The Politics    Thursday, October 1, 2020

Don’t believe the hype

By Nick Feik

Image of Scott Morrison at the National Press Club today

Scott Morrison at the National Press Club today. Image via Facebook

Morrison’s manufacturing plan is just another empty announcement

In his latest pre-budget policy statement, Prime Minister Scott Morrison today announced a “new” manufacturing strategy worth $1.5 billion. Garnering great headlines across the media (“Scott Morrison’s national rebuild”, The Australian called it), the plan promises a “roadmap” for development in six priority areas over the next four years: resources, food and beverages, medical products, recycling and clean energy, defence industry, and space industry.

You can read the outlines elsewhere, but suffice to say they involve “strategically investing”, and much innovation, revitalisation and supporting of businesses etc etc. Sounds impressive!

A plan for manufacturing is a great idea, for sure. It’s so great, in fact, that this is the fifth time in 15 months that he or Industry Minister Karen Andrews has announced one. In May and June this year, and on two occasions last year (May 2019 and Sept 2019), the Morrison government announced almost identical strategies. Last year’s announcement, for example, promised to create “1.25 million new jobs over the next five years” by co-funding investments in new technologies. You’d be right to wonder what happened to that strategy. And the others. The short answer is: very little.

As with many Morrison announcements, details on this latest one are scant. Some will be revealed in the budget, and others will emerge when the roadmap is drawn up for each sector – by April next year. 

But let’s take today’s announcement seriously for a moment and assume that it will roll out as Morrison says. Bearing in mind that defence is one of its “priority” sectors, $1.5 billion would cover the equivalent of one fifth of one new submarine. But this package is supposed to be spread over six industry sectors, and over four years. One of these sectors is the space industry – what sort of space technology can you build with one sixth of a bag of chickenfeed? Don’t become an astronaut, kids.

This announcement could also be just another way to relabel its subsidies, directing money to resources and minerals companies, as usual, or preferred electorates. Either way, it will do virtually nothing to boost manufacturing in Australia.

The sad truth is the Coalition has overseen a massive decline in Australian manufacturing in recent years. The major blow was the collapse of the car industry under Tony Abbott and Joe Hockey, who, believing it would never be competitive, ushered it out and blamed the unions. The main reason it was uncompetitive at the time was that the Australian dollar was at parity with, or stronger than, the US dollar. It fell back soon afterwards, but by then the car companies had packed up and left, taking associated jobs and supporting manufacturers with them. Other countries with successful car industries – such as Germany, Japan and the United States – have always relied on government support, and governments subsidise them because they support other manufacturing. Put simply, it’s the price of having a large manufacturing sector. For the Coalition, though, it was too high.

For years, the Coalition has avoided even mentioning industry policy, claiming it amounted to “picking winners”, and that governments shouldn’t do this. Over its recent years in government, Coalition budgets have pulled money out of research and development, and out of universities and bodies like the CSIRO, which build the capacity for the innovation required for advanced manufacturing. In fact, Treasury recently pointed out that changes to the R&D incentive scheme would “save” the government $1.8 billion over the coming four years – i.e. more than it will spend supporting manufacturing.

Manufacturing now makes up just 6 per cent of Australia’s GDP, and many manufacturers are hanging on by their fingernails. And while the Coalition is suddenly happy to “pick winners”, they all seem to be in the fossil-fuel and resources industries. What is its “gas-led” recovery if not this? The insistence on gas as the driver of this new manufacturing plan is yet another sign that the plan is just a re-run of the same old discredited thinking.

Australia could have a major manufacturing sector, and Ross Garnaut among many others has explained how it could be driven by green energy, and be highly profitable. But the Coalition has ignored or decried Australia’s renewables sector, despite its many comparative advantages for Australia, and despite it being the embodiment of advanced manufacturing potential. The benefits in terms of cheap energy would carry the rest of the manufacturing sector, and would produce jobs by the truckload. Where’s the plan for that? Apparently, there’s one due in April. Believe it when you see it.

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“If you are not for gas, you are not for manufacturing jobs.”

Scott Morrison rebukes the NSW energy and environment minister, Matt Kean, for describing the controversial Narrabri coal seam gas development as a “gamble” and “a hugely expensive way of generating electricity”.

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The number of Flight Centre stores to be shut down across Australia. The travel agency now has 332 stores remaining of the 740 it had before COVID-19 struck.

“The legal lay of the land has shifted. Once abuse survivors were completely legally powerless – now they can fight on a level playing field.”

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The list

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“Like several of my women friends, I flinched from the story yet followed the media reports out of the corner of my eye. We emailed each other, we texted, about women we had known (or had been) – single mothers who slammed the door and ran away, or threw a screaming baby across a room, or crouched howling with one hand on the phone, too ashamed to call for help.”

“The federal government has quietly amended the law governing its ban on Australians travelling overseas, fixing wording that may have put tens of thousands of decisions under a legal cloud. The changes redefine who can make the exemption decisions, inserting specific legal cover for the person who says he has been making them until now – the Australian Border Force (ABF) commissioner, Michael Outram.”

Nick Feik

Nick Feik is the editor of The Monthly.


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