Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

I move:

That this House:

(1) congratulates the Australian researchers at Monash University and Amaero Engineering Pty Ltd who created the world's first 3D printed jet engine;

(2) recognises that:

(a) Australia has a history of punching above its weight when it comes to research and development; and

(b) huge opportunities are available to create new advanced manufacturing jobs and industries with the right government support for our science, research and manufacturing sectors; and

(3) condemns the Government's shortsighted approach to science, research and industry policy, where it has:

(a) cut $878 million from science and research, including $115 million from the CSIRO;

(b) recklessly undermined the Australian auto manufacturing sector, risking the loss of millions of dollars annually of investment in research and development;

(c) failed to support the shipbuilding industry by refusing to guarantee that the 12 future submarines will be built in Australia which would lead to millions of dollars of investment in research and innovation; and

(d) introduced enormous uncertainty for innovative businesses conducting Australian research and development, with retrograde changes to the Research & Development Tax Incentive that sees the removal of the benefit for expenditure over $100 million and a reduction in the rate of the offset by 1.5 percentage points for all firms across the board.

I congratulate Monash University and Amaero Engineering Proprietary Ltd, who in partnership with others including the CSIRO and Deakin University, created the world's first 3-D printed jet engine. Earlier today, I met with Dr Tony Peacock, CEO of the Cooperative Research Centres Association, and Simon Marriot, from the Advanced Manufacturing CRC, who provided me with a personal briefing on the printer. It is a remarkable invention that will reduce the time and cost of producing prototypes, enable the rapid and relatively inexpensive production of small quantities of parts and the production of highly customised components in small production runs. The 3-D printer was proudly developed here in Australia, by the public and private sector working together, and it was, I understand, four and a half years in the making.

The outcome highlights several critical matters: firstly, the importance of investing in science research and development: secondly, the importance of investing in and supporting university research; thirdly, the importance of innovation to Australia's future, and to the future of Australia's manufacturing sector: and, fourthly, that Australians have the ability to invent, innovate and develop new products. Australians have proven time and again that we can lead the world in science and innovation breakthroughs. Australia's future is indeed as much dependent on research development and innovation as the future of any other nation. Even our agricultural and mining sectors, which have created considerable wealth for Australia over recent years, will struggle without continuous innovation.

Disappointingly, this government does not seem to understand or value our researchers and scientists. Only last week, the Minister for Education and Training—the fixer—was holding some 1,700 scientists to ransom, using them as a bargaining chip to try to get his unpopular and retrograde university deregulation changes through parliament. This was not a one-off, misguided thought bubble, but follows a pattern of neglect of our science sector by the Abbott government. It began with a government that on coming into office did not appoint a minister for science. Then, in its first budget, the Abbott government cut $878 million of funding from science and research, including $115 million from the CSIRO. One has only to go to one of the many breakfast briefings provided by the CSIRO in this place to understand the value of that organisation's work to our nation. The stupidity of cutting funds to CSIRO is a no-brainer.

In addition, the government cut all the programs that encouraged and rewarded innovation, like Commercialisation Australia, the Innovation Investment Fund, Enterprise Connect and the Research and Development Tax Incentives. Then in a total display of ignorance and arrogance, the Abbott government turned its back on the automotive sector and the Australian Submarine Corporation, both of which added hundreds of millions of dollars of research, development and innovation to the Australian economy. If time permitted, I could talk about personal examples in Adelaide of companies that innovated as a result of the work of both of those sectors. The benefits of research and development dollars spent by the car makers or the Australian Submarine Corporation were not confined to their own sectors but ultimately spread throughout the economy. Indeed, several European countries have maintained strong manufacturing sectors not through cheap labour but by investing in science, research and innovation, and by developing niche products in advanced manufacturing.

Australia has the ability to do the same, but this government, rather than build on Australia's existing innovation strengths and opportunities, is tearing them down. It is a government that is looking to the past for solutions instead of looking to the future; a government that gives lip service to science and research but then does the reverse with its budget.

