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Speech to the Manufacturer's Monthly Endeavour Awards, Melbourne

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25 May 2011



Thanks very much ladies and gentlemen. It’s great to be here. It’s great to see so many people who are in the manufacturing sector and supporters of the manufacturing sector. I want to make it very clear at the outset that a strong and vibrant manufacturing sector is essential to the prosperity of our country. An Australia without a strong and dynamic manufacturing sector would not be a first world economy and the last thing that any politician would want to see is Australia slipping out of the ranks of first world economies and I thought it was very important that I should start my few remarks tonight with that statement because I know that’s a statement that my friend and colleague Mark Dreyfus would agree with. We want Australia to be a dynamic, manufacturing economy. Not just a manufacturing economy - we will have an agricultural sector, we will have a resources sector, we will have a services sector, we will have an financial sector and that’s good and may they grow - but let us never lose the manufacturing sector and I think Mark would say amen to that and I am pleased that we agree on this because Mark, I’m sorry, you probably won’t agree with much of what I am now going to say.

Ladies and gentlemen, when I look out at these representatives of the manufacturing industry of Australia, I don’t see the representatives of big emitters, let alone big polluters. I see big employers, I see creative innovators, I see the people upon whom our modern way of life absolutely depends. If we didn’t have a steel industry, if we didn’t have an aluminium industry, if we didn’t have a cement, a glass, a plastics industry and if we didn’t have all the other businesses that make use of those products, it’s not just that we wouldn’t be a first world economy, we wouldn’t be a modern society.

So I am all in favour of sustainability. I want sustainability. But I don’t just want environmental sustainability. I want sustainable industry and a sustainable manufacturing industry in this country and there’s not always a lot that government can do about the high dollar, about tough markets, about bolshy customers and about difficult unions but what we can do is avoid hitting you with unnecessary burdens. I think what the manufacturing sector of Australia needs is not necessarily protection but, by gee, it needs encouragement and what it doesn’t need, in my opinion, is a big new tax.

Now, ladies and gentlemen, I am not normally party political at gatherings like this because I know you didn’t really come here to listen to politicians. You came here for fellowship and to celebrate the achievements of the best of your industries and that’s great but I do think it is important that you know where the respective political parties of our country stand and you’ve heard from Mark, you’ve heard from the Industry Minister, they want to inflict additional costs on your industries. Now, they say it’s in a good cause and I accept that it is a very good cause to reduce our emissions, but in my opinion there are smart ways to reduce emissions and there are dumb ways to reduce emissions and reducing emissions by penalising manufacturing industries is very much the dumb way to go about this.


Let’s be clear. A carbon tax or an emissions trading scheme is designed to change the way our economy works. It is designed to make it much more expensive and much more difficult to do things that require large amounts of energy. That means steel is more expensive, aluminium is more expensive, cement is more expensive, glass, plastics, motor manufacturing - all more expensive because they’re all very emissions intensive. They all require vast amounts of power and vast amounts of power means burning vast amounts of coal or vast amounts of gas. You just can’t get away from that. You cannot have a solar powered steel mill. You cannot have a wind powered motor manufacturing plant. You just can’t do it. You need base load power in vast quantities and that means coal and that means gas and under a carbon tax or emissions trading scheme that means your costs go up.

Now, ladies and gentlemen, if we have a carbon tax or an emissions trading scheme we aren’t going to use less steel, less aluminium, less plastics, less cement, less glass; but we will use a lot less Australian steel, glass, plastics, cement and so on. We will still use it but it will be imported. Maybe we won’t use as much because we won’t be as wealthy, but that which we use and which we must use to maintain our economic circumstances will come from overseas.

So ladies and gentlemen, that’s my simple message tonight. There is a Government which sincerely and honestly wants to, in the name of sustainability, increase manufacturing industry’s costs and there’s a Coalition which sincerely wants to improve the environment but which doesn’t believe the right way to do it is to increase your costs. I think that the manufacturing sector is at a bit of a crossroads at the moment. I think this bid to bring in a carbon tax followed by an emissions trading scheme is a watershed for the whole of the manufacturing sector. Not for nothing did 39 of the biggest manufacturing businesses in our country write a joint letter to the Prime Minister saying a one-sided, unilateral carbon tax or emissions trading scheme would cost jobs, damage competitiveness and hurt Australians’ standard of living. It’s almost unthinkable that so many businesses were to come together on this issue, but they did. People who are normally competitors, normally rivals, came together on this issue.

I want to say that there’ll be many things that you won’t agree with me on, but I agree with you on this - that this is a very bad tax. It can’t be fixed, it has to be fought and if it’s not fought the manufacturing sector in this country, I regret to say, is almost certain to die and I think this is as stark as that, the choice you face: do you fight or do you die? Now, there are a lot of young people in this room who’ve got a big future ahead of you and I hope that you won’t let your industries and your sector wither and die because you just accept this thing which should not be accepted.

I just have two further comments to make, ladies and gentlemen. The first comment is I am very confident that in 25 years time and in 50 years time there will still be a vibrant manufacturing sector in this country because I don’t believe there will be a carbon tax. I will fight it as long as there is breath in my political body and I think that you will fight it because that’s the only choice you’ve got. Secondly, I want to say that it is very encouraging to see so many of you come together to salute innovation, to salute creativity, because it’s not just the finance sectors, it’s not just the arts, it’s not just the resources where Australians are creative. We are creative everywhere and as long as we have a manufacturing sector we will have a creative manufacturing sector. It’s great that you celebrate it tonight. I congratulate everyone who is going to be honoured. I particularly congratulate the winners and I wish you a long and successful future.