Resources Minister Martin Ferguson has admitted that the resources industry is really hurting Australia’s manufacturing sector, but says this is OK because other industries will benefit.
In an article published by SMH.com.au yesterday, Ferguson warned the manufacturing industry against pushing for protectionism, and asked them to look at the bigger picture.
Ferguson was talking during a lecture on energy and resources at Sydney University on Tuesday.
Though he admitted high commodity prices and the Australian dollar are pushing manufacturers into a corner, he reportedly claimed the demise of manufacturing will open-up opportunities for other sectors.
The author of the article claims Ferguson said the resources boom can provide business for engineers, transport companies, travel agents, lawyers and bankers.
He reportedly warned Australia against going down the protectionist route, claiming recent discussions about local content mandates have been narrow, putting the spotlight on the woes of the manufacturing industry rather than trying to support resources.
Unions have been putting pressure on the WA state government these past weeks to instigate local content mandates to ensure big resources projects give Australian manufacturers a fair go.
Big mining and energy companies have been accused of favouring foreign manufacturing and engineering support because it is more competitively-priced.
Unions revealed yesterday that Chevron had already signed the majority of its engineering and fabrication work over to overseas businesses before its $29 billion LNG project had even been given the ‘go ahead’.
"I cannot deny this pressure," Ferguson said of the impact the resources industry has on manufacturing — during his lecture on Tuesday.
"But at the same time I reject narrow views and definitions, particularly when it comes to Australian content."
The SMH.com.au reported that Ferguson said protectionism for manufacturing projects would take the focus off the resources industry, warning Australia not to take the sector’s economical contribution for granted.
"Investment capital is footloose, and Australia is competing globally to attract this capital and investment," he said.
According to Ferguson, manufacturers and companies in other industries would do better to focus their efforts on taking advantage of the opportunities created by resources companies.
Read the SMH.com.au article here