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Thursday, 16 August 2012
Page: 5695


Senator MADIGAN (Victoria) (22:43): Today was an important day for the Australian manufacturing industry. We saw the release of the report by the government's manufacturing task force. We also had the launch of my initiative, the Australian Manufacturing and Farming Program, which encourages federal parliamentarians to place themselves into Australian manufacturing workplaces and farms for a few days or a week to reacquaint themselves with the reality of those workplaces. We see two important initiatives designed to help Australian parliamentarians arrive at better decisions about Australian manufacturers and primary producers.

I must also admit to some concern today, listening to the answers of the Leader of the Government in the Senate, Senator Evans, in response to questions asked about government policies and the plight of the Australian manufacturing industry. Listening to Senator Evans display an unfortunate lack of knowledge about the continuing role of blacksmiths and typists in our economy, and thinking of today's two pro-manufacturing initiatives, I thought a line or two from a report commissioned in 1984 by the Metal Trades Federation of Unions might be instructive to Senator Evans in relation to the role of metal manufacturing, including blacksmiths, in our economy. The report, called Policy for Industry Development and More Jobs, makes a critically profound comment. It says:

The products of the engineering industries are the processes of the rest of the economy.

The truth is at the core of Germany's manufacturing success, propelling its economy forward. The products of its engineering industries are the processes of the rest of Germany's economy and increasingly our economy as we import and install the products of German engineering industries into our factories and workplaces. China is now establishing itself as an engineering powerhouse too, manufacturing the processes of its rapidly industrialising economy, competing with Germany to sell its engineering products to Australia and elsewhere. The MTFU industry policy document makes the very strong case that, in order to be a successful exporter, a country must have a successful domestic manufacturing base from which to export. China and Germany equip their own workplaces first and then export.

The central problem that has displaced 125,000 Australian manufacturing jobs over the last four years—with another 50,000 jobs predicted to end over the next five years—is that we are being outcompeted by China and Germany on the industry policy front. Unlike Australia, they do not allow other countries to take control of their domestic markets in key areas of production; neither do other manufacturing countries. As Edward Luttwak points out in his 2010 ABC Lateline interview, do not bother trying to sell locomotives to the French unless they are made in France. Australian economist Martin Feil makes the point that you will not find too many French cars in Italy or Italian cars in France. I have not had time to read today's manufacturing taskforce report in any detail, but I hope that it takes some of the emphasis off Australian manufacturing industry being smarter, more innovative and more productive and instead places that emphasis on Australian industry policy makers and decision makers to be smarter, more innovative, more productive and more competitive.

We, in this place, must start taking responsibility for failing Australian manufacturing industry to date. We must reject the free trade policies that have got our industries into this fix. We do not have to breach trade rules if we are smart. We do not have to introduce tariffs to protect our manufacturers. However, we do have to be just as clever and competitive as legislators elsewhere in the world who use a whole range of non-tariff supports to assist their manufacturing industries and protect them from damaging external competition. The challenge for our Australian manufacturers starts right here in this place. I finish by asking: are Australian legislators up to this task?