Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | Hansard source

What Senator Bernardi should appreciate is that the auto sector contributes 2.4 per cent to the GDP of South Australia. It contributes one per cent to Australia’s total GDP. It is not an insignificant issue. This parliament should take up these concerns and take up the protection of this industry insofar as it has such strategic importance to our economy and to our society.

However, for Senator Bernardi to denigrate, before his Liberal Party colleagues, the work of auto workers and the work of the auto industry in the manner in which he has defies any rational assessment. Automotive vehicles and components are Australia’s sixth largest export. They represent a larger export than even the exports of our agricultural sector. You would think the Liberal Party would at least know that. You would think that would be at the forefront of Senator Bernardi’s thinking, coming as he does from South Australia, a manufacturing state—but no.

The Labor Party would like to draw to everyone’s attention the fact that innovation and R&D are the keys to competitiveness for manufacturing industry. Manufacturing is one of the most innovative sectors of our economy, with the ABS finding that in 2004-05 over 43.1 per cent of businesses were innovative active compared with 34.9 per cent across all industries, and that within manufacturing the automotive industry contributes 23 per cent of R&D. Indeed, the automotive industry contributes 10 per cent of Australia’s total business R&D. Unfortunately, Australia’s performance in business R&D is nowhere near the standard of performance of our international competitors; it is nowhere near the benchmark being set by others. Business R&D in Australia is 0.89 per cent of GDP compared with the OECD average of 1.5 per cent. Among OECD countries, Australia ranks 15th in the world.

The Commonwealth refused to participate in the National Manufacturing Forum. Every state, every territory and all major industry players participated in this vehicle by which the fundamental issues facing Australian manufacturing could be discussed, but not the Commonwealth. When it comes to manufacturing, the Commonwealth essentially sits on its hands. It takes the view that it is someone else’s problem. It takes the view that, essentially, Australia can be a beach or a quarry. It has no understanding of the significance of manufacturing. Essentially, the government has turned away from its obligations in this regard.

Over the period 1986-87 to 1995-96, we have seen the average annual growth rate of real business investment in the research component of R&D plummet from 11.4 per cent to only 5.1 per cent. In manufacturing the story is particularly grim, with the average annual growth rate slipping from 10.6 per cent to only 1.9 per cent. Looking at gross R&D spending, we can see that China has committed to lifting its expenditure as a proportion of GDP from only 0.6 per cent in 1995 and 1.2 per cent in 2002 to 2.5 per cent by 2050. China is doubling its R&D spend every couple of years. Compare that with our performance and we can see that our performance is grossly inadequate.

We are in the situation where our manufacturing output has fallen by some $860 million. Our manufacturing output has shrunk by 1.1 per cent in 2004-05 and by 0.4 per cent in 2005-06. Since the last federal election, in 1996, we have seen a loss of over 110,000 manufacturing jobs. That equates to 204 manufacturing jobs disappearing each and every week of the Howard government. It is time to act and there is a requirement by this government to face up to its responsibilities. We have laid down the challenge and we now seek a response from the government.

Question agreed to.

Bill read a second time.