiveness of manufactured exports. The resources boom has therefore reinforced the need for Australian manufacturers to adopt alternative competitive strategies to that of price, whilst recognising the importance of production efficiencies.

Against this backdrop, in May 2006 the Treasurer, the Hon. Peter Costello MP, referred to the committee an inquiry into the state of Australia’s manufactured export and import competing base now and beyond the resources boom. The committee was asked to focus on the challenges and opportunities for Australia’s manufacturing sector arising from both the resources boom and the expansion in global trade. In response to the sector’s current and expected transformations, the committee’s primary recommendation is that the Australian government develop a national manufacturing strategy and, in line with this, review manufacturing oriented federal government programs to improve their relevance and accessibility. Australian manufacturers need to work smarter to develop export survival strategies appropriate for their line of production. This could involve producing components offshore, entering global supply chains or manufacturing niche or high-value goods. To assist these approaches, the committee recommends that the certainty of funding from the Export Market Development Grants Scheme is improved and that the Australian industry productivity centres are manufacturing focused and adequately resourced to provide expert advice to manufacturers across Australia. Importantly, this latter initiative would incorporate a one-stop manufacturing advisory portal.

The committee heard that innovative Australian manufacturers are often confronted with start-up funding difficulties. In response, it recommends a number of venture capital reviews to improve data and knowledge of this market in Australia. It similarly recommends the design of the research and development tax concession scheme be thoroughly examined, given that inquiry evidence raised doubts about the effectiveness of concessions in prompting additional research and development activity.

The emerging frontiers of manufacturing are demanding more scientific, electronic, design and environmental expertise. It is therefore vital that Australian students—at school, university and vocational levels—are kept abreast of emerging technologies and that industry and government work together to communicate the opportunities that the sector offers. The committee further notes that Australian firms should be able to take advantage of CSIRO and university generated research and recommends that the CSIRO receive more funding to employ staff dedicated to manufacturing based liaison.

The committee has formed the view that Australian manufacturing has a strong future beyond the resources boom. For the last two decades, Australian manufacturing has slowly but surely transformed its perspective from the local to the global. With continued adaptability and a committed international outlook, there are significant opportunities for Australian manufacturing to seize in the globalised market. On behalf of the committee I thank all of the organisations and individuals who participated in this inquiry. I particularly thank the members of my committee, who contributed in a bipartisan and very effective way. (Time expired)

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