Christine Milne (Tasmania, Australian Greens) Share this | Hansard source

I rise today to comment on this general business motion moved by Senator Carr. It is an important opportunity to talk about Australian industry policy and the place of manufacturing within the context of Australian industry policy. Unfortunately, with the great deal of hyperbole from the last speaker, the opportunity has been lost to talk about what can be the future of manufacturing in Australia.

I would like to begin by informing the Senate of a statement from Alan Atkinson as a foreword to the book The Natural Advantage of Nations: Business Opportunities, Innovation and Governance in the 21st Century. He said:

We need transformation—a wave of social, technical and economic innovation that will touch every person, community, institution and nation on earth. The irony is that this transformation is still viewed as an economic cost when it is in fact an enormous economic opportunity, an opportunity that we are now being increasingly forced to recognise.

That is where I would like to begin today. We have an enormous opportunity in Australia to make that change and transform the Australian economy away from what we have now—which is a resource dependent economy—to a brains based and service economy. To many if not most observers, the Australian economy could not be going better. But much of the nation’s economic prosperity is merely a veneer. Our most fundamental vulnerabilities relate to our use of and our overreliance on the bounty of natural resources with which Australia is endowed. The three clearest expressions of this economic vulnerability are the interrelated problems of our high greenhouse gas emissions, our looming domestic oil shortage and our ongoing economic dependence on natural resources. In fact, there are many analysts around the world who have argued that nations which have huge amounts of natural resources are the ones which in fact will not prosper in the long run because it is easy for them to use their natural resources and not have to rely on innovation, creativity and value-adding and just continue to export.

It is to those interrelated problems of greenhouse gases, domestic oil shortage and the economic dependence on natural resources that we have to turn our minds. To solve these interconnected problems, federal and state governments need to develop a wide range of strategies in a coordinated way. Some will be regulatory levers, some will provide economic inducements, some will impose economic penalties, but all will create new economic opportunities. Critics might argue that governments should not intervene but should leave the transition to a low-carbon, oil independent and low-resource-use economy to the free market. But government driven measures are needed because the present distorted marketplace is failing the environment. In Sir Nicholas Stern’s ringing indictment:

Climate change presents a unique challenge for economics: it is the greatest and widest-ranging market failure ever seen.

Throughout the 20th century, it was assumed that economic growth could be pursued with little consideration for its environmental consequences and that any pollution or resource scarcity challenges would be solved by technological advances or by simply going out and finding more. At the start of the 21st century, climate change and oil depletion have delivered a reality check. The silver lining of climate change is that it does give us the opportunity to reconsider the way that we live. We know that we have to change. We know that we have to rethink the economy so that it operates within the earth’s ecological limits if we are to avoid the collapse of human civilisation.

What is less well understand is that it is this transformation that will give us the opportunity to create enormous economic benefits in sectors hitherto neglected and to make changes which can make us happier, healthier and more secure in the knowledge that our children will inherit a world that is a joy to live in. There is an emerging consensus that nations and corporations that fail to understand this imperative will lose competitive advantage, while those that grasp the new opportunities that it offers will prosper.

That is what the Greens are doing with the strategy that I have outlined in a document that I produced called Re-energising Australia, which looks at the following issues: (1) how Australia is going to address climate change, (2) how we are going to provide a sustainable economy into the future and how we are going to have industry-wide and economy-wide transformation so that oil depletion does not become a major shock in our economy and (3) how we can address the fact that we have hollowed out the manufacturing sector under the Howard government. Contrary to what Senator Ronaldson had to say, that is in fact the case. The figures show it. The erosion of manufacturing has left Australia with a large and expanding trade deficit in manufactured products. In the mid-1990s, it was $43 billion per annum. In 2003-04, it had risen to $87 billion. This erosion leaves the Australian economy vulnerable, especially if overseas buyers begin to reduce their purchases of greenhouse-gas-intensive fossil fuels.

Australia needs to make its economy more robust by rebuilding its manufacturing base with industries that have low environmental impacts and high levels of value adding. These industries could include such expanding industries as environmental management, energy efficiency, renewable energy and fuel efficient vehicles. This is the opportunity that the Greens see for Australia. Instead of hollowing out the manufacturing base, signing up to free trade agreements that in fact transfer jobs overseas to low-wage economies and setting low standards which mean that we lose manufacturing here in Australia to our overseas competitors, what we need to do is invest heavily in innovation and education. In fact, as I have argued many times here and in Tasmania for years, Donald Horne said that imagination is the raw material of the future.