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Issue #1583      February 27, 2013

Time for real plan for manufacturing

The Gillard government’s “$1 billion jobs plan” is the latest in a long list of pre-election announcements. According to Prime Minister Julia Gillard it is a comprehensive plan to support and create high skill, high wage jobs for blue collar workers and turn Australia into “a country that makes things”. Labor’s “Industry and Innovation Statement – Plan for Australian Jobs”, to give it its full title, falls far short of what is required to rebuild the manufacturing sector in Australia which at present employs less than 10 percent of the workforce.

Holden Manufacturing operations, Elizabeth, South Australia.

Addressing delegates at the Australian Workers’ Union (AWU) national conference last week, Gillard said, “We can’t simply drift into the future thinking, well, it doesn’t matter, everything will be all right … We cannot embrace an agenda of cost-cutting and wage reduction as our future.” She described the document as “a comprehensive plan to make things”.

One billion dollars will be spent on creating jobs and $1 billion will be saved by cutting research and development (R&D) tax breaks for corporations with an annual turnover of $20 billion or more. Sounds great – rob Rio Tinto to create manufacturing jobs for workers.

It is not a comprehensive jobs plan. It falls far short of what is required to develop manufacturing in Australia. It is not even an additional $1 billion in funding as Lenore Taylor, writing in The Age (19-02-2013) points out: “The Gillard government’s $1 billion jobs package actually only spends an extra $421 million on new job-creating measures and delivers the government a handy $600 million to help its stretched financial budget.”

All of these figures are totals over four years, and in no way indicate what might be spent in the next budget. But money aside, the “plan” also relies on the private sector choosing to use Australian rather than imported products and employing Australian workers on high wages. There are no measures to ensure any of these things will happen.

The resources sector will be obliged to employ Australian Industry Opportunity Officers on projects over $2 billion if they are to qualify for a five percent reduction in tariffs on imports. Their job is to attempt to source local content for their projects. They will be obliged to report to government every six months on their efforts. But there is no obligation to use local content where it is available – neither for the private sector nor for governments.

The research and innovation funding is geared towards small and medium sized businesses and venture capital with the emphasis on the private sector receiving the funds but being able to draw on the public sector for assistance.

Ten industry precincts will be established starting in Melbourne and Adelaide to “bring together researchers and businesses to make sure the great ideas are spread and adopted, to give us comparative advantage that will help us sell our exports into Asia and create Australian jobs,” Gillard promised AWU delegates. “Projects in Australia, employing Australians – that is the way it should be.”

It is not clear how or why the private sector would want to spread the great ideas with strong patent laws in place.

Not all the precincts have been named. The one in south east Melbourne will be will be a Food Precinct. In Adelaide, the Defence Precinct “will service the state’s strong defence industry,” and will assist the state realising “its vision of employing over 37,000 workers and contributing $2.5 billion to the economy by 2020”.

Gillard actually chose a gathering at Boeing Aerostructures in Melbourne to announce the great $1 billion plan. Per dollar the defence industry has one of the lowest rates of employment and highest rates of environmental pollution, apart from the death and destruction its use causes. The government should put the funding into converting existing defence enterprises into civilian projects.

If the government were serious about jobs, then it would be acting to stop Telstra’s subsidiary Sensis cutting close to 700 backroom jobs and sending the work offshore. It would be regulating for the use of products made in Australia by governments including itself. It would halt and reverse its privatisation of Telstra, the Commonwealth Bank, Australia Post services, public housing, etc.

Gillard is correct, planning is needed, for job creation and associated R&D. There cannot be any return to the manufacturing days of the 1970s, but Australia could still make its mark in manufacturing by taking the necessary measures.

It is an important sector of the economy which requires serious planning to be redeveloped and cannot be left to neo-liberal economics and the private sector which have failed dismally.

The alternative plan

In any plan, the question of skilled labour is fundamental. That means addressing the education system from pre-school through to TAFE and university. At all levels education and training should be free. At higher levels there should be appropriate income and other support, not just for younger students but also for adults returning to study.

Industrial relations reform is required to restore full trade union rights, including the right to strike and the right of entry of trade union officials, so that high wages and good working conditions can be won and protected.

R&D is critical. This should be funded by governments and carried out in the public sector. Australia has produced some of the greatest scientists and engineers in the world. Too many of them have been forced go overseas through lack of support to continue or develop their highly innovative work in Australia.

University research is now largely dictated by the corporate sector. The outcomes are not publicly available for use. This must cease. The government must fully fund university research out of central revenue and research projects be selected on the basis of their merits – how potentially beneficial they will be to society, how they advance the progress of science, not their immediate importance to profit-driven private corporations.

The corporatisation of world renowned organisations like CSIRO must cease. These institutions should be completely funded by the public purse and their work uncompromised by private dollars, and publicly owned.

There is no shortage of areas requiring research and development. Climate change, for example, has huge potential for job creation as well as benefiting the community and planet. Australia was once at the forefront of solar power research. With Australia’s huge land mass, hours of sunshine and vast oceans the potential to convert to renewables is huge.

The public sector could and should be providing renewable energy to homes, businesses and regional and rural communities. Scotland, for example, is already 35 percent dependent on renewables. Any profits from renewables could be used to further R&D or fund social needs.

That is just one area. There are many others such as public transport, housing construction, pharmaceuticals, medical products, food, production materials, agriculture, fire-fighting, etc. Another important area is the conversion of military industries to civil production. Australian manufacturing has a future with sophisticated products which are designed and produced in Australia – for local use and export.

Where would the money come from for the R&D? There is no shortage of possible sources:

  • Cut the multi-billion dollar diesel fuel rebate to the mining companies.
  • Cut military spending by at least 10 percent.
  • Stop subsidising an otherwise unviable private hospital system by abolishing the $5 billion private health insurance rebate.
  • Increase corporate taxation and higher marginal tax rates on the rich.
  • End negative gearing on investment property. Bring in a real super-profits tax to cover all business sectors.
  • Establish a publicly owned national bank which can provide cheap loans and profits go into the public purse.

The private sector has failed to deliver for Australian workers and the Australian people. They have taken the government hand-outs, exploited Australian workers and gone offshore. Such policies require the abandonment of neo-liberal economics and in its place pro-people policies centred around the public sector.

A real plan would also involve detailed development in consultation with trade unions, communities, research institutions, and other relevant bodies.

Labor’s opinion polls have taken a hit. This should come as no surprise to anyone. The government can make as many fine sounding announcements as it likes but after almost six years in office, people are judging the government by what it has delivered and how it affects them.

Single parents who had their payments slashed, the unemployed trying to survive on $37 a day, age pensioners struggling below the poverty line, those with chronic illness who lost Medicare access to dental treatment, the tens of thousands on hospital waiting lists, the millions denied secure jobs, the homeless and many others who Labor has failed dismally – they vote. Why would they want to vote for a party full of glowing promises and six years down the track and still to deliver?

A promise of $1 billion over four years won’t fool the unemployed or young workers and students who cannot go to uni or TAFE to get the qualification and skills they require because of fees and lack of income support.  

Next article – Editorial – Right of entry an inviolable right

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