Australians can see what is happening and so can the Australian science sector and industry. They are not blinded by the government's spin. They understand the damage the coalition government is doing to Australia's future and that is why they have lost confidence in the Abbott government. The government's blind ideology has not only lost Australia tens of thousand of jobs, including research scientists and engineers, and hundreds of millions of dollars of innovation investment, but also lost the productivity gains and the export value that those investments in science, innovation, research and development would have brought to Australia. The Abbott government simply does not understand that more than ever before Australia's future is dependant on innovation, and for that it stands condemned.

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

I thank the member for Makin. Is the motion seconded?

Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Sarah Henderson (Corangamite, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on this motion put forward by the member for Makin, and I have to say that it is disappointing to hear from the member for Makin so many spurious, inflammatory, irresponsible and, frankly, false claims.

I often despair at the way in which politicians are perceived in our community. I know for myself as a new member that I do try very hard to play a straight bat and tell it how it is. I have to say that—and I would never say this about members opposite, because I know it to be false. So when the member for Makin says that our government does not value scientists or researchers, it is that sort of rhetoric that is just disappointing. It is clearly ridiculous and, more so, it is disappointing because I do think we need to see a higher level of debate.

I do agree with the member for Makin, who asserts that there are huge opportunities to create new, advanced manufacturing jobs in industries with the right government support for our science, research and manufacturing sectors. We agree wholeheartedly, and that is why we are providing such strong support for these areas.

I want to put on the record that in 2014-15 the government is providing $9.2 billion in support of science, research and innovation. Support for science and research in the industry portfolio will total $5.8 billion over four years. This includes more than $3 billion for the CSIRO. There are some savings being made at science agencies, just like in other government entities. The reality is that members opposite left us with no alternative: Labor's legacy to the people of Australia was, of course, gross debt projected to rise to $667 billion and $123 billion in cumulative deficits. The efficiency dividend increases from 1 July 2014 from 2.25 per cent to 2.5 per cent apply to all agencies subject to the efficiency dividend. It only applies to a percentage of the budget funding for AMES, CSIRO and ANSTO, representing their corporate component.

In addressing some of the false and inflammatory claims that have been made in this debate, I do want to reflect on my own electorate of Corangamite and look at what happened with Ford. Ford, of course, ended its manufacturing under the previous Labor government—and Labour often forgets to remind the people of Corangamite about that. In January 2012, the former Prime Minister, Julia Gillard, came to Geelong and announced $34 million for Ford. Then, some six months later, after promising that this would lead to 300 new jobs, we saw a loss of 330 jobs. The fact of the matter is that Holden, Toyota and Ford left of their own volition, and the fact of the matter is that we have had very strong support for the auto sector.

If you look at Labor's record, Labor promised $6.2 billion in funding for the auto sector over 13 years, and yet, in 2011, reneged on three separate programs: the 'cash for clunkers' program—wasn't that a great success; it absolutely crashed—the Green Car Innovation Fund, and the LPG Vehicle Scheme to encourage the uptake of LPG. And then, to cap it off, we saw, from members opposite when they were in government, how they slugged the car industry, or attempted to, with $840 million in carbon taxes over a decade and $1.8 billion in FBT changes.

So what we are doing is: we are confronting the big challenge for jobs of the future. That is why we are rolling out a $155 million growth fund, $30 million for skills and training, a $15 million boost to the Automotive Industry Structural Adjustment Program, $20 million for the Automotive Diversification Program, and the $60 million Next Generation Manufacturing Investment Program. And one of the recipients of a grant under that program is Backwell IXL, a great local manufacturer in Geelong, as just announced last week.

So our government has very strong support for science, for research and for innovation. We have a strong focus on investing in these industries, building the jobs for the future and not throwing the bandaid solutions that we saw under the Labor Party.

Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source

There is one thing I agree with the previous speaker on, and that is: we should look beyond the rhetoric. Let us look in this debate at the actual evidence. The evidence is that those on the other side have an appalling record in terms of support for industry and jobs. Let us start from the top level and work down.

