14 November 2018

Senator DAVID SMITH (Australian Capital Territory) (17:11): Putting local workers first and protecting
local manufacturers is a key responsibility of Australian government and can only be done by a government
that understands the threats facing workers and manufacturing businesses in Australia, threats this government has shown it simply does not understand—threats like foreign products, such as steel, being dumped into the Australian market; threats like the use of visas to bring in foreign workers to do jobs that can and should be done by Australians; threats like underinvestment in research and development; and threats like governments procuring goods and services from overseas when there are equal or better Australian alternatives available.

The government's contempt for manufacturing is demonstrated by the revolving door of ministers for industry.

Minister Karen Andrews is the sixth. Under this government, they have a shorter life expectancy than the
bogong moth. Minister Andrews' tenure has been marked by her preference for soft media events, rather than
meetings with actual stakeholders. Currently, Minister Andrews is asleep at the wheel while crises and urgent
calls for action pile up at her door. A perfect example of such a situation is the crisis, on her watch, facing the
complementary medicine industry.

Complementary medicine manufacturing in Australia has 82 different manufacturing companies employing over 29,000 Australians and paying $170 million annually in salaries. The industry generated $4.9 billion in revenue in 2017 and has nearly doubled in size in the last five years. Much of this growth has come on the back of exports to Asia. This growth is based on Australia's reputation as a clean, safe supplier, endorsed by the 'Australian made' logo. It's an increasingly rare example of Australian manufacturers being able to enjoy some competitive advantage against cheaper overseas rivals. But an unintended outcome of changes to labelling laws has thrown doubt on the industry's right to use the 'Australian made' label, jeopardising the jobs and revenue generated by this industry. This crisis requires firm and decisive action by the minister for industry to find a resolution.

So how many stakeholders have managed a meeting with Minister Andrews on this matter? According to our
information, it is zero. Perhaps this minister, too, is suffering from what a member of the government described earlier today as 'L-plate syndrome'.

As the OECD has made clear, the sustainability of economic growth and prosperity depends on knowledge based economies having a vibrant innovation system. A nation that does not invest in R&D is not investing in its future.

The latest annual science, research and innovation budget tables, released last month, confirm there has been a 10 per cent decline in real terms in spending on science, research and innovation during the life of this government.

This decline has covered all sectors—government, universities and businesses both large and small. A Shorten
Labor government will aim for three per cent of GDP to be devoted to R&D by 2030. The present level, 1.8 per cent of GDP, is well below the OECD average of 2.3 per cent.

The automotive industry is another example of this government's failure. Automotive manufacturing has not
only been a major direct employer, especially in South Australia and Victoria, but it has also generated jobs
across Australia through its supply chain. Most importantly, this industry always has been the great repository
of advanced manufacturing skills in Australia. It's been the great driver of research and development, as leaders of other sectors have long acknowledged, making Australia not just a leading industrial nation but, more importantly, a nation ready for the fourth industrial revolution.

But Australians will not benefit unless government is prepared to invest in Australians, in their skills and in their future. Unfortunately, this government has given up. The former motor vehicle producers know the capability of Australia's engineers and industrial designers. That's why all three have still chosen to retain design and testing centres in Australia. We must not lose this essential core of knowledge and skills and the great talent pool of the former auto supply chain.

A small window remains for Australia to fully participate in the technological revolution that is transforming
industrial economies across the globe. We don't have to compete with low-wage countries producing
manufactured goods for mass markets, but that window is about to close unless there is change in 2019.