1. What manufacturing capabilities will be in demand next year? (i.e. where could savvy Aussie manufacturers focus their attentions?)
Every firm faces unique challenges, and brings their own strengths to that task. That is one of the reasons the Government established Enterprise Connect, to ensure firms have the one-on-one support to make the right investments.
More broadly, however, the work of the Industry Innovation Councils has helped us understand the characteristics that set strong firms apart in the market. The Future Manufacturing Council tabled a report at the recent Jobs Forum that identifies key features of such firms:
– They bundle goods and services together to offer the customer a solution, not simply a manufactured product.
– Similarly, they have the capability to identify, design, develop, make and sell products and services that are in demand.
– They reduce waste in all its forms – whether that means changing the light bulbs or moving to platforms like 3D printing.
– They supplement their core strengths by diversifying, with a focus on low-volume, high value-add niche markets.
– They look to integrate into the global supply chains of multinational companies, estimated to comprise some two-thirds of world trade.
– They find avenues to the increasingly affluent middle-class market in the BRIC economies – Brazil, Russia, India and China.
2. How can manufacturers organise their businesses next year to ensure they’re not at the mercy of a high Australian dollar?
We always have to deal with the world as it is, not the way it was, and not the way we might prefer it to be. The high dollar is a fact of life. That does not mean firms are helpless, and it has certainly not weakened this Government’s confidence in the long-term viability of Australian manufacturing.
There are some benefits from a strong Australian dollar, such as lower inflation and access to cheaper imported capital goods and equipment.
At the same time, the Government is working with firms to help them adjust their business models to the new realities. Innovation is the key. Manufacturers that organise their businesses to respond flexibly to new opportunities and move up the value chain put themselves in the best position possible to minimise adverse impacts from the high dollar.
The Australian Government delivers programs that encourage ongoing innovation and productivity in Australian industry, including manufacturing businesses. I encourage Australian manufacturing businesses to consider the full range of government support that is available, including the new R&D Tax Incentive, the major grants in the Clean Energy Future package, Enterprise Connect and Commercialisation Australia.
3. There are now sector-specific Supplier Advocates for many manufacturing areas, trying to bring manufacturers with complementary capabilities together so they can become more globally-competitive. Will this be a government focus in 2012?
Supporting Australian manufacturers through the Supplier Advocates has always been a core priority for the Government, and this will not change. This is about giving firms a red hot go to compete for work, whenever and wherever we can.
We know this approach works. Look at the work of the Auto Envoys Steve Bracks and John Conomos in the Automotive Access Program. They helped Australian auto firms secure $538 million in new international contracts in 2010/11.
The Supplier Advocates already appointed in the sectors of rail, steel, information technology, water, built environment and textile, clothing and footwear, are all leading practical projects to get more business for local firms.
I recently appointed the Hon Peter Beattie as the Resources Sector Supplier Envoy to strengthen Australian industry participation in resources projects, and I will shortly be appointing up to four Supplier Advocates with a focus on resources opportunities.
4. Can you provide some tips for manufacturers to make the most of the mining boom next year?
Australian industry participation is vital for spreading the benefits of the resources boom to other sectors of the Australian economy. We should not be the back-room operators in the transformation of our own country.
In October 2011, I announced that the Government will not only apply Australian Industry Participation Plan requirements to large government grants over $20 million – we will also require future resources project developers to publish more details on opportunities for local firms if they want to receive tariff concessions under the Enhanced Project By-law Scheme.
This builds on the $50 million of Buy Australia at Home and Abroad initiatives we have announced to enhance opportunities for Australian industry and to build local SMEs into globally competitive suppliers.
I strongly encourage firms to look to the new resources sector network in Enterprise Connect and the Industry Capability Network to identify possible opportunities, even if they have been deterred by their past experiences with the big project proponents.
I also urge firms to look to the CSIRO and universities for emerging technologies that can boost their competitiveness in the bidding process. The R&D Tax Incentive was established to help firms build their capabilities in this way.
5. What are your predictions for the state of the industry as a whole in a year’s time? Will manufacturing have consolidated further, or will it have grown?
There will always be fluctuations in the monthly statistics, and there will always be people who want to use them to promote their own agendas. The fact remains, manufacturing has coped with more than forty years of phenomenal change. Our great strength is our capacity to adapt.
There will be major challenges in the year ahead, but I remain optimistic. Manufacturing has a great future in this country. There are quality jobs in manufacturing for our kids. It is our obligation to build and sustain the capabilities we need through these tough times.
6. From your experience visiting manufacturing companies, what are they demanding from technology suppliers right now? And are the suppliers meeting these demands, or is there room for improvement?
