Manufacturing Taskforce Must Act Quickly

21 Oct 11

The Manufacturing Taskforce recently accounced by the Gillard Government must act quickly as the economic divide within the economy continues to grow.

The press today is alive with data and commentary highlighting that the gap between the mining sector and the manufacturing sector is growing and is at its widest point in recent history. The manufacturing taskforce must move quickly to address this two speed economic situtation as Australia's economic future is currently at the mercy of a "boom", not to mention fluctuations in mineral and ore prices, which will be influenced by global demand. History dictates that "booms" never last in the long term.

As announced the taskforce will be made up of 23 industry professionals, from unions, government and manufacturing companies operating in Australia.

Manufacturer representatives are: OneSteel chief executive Geoff Plummer; Holden chairman Mike Devereux; Thales managing director Chris Jenkins; Boeing president Ian Thomas; Agilent Technologies general manager Philip Binns; and Textor Technologies managing director Phil Butler.

Recent surveys indicate that business conditions and confidence dropped in the third quarter on the back of uncertainty caused by the looming tax on carbon emmissions and uncertain global markets, with European politicians attempting to solve the continent's debt crisis.

The RBA has previously signalled that there is scope to cut interest rates next month, which is dependent upon underlying inflation figures which are due out next week, and the outcome of talks in Europe to restore confidence and resolve the sovereign debt crisis. The Reserve Bank is scheduled to meet on Melbourne Cup Day.

Australia's Treasury Secretary Martin Parkinson recently yesterday warned that unless Europe deals quickly and efficiently with the sovereign debt issue, the global economy could be dragged into a second recession.

"The bigger risk to the Australian economy would be if Europe failed to deliver a comprehensive response to the sovereign debt crisis and found itself in a situation where, basically, it was dragging the rest of the world into a second global recession," Dr Parkinson told a Senate hearing.

"If that was the case - around 20 per cent of China's exports go to the US and about the same to Europe - obviously the impacts on Australia would be magnified."

If the Manufacturing taskforce can quickly address at least some of the issues currently facing the manufacturing sector, such as local content in projects as an example, it might provide a protective barrier around the sector, in a time of global uncertainty and secure the future of jobs in the sector.

This taskforce must be effective, efficient and not politically driven.