Where the new industry plan could do better

As mentioned in an earlier wrap-up of responses to the federal Coalition’s Modern Manufacturing Strategy, the amount allocated — $1.5 billion — has been described as too small, especially given the monumental challenge it addresses.

After years of decline in manufacturing’s overall share of Australian GDP to the current 6 per cent, and reductions in business R&D investment, critics have said the plan doesn’t invest enough.    

Raw dollar value aside, others have said it badly overlooks some important areas.

Below are some of the criticisms of Thursday’s announcement at the National Press Club.

  • Independent Senator for South Australia Rex Patrick said that after four decades of decline for the sector, $1.5 billion over a decade represented “a drop in the bucket.” He added that the announcement came on Thursday “because no one will notice it on budget night.”
  • Former chair of Innovation and Science Australia Bill Ferris said the federal government would have to work with superannuation funds, which would be a necessary source of patient capital for advanced manufacturing. In an interview with The Australian Financial Review he cited the public/private Biomedical Translation Fund established under Malcolm Turnbull’s government. “We all know that unless we do it, the country is not going to get the best results,” he said of the required alignment between government and investors. “So we have got to take it on, we have got to be on the front foot with that.”
  • Emeritus Professor Roy Green called the $1.5bn announcement “nowhere near where the public funding commitment should be when other countries are committing multiples of billions” with a lot missing to address previous failures to support Australia’s research and innovation system. (Read Green’s analysis for @AuManufacturing here.)
  • While recognising the merit of the six manufacturing sectors identified, Ai Group cautioned against “the exclusion of the development of other parts of manufacturing or of industry more generally” and “tilting the playing field against industries that have not been identified to date.”
  • ANCA co-founder Pat Boland said his company — a globally-successful machine tool maker — doesn’t appear to benefit from the announcement, as it was not in one of the six targeted areas. He also said it didn’t address demand for Australian-made goods. “This is $1.5 billion, the government has already announced spending programs many times bigger than that in the defence segment, really getting defence to inject demand into manufacturing in Australia would be a far more powerful approach,” he told The Sydney Morning Herald. 
  • Shadow federal industry minister Brendan O’Connor called the policy announcement a re-packaged re-announcement, which was also worth less than what was being cut from the R&D tax incentive. He added that the six focus areas were identified in the 2012 PM’s Manufacturing Taskforce and then-government’s 2013 Plan For Australian Jobs. Labor’s industry minister of that era, Kim Carr, tweeted: “What the Libs present as industry policy is just a host of bits and pieces, covering up billions of dollars in cuts they have made. The Libs have trashed our science and squandered our research potential, while other nations and advanced economies invested in themselves.”

Picture: www.industry.gov.au

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