GMC Deputy Chair Rob Backwell shares his thoughts on government energy policies and red tape in today’s Geelong Advertiser:
Many manufacturers in Geelong are continuing to innovate and find new paths to success. There are now more people working in manufacturing in our region than there were 5 years ago.
While we should celebrate this, our nation is now at a critical fork in the road when it comes to policy settings affecting manufacturers in areas like energy, industrial relations and regulation generally.
For about 40 years, Australian manufacturers have operated in a largely open economy, with generally minimal protection, whether in the form of tariffs, subsidies or otherwise, from international competition.
Overall, this has been a good thing – certainly for Australian consumers, who now pay a global price for most products, rather than what in the past was often a much inflated local price. However, the consequence of this is that those Australian manufacturers who haven’t been able to compete in our open economy have disappeared. The car industry is a relatively recent example, preceded by the demise of most of the textile and clothing industry. It seems that some energy intensive industries, like polymer and glass, now are going the same way.
The lesson is simple: to survive, let alone thrive, Australian manufacturers must be able to compete with international alternatives.
We often hear politicians say things along the lines of “manufacturing matters” or “I want to live in a country that makes things”. But talk is cheap, and we must judge people not on what they say, but on what they do.
If elected officials really wanted to support Australian manufacturing, they would offer policy, not platitudes.
Policy like ensuring energy – especially electricity and gas – is both cheap and reliable, because without cheap and reliable energy there can be no manufacturing of any scale. It is a simple statement of fact that current Australian policies prioritise the reduction of local – not global, local – carbon dioxide emissions over the need for cheap and reliable energy.
Current Australian energy policy might align with that of Germany and the UK, countries now experiencing rapid deindustrialisation, but it doesn’t with those of China, India, the United States or much of South East Asia. As a society, we ought to think harder what that means for the future of Australian manufacturing and the people who work in it.
When people like Kim Carr, the former Labor Minister for Industry, and Jennie George, the former president of the ACTU, loudly and frequently call for a fundamental reset of Australian energy policy, it should be obvious that this issue isn’t a matter of party politics.
Productivity is also critical to competitiveness. Yet in Australia productivity is not just flat-lining; it is going backwards. This should be no surprise. For decades now, the Australian way has been to pile a never-ending burden of new taxes and regulations on business and to assume that business has an infinite capacity to absorb the cost of this. We seem to live in a society which believes there is no problem which cannot be solved by even more regulation and even more bureaucracy.
This is the path to oblivion.
For Australian manufacturing to thrive into the future, we need to significantly reduce the productivity choking effect of taxes and, especially, regulation. Whether it’s the multiple layers of planning, environmental and even Aboriginal heritage approvals required for any significant project, the industrial relations framework recently redesigned to entrench trade union power, the Workplace Gender Equality Agency reporting requirements, the so-called climate reporting obligations which soon will impose substantial new costs on even relatively small Australian businesses or a myriad of other rules and requirements – there is simply too much regulation, regulation which often imposes costs that far exceed any benefits.
The hand of government is everywhere yet, when it comes to creating the circumstances in which Australian manufacturers can thrive, government is not the solution, too often it is the problem.
Rob Backwell
Deputy Chair
Geelong Manufacturing Council
Director IXL Group
Upcoming event: Victorian Gas Users Summit