Labor offers manufacturing hubs ahead of state election

| November 20, 2017

State Premier Annastacia Palaszczuk has promised to spend $30 million on three new manufacturing hubs in Rockhampton, Cairns and Townsville as part of a raft of industry support measures if her Labor government wins re-election on November 25.

The hubs target areas which have seen job losses in recent years and aim to create jobs and promote manufacturing expertise. Rockhampton suffered from the closure of Aurizon workshops, while the Cairns hub would support maritime industries around the Port precinct and Townsville would receive a boost after the shuttering of the Yabulu Nickel refinery.

The Premier said the hubs would complement the Government’s expansion of its Back to Work and Skilling Queenslanders for Work programs. Almost 500 Rockhampton-Keppel residents have found work as a result of these schemes, for example, with 134 going on to further training and 13 returning to school.

The manufacturing hubs will build knowledge capital throughout the supply chain, train workers for new roles, match appropriately-skilled workers – including the unemployed – to vacancies and help employers expand their operations in areas of comparative advantage.

Local businesses, unions and universities will be involved in the hubs’ development, as it increasingly common worldwide. Many nations, including the United States and China, are co-locating small to medium-sized enterprises to build economies of scale and increase collaboration with universities.

The initial $30 million allocation will cover land supply and infrastructure-establishment costs and be overseen, implemented and monitored by a new Minister for Manufacturing and the Department of State Development.

Chamber of Commerce Reaction

Queensland’s Chamber of Commerce welcomed the Premier’s commitment, however, it noted that a dedicated Minister for Manufacturing was also promised by Labor at the last state election without result. It therefore called on a re-elected Palaszczuk Government to create the ministry promptly on re-taking office.

The CCQI’s General Manager of Advocacy, Kate Whittle, said: ‘We have some fantastic manufacturing businesses in Queensland, such as 5th generation Packer Leather, award winning Audeara, a Brisbane based start-up and Field Orthopaedics and Cook Medical, both on the cutting edge of medical device manufacturing. Reports of Manufacturing’s death have been greatly exaggerated, however a little help will go a long way and some of these policies will help manufacturers thrive in Queensland.’

However, Ms Whittle warned politicians that the state’s manufacturers continue to reel from rising energy costs and noted the difficulty of re-establishing capacity once it is lost. She argued that manufacturing businesses are more exposed than most to the volatile nature of the electricity market and manufacturers are being driven offshore as a result. Other factors inhibiting the state’s manufacturers include declining output, intense domestic and international competition, changing consumption trends and a lack of skilled workers.

She welcomed any programmes which offer opportunities for manufacturers to plug into the global supply chain, including an additional $70 million for the Building our Regions programme. but was disappointed by Labor’s opportunistic suspicion of free trade pacts given their importance to cattle and agricultural exporters. Although she ‘understood the politics’ of the election campaign, she underlined that ‘in reality, anti-free trade sentiments read as myopic, unproductive, and populist.

The CCIQ also welcomed Labor’s commitment of a further $20 million to Made in Queensland, a grants programme targeting the state’s manufacturing industry; however, Queensland smaller businesses compete against low wage and low taxing economies, as well as nations with lower business operating costs and the state’s rising energy prices continue to undermine progress in regional Queensland. The state’s 16,000 manufacturing businesses generated almost $20 billion in 2015/16 but Ms Whittle cautioned both sides of politics that additional industry support is not a ‘silver bullet’ for growth as multiple factors contribute to a ‘level playing field’ in a fiercely competitive market.

The CCIQ praised the creation of additional defence hubs for playing to the state’s manufacturing strengths. Ms Whittle encouraged state politicians to work with their Federal peers to bring more defence work to the state but asked for more detail on how the hubs will be created and operate.

The promise of headline grabbing cash injections for marginal constituencies in the run-up to state elections is a well worn tactic, and Queensland’s mid-sized manufacturers will be hoping that whichever party takes power after November 25 recognises and supports their contribution to the region’s growth on a long-term and sustainable basis.

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