Not just manufacturing, actually. There needs to be a new umbrella peak body/lobby group covering all non-resource exporters – manufacturing, tourism and education (maybe primary goods too). That group needs to go head-to-head with the Minerals Council of Australia over the soul of the Australian people and the fear gene of the Australian government.
And Brad Orgill is the ideal candidate to run it. Today he writes in The Oz:
As a child I lived next door to the Consul-General for Nauru. Nauru had enormous phosphate reserves and with the substantial mining profits bought towering office blocks in Melbourne. Forty years on, though, and Nauru is impoverished and a barren rock.
It makes you think our once-in-100 years terms of trade and seemingly inexhaustible resources will not last forever. The challenge is to transform this opportunity into a long-term economic framework, including advanced manufacturing, that sustains competitive advantage and productivity growth.
Manufacturing and agricultural employment have declined for 50 years, with our transition to a service economy. We cannot compete in low-end manufacturing, should not revisit protectionist measures, but must ensure imported product consistently complies with Australian standards. We can compete in advanced manufacturing and food. Participation in both is critical for long-term productivity, as services are people-intensive and the ability to leverage productivity is limited.
What is required is a 25-year vision that positions our manufacturing as the Switzerland on the edge of Asia, with an integrated university business investment in the science, engineering and vocational skills necessary to drive innovation and productivity growth. We should support initiatives to compete in the manufacture of technologically complex and innovative products involving high levels of design, including the emerging industries of electric cars, renewable energies and biomedical manufacturing.
Critical to this execution will be an upgrading of our public education, which on OECD rankings is falling behind the rest of the world in reading, scientific and mathematical literacy plus progressively enhancing the status, expectations and compensation of teachers, scientists and engineers.
It is economically inefficient that we have three times as many university students studying the humanities, law and commerce as are studying engineering, information technology and science.
Food manufacturing employs 212,000. We have an opportunity, on the edge of a heavily polluted Asia, to position ourselves as the cleanest food bowl in the world and a competitive supplier of high-value, high-quality manufactured food. It is shortsighted to risk poisoning our water aquifers and prime cropland to drill for coal-seam gas along the eastern seaboard. There is a reason France has banned drilling.
Magnificent! Orgill is the former CEO of UBS Australia so he has both the market credentials and contacts to form a serious lobby. He is highly connected with the Labor Party and clearly has a strong interest in public policy, as well as the depth of understanding to produce and communicate a comprehensive strategy to push back the mining obsession that has taken hold of Canberra. He is also, according to my wife, devilishly handsome (though the mullet needs a trim, apparently ). Orgill goes on:
From 2001 to 2008 we basked in the illusion of wealth creation delivered by 15 per cent per annum credit growth and the wealth effect of asset price inflation. As a nation we over-invested in real estate and corporate executives were deflected into financial engineering rather than building businesses with an efficiency focus. With oligopolistic market shares, negligible global competition in several industries and the ability to pass on cost increases; until recently there has been no sustained pressure for business to innovate, enhance skills, invest in technology nor drive down costs. Within our examination of the BER program we observed direct examples of such shortcomings in the construction industry, which now employs 9 per cent of the workforce.
…The collapse in credit growth, a significant shift by households to save rather than spend and the high dollar has dramatically elevated the need for efficiency, restructuring and investment in technology. Sadly, but ultimately positively for productivity growth, there will be continuing job losses in the banking, retail and manufacturing industries.
My God, I might have written that! Manufacturers of Australia (universities and tourism operators too), here’s your hire.
