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Govt's manufacturing plan about a fair go -

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Govt's manufacturing plan about a fair go

Broadcast: 11/04/2012

Reporter: Tony Jones

The incoming chief executive of the Australian Industry Group, Innes Willox, discusses the
Government's plans to help manufacturers compete with overseas businesses for local projects.


TONY JONES, PRESENTER: Here is an interview with the incoming CEO of the Australian Industry Group,
Innes Willox.

Innes Willox , thanks for joining us.


TONY JONES: You've just heard Penny Wong's position. How hard will business and industry groups be
pushing tomorrow on these issues of green and red tape?

INNES WILLOX: Look, these are big issues for industry generally across Australia. It's one of the
curses in many ways of our history. We have a federation with the states, the Federal Government,
local government and now we have a range of intertwined crossover rules and regulations which quite
frankly inhibit industries like manufacturing, like construction, like even the mining sector in
many ways. So, it's good to sit down and have a serious look at how industry is being impacted by
all these crossovers in terms of regulation.

They're impacting business's ability to move labour, business's ability to move their own
operations around the country and business's ability to grow. And at this time when we see the
economy - although we're doing well in some regards, but big parts of the economy are struggling,
it's important to have a look at these issues to see what's been done in the past and has it been
done properly and what needs to be done in the future.

TONY JONES: Alright, on the detail. Let's start with the very large increase in red tape that
you've actually endorsed today, the Australian industry participation plans. Is some red tape
better than others?

INNES WILLOX: Well, we don't see that as red tape. We see that as quite a sensible approach,
actually, to the future of industry in Australia and it's something that industry would quite
happily sign up to to allow Australian industry to have proper visibility around major projects,
major resources projects, major construction projects, infrastructure projects and areas where
there are significant government grants. What industry's been after here in this area for a long
time is visibility and transparency and there's been a sense now for many years that there hasn't
been that, so there hasn't been the fair go for Australian industry.

TONY JONES: But it is - you're right, it's about disclosure, but these plans require new paperwork,
breaking down all the key goods and services procured, submissions to government on all contracts
awarded, details of the tendering process and updated every six months. So that is red tape, isn't

INNES WILLOX: Look, it's disclosure and we see that as being important. And this was part of a
decision taken by a committee recommending to government which included industry participants,
including myself and representatives of major companies. So we're all aware of what's involved here
and it was a decision taken quite deliberately to try and give Australian industry a fair go.

To your point earlier, we know of at least three major resources projects that have been signed off
recently where procurement is going to occur virtually all from overseas. Why is it that in WA,
where there's significant growth at the moment, the strong point of the Australian economy, steel
fabricators are going broke and going out of business? We're not saying this is...

TONY JONES: Well that is the question the unions have asked as well, and so I ask you this: did you
ask the Government or try to encourage the Government to go to mandated levels of Australian
manufactured goods and services in these giant projects?

INNES WILLOX: Not at all. Mandated procurement is not the way to go. That's going to just put us
into a cul-de-sac economically. We complete globally. All businesses within Australia complete
globally. We all know that. It was part of a discussion today with the Prime Minister's
manufacturing taskforce where one of the big themes that came out of the discussion was that we are
all part of a global supply chain. And part of the secrets of growing Australian business is to get
Australian business involved in that global supply chain.

So mandated procurement is just another form of protectionism. That's not going to fly in the
current global environment. We know that. Nobody's pushing that. What we're pushing for is just the
transparency and the fair go. If Australian business can't compete on a project on cost or quality,
well then fair enough. But at least Australian business should be given the opportunity to compete
and that's where the argument lies.

TONY JONES: OK. To the broader issues that are going to be discussed at the roundtable tomorrow,
what is the green tape the industry group is most concerned with?

INNES WILLOX: Look, there are a range of areas. You look at environmental regulations around
Australia. If you're a national company operating in Australia there's well over 300 different
environmental regulations that you have to comply with right across the country. There's overlap
left, right and centre. What we're saying is: let's have a look at this, let's strip it back, let's
determine what is essential and what most importantly is redundant. There's a lot of redundant
regulation around which is a function of our history, so let's just clean it out and make it easier
for business to operate, particularly at a time when we're about to have the introduction of a
carbon tax which is...

TONY JONES: Well in fact I'll just come to that quickly, because the Opposition says that's the
biggest piece of green tape that there is and it's jeopardising the economy. Do you agree or not?

INNES WILLOX: Look, the carbon tax is happening from July 1. We all know that and the Government's
committed to it. The Government and Opposition are committed to the same targets. It is going to be
a compliance burden on industry, there's no doubt about that. It's going to increase costs for
industry. There will be a flow-down through the economy which will make business harder in many
cases. So, we recognise that. But what we're about is trying to make it as easy for business to
make the transition and to adopt to the new requirements. And stripping back that regulation is
something that we don't believe the Government did when it was introducing the carbon tax and that
legislation. There wasn't enough attention paid to the regulatory requirements around the tax, the
existing regulations that were in place, and this is a good opportunity to have a look at it.

TONY JONES: So, we're unaware of your views to a large degree. Do you share the belief that your
predecessor Heather Ridout had that there does need to be a price on carbon and that it should be
regulated through an emissions trading scheme?

INNES WILLOX: We've taken this view over a long time. This dates back to 2006 and '07 when there
was first discussion under the Howard Government about how to address these issues and I think you
alluded to earlier that the Howard Government was looking at an emissions trading scheme. So, in
some ways this has been an inevitability in the public policy debate within Australia. The question
is how best to frame it. Do we need a carbon tax? Do we need an emissions trading scheme? What
price should there be? I make a couple of points on price. Twenty-three dollars a tonne escalating
up to almost $26 a tonne over the next couple of years before the emissions trading scheme is
introduced is too high a price. We've argued for a long time now that there should be a softer
starting price at around $10 a tonne, which is a figure now I hear much more frequently in the
public policy debate. Compared to our European competitors, we're putting ourselves at a major
disadvantage. So, if we are ...

TONY JONES: So do you take the view and do the combined industry and business groups take the view
that this could still be changed? Or is it now inevitable it's going to be at that price? How much
pressure could you put on Government if you think it can be changed?

INNES WILLOX: Look, it's been legislated, so it's very hard to turn the legislation around. The
Government has an agreement with the Greens. This is sort of by chance or by happenstance,
defending on your viewpoint, this was the price that the Greens took to the last election - $23 a
tonne - which raises a few eyebrows, but this is a function in many ways of a political discussion.
It's happening from July 1. We need to make this transition as easy as possible for business. And
we'll come back to the price again once we see it operation.

TONY JONES: OK. A final question: what's your view on the Coalition policy of controlling emissions
through direct government intervention?

INNES WILLOX: Still needs some work, I think. It still needs to be fleshed out. We still need to
see detail on that. The important thing from the Opposition is that they've agreed to the same
target in terms of emissions reduction. The question is how we get there. We're continuing to talk
to the Opposition about their approach. It still needs some work and it's a work in progress. I'm
sure you'll hear more from them as time goes on.

TONY JONES: Innes Willox, we'll hear more from you as time goes on too I'm sure. For your first
interview on Lateline we thank you very much for being there.

INNES WILLOX: Thanks, Tony.