Manufacturing Announceables: malaise needs more than a bag of goodies

by | Oct 2, 2020 | Business

Let’s put Scott Morrison’s $1.5 billion manufacturing plan in perspective, writes Peter Roberts. Just last month $1.9 billion was invested in clean energy, while far more is to be given away in futile tax cuts to the already-well off. 

How can $1.5 billion change the trajectory of a $2 trillion economy? It won’t, because the sum is far too small for the size of the problem.

The scale of Australia’s manufacturing malaise is far greater than the federal government’s response.

Manufacturing is a rump of its former self, at only 5.6% of GDP, the lowest among developing nations.

Australia has just one factory capable of making silicon chips, for example, and this is small-scale and specialised in nature.

Computer chips are perhaps the essential of modern industry yet experience has taught us that to attract a significant investment in a large-scale computer chip plant would eat up $200 million in government assistance.

In medicines we manufacture no anesthetics and no rubber gloves – clock up another $100 million here.

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A billion dollars will be spent very soon or, more likely, spread far too thinly.

Unfortunately, Scott Morrison’s manufacturing plan announced yesterday changes nothing.

Crucially, the Prime Minister has little to say about skills. Yet management skills are mediocre while workplace skills are in decline. This is perhaps the greatest human element missing from our hoped-for manufacturing revival.

The grab bag of initiatives are all laudable in themselves, including a $1.3 billion co-investment fund for large projects in priority sectors of resources technology and critical minerals processing, food and beverages, medical products, recycling and clean energy, defence and space.

Prime Minister Scott Morrison is essentially trashing decades of campaigning by the economic rationalist sections of the community who argued that we should not pick winners.

And let’s put the $1.5 billion in perspective. Just last month $1.9 billion was announced for a 10-year plan to invest in technologies to lower emissions, while far more is to be given away in futile tax cuts to the already-well off.

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This all suggests a low priority for manufacturing.

Reprinted with permission from @AuManufacturing.

ABOUT THE AUTHOR

Peter Roberts

Peter Roberts

Peter Roberts is a manufacturing and media networking specialist. He was a senior columnist, writer, editor and editorial manager, founded a start-up online procurement service and served on the board of Australia’s premier private-sector funder of research into innovation and competitiveness.

6 Comments

  1. Avatar

    Deliberately, Australia smashed its wobbly manufacturing base. Deliberately, we substituted resource exports plus mass migration. As no other advanced nation has done. Lunatics (aka economists) ARE running our asylum.

    • Avatar

      Economists aren’t running the show, it is nowhere near that rational.

      Scotty from marketing, trying to spend the minimum that looks flash to the uninformed public.

    • Avatar

      Economists aren’t running the show, it is nowhere near that rational.

      Scotty from marketing, trying to spend the minimum that looks flash to the uninformed public.

  2. Avatar

    It’s not only Morrison and his tunnel vision, it’s also the entire LNP that suffers this malaise. Incapable of envisioning anything more than Game of Mates, commoditising property, roads, bashing the environment and people. Forget about reducing CO2 levels and improving existing rail and public transport with reducing carbon emissions from private transport.

    Flatulence is a common outcome of poor diet, and Morrison’s economic diet from Treasury to date is shocking. Whatever the LNP/BCA/IPA are selling, it’s very hard to swallow, and leads to poor outcomes and wastage all round.

    Manufacturing 1980’s – we could not compete with Europe at that stage, and Italy could export small complete ‘pumping’ units
    off the shelf with high quality engineering and reasonable prices!

    Well, the announcement sounds big, until you realise that it’s the equivalent of a fig leaf. So, how’s 2020 thus far, the crescendo
    of going backwards. It ain’t over till the fat lady sings, and she’s just warming up.

  3. Avatar

    As an engineer I think the reason that LNP right wingers don’t like manufacturing is because you can’t be in charge. Manufacturing needs an ecosystem that extends across supply chains, area, talent, community and generations. It is a matrix of commitment. That means an MP has to serve manufacturing rather than being in charge and right of centre MPs derive meaning from telling others what to do. Until this mindset is got rid of then manufacturing in Australia will always struggle.

  4. Avatar

    The Liberal Party are ideologically opposed to manufacturing, on the basis that manufacturing might employ union members.

    For example the car industry and the denigration of the Submarine Corporation.

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