Industry bodies welcome Labor’s billion dollar manufacturing pledge
Industry bodies have welcomed Labor’s promise of a $1 billion Australian Manufacturing Future Fund to support innovative mid-sized Australian firms if it takes power after the next Federal election.
The Australian Steel Institute, which represents the steel supply chain, believes the proposed Advanced Manufacturing Finance Corporation, modelled on the Clean Energy Finance Corporation created by the last Labor government, would signal the importance of the manufacturing sector to the economy. ASI Chief Executive Tony Dixon said the fund would help small and medium sized enterprises which struggle to obtain funds from private sources to invest in advanced new automated and precise plant and equipment. He hoped it would spur advances in state of the art manufacturing capabilities and help revitalise the sector.
The Australian Industry Group also backed the proposed initiative. Chief Executive Innes Willox stressed Australia’s ‘tremendous strengths in manufacturing-related research and development’ and praised the steps which companies have made to increase productivity and exports. He noted long running concerns that “Australia’s financial system under-caters for innovative and apparently higher-risk investments by small and medium-sized businesses” and called Labor’s measures “an important recognition of the potential for the creation of exciting and enduring jobs; new export opportunities and new domestic business capabilities in Australian manufacturing.”
ABS figures chart the decline of manufacturing employment from over a million people in in 2006-07 to 838,000 in 2015-16 and Mr Willox urged both sides of politics to embrace support of advanced manufacturing by medium sized firms to create new jobs. The Coalition has pointed to its own raft of support for medium sized manufacturers looking to expand and diversify, including massive additional spending on defence, and the issue may result in a political bidding war before the next election.
It is significant that Labor’s policy proposal was announced in Adelaide, 25 kilometres south of Elizabeth where the last Holden plant closed this week, by its leader Bill Shorten and the shadow industry minister Kim Carr. Senator Carr served in the Rudd and Gillard administrations and doled out billions of dollars of subsidy to the car industry to preserve jobs in this country. These expensive subsidies were dropped by Tony Abbott’s Coalition government which led to the withdrawal of Ford, Toyota and finally General Motors from this country.
Mr Shorten argues that Labor’s fund will help Australia revamp itself as an advanced, high value manufacturing nation to replace the jobs lost with the eclipse of legacy industries. The fund would help former car component makers invest, retool and offer new product lines by offering an alternative to private financial institutions which appear reluctant to lend to smaller firms, regardless of individual circumstances or business risk. Although concerns have been raised about its cost, Labor claims the fund would not count towards the federal budget’s fiscal or underlying cash balances as, for accounting purposes, it would count as an investment in financial assets rather than current spending.
