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Release of manufacturing forum report highlights the ongoing neglect of the Howard Government.

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Stephen Smith MP Shadow Minister for Industry, Infrastructure and Industrial Relations Member for Perth


23 October2006



Labor welcomes today’s release of the National Manufacturing Forum’s report, ‘Strategic Actions to Boost Australian Manufacturing’.

This report is significant in that it represents the agreed view of industry, unions and all State and Territory Governments.

Not only did the Howard Government refuse to participate in developing the Forum’s report, but a number of its conclusions show that on John Howard’s watch, our manufacturing sector continues to slide.

This is further evidence of the ongoing complacency and neglect of the Howard Government.

The track record of the Howard Government’s complacent policy approach speaks for itself:

• The latest June quarter National Accounts indicate that Australian manufacturing is technically in recession, with a 2.4% contraction in the industry over the past year, including three consecutive quarters of negative growth;

• Despite a commitment in 1996 to create 200,000 new manufacturing jobs by the year 2000, approximately 45,000 manufacturing jobs have actually been lost since 1996;

• The manufacturing industry’s share of the economy has fallen from 14.5% of GDP in 1996 to 12.5% today;

• Australia’s share of world exports has fallen from a high of around 1.22% in 1989 under the previous Labor Government to 0.94% today, the lowest since records began in 1946;

• Manufactured exports have recorded average annual growth of just 4%, compared with average annual growth of nearly 16% between 1983 and 1996 under the previous Labor Government;

• Exports of elaborately transformed manufactures (ETMs) have fallen as a share of total exports from approximately 18% in 1996 to 14% in 2005-06;

• Business expenditure on R&D has recorded average annual growth in real terms of just 6%, compared with average annual growth in real terms of 15% in the ten years from 1986 to 1996 under the previous Labor Government;

• Despite a commitment in 1996 to maintain the 150% R&D tax incentive, in August 1996, it reduced the incentive to 125% and as a result, business expenditure on R&D in real terms took more than four years to recover;

• Despite the importance of the availability of venture capital to Australian industry, innovation and the commercialisation of research, the average size and amount of capital raised by Australian venture capital funds continues to decline.

If John Howard ignores the Forum’s report, it only confirms that he is completely out of touch with the needs of an industry that must continually strive to be internationally competitive.

Labor believes that it is in our national interest to have a strong, vibrant and internationally competitive manufacturing industry, especially the parts that are high value and high skills.

The Forum’s report picks up a number of sensible recommendations focusing on the themes of globalisation, investment, innovation and skills.

The report is in substantial agreement with Labor’s manufacturing industry policy priorities, including the need to:

• Increase investment in manufacturing-related R&D; • Increase support for skills, education and training; • Attract equity into Australian SME’s; and • Better facilitate export market development.

By adopting a national approach, with leadership from the Commonwealth and an emphasis on innovation, on doing things better, on being smarter and relying on our superior technical and intellectual knowledge, Australia’s manufacturing industry can build back its international competitiveness.

That is something we won’t get from John Howard.

Only a Beazley Labor Government will deliver this future for Australia’s manufacturing industry.

Contact: Tom Cameron on (02) 6277 4108 or 0417 147 932