Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

People in my electorate want to see a future for Australian manufacturing and so do the Greens. Australian manufacturing needs a road map for the future. So we look forward with a keen interest to the release of the manufacturing task force report today. We know that the high Australian dollar, in part created by the mining boom, has put pressure on our manufacturing businesses and pressure on jobs. The manufacturing sector has lost 125,000 jobs in the last four years. A key to the future for Australian manufacturing is innovation and value-adding, which means more investment in research and development and linking investment with innovation and skills and training. Melbourne is at the leading edge of research in Australia and it will play a big role in ensuring manufacturing stays competitive and viable into the future.

I am hopeful the task force will make some useful recommendations. But we need to have an industry policy with teeth, so the Greens want proposals for local content rules for big investments such as mining projects to be seriously examined and adopted by the government. Estimates suggest as little as 10 per cent of the steel used in the construction of some big mining projects is manufactured in Australia. These projects should have quotas requiring them to use a significant amount of Australian content. Many successful resource economies such as Canada and Brazil have local content rules. There is no reason why Australia cannot do the same.

I am pleased by reports today which suggest the task force will make recommendations regarding a sovereign wealth fund. At the tax forum last year, the Greens advocated that a substantial proportion of the proceeds from the mining boom should be quarantined in a new sovereign wealth fund. We need to address the challenge of the two-speed or 'Jekyll and Hyde' economy. A sovereign wealth fund investing offshore could help to counteract the appreciations of the Australian dollar, which have eroded the international competitiveness of important export industries such as sophisticated manufacturing, tourism and international education.

Sovereign wealth funds have operated well overseas in places such as Norway, where they have invested proceeds from their North Sea oil. So we should commit to putting in place a sovereign wealth fund, and the first step is a thorough examination of how it could be done. Sovereign wealth funds are generally state owned investment funds composed of financial assets such as stocks, bonds, real estate or other financial instruments. Around 36 countries have such funds. Some countries even have more than one. Currently, $4.2 trillion worth of assets are under management by these types of funds. That is an increase of 11 per cent from 2010.

In some respects Australia already has a type of sovereign wealth fund. The Future Fund was established in 2006 to meet unfunded pension liabilities for former public servants and Defence employees. I do have criticisms of how the Future Fund has invested some of its revenue—most notably in tobacco shares, and I commend my colleague Senator Richard Di Natale, who is working to address this issue. However, I believe the Future Fund has shown that it is possible for such a fund to function effectively and with fairly wide support in Australia, especially if its remit is to invest in infrastructure and services that we will need after the mining boom is over.