Sofitel Hotel
25 Collins Street,
Melbourne, Victoria
[check against delivery]
It’s good to be among old friends.
The first time I addressed your annual dinner was back in 2004, just before the Federal Election that year.
You were kind enough to invite me back in 2007 – again just before an election.
It’s great to be here again this evening, this time with no election around the corner – I promise.
We have both undergone a major transformation during the last twelve months.
This organisation has morphed from Tooling Australia into Advanced Manufacturing Australia, and I’ve morphed from Opposition spokesman into Minister.
In fact, I had the honour of launching your new identity just a few weeks before Labor won government last year.
Looking around me here this evening, I’d say that the change agrees with you.
Being in government – having the chance to make a real difference – certainly agrees with me.
Manufacturing
How much of a difference have we made so far?
Quite a bit, in my view – certainly enough to make me feel much more optimistic about the future of manufacturing in Australia than I might have been if we’d just gone on with business as usual.
The biggest change is that we now have a Government that actually believes in manufacturing.
A Government led by a PM:
• who has famously said “I don’t want to be Prime Minister of a country that doesn’t make things anymore”.
• who has said governments must be ready to offer “incentives to design innovative approaches to … long-term challenges”.
• who has said “we need to have a proper Australian industry plan which deals with the long-term future of our manufacturing sector”.
It is impossible to overstate how important these declarations are – and what a radical change they represent.
They demonstrate commitment and they provide certainty – both of which have been lacking.
Some may object that they are only words, but you quickly learn in this business that words are powerful things.
That’s why the Prime Minister and I have taken every opportunity to remind people that Australian manufacturing is here to stay – that the Government supports it, and that the country needs it.
We can’t expect business people to invest their money in an industry that has no future.
We can’t expect workers to invest their lives in trades that won’t be here tomorrow.
We can’t expect researchers to invest their time and energy in ideas that may never find an application.
So the first thing we set out to change was the way people see manufacturing.
We wanted to send a very positive message about its value and viability.
In the jargon of the moment, we wanted to change the narrative.
A lot of people have been saying the story of manufacturing in this country is coming to a close.
This Government is saying it’s just beginning, we’re saying the best is yet to come – but we’re also saying it’s time to open a new chapter.
That’s why we’ve placed so much emphasis on innovation.
There are some who argue that Australia should focus exclusively on activities in which it has a natural comparative advantage – by which they generally mean digging up minerals and loading them onto ships.
The Government believes we don’t have to settle for a dumbed-down economy in which our natural endowments dictate our ambitions.
Instead we should be building a savvy economy by creating competitive advantage wherever we can.
That’s why innovation is so important, and that’s what today’s industry policy is all about.
It’s about mobilising the power of public and private investment in education, research, knowledge-transfer, enterprise improvement and risk management to make us more efficient, productive and competitive.
Programs
This is the principle that informs all the new initiatives we’ve introduced this year.
Perhaps the most important of these is Enterprise Connect, a $251 million network of Manufacturing and Innovation Centres dedicated to giving small and medium-sized businesses access to the services and infrastructure they need to increase their innovation performance.
This morning I had the pleasure of opening the $32 million Victorian Manufacturing Centre in Dandenong.
It joins Manufacturing Centres in Adelaide and Brisbane, and the Innovative Regions Centre in Geelong.
Manufacturing centres in the other three states will follow soon.
So will Innovation Centres for Mining Technology, Creative Industries, Remote Enterprise and Clean Energy.
As well as providing great services themselves, each centre will act as a gateway to the wider innovation system.
Enterprise Connect is a network of sites – and I think the physical presence is incredibly important – but it is also a network of people.
Those people are already hard at work in every State, and more than 1,000 firms have applied for or received business reviews – four-fifths of them manufacturers.
Manufacturing is also the focus of the $75 million Re tooling for Climate Change.
It offers firms grants of between $10,000 and $500,000 to make their operations more water-wise and energy-efficient.
Applications for the first funding round close on the 20th of this month.
Re-tooling for Climate Change is one element of the government’s Clean Business Australia initiative.
Climate Ready is another.
Also worth $75 million, it provides dollar-for-dollar grants of between $50,000 and $5 million to support the development and commercialisation of products that save energy and water, reduce pollution, and use waste in innovative ways.
The next funding round closes on the 4th of December.
Both programs are designed to deliver great environmental outcomes, to support Australian innovators, to put Australian industry on a more sustainable footing, and to help secure jobs for the future.
Both are about drawing on the creativity of Australian business to develop climate change solutions we can use ourselves and sell to the world.
We have also made massive investments in education and research, including:
• more scholarships for PhD students;
• 1,000 new fellowships for mid-career researchers;
• dramatically improved fellowships for senior researchers; and
• incentives for young people to study and work in maths and science.
These may sound like matters of purely bookish interest, but I expect them to have implications far beyond the academy – especially as we push forward with higher education reforms that will give universities a clearer focus on community outreach and industry engagement.
We are also creating 630,000 new training places, including 85,000 traditional apprenticeships.
Apprenticeship training is critical to maintaining high-skill, high-wage jobs – a point Advanced Manufacturing Australia well understands.
There is obviously a lot more we want to do.
Our reviews of the national innovation system, the CRC program, and the automotive and TCF industries are all now in, and they will shape our work in the months ahead.
Innovation councils
In the meantime, we are honouring our election pledge to establish Industry Innovation Councils for specific sectors and issues.
The first council – for the built environment – was announced last month, and will have its first meeting in a couple of weeks.
It’s my great pleasure this evening to announce the second, which will be the Future Manufacturing Industry Innovation Council.
The council will work with everyone who has a stake in high-tech, high-value-added, innovation-intensive manufacturing to develop a strategy for the future of the industry.
It will be chaired by Philip Binns, and I’m delighted that he has agreed to take on the job.
Many of you may already know Philip, but for those who don’t:
• he is managing director of scientific instrument maker Varian Australia Pty Ltd;
• he has qualifications in applied science, marketing and business; and
• he is an industry advisor to the University of Melbourne and CSIRO.
Philip will be joined on the council by innovation leaders from business, unions, professional organisations, the science and research community, and Government.
My intention is to finalise the membership of the council in time to hold a first meeting before year’s end.
The future
This is a great initiative – especially for this sector – but I can’t just leave it there on a day they’re already calling Black Friday.
There is little point pretending that the global financial crisis won’t have an effect on what you and I know is the real economy – on people who actually make things, their workers, and their investors.
Tight credit conditions have been making life tough for Australian manufacturers for months.
Even before the dramatic events of the last two weeks, there were disturbing signs that banks around the world were minimising their exposure to manufacturing.
Today’s collapse will make it even harder for the industry to borrow or attract investment.
That makes programs like Enterprise Connect and Clean Business Australia even more important.
It makes the government’s response to the innovation, auto, TCF and CRC reviews even more critical.
The automotive industry in particular is going through tough times.
All three car makers are feeling the squeeze, and Steve Bracks estimates that at least a third of our component makers are under stress – although the industry is doing better in Australia than it is in the United States.
The Government is developing a comprehensive response to the Bracks review as a matter of urgency, and I remain positive about our capacity to revitalise the industry.
It makes the case for an innovation partnership between Government and industry even stronger.
Advanced Manufacturing Australia is already showing the way with its contributions to Enterprise Connect and Innovation Australia.
Together, I am confident we can see this through.
Click here to view the Media Release for the announcement of the Future Manufacturing Industry Innovation Council.