We have a decade-high unemployment rate. We have a 14.2 per cent youth unemployment rate under those opposite. Aggregate hours worked in the economy have only grown by one per cent since the election in 2013. Average hours of work have fallen since their election. We have a labour force underutilisation rate of 15.1 per cent, which is the highest underutilisation rate since 1995 when we were coming out of the 1990 recession. Perhaps worst of all, we have the highest underemployment rate ever of 8.7 per cent. Statistics started being collected in 1978 on underemployment, and it has never exceeded the level we have now—not even at the depth of the 1980s recession or the 1990s recession did we see an underemployment rate higher than it is now. These are damning statistics that demonstrate the lack of commitment and the lack of delivery from those opposite.

If we look at manufacturing specifically, according to ABS statistics we have seen 12,000 manufacturing jobs already disappear from the sector under their stewardship. We will see 50,000 automotive jobs go in the next few years, and another 200,000 indirect jobs will go. It is an absolute untruth to argue that Holden and Toyota were leaving regardless of what would happen. I was involved in the negotiations with those companies before the last election, and what was very clear was: with the current funding envelope, under the Automotive Transformation Scheme, they would have stayed. They left for one reason: the $500 million cut to that fund promised by Mrs Mirabella when she was opposition industry spokesperson and put in place by Prime Minister Abbott. The spokesperson for Holden was very clear. He said before the last election: 'If you cut that $500 million, we will go.' And that is what happened when Mr Abbott won the election. So let us have none of this rubbish about, 'They were always going.' That is the end of an entire industry—50,000 direct jobs going, and another 200,000 in peril.

We are seeing the same in shipbuilding. I saw 200 shipbuilding jobs go at the shipyard of Forgacs at Tomago very recently in my region.

It is not just support for jobs where they have underperformed. They consistently attack support for research and development. In 1996, when the last coalition government won power, they slashed the R&D tax concession from 150 per cent to 125 per cent, which had a dramatic impact on R&D immediately, and we have seen now a $900 million cut to science and research under this government.

The previous speaker talked about the $188 million for their growth centres, which is a good announcement—except that that is a cut from $500 million, which is what Labor had applied to the precincts initiative, which is essentially the same thing: promoting industrial clusters. That is a $300 million cut, and they brag about saving that $188 million when they cut $312 million from what is essentially the same program. So this shows their lack of commitment in this area.

Another initiative from the last government that they have ignored this the Australian Jobs Act, which gave Australian companies the first chance of winning work on projects over $500 million. Again, we have heard nothing of it since this mob have come to power. We have heard nothing about it because, ultimately, they talk a big game about support for jobs. They are supposedly the party for small business, ignoring their attacks on things such as instant asset write-off. You just have to look at the evidence. The evidence is less support in programs that are poorly targeted. In terms of the statistical performance of employment under this government, it is woeful—a decade-high unemployment rate, the highest underemployment rate ever measured in this country and a dreadful youth unemployment rate that will scar a generation of people.

I agree with the last speaker that we should not try to make things up; we should not try and engage in empty political rhetoric but we need to look beyond the rhetoric to the evidence. The evidence is damning in government support and the evidence is damning in actual economic statistics. I stand together with the Labor Party supporting jobs, supporting research and development and supporting developing an innovative economy that can compete with the best around the world. Those on the other side stand for a rustbelt economy, an economy concentrating on the farm and the quarry because that is what ultimately they think the Australian workforce should pursue and they will stand condemned in history.

Sarah Henderson (Corangamite, Liberal Party) Share this | Link to this | Hansard source

I seek leave to make a further contribution.

Leave granted.

I think in this debate it is worth putting forward—

Mr Conroy interjecting—

I will try and speak without interruption given the member for Charlton has just had his go. I think it is worth putting on the record a number of initiatives of this government. Last year the government released the industry innovation and competitiveness agenda, which recognises the important link between science and industry. The government will provide $188.5 million to pursue global excellence in areas of competitive strength through industry growth centres.

I do note the member for Charlton's comments in relation to the industry hubs, which was the previous government's policy. I have to say, those industry hubs were regarded by industry as a failure. They were actually providing very little funding, particularly in the advanced manufacturing and the other hubs that were being rolled out in Victoria. What we are seeing with the Minister for Industry announcement is a very strong commitment to grow the jobs of the future.

