News dalla rete ITA

13 Ottobre 2020

Australia

GOVERNMENT COMMITMENT WON’T RETURN AUSSIE MANUFACTURING: USSC FELLOW

The Commonwealth government has launched a comprehensive policy and funding package designed to boost Australia’s manufacturing capacity and national resilience. For Sydney University-based United States Studies Centre (USSC) fellow David Uren, it seems like a case of “too little, too late”. Prime Minister Scott Morrison and Treasurer Josh Frydenberg have used a series of pre-budget announcements and the federal budget to announce the launch of a $1.3 billion 'Modern Manufacturing Initiative' (MMI) plan designed not only to reignite the fires of Australia's long-neglected industrial and manufacturing base, but expanding on areas of natural competitive advantage driven by innovation and open up global markets for Australian export growth. Prime Minister Morrison said during his National Press Club address, "We make things in Australia. We do it well. We need to keep making things in Australia. And under our plan we will. Manufacturing ­employs around 860,000 Australians, and prior to the pandemic it generated more than $100 billion in value for our economy each year and over $50 billion in exports. However, it appears as though not everyone is buying into the politicking surrounding the Prime Minister and Treasurer's announcements and enthusiasm for what can be best described as an industrial and manufacturing rebirth in Australia. For Sydney University-based United States Studies Centre (USSC) non-resident fellow David Uren, the policies proposed seem to be a little too optimistic. At this stage it is well known that rebuilding and transitioning the nation's industrial and manufacturing base is a mammoth task and will require more than a momentary, flash in the pan policy approach. "The government is establishing a $1.3 billion fund to cover up to a third of the cost of expanding a manufacturing plant to achieve economies of scale and up to half of the cost of projects to integrate products into global supply chains or bring new research into production. Manufacturing has been falling as a share of the economy for a long time, having peaked at more than 25 per cent in the 1970s compared to just 5.5 per cent now, but it’s only over the past 12 years that the sector’s actual output has dropped. Manufacturing was 40 per cent larger than the resources industry, measured by its value added, in Rudd’s first year, but is now only two-thirds its size. The decline is destined to continue because investment has not even been keeping pace with the depreciation of existing plant and equipment, let alone providing a base for future growth. The value of machinery and equipment owned by manufacturing companies has fallen by $20 billion, a drop of 26 per cent, since 2008 (again after allowing for inflation). This includes a 14 per cent fall in IT hardware and a 32 per cent drop in other electronic and electric equipment." Policy consistency has long been identified as a major shortfall hindering Australia's development and implementation of a true industry policy, while strides have been made, particularly with the Defence Sovereign Industry Plan, Naval Shipbuilding Plan and the government's commitment to building Australian Industry Capability, the broader policy has struggled. Uren remains pessimistic about the possibility of Australia's reindustrialisation, despite a seemingly concerted effort by the government to reignite the fires of manufacturing and industry in Australia, with Uren stating, "Manufacturing in Australia suffers from inescapable problems of distance from major markets and lack of scale, which mean it cannot overcome the disadvantage of its high labour costs, as do manufacturers in countries like Germany and Japan. An OECD research shows that to the extent Australian manufacturers form part of global value chains, they provide only the first links, exporting processed raw materials. Businesses do not send goods to Australia for further processing. The OECD says, ‘Australian manufacturing stands out as overall being less competitive’; it has an edge in only a small number of niches, such as non-ferrous metals, pulp and woodchips, and food and beverages — all low-technology industries. Competitive high-technology industries in Australia, such as pharmaceuticals, reflect multinational enterprises establishing local content in part to gain access to government procurement.  (ICE SYDNEY)


Fonte notizia: Defence Connect