Government’s lazy attitude revealed

Editorial comment piece from the October issue of Manufacturers' Monthly. Surprise authors of damming report on Government's industry policy. Committee calls for significant changes, including a strategic manufacturing policy.

Surprise authors of damming report on Government’s industry policy. Committee calls for significant changes, including a strategic manufacturing policy.

LAISSEZ Faire is not a commonly used maxim, but it describes perfectly the Federal Government’s attitude to our manufacturing industry over the past 11 years.

So it came as no real surprise to see it used in a recent House of Representatives report critical of the Government’s role in Australia’s manufacturing industry.

The report, Australian manufacturing: today and tomorrow, was tabled by the House Standing Committee on Economics, Finance and Public Administration.

The surprise was the authors of the report are predominantly from the Liberal Party, putting forward over 20 major recommendations.

The full report, close to 250 pages of it, makes interesting reading (go to and in many ways captures in one document many of the areas the government should have attended to. And if the election polls are right, they will never get a chance to be implemented.

Rather than standing back and allowing the market to adjust to life beyond the resources boom, the committee supports an approach of capacity building through removing impediments to growth and correcting for genuine market failure.

Probably the key recommendation is a call for a national manufacturing policy, something industry minister, Ian Macfarlane, refuses to accept, arguing Australia already has a comprehensive industry policy.

The committee on the other hand calls for a strategy that provides a sector-specific direction for manufacturing, including regional strategies, to supplement the existing industry policy.

A key ingredient of the current industry policy over the past decade has been the Action Agendas, with 22 of the 38 approved Action Agendas covering the manufacturing industry.

However, while the Action Agendas have merit and industry’s participation is strong in the early stages, when Government provides secretariat support, the momentum soon drops once the report is signed off when the Agenda is considered completed.

In reality however, the Agendas are rarely fully implemented. The committee recommends a review of the Agendas and suggests the Government think about a dedicated manufacturing agency aka the UK’s one-stop-shop MAS (Manufacturing Advisory Service).

This proposal differs from AusIndustry in two broad ways: it is manufacturing specific, having manufacturing oriented representatives in regional offices and contracting experts to assist with programmes in-the-field; and it provides a greater level of advice and information dissemination, far beyond assistance programme intricacies.

The committee acknowledges the new Australian Industry Productivity Centres (AIPC), which are modelled on the UK’s MAS are a move in the right direction, but question’s their broad brush approach, calling for a manufacturing focus.

This is a key point Labor’s shadow industry minister, Kim Carr, picked up on when announcing Labor’s Manufacturing Network.

Carr says the $100m program, over four years, will help up to 3,000 manufacturers a year.

As well as offering free benchmarking services, the centres will provide intensive technical assistance programs on a co-investment basis.

The committee agrees benchmarking, and the use of diagnostic audits, is a positive step towards productivity and efficiency gains, and recommends the Government’s AIPCs are adequately funded.

Other recommendations in the report include: increased spending on the government’s Export Market Development Grants (EMDG) scheme, harmonised State and Federal OH&S regulations, review of the venture capital market, increased funding for CSIRO with closer links to industry, review of present R&D tax concessions, and improved government’s assistance programs.

When questioned, Macfarlane would not go into any detail regarding the report, except to say the report will be studied closely and the Government will provide a formal response in due course. With time running out to the next election and the odds of the Coalition staying in power much longer getting longer, any response will be too little too late; a fitting epitaph for this Government and its regard for our manufacturing industry.

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