I hear the member for Charlton talk about how he does not want to engage in rhetoric and then he talked about the rustbelt. Again, this sort of rhetoric is incredibly disappointing. Perhaps he should come down to my home town of Geelong, a very fine advanced manufacturing town, a town where the member for Corio said to the Geelong Advertiser, 'manufacturing was dying' under this federal government. However, it is a town with 12,000 people employed in manufacturing with 500 manufacturers. Manufacturing is responsible for around 40 per cent of the region's GDP, so we are seeing a very strong commitment through the growth fund that we announced, the local Geelong Region Innovation and Investment Fund, a $29.5 million fund. Unfortunately, the Victorian government committed $7.5 million to that fund but currently only $4 million is committed. We are still waiting to see that money delivered.

I say to members opposite, come to my home town of Geelong and look what we are doing. Look at the examples, look at where we are investing. Carbon Revolution is an incredible business investing in state-of-the-art carbon fibre wheels for the global auto market. Come and look at Marand, which is helping to build the trailer for the engines of the joint strike fighter, an incredible defence company building 14,000 separate parts in this trailer and making Geelong very proud.

I do reiterate, and it is on the record, that the decisions to cease manufacturing in Australia by 2016 from Ford and 2017 from Holden and Toyota, were made entirely by the companies themselves. It is important to note that on 10 March 2015 the government announced that the Automotive Transformation Scheme, which provides investment for support for research and development, is going to continue as legislated. I do appreciate that there was an announcement by our government to cease that scheme, but we are continuing it. It was caught up in the Senate. That will give not only Ford, Holden and Toyota but also, very importantly component manufacturers the opportunity to continue to get the full support under that scheme.

I also look at what is happening in research and development by Ford in Geelong. Again we see Ford with an employment workforce of something like 490 workers at Ford's proving ground and at Ford's research and development operation in Geelong—a very strong commitment to global auto manufacturing, right through beyond 2017.

I also want to put on the record that the Australian government is committed to acquiring a future submarine that provides the best possible capability and value for money for Australian taxpayers while maximising the involvement of Australian industry. That is the responsible thing to do. The government has stated that it is investigating a number of options for new submarines from France, Germany and Japan whilst at the same time ensuring that Australian workers and Australian manufacturers, particularly focussed in South Australia, get every opportunity to be part of that very significant project. The competitive evaluation process announced by Minister Andrews will ensure that capability, cost, schedule and key strategic considerations will be very much a part of our Future Submarine program. (Time expired)

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

I think it is interesting that the government was not even able to marshal three speakers on this and we had to recycle the member for Corangamite in order to continue the debate. That really does say it all about the commitment of this government to this fundamental task of supporting innovation and industry in this country.

I believe, as the members on this side have said, that we have a very profound problem facing us. As I travel around Western Australia, I see the amount of restructuring that is going on and the extent of the job losses in not only the mining sector but also a lot of industries that are associated with the mining sector. We are going to have a very, very real challenge in terms of creating employment, and we see that already feeding through the unemployment statistics, which unfortunately are tracking very much in the wrong direction. And, of course, we are racing to notch up various free trade agreements, which will place Australian non-agricultural industries under even greater pressure.

I want to talk a little bit today about some of the creativity that we are, nevertheless, seeing in Australia. We all know the tragic stories about Australian inventions that went overseas for commercialisation and manufacturing—the Xerox, the black box, Wi-Fi, and various photovoltaic technologies. But I have to say that, despite all this doom and gloom, there are actually signs of life. One of the fabulous things about this role is that you come across those. I want to talk about a few of these that I have been dealing with. One is Hofmann Engineering. This is an outfit based in my electorate. It employs around 600 people and is headquartered in Bayswater. It was founded by two immigrant toolmakers 45 years ago and now has facilities not only in Western Australia but also in Victoria and New South Wales.

Quality in innovation has been really at the heart of this company. They design, manufacture, repair and refurbish mining and industrial equipment. They are now the largest privately owned engineering company in Australia. They really are in the heart of the beast. They manufacture steel mill gears for export to China, they produce wind-turbine gears for clients in Germany and they produce aircraft parts for the US. The company tell me that they are spending around $33 million each year to deliver innovation and flexibility, and they point to the strategic role that various innovation grants from government have had in allowing them to be ahead of the curve and continue to be competitive in a very, very challenging environment. They also depend very heavily on the development tax breaks that they get, and it is important that they get them. They also have participated in defence industries, and they provide parts for submarines.

