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Tuesday, 23 August 2011
Page: 9046


Mr STEPHEN JONES (Throsby) (16:44): We have heard 25 minutes on the topic of manufacturing in this country from the opposition, without one constructive policy proposition. From those who would like to sit on this side of the chamber, there was not one proposal—not one proposal. I was hoping that the member for Indi might use the opportunity of this matter of public importance debate to clarify the response she gave on a recent television program, where she was pinned by the host, Tony Jones, who asked her:

Can I get you to respond to criticism from the government that the opposition is saying that it supports the manufacturing sector, you want Australia to keep making things, but in practical terms you're not providing the support that your rhetoric would suggest. For example, Tony Abbott has said you will cut $500 million in assistance to the car industry.

Mirabella: Well, supporting the future of manufacturing requires several different policies and we are working on our policy response. We have already foreshadowed that we will have a very robust—

Host: But one specific—you have said that you're cutting half a billion dollars from the automotive industry.

Mirabella: Well, that is one policy from the last election. We are not going to do—

Host: And Tony Abbott says, 'I'll stay with that policy.'

I was hoping that, in a debate about the opposition's proposed policy on manufacturing, we might hear the manufacturing spokesperson come into this place with something positive to say about an industry that is indeed going through a difficult time at the moment.

Times are tough for manufacturing, and they are tough for a number of reasons. They are tough because of the circumstances facing the European Union economies. They are tough because of the circumstances facing the world's largest economy, the United States. They are tough because of the high Australian dollar, which is at record levels. It has been over US$1.10 numerous times this year and it does not look like it will go south of that any time in the near future, making it very difficult for our manufacturing sector to compete with low-cost inputs. It is a tough time for manufacturing because of the high input costs. We are enjoying fantastic terms of trade at the moment because the high prices that are demanded for our iron ore and our coal are great for those who receive the benefit from that, but for many in the manufacturing sector those high prices for iron ore and coal are known as high input costs. We also face the fact that, in world terms at least, we have a very small domestic market. So, for our industries to survive, they must find niche markets within the domestic market or export to larger overseas markets.

There are some other reasons why manufacturing is struggling at the moment, reasons that the member for Indi and those behind her will go to great lengths to avoid talking about. One reason is the fact that, after 11 years in government, those opposite left this country with a woeful skills crisis because they never invested in skills and education, because they do not believe in the university sector, they do not believe in the TAFE sector. In fact, their only policies in relation to the TAFE sector were to try to destroy and replace it. A further reason is the poor state of public infrastructure, the $40 billion infrastructure deficit that they left us with and which we, because we believe in roads, rail and ports, have started to turn around. It is a tough time for manufacturing at the moment, but there are a whole range of reasons for that that those opposite will not want to talk about because, if they talk about it, they have to go to the heart of their woeful legacy.

There is another reason why times are tough for manufacturing, and that is because, globally, manufacturing itself is going through a transformation. All of the smart businesses in the manufacturing sector, and that includes those in China, understand that they have to transform their operations if they are going to be viable and competitive in a carbon constrained future. They are moving to innovate; they are putting billions and billions of dollars into research and development. That is what the smart companies are doing. That is what the smart countries are doing. We know that, if our manufacturing industry is to have a future in this country, in an open economy and a trading world economy, we have to move our manufacturing through that process of innovation and transformation as well. It matters a lot because one million people are employed in the manufacturing industry. Over one-fifth of all engineers in this country are employed in manufacturing. It is an important place for knowledge and innovation. The manufacturing sector contributes about $4.5 billion to research and development and innovation in this country, so we know on this side of the House that we need to do whatever we can to ensure that we have a viable, robust manufacturing sector which is able to transform itself to compete domestically and in a global market.

Let me get to the issue of carbon pricing and a carbon constrained future because, if you listened to the debate around this place, you could be forgiven for thinking that one side of politics believed in climate change and the other side did not, and that one side of politics had a target for reducing carbon emissions and the other side did not, when in fact that is not the case. The simple fact is that we have a bipartisan position on the targets for reducing our carbon emissions in this country—five per cent by 2020 over our 2000 emissions level. We also have a bipartisan commitment to the contribution of the renewable energy sector to meeting that emissions reduction target.

The single difference between those on the other side of the House, those who sit behind the member for Indi, the shadow spokesperson on manufacturing, and those on this side of the House is not whether we believe in carbon pollution, not whether we believe in climate change and not whether we believe Australia should play its role in reducing our carbon emissions, but how you do it. I think that if we are to have a sensible policy on how we do it we should look at the least cost means of abatement, which is why we have approached this by a market mechanism, by putting a price on carbon. I could not find a better way of expressing the proper role and the proper approach of government in this matter than to refer to the words of the Boston Consulting Group on this matter, where they said that the government's role should be to create the market environment that will lead to the outcomes sought either through putting a price on carbon or placing a cap on how much carbon will be emitted and then allowing companies to trade CO2 entitlements. They went on say that governments are poor at making such hard-headed assessments to determine what gives the best returns for a dollar invested, and that political considerations and emotional arguments inevitably cloud judgments; the decisions should be left to the market.

Of course, consulting groups do not speak. These are the words not of the Boston Consulting Group as an organisation but of a person who used to work for the Boston Consulting Group, a man who used to be known as Alan Tudge, but in this place is known as the member for Aston and the person who spoke. I am glad to see he is back in the chamber. He probably recognises those words. They were the words he penned in an op-ed to the Australian on 13 February 2007—when he was not walking lemming-like in the procession of opposition, in the procession of 'no' led by the Leader of the Opposition, the weathervane on these matters, who has had more political positions on this than the Kama Sutra—when he was actually talking common sense and had the ability to speak plainly, to talk in the language of experts and in the language that understands the best way of approaching this bipartisan objective.

I commend the approach of the then Alan Tudge of the Boston Consulting Group, now known as the member for Aston, because I think he makes a lot of sense when he says that the best way of approaching this is through a market mechanism. I implore the member for Aston to show a bit of gumption and get up inside his caucus room and join with those others on his side of the chamber who know that this debate can be won with a bipartisan approach.

The DEPUTY SPEAKER ( Hon. BC Scott ): Order! The discussion is now concluded.