12 May 2013

Manufacturing base

This is the point where companies are starting to make investment decisions about the next financial year, and to make long-term decisions for the rest of the decade. We're at the point where the Coalition should start looking like a confident alternative government, rather than like a bunch of chancers riding their luck. Late last year, The Australian's Paul Kelly declared that the Coalition had fifty fully-costed policies ready to go: it's increasingly clear this isn't the case, and could well be for Kelly what assertions about Iraqi WMDs were to Colin Powell.

Let's look at one example where a key member of the would-be Coalition cabinet is playing ducks-and-drakes long after it has ceased to be cute. Sophie Mirabella has written this piece hoping that the case against the government has already been made and can be taken for granted. She hopes that the teasers on policy are more enticing than annoying. She hopes that pic doesn't make her look more than a little unhinged. Let's look at the article and see what, if anything, is there:
The outcome of this year’s Federal election will be vital in determining whether manufacturing with grow and flourish in Australia. As part of our policy approach, the Coalition has identified manufacturing as one of the five key pillars of our economy.
Pillars don't grow, let alone flourish. The Coalition has enough trouble with its silly metaphor about slicing up a growing pie, stop the metaphors! Most manufacturing businesses regard it as their only pillar. Readers are meant to be grateful about this snippet of the Coalition brochure being thrust into their industry, aren't they.
We believe a vibrant manufacturing sector is essential to a diversified economy, job creation, and driving innovation and economic growth.
Who doesn't?
The Howard Coalition Government presided over the longest industrial expansion in our modern history, including an expansion in manufacturing activity for 13 of its last 14 months in office.
See, that "13 of its last 14 months" casts a shadow over what went before it. What is "an expansion in manufacturing activity"? More capital equipment? More output? This is the point where I start to need sources rather than accepting Sophie's word. She sounds like any Canberra bureaucrat rather than the prospective minister.
Between 1996 and 2007, manufacturing employment remained stable at over one million jobs ...
So much for expansion, then?
... and real wages for Australian workers rose by an astonishing 21 per cent.
Now that's what I call a WAGES BLOWOUT of the sort that The Australian Financial Review has been keening for. Who'd promise employers a return to that? I bet this article has plenty to say about addressing skill shortages, eh.
This contrasts with downturns for almost 65 per cent of the Rudd and Gillard Governments’ tenures - including a decline for every one of the past 11 months.
That decline has largely been due to the high cost of the Australian dollar, and the rise of competitors in Asia-Pacific markets. Oh, and the GFC. I wonder what Sophie has to say about the central issues facing Australian manufacturing?
If elected, we will provide the stability and certainty that our manufacturers need to be able to get on with what they do best. We will abolish the carbon tax, reduce red tape by $1 billion a year, get government spending under control and create the right economic environment within which manufacturing can grow.
That's it?

Carbon tax is a non-issue (and if it really is the difference between economic life and death, Minister Mirabella won't be able to do much about it). All governments propose to reduce red tape and somehow I doubt they'll resort to increased IT expenditure to make compliance less burdensome - and an Abbott Government would be very big on Compliance indeed. Government spending is under control. The economic environment is not something governments create - and when I met Sophie Panopoulos, as she was then, she knew that too.
Since the announcement of the carbon tax, over 27,000 manufacturing jobs have been lost. For the first time in decades, the number of Australians employed in manufacturing has fallen below one million. And even the Government itself has failed to deny that the rate of manufacturing job losses in recent years has been unprecedented in Australia’s history.
Having failed to address the reasons for that, and offered four talking points, readers of this article are at the point where they/we start doubting that the Coalition really do have any answers: a bit of red-tape cutting and good luck with the rest?

What sort of pissweak construction is "failed to deny"? It sounds like a bad action flick: Tom Cruise IS Jack Reacher IN 'Failed To Deny' (shot of Aussie manufacturing business blowing up) ...
We understand that, for our manufacturing businesses to prosper, they must be able to compete on a level playing field. Abolishing the carbon tax is an important first step as it will remove a tax that increases the cost of manufacturing in Australia whilst imports get a free ride.

