Posted on February 13, 2012 by Stephen from BAM
Julia Gillard – Saving our manufacturing sector is possible! by Roger La Salle
Only a change in Government policy can save our manufacturing sector!
Despite Julia Gillard’s recent commitment to the future of manufacturing in Australia, the fact is that with current policy our manufacturing base is largely unsustainable, except in some key strategic areas where subsidies may be important to maintain some capability. Military application and the like may fall into this category, so too agriculture, if we can categorise this as the manufacturing of food which is essential to our survival.
As for the rest, the future seems bleak under the present government policy.
Innovation can be the solution
Innovation has often been cited as the saviour of Australia’s declining manufacturing base. Indeed we do need to support innovation and the development of new products, technologies, processes and systems but this alone will not sustain our manufacturing sector, as long as present government policies prevail.
Is IP Protection the answer – perhaps!
New products and innovations that are the subject of IP protection can lead to sustainable manufacturing. But ask yourself this question, “why would you manufacture any new product in Australia (or any other product for that matter) when you can make it for much less in China and import it (with little or no duty) then sell it at a much greater profit?
In short it is simply uneconomic to manufacture most items in Australia, and to do so is little more than an act of altruistic patriotism. An obvious answer is to impose duties to protect our manufacturing base, but with both the Labor and Liberal commitment to “free trade agreements” this is unlikely to happen. A different solution needs to found.
One possible solution
If the government were to offer a tax holiday, for perhaps 5 years, on inventions and innovations that are made in Australia it would have a trickle through effect. It would kickstart local manufacturing, create jobs and stimulate and support Australian innovation. The cost to the Government would be negligible and further revenue would flow to government from taxes on employees, reduction in unemployment and the activities surrounding the creation of new facilities to support these new ventures.
The incentive to develop and localise industries with new products would be profound.
Is anybody listening