Manufacturing Adjournment

08 February 2012

This evening and this week we have been having a debate about the future of manufacturing in this nation. This future is critical for a strong future for all Australians. The Gillard government wants to make sure that jobs and growth happen in the manufacturing sector and in many other industries that are affected by, or flow on from, manufacturing. For example, manu­facturing is an important part of the resour­ces boom in Western Australia. It is vitally important for skills and our supply chain. Having a strong manufacturing sector also means that we, as a nation, are world­wide leaders in innovation in technology and business. It means jobs for Australians and it means a future for our kids.

But, sadly, we are currently seeing job losses in key parts of the manufacturing sector—as in recent weeks in GM Holden. You might not think that the job losses and the future of the car industry would be relevant to my home state of Western Australia as we do not have any full car manufacturing plants. However there are, in fact, more than 2,000 people employed in Western Australia directly in automotive and parts manufacturing in our state. So the future of the manufacturing sector is a matter for all Australians. We are also seeing job losses in local fabrication in states like WA as jobs go offshore.

I am very proud to say that, in contrast the to the Liberal Party, the Gillard government and Labor are actively supporting this important part of the economy—and the jobs on which so many people and their families depend. Mr Abbott has been appalling in his lack of support for the car industry; the Liberal Party need to lift their game on this front. Similarly, Colin Barnett told the 'WA Jobs from WA Resources' rally last year that WA was not in a resources boom. I think that demonstrates how out of touch he has been on some of these issues. The truth is that Western Australia is in the middle of a resources and construction boom worth an estimated $150 billion to $200 billion. These projects are currently under construction or they are in the pipeline. We are fortunate that this creates jobs and opportunities around our state.

What Mr Barnett and Mr Abbott must recognise is that many Western Australians are missing out on the benefits of this boom. Why is this so? Because our major resource companies are increasingly performing engineering, fabrication and other skilled work offshore meaning much of the capital investment value of the projects is flowing through other economies at the expense of our own. In fact the state agreement act signed by the WA government for the port of Oakajee specifically encourages the use of Chinese steel fabrication and rail cars. There is no mention of Australian steel or Australian rail cars in the agreement. This is an outrage and a very serious issue. I have been following this issue for some time and it is clear that we should not be putting forward government money into infrastruct­ure that privileges the content of other countries over our own.

While there is an increasing gap between those benefiting from the resources and construction boom and those missing out on the benefits there is also concern about what happens once these massive projects are built. Resource projects when complete do not require as many workers to operate them as in the design and construction stage. These construction jobs by their very nature are short term. They will be gone when the projects are built. If we have allowed our engineering, fabrication and other skilled industries to shift offshore during the resources construction boom, what will our children do when this boom is over? And what will we do when all our non-renewable resources start running out?

Our natural resources belong to all Australians. We can only use them once and we should not be letting big resources companies use them unless Australians get a fair return and local opportunities. That is what other countries insist on. It is why the minerals resource rent tax is important—so that we can invest in our future. It is also why embedding skilled manufacturing jobs into our resource boom is really important.

The legacy from this resources boom should be a highly trained and highly skilled workforce that can provide engineering, design, fabrication and manufacturing services to resource projects all around the world. We should work together to create new industries and new jobs in WA and, indeed, for all Australians. Importantly, WA's manufacturing sector is a training ground for so many of the skills that our growing economy needs. The success of WA's manufacturing sector will be a vital part of fully realising the potential of the many resources projects underway in Western Australia.

We should not be relying on people coming in on 457 visas in order for these resource projects to succeed while Western Australians miss out. The simple fact is that we do not have enough apprentices coming through. Manufacturing has a key role to play in training the people we need for jobs now and into the future. Much of the mining industry simply is not pulling its weight as far as training and apprenticeships are concerned. The mining sector simply needs to and can do much more as far as training and providing apprenticeships and pathways into other professions. It is not just Western Australians, there are thousands of others whose jobs are under threat around the nation because of the high dollar and its impact on our manufacturing sector.

The simple fact is that our big resource projects are not training enough people; they are poaching skilled workers from our manufacturing sector. This has big ramifica­tions for the state of WA. Skills shortages like these drive up wages. That is terrific for many people but it further impacts on our competitiveness. It also means that people in other parts of the economy, who are not paid as well, are getting left behind. These are people like community service workers who simply cannot afford the rent in communities like Karratha and Port Hedland and as a result community services for everybody suffer. We need our manufactur­ing business to train people and maintain a strong and well-balanced economy.

WA's fabrication and mining transport manufacturing are training grounds for many of the skills that our mega projects need in WA. We have skills shortages in WA but some regions have massively high unem­ployment and people are without the skills they need to make the most of these opportunities. Skills shortages present a grave threat to the cost base and viability of some of these massive projects. A good example is WA's gas pipeline industry which trains highly skilled welders and boiler makers. No sooner has a pipeline company trained an apprentice than they are offered twice the pay to work elsewhere. So it is not just the high dollar that is impacting these industries; it is also competition for skills. But these are skills our economy desperately needs and we need manufacturing to be viable so that the training our nation needs gets done.

The Gillard government takes seriously the capacity of local firms to make the most of the opportunities presented by the resource boom so that we can develop our manufacturing base. This takes work. For example, we need to work with local fabricators to target contracts in the WA resources sector. It is detailed capacity-building with our local industry. It is about ensuring that Australian companies can compete effectively for work in these major resource projects. This means practical requirements like ensuring tenders are done according to Australian standards.

There is growing evidence that many of our big resources projects are locking out Australian fabricators by stipulating that their fabricated steel must be supplied to Chinese specifications in their tender documents. This was reported in the Australian recently. When this happens, it effectively means Australians firms cannot tender for the work as it is not financially viable for their workshops to produce in both Australian and Chinese specifications.

I will not have time to finish my remarks about all the things that the Gillard government is doing to address these issues. We have appointed Dennis O'Neil as our Steel Supplier Advocate and he has been working with Western Australian fabricators and resource companies. We have been discussing the need for joint venture models to enhance capability and capacity of fabricators to better target contracts in the resources sector in Western Australia and nationally.

Finally, the growth that WA is experiencing should not mean digging up our future and selling it off overseas. We can only use these resources once and they should leave a positive legacy for all Australians. It is about our kids having jobs while resources projects are being built and providing opportunities for the future.