We have developed a world class anti-dumping policy that will cut the time and cost of anti-dumping applications and better ensure that foreign products are not dumped into the Australian market at below cost price.
That sort of rhetoric makes it hard to said foreigners, which is the whole point of the trade thing. As to anti-dumping, believe it when you see it.
We have also signalled our intention ...
You have what? Are you going to do this or not? One pissweak construction looks like someone taught at a Victorian school, two is starting to look like a spivvy prospectus.
... to change Australia’s standards regime so that imported products comply with the costly mandatory standards imposed on locally-made goods.
I doubt Standards Australia can or will bear a change of that dimension. The ISO won't, and if you're using standards to play silly-buggers with imports then the World Trade Organisation will jump on us with both feet. And when I say 'us', I don't mean career politicians who sit around thinking up ways to make life difficult for people; I mean Australian businesspeople far from home attempting to cut deals, knowing Sophie Mirabella is putting up barriers that make those deals difficult. Thanks for nothing, political-class hack.
A vibrant culture of innovation is essential to growing and diversifying our manufacturing base. The Coalition understands the importance of innovation in a highly competitive global economy.

The weakening by the current government of R&D tax incentives for manufacturing will therefore be reversed. Like many manufacturers, the Coalition was bewildered at the abolition of the very successful Commercial Ready programme and its replacement with the inferior Commercialisation Australia model. We need practical and effective commercialisation programmes, particularly for small business.
Well, yes. What was so great about Commercial Ready, and why was Commercialisation Australia so inferior? Are you going to reinstate Commercial Ready, and if not, how will you improve on Commercialisation Australia (given, apparently, that it isn't so hard)?

Come on Sophie, I bet you've been all over Australia consulting with manufacturing people. By now you will have a clear idea of what needs to happen. What, in the name of stability and certainty, might that be?
The Coalition will abolish the Government’s flawed Industry Innovation Councils. We will work, through genuine consultation with Australian businesspeople, to deliver better future plans for individual industries. In the wake of regular Labor cuts, we will also ensure that Cooperative Research Centres are appropriately funded to continue their work in creating greater collaboration between researchers and industry. We will also encourage much closer collaboration between academic researchers and business.
How "flawed"? Hasn't the "genuine consultation" been done by now? Everyone talks about closer collaboration between business and academics (well, when you're not bagging them as ivory-tower elitists and skivers). What came from the consultation? What are you going to do differently? Will you promise all your policies will be flawless? That there won't be any cuts, at all?

The following paragraph, listed as the most important in Mirabella's screed, is actually a dollop of pablum with which no-one disagrees. Then there's this:
For too long, manufacturing in Australia has languished under the economic torpor and policy ineptitude of a divided, dysfunctional and chaotic Labor Government. If we are to regain our competitive edge in an increasingly global marketplace, we must take immediate action to address the inequalities that have been created through the unwelcome introduction of excessive red-tape and new taxes.
Should that be "iniquities"? This blog has had a lot to say about political shenanigans in Canberra, and of course Mirabella revels in it (and gets chucked out of Parliament regularly) but the woes of Australian manufacturing can hardly be traced back to that. Even if they can, have all those failed motions to suspend standing orders or bike-riding, fish-gutting stunts made a blind bit of difference? If not, why not?

As for "increasingly global marketplace": what is this, 1986?
We must take immediate action to address the uncertainty that has been created through the constant moving of the goalposts and chopping and changing of policy.
The best way to do that is to keep the incumbents. That nice Mr Combet seems to have matters in hand. Let's not risk that risky Opposition. Oh wait, that's the opposite of the effect you're trying to create, isn't it?

Where evidence of thinking exists, it's sloppy. And we're toward the end of the article.

She lunges for a strong finish; insofar as Sophie Mirabella has a style, that's it. It's big of her to allow Australia a future with a 21st century manufacturing base, and she gets a bit ahead of herself by a) implying that "Our Plan for Australia" is something more than a brochure, and b) that manufacturing, but one 'pillar' mentioned in passing, is somehow "front and centre" of it.

Mirabella clearly knows bugger-all about manufacturing despite more than three years in her role. She'd love to help but she clearly doesn't know how. The Liberal Party used to be full of old manufacturing hands who'd gone into politics as a second career, old hands who knew where the problems were but wouldn't embarrass themselves by promising more than they could deliver, or going on about non-issues - but not any more. Other countries seeking to actively boost manufacturing don't just abandon the field, as Mirabella would have it, but actively address issues like skills and infrastructure and even manipulate the currency. Mirabella isn't promising that but she isn't promising anything else either.