We have enough company in WA, Fairclough Corporation, an extraordinary group. They have developed equipment that is used in ultrasonic testing, imaging, track geometry and ground-penetrating radar to determine the condition and soundness of railroad tracks, and they manufacture the equipment. So the technology is being developed here, and we are seeing this equipment being manufactured and exported into markets like Japan, Brazil, Taiwan, China and Korea.

We have a company called PDC. Their slogan is 'engineering evolved'. They create highly accurate scaled virtual models of all the structural components in a building. These independent models and data are integrated and standardised to produce a 3-D model. In this way, they can determine the progress of a construction project, anticipate the problems and cut costs very significantly. They are currently doing work on the new Apple campus in California.

So we have all of this creativity here, but all of these companies are saying to us that they need government to help them and to match, with their policy, the inventiveness of these companies.

Eric Hutchinson (Lyons, Liberal Party) Share this | Link to this | Hansard source

Science and research are critical right around Australia, particularly in my home state of Tasmania. One of the points that I would like to make about the Commonwealth Scientific and Industrial Research Organisation is that the I in CSIRO stands for 'Industrial', and we should never forget that. That is where it was born, that is where it started and that should be the focus, and increasingly that is the focus of this government: to make sure that our scientific and research endeavours are applicable within industry in a practical way.

This is no more evident than in my home state of Tasmania, within the university and with the commitment that this government has shown to Antarctic research. It is critical to our country. In the week when we mourn the passing of our 22nd Prime Minister, Malcolm Fraser, it should be remembered that he moved the Antarctic research division from Melbourne down to Hobart, which was the right thing to do. It is an important part of the Tasmanian economy, and this government's commitment to research and innovation in the Antarctic should not be underestimated. I think, for example, of the $24 million that was committed as an election commitment to the collaborative research centre in respect of Antarctic studies. I think of the fantastic work that is done by the Institute for Marine and Antarctic Studies. In terms of infrastructure, I think of the $38 million that was committed to the upgrade of the Hobart International Airport. The primary reason that that happened was the program around the Antarctic Division in Hobart. That is going to be the driver, and I think there is generally broad support for the idea that that will enable Hobart and, indeed, Australia to compete with New Zealand, South America and South Africa as a step-off point for many countries as they look at doing research in the Southern Ocean and in the Antarctic. It will also present opportunities for an important and growing sector within the Tasmanian economy—that is, tourism and the opportunities that flow from that for exports. Not least is the commitment from Minister Hunt to purchase a new icebreaker to replace the Aurora Australis.

These are the sorts of things that are, again, showing this government's commitment. Indeed, industry is the critical part. Investment in science and research must be focused. It should not necessarily be done just for the sake of research but—as there has always been in this country—there should be an opportunity to apply it in a practical way through the innovative people that we have.

That could be no more evident than in the recently announced Innovation and Investment Fund. That is a $13 million fund that was launched in Tasmania, and I was pleased to have Minister Macfarlane in my electorate for a couple of days. There were 137 applications received, and $85 million-worth of private capital was committed. It shows that there is confidence coming back into the economy—that there are green shoots. After three years of having a Labor-Greens government in Hobart and a Labor-Greens government in Canberra, our state is finally finding its feet again. Tasmania, I am so pleased to say, is off the bottom of the tables in terms of unemployment, and we are seeing confidence coming again into business to reinvest in the things that they business does well.

There were 40 successful programs out of those 137 applications. The flip side of that is that there were 100 that missed out. But the feedback from AusIndustry—and the good work that they did—demonstrated that there were another 30 or 40 projects that were of very high quality. This goes to the fact that jobs growth is starting to come again in this country. Even last year, jobs growth in this country was three times as fast as it was in the previous year under the Labor government. So things are starting to move again. Tasmania is certainly, under the Hodgman Liberal government, well and truly open for business—whether it be tourism, aquaculture, or the innovative people that are using the Antarctic Division as a step off. There are so many opportunities in my state and it is a very exciting time to be a Tasmanian.

Debate adjourned.