Is the Government waking up that the manufacturing sector is in trouble

18 Aug 11

Various media reports this morning suggest that a group of 20 Labor backbenchers is adding to the pressure on the Federal Government to do more to support Australia's struggling manufacturing sector.

Recent announcements certainly support that view with Qantas announcing the axing of 1000 jobs, OneSteel announcing the retrenchment of 400 jobs and Sydney based solar company Silex Solar announcing that a lack of NSW government support forced its hand to abandon local solar cell manufacturing in favour of imports at the cost of 30 jobs. Silex was Australia's only cell manufacturer but will still manufacture panels at its Sydney factory.

The 20 MP's have indicated that their own government is failing to support the manufacturing sector and they are calling on it to preference Australian companies when awarding contracts and to require the mining sector to do the same.

Whilst leading economists warn of the perils of protectionism, clearly the message is also that the demise of manufacturing will result in lower productivity, lower incomes for Australians and fewer jobs for Australian workers.

The Federal government is under pressure to act within its own ranks with the opposition quick to declare that if the government is serious about protecting Australian jobs and Australian industry, Prime Minister Gillard must drop "this toxic tax", referring to the proposed tax on carbon emissions.

When any community hears of jobs losses there is caution, anxiety and fear which has follow on effects to other sectors of the economy such as retail.

Is the fact that there is growing pressure, within the government's own ranks, to provide more support for manufacturing, enough to draw attention away from what many think is an ill-time, ill-advised tax on carbon emissions, which the government has failed to sell to the manufacturing sector who believe it will result in job losses and loss of productivity.