Bruce Baird (Cook, Liberal Party) Share this | Link to 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)

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

I commend to the House today the report of the Standing Committee on Economics, Finance and Public Administration entitled Australian manufacturing: today and tomorrow. I joined the committee only in March this year when this inquiry was well underway. Shortly thereafter I became the deputy chair of the committee, which was a fairly significant task to take on. I place on the record my great appreciation to the chair, the member for Cook, for the great assistance he gave to me in undertaking that role. In the tradition now established in this afternoon’s tabling of reports, I also wish to put on the record, as the member is retiring at the next election, my great appreciation for what I think has been an exemplary public service career in both state and federal parliaments. I think he is a damned nice fella and he will be greatly missed. Having shared a border with him across electorates, I will miss him personally—as will our local region. I think the House should record our great appreciation not only for his committee work but also for his work more broadly.

In acknowledging my late coming and the great speed required in catching up, I wish to thank the committee secretariat—particularly the secretary, Mr Stephen Boyd, and the inquiry secretary, Sharon Bryant. I have to say that we caused great mirth around the nation because two women members on the committee were me and the member for Newcastle, Sharon Grierson. There was a belief in New Zealand that all Australian women were named Sharon, but I think that just reflects the great quality that went with the names! I appreciate the work that Sharon contributed, along with the rest of the secretariat—Andrew McGowan, John Hawkins, Judith Ireland, Amelia Johnston and Natasha Petrovic.

This report is extraordinarily timely. We are all aware of the great pressures placed on Australia from the massive growth of the Chinese economy, and indeed the emerging Indian economy, and their demands for mineral resources. That is something that we benefit from greatly in Australia. As with all positive developments, there are challenges. One of the challenges is that, as the infrastructure and skills resources in our economy are drawn towards those industries, problems are created for other sectors. Indeed, we saw that in the resources sector report which the committee concluded recently and again it is in the manufacturing sector report.

What was particularly encouraging as we went around the country was the number of manufacturing industries that have flourished. They have taken up the challenge with great gusto and have forged a future for themselves in this nation. The characteristics of those highly successful manufacturing industries made a most important contribution to this inquiry. It showed us that there is a viable future for the manufacturing industry in Australia. As the chair said, it is not focused on competing on price; it is focused on being an outward-looking, globally competitive, export focused industry. We saw numerous examples of this and it was very encouraging. The report and its 21 recommendations make it clear that we do see a role for government in fostering and supporting that growth. We do not see that role as a protectionist one; we see it as a supportive one. There was some talk about the focus of our inquiry and the subsequent report being on supporting winners, rather than picking winners—on acknowledging that there are manufacturing industries which have developed problem-solving approaches and niche markets. They have acknowledged their strengths and have built on them and there is much that governments can do to support and encourage that into the future. The 21 recommendations go to many aspects of that, particularly the way in which we can support research and development and the skills development that is needed for those industries and the way in which government can better gather data and better share information through things like a single portal, putting all that together so that we provide all of the backup that needs to occur for those industries which are doing so well. The committee’s approach in this final report is a particularly constructive one for the future. (Time expired)

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The time allotted for statements on this report has expired. Does the member for Cook wish to move a motion in connection with the report to enable it to be debated on a later occasion?

I move:

That the House take note of the report.

In accordance with standing order 39, the debate is adjourned. The resumption of the debate will be made an order of the day for a later hour this day.