Stuart Kennedy
October 25, 2017

A last gasp for manufacturing?

Policy

A last gasp for manufacturing?

Michaelia Cash: Trumpeting a boost for the manufacturing sector

In the month when the last Holden and the last Toyota rolled off a local assembly line putting an irretrievable dent in Australia’s manufacturing capability, the Coalition sought political cover in the form of a shiny, new report.

Under the slightly ironic headline of ‘Advancing All Australian Manufacturers’ – given the demise of the Holden production line – the acting Industry Minister Michaelia Cash’s presser rang in a new dawn for how this country makes stuff.

“Manufacturing has played a major role in contributing to Australia’s stellar economic performance over the past 25 years,” Minister Cash said in a statement.

“However in order for Australian manufacturing to continue to succeed domestically and globally, it must evolve and diversify,” Senator Cash said.

The report, ‘Advanced manufacturing: A New Definition For A New Era’ was released by the Fed’s Advanced Manufacturing Growth Centre (AMGC).

“Today’s report emphasises that the continued growth of the sector is dependent upon manufacturers innovating, moving up the value chain and embracing production efficiencies in order to develop new products and serve new markets.”

Tell that to the workers at Fisherman’s Bend, South Australia (Holden), Geelong, Victoria (Ford) and Altona, Victoria (Toyota).

“Every single manufacturer has the potential to be advanced. I encourage all Australian manufacturers to examine their business models and look at where they can emulate the practices of globally successful firms,” Senator Cash said.

In lieu of making cars and all the bits and pieces that go into them, the Turnbull government has funded ‘the next chapter of Australian manufacturing’ which it says  ‘revolves’  around a sector based on smart people, smart production, quality customer service and the continual search for products that add high value.’

The $100 million Advanced Manufacturing Growth Fund is there to support what is left in advanced manufacturing projects in Victoria and South Australia as serious motor vehicle production leaves these shores forever. Labor has said it will create a $1 billion advanced manufacturing fund if elected although details are scant.

The Advanced Manufacturing Growth Centre (AMGC) is part of the Government’s Industry Growth Centres initiative, which is designed to improve the productivity, competitiveness and innovative capacity of industry sectors of strategic priority in the Australian economy.

About 10 per cent of the Australian workforce is employed in the manufacturing sector, according to the AMGC, a rise from 905,000 to 1.3 million due to ‘updated analysis’ which finds in a politically timely manner that the Australian manufacturing industry is ‘larger and more dynamic than currently estimated’.

We get from the ABS May 2017 figure of 905,000 manufacturing jobs to the new improved figure of 1.3 million manufacturing jobs by changing definitions to including pre-production and post production jobs such as workers exclusively delivering research and development, design, logistics or services to manufacturers.

“Our research shows that almost half of all manufacturing jobs are in non-production based roles. Being a successful advanced manufacturer is no longer just about what you make but how you make it and the way you run your business,” says Jens Goennemann, AMGC managing director in a statement.

Again, tell that to the ex-automotive industry workers.

According to the AMGC report just five per cent of manufacturers drive 99 per cent of the industry’s export value.

The same group is responsible for 94 per cent of capital spending and 54 per cent of the sector’s entire research and development.

As for the dullards not in this group, the report finds 80 per cent of Australian manufacturers could become more advanced by collaborating with researchers, upping their ICT spend and rolling out fresh product-related service or using patents to protect their ideas.

“Australia’s manufacturing exports generate close to $9 billion every month so just imagine what the possibilities could be if we increased the number of firms contributing to economic output by even five or 10 per cent,” says Dr Goennemann.

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