The audience for that piece are probably Liberal-leaning and can read the polls about as well as anyone. They are looking for a Liberal Party that gets it, and that the Nationals will tag along. They will almost certainly vote Liberal anyway, but in this piece Mirabella raises real doubts as to whether she and the Abbott team really are across the issues. Can they really take on well-briefed incumbents like Combet and Gillard, especially if prevailing winds turn against them? It isn't just that the Liberals are promising nothing, including the usual change-of-government rebadging, but that they don't get it and won't know what to do if manufacturing conditions get even worse.

Pablum like we've seen from Mirabella isn't just boring, or even patronising; it's the sort of complacency that Australian manufacturing knows only too well, the sort of complacency that sees previously underestimated competitors jump up and eat your lunch. There is a dishonest campaign about in the broadcast media implying that there might be more to an Abbott government than meets the eye today; Mirabella has shown here that, well, no there isn't. It will take them until 2015 to find the toilets in the Ministerial Wing, let alone work out what really ails Australian manufacturing and what government can/will do about it.

Do you really want these clowns running the show? Would it really be so bad if the incumbents got back in - sure, they could do some things differently/better, but look really hard at the alternative. It isn't just Labor that is full of talentless political time-servers.

Why is it up to me to ask questions like this? I don't even work in manufacturing. Don't they have journalists for this sort of thing - and plenty of them looking for work, from what I hear.


  1. Andrew

    as a small business person at this point in time I wlll not be thinking about anything new. I will be keeping every thing on hold, as the prospect of the libeals running the country

    does not give much comfort to this small business person for a start pension cuts
    no school bonus,, sacking public servants, cutting health, we want have too many customers, as people will have less to spend and to scared to spend, on top this inflation will rise,, I also get the feeling they are considering a gst rise, imagine if that went to 15 percent along with the above
    In my whole life I have never known an opposition who have NO policies, to take to an election. truly scary

    and I bet interest rates will rise to, put all that together and not pretty picture
    we have a great economy nearly full employment
    why on earth would people vote liberal.

  2. Yet another case of Coalition piss and wind on the policy front - buzzword bingo mumbo jumbo that means nothing and tells even less. So much for their "suite of fully-costed policies". Alternative government my arse.

  3. The Liberals' performance in opposition has been spectacularly successful and, if they win in September, that performance will be matched once in government by the success of this promise-nothing strategy. I reckon they're running a near perfect campaign given their circumstances and Sophie Mirabella's commitment-vacuum is an example of the game they're running.

    If the Libs are certain of victory in September they'll avoid campaigning with promises and policy detail that might shackle them once in government. Why lock themselves in tomorrow by making a detailed promise today if they're going to get your vote anyway? Maybe Mirabella knows as little about her portfolio as you suggest but, either way, she's doing the right thing by her party: be a small target, avoid policy controversy, and promise nothing. At this rate, once in government, she and the rest of the Liberal cabinet won't be at risk of being held to anything they've said prior to the election. They'll be in a position to do whatever they please while maintaining plausible deniability about any promises made during the election campaign.

    It's as shitty as shitty can be, but I guess the incumbent government has to take responsibility for the strength of their opposition's position.

    1. In what way is Labor responsible for the Liberals policy vacuum?

    2. realy I would of thought that if the media

      wrote word for word about all the labor gov.
      policies there would be NO contest.
      because how can there be when the libs have no policies if the media where doing this
      under the word liberal would be the word

      why would people vote for nothing,
      in fact its not nothing, they are taking away what the gov have put in place,

      now that's not a policy, its not, nothing.
      it scary,

      so will abbott campaign speech be full of nothing
      except bad givment, prove it , he cannot with int. all time lows and aaa ratings and employment at all time lows.

      so will slogans be the forefront of his campaign speech. that's all he has,
      but what he doesn't say is the scary bit.
      very scary

    3. I agree with Anonymous: nothing will come from nothing, nobody ever snuck into office with a small target strategy, and in his hubris Abbott has squandered the two things any truly successful opposition needs: underdog status, and the benefit of the doubt.

      What you call success is merely keeping the government on its toes, "keeping the bastards honest". Ever since Hawke there has been this perception that the nation has to fall in love with you before you can win. Fraser and Keating showed that wasn't true, and despite what Liberals think the nation tired of Howard after the GST and the Sydney Olympics. Gillard will do the same.