In my dealings with industry, I welcome the strong demand for technologies that take advantage of the opportunities that come with the Government’s nation-building plans. The NBN. The climate change measures. The massive boost to the budgets of the CSIRO and the universities. These investments are building the capabilities for entirely new industries and ways of doing business. We are seeing firms that use new technology to diversify into niche, higher value-added markets – such as medical devices, scientific instruments and custom designed chemicals and plastics. We are also seeing firms integrate capabilities like cloud computing and computer-enabled design into their routine operations.
A core focus is obviously the push to clean technology. As firms have put to me for many years, efficiency is first and foremost a business imperative. Technologies that cut the waste and cut the costs make sense. As part of the Clean Energy Future initiative, the Government will help businesses, including manufacturers, through a range of clean technology programs, including $1.2 billion in new grants available in my portfolio. All up, there is more than $20 billion in measures to help industry take advantage of the shift to cleaner, cheaper production. From my perspective, there ought be an opportunity there for every manufacturer.
7. The industry has been bemoaning the shortage of skilled workers for years now. Does the government have plans to step in and help make the industry more attractive for job applicants?
You can’t be the Minister responsible for manufacturing policy without knowing about the skills shortages that companies are facing. This is a challenge that crosses many portfolios, and we are dealing with it at the highest levels.
On 6 October 2011, at the Future Jobs Forum the Prime Minister announced the formation of a Prime Ministerial Taskforce on Manufacturing. The Taskforce will be chaired by the Prime Minister with the help of manufacturing leaders, unions, the science and technology sector and government. It will co-ordinate work conducted at a range of levels across government to help the manufacturing industry build crucial skills, move up the value chain, and obtain capital.
One example of the programs we offer is Australian Government Skills Connect, a new ‘one stop shop’ service for employers and industry bodies seeking funding to address their skills needs.
The objective of Skills Connect is to make it easier for eligible organisations to access Government assistance for training and workforce development, which will in turn support growing sectors and businesses, and assist people who risk losing their jobs because of structural changes in the economy. Skills Connect will be launched by Minister Evans in the near future.
One program that is part of Skills Connect is the National Workforce Development Fund (NWDF). Through the NWDF, the Government will support training and workforce development in areas of current and future skills needs. The idea is to offer staff a greater incentive to remain with their current employer.
In addition, Job Services Australia (JSA) provides a free service to help employers find staff to meet their specific business needs. JSA is designed to be flexible and responsive to employer needs, skills in demand in local communities and changing economic times.
8. What is the government doing about dumping?
The Government has acted swiftly to implement the reforms we announced on 22 June this year. This is about ensuring that Australia’s anti-dumping arrangements match the current economic circumstances and the legitimate expectations of industry.
The Customs Amendment (Anti-dumping Improvements) Act 2011, which commenced on 24 October 2011, gives effect to the first tranche of improvements. These include a 30 day time limit for Ministerial decisions on anti-dumping cases, clarification of injury factors that can be claimed by domestic industry, and ensuring that industry associations, unions and downstream industry can participate as interested parties in investigations.
A new SME Support Officer is being appointed to assist SMEs and downstream manufacturers and producers participate in anti dumping investigations. The Government has also established the International Trade Remedies Forum (ITRF) to provide advice on anti-dumping matters. The ITRF includes members from industry, unions and Government. It will provide strategic advice and feedback to the Government on the implementation and monitoring of the proposed reforms.
9. As global manufacturing sectors become more competitive, ‘manufacturing nationalism’ or ‘protectionism’ seems to be rising. What is the government’s position on this? And how do we engage with other countries with the FTA, and at the same time support Australian manufacturing?
From the Government’s perspective, this is not about fighting change, and it should not be boxed into the old protectionist versus free-trade debate. Across the political spectrum, there is a growing global consensus that investment in innovation is the only way to build industries that compete in an advanced economy. China understands this. India understands this. The United States understands this. I am confident Australia is well-placed to collaborate and compete for new investment. Our proximity to Asia, our world-class research capabilities and our stable business environment set us apart in the OECD. We need to keep building the strengths that attract global investment: high-speed broadband, global research hubs, advanced manufacturing capabilities, robust governance frameworks and a high-skill workforce.
The new R&D Tax Incentive is a vital part of that strategy – it removes the requirements in the old R&D Tax Concession for intellectual property rights to be held in Australia. The important principle here is that Australia is open for global investment, and the benefits that flow from it for the business community.
Just as we train our elite athletes to compete on the global stage, so to can we build our companies into globally competitive suppliers.