The last decade of Australian manufacturing has been the worst in modern history. It has been abused, flogged, ignored, hollowed-out and shat upon by successive Coalition governments.
This has included:
- Deliberately throwing the car industry into the sea just as the AUD peaked and cratered. That is, just as it was about to return to profitability.
- Deliberately running a financialisation economic model favouring banks, house prices and consumption over productivity gains and competitiveness.
- Deliberately allowing a resource endowment sector to overwhelm all policy constraints.
- Deliberately failing at any and all productivity reform and allowing mass immigration to crush load infrastructure.
- Deliberately butchering the energy transition by favouring a gas export cartel and driving manufacturing input costs wild.
- Deliberately dumbing down our scientific prowess in universities by whoring it to foreign dills.
All of this hollows out the industrial base and guess what? It has. Over the long run (manufacturing in red):
And especially since the Coalition took power in 2013:
In fact, during the reign of the Coalition, bureaucrats have surged while manufacturing was gutted, and pen-pushers are on the verge of adding more value to the Australian economy than is industry.
But it’s nothing a good press release can’t fix:
Scott Morrison will single out seven key types of goods Australia needs to turn its attention to “in the national interest” amid increasing global supply chain disruptions.
In the wake of Covid-19, China’s trade coercion and the war in Ukraine, the Prime Minister is on Tuesday expected to outline what categories of goods Australia should focus on manufacturing domestically.
Giving his keynote address to the Australian Financial Review’s business summit, Mr Morrison will say government has a “vital” role to play in maintaining Australa’s economic security.
He will outline seven key initial categories of goods that need attention and are considered important to the “national interest”.
These are:
• Semiconductors – Used in electronics and computing, they are materials which conduct a current but only partly. Examples include computer chips and high grade silicon wafers.
• Agriculture chemicals – Examples may include fertilisers, pesticides, herbicides, rodenticides as well as chemical compounds like urea or ammonia.
• Water treatment chemicals – These could be substances used to disinfect or purify water. An example of this is chlorine.
• Telecommunications equipment – This could include hardware used for mobile phone networks, including routing.
• Plastics – Examples may include packaging, piping, construction or medical products made from Polyethylene, polypropylene or PVC.
• Pharmaceuticals – Common and specialist drugs and medicines as well as ingredients needed to make them.
• Personal protective equipment – This could be gloves, masks and other products that have been used in the fight against Covid.
Who made these choices and how is it going to be done?
- We have no semi-conductor capacity or expertise.
- We used to make agricultural chemicals before Morrison’s gas cartel shut the sector.
- Ditto. Chemical manufacturing goes hand-in-hand with oil refining which is dying.
- Same as semis.
- Same as chemicals.
- Same as agriculture.
- PPE? Who cares.
To wit:
- Where’s the research behind the choice of Morrison’s Magnificent Seven?
- Do the seven choices look forward to a greater China conflict and have Australia’s industrial needs been analysed in those terms?
- Where’s the policy formulation and debate to persuade the Australian people that the seven are necessary?
- Where are the policy measures to deliver outcomes, both micro economic and macro economic?
- Is it going to be done through PPP? Through hubs? Through tenders? Through Australian-only public purchases? Through subsidies? Through national champions?
- Which departments? Who is running it? How will the money be allocated? What probity processes will be used? Which firms will be involved? How will corruption be prevented?
- Where is the capital coming from? How will the skills be met? Will labour be trained? By whom?
- What about automation? What role will it play? And robotics?
- How will an ecosystem of local supply chains be developed to feed off one another that is discrete from the offshore competition? How will it reach critical mass?
- How will IP be protected from Chinese theft?
- How will land, energy and labour costs be made to be competitive?
I mean, seriously, these are just the basic questions before we even get to the specifics of each industry.
It all reminds one of this:
Any idiot can put on a helmet. Well…perhaps not any idiot.
It takes brains to build industry.