      As to this piece: shows how manufacturing has lost its central position in the way we think about our economy.

  4. Well, the Liberals would be a disaster. They do not have a clue what the country needs. How on earth can small business prosper when pensions would be cut under the Liberals, thus meaning less revenue (No, I'm not echoing the insensitivity of Bernie Brooks, I'm talking about the small shopkeeper, the newsagent who sells one less newspaper, the butcher who sells less meat) for their enterprises? The Coalition have no alternative policies, just carping at Labor! The Liberals are trying to make this government look bad and themselves look good by talking down the economy.

  5. Here's an article published recently about the actual effect of the carbon tax on a manufacturing business that might interest you as a case study: http://www.beaudeserttimes.com.au/beaudesert/215-carbon-tax-turnaround
    Note that this business is a major employer in a rock-solid conservative electorate.
    "..Mr Kassulke is the first to admit the tax has hit hard.
    However, he now also says the tax has had a positive impact on the business..."
    "..the company expects to cut carbon emissions from 82,000 to 25,000 tonnes per year..."
    "..AJ Bush will ultimately be in a much more competitive position in the marketplace as a direct result of the tax..."
    "..“What the imposition of the carbon tax has done is make industry take stock of what it is currently doing and has forced it to look at doing things in a better way.
    “It means companies are now looking at ways to use less energy which equates to less cost and a subsequent reduction in the tax that is being levied.
    “That has been the intention of the tax and clearly from that perspective it is working and working well.”.."

    So, not only is the 'carbon tax' a win in environmental terms, it's a win for the economy (including manufacturing businesses) too.

  6. So much could be said about political interference by the media why reporting is so bereft of analysis but after watching SBS last night no one should be surprised by what is being said and written by Murdochs minions such as Paul Kelly who will say and do what ever his master directs.
    And then to see a bald frog saying that Murdoch now supports Tony Abbott.

  7. The only positive I can glean from an Abbott victory is the bittersweet thought of the chaos that will ensue when a party so abjectly unready for office finds itself having to manage real world problems.

    The only coherent theme will be the payback against their perceived foes - the unions will be Newmaned at a national level and 'traitors' such as Palmer will have their lives made difficult.

    Other than that, there will be chaos, as Abbott gets torn between the polls and satisfying his numerous backers and tearing down real policies that are actually working.

    Just wait for the inevitable poll slide to start producing the most outrageous reversals of 'policy' ever seen.

    1. Queensland is a disaster for the Coalition. Elsewhere in the country a Liberal win here will be offset by a Labor win there. People aren't stupid, they won't vote against the incumbents unless the opposition are better, and they're not.

    2. Abbott's motto has always been "In defeat, malice; in victory, revenge." His "brilliant" political strategy has been to ignore developing government policy in favour of marketing.
      Now will the punters be smart enough not to buy this lemon?

    3. I think the Liberals don't realise that the same thing that happened to Rudd can happen to them, and even more likely with Abbott at the helm. Australian voters are less partisan and more driven by bloody-minded self interest. As the economy gets tougher, it will be harder to assuage the baying mob - the tricks the Howard government used won't be available to the Libs, as tax revenue will be thin and spending will need to be curtailed.

      For politicians, the future is a case of 'be careful what you wish for'. With growing populations and expectations putting greater pressures on the environment, infrastructure, resources and space, things are only going to get progressively worse for humanity, and the politicians who lead us will be in for some awful times, regardless of political hue.

    4. Oh yes they will!

      People with an interest in politics know what a rabble the Coalition currently are. But the other 99% of the population don't, they just know they hate this government. Sad but there you have it.

      They're not stupid, they've just been fed garbage every day by the media for the past three years and they have no reason to believe otherwise. Let's face it, the media's not even trying to pretend anymore.

      Tone has a problem with women? Cue the 'Women love Tone' headlines.

      Tone has a problem with dogs? 'Tone's furry friends vote with their paws' all over the Murdoch tabloids.

      Tone has a problem with IR? Well what a surprise, a raft of 'Meet Tone, the workers' friend' stories.

      There's nothing we can do but sit back and laugh.

  8. This comment has been removed by a blog administrator.

  9. I think it is kinda scary than front benchers like Mirabella keep getting themselves thrown out of question time.,it shows that they know that cannot win an argument on policy and just resort to abuse. I doubt that T Abbott wants some advice from me but its not a good look (as Andrew bolt might say). i have been following paliament long enough to know that oppositions cop it at question time.they have to just take a deep breath and keep smiling.

  10. Please call it what it is. It's a carbon PRICE, not a carbon TAX. The PM promised a carbon price prior to the election (as opposed to a carbon tax).

    The fact that almost everyone in this country still calls it a carbon tax is evidence that the opposition is controlling the narrative. Can we at least take something out of their hands?


  11. Mirabella is hated by many Greeks as was evident with her visit to Oakleigh, in Victoria to a Greek school there.

    Seriously,how can you take the party seriously when you elect people of her calibre that many middle class Greeks find horrible both here and in Greece.

    Like many in the diaspora,the nasty migrant gravitates to a country like Australia with their strange extremist and outdated conservatism that their children adopt in ideology.

    Shes a product of that generation.

    Her q and a appearance along with her weird personal life..that those in the know find hilarious,says a lot about the hairy,scary hellenic 'women of calibre'.

  12. Wow, that's her official party head shot! I thought they might have run one of the very unflattering shots the Border Mail has. But that makes her look even more frightening that the mouth-open mid-tirade ones they favour.

  13. VoterBentleigh14/5/13 2:29 pm

    Given that the Ministry for which Sophie Mirabella is the Shadow changed to the Department of Innovation, Climate Change, Science, Research and Tertiary Education in March, and the Opposition has said that they will abolish the Department of Climate Change and, judging by its criticism of the public servants working in the Department of Innovation, plans to do away with that section of the ministry, too, Sophie Mirabella may not have much of a Department to preside over. This probably explains why, while receiving a salary at taxpayer expense, she has failed to offer any detailed positive policy analysis in relation to her portfolio.

  14. Throw into that NSW Senator Concetta Fierravanti-Wells who is No1 on the ticket and an acolyte of Howard. Her maiden speech is in part about her immigrant father who,"was the sole breadwinner, so working every day was very important to him. When the unions called a strike, I saw the inner turmoil in my father. He needed to go to work but, like many other workers, could not afford to break ranks. Regardless of the merits of the issue, they could not go against the power of the unions."

    It appears she has also picked up an element of conservative extremism from her father.

    1. Anon,

      Throw into the fray a lot of the first and second generation in the coalition and labour party!

      Sometimes multiculturalism brings out adopting the worst of both cultures...!

      Narcissism and ego...


  15. Conservative extremism???

    Thats kind of a polite way of espousing polite bigotry in a sophisticated manner....

    Food for thought!

  16. Like many people in politics sadly...

    She is selfish and manipulative and plays identity politics....

    Thats the reality....

    Its repugnant!

  17. Why not look at fact.
    Australians have devolved to a mob of useless Yo-yos.
    Their emotions and base instincts are pretty much past their control and they vote the same way.
    They vote in one lot of useless bludgers who completely ignore the valid interests of those who voted ‘em in (or as I call it – won ‘em their pathetic raffle) then next time they vote the last lot of sorry, ignorant bludgers out again.
    Honestly, doing that is getting us nowhere.
    But nowhere in this dysfunctional dump is anyone, or any faction, ever getting irate enough to set up some situation able to sideline the crapola.
    Anyone with half a brain can see that gillard’s pals intend to hand the show over to the wingnut.
    She’ll be out of the country the same way bligh was out of queensland after the raffle there.
    Grow up Australia!!!

  18. The liberals are akin to those embarrassing elderly relatives from the burbs that turn up to an inner city party in Prahran ...uninvited..

    Good ole Uncle Tony and friends are tarnishing Australias progressive,cool status...


  19. Yet to hear anything from Mirabella on the Ford closures, unsurprisingly

  20. Sophie's worst nightmare: http://www.voiceforindi.com/candidate

  21. To Hedonistic Hellenes credit,she was on the abc morning show spinning on this issue.

    Sounded so incredulous and pathetic

    Note of point......the toning down of all the liberals!!

    Such ridiculous sincerity!

    Oh pleaesaaaaase!

  22. Wolf in sheeps clothing ex advisers are going on Bolt et al.

    Lobbying has become the perfect career choice now for lazy ex advisors and their hacks who are doing the rounds in the media.

  23. Andrew, a request - please update blog if you've written a piece for another journal, e.g. the recent Aus for honest politics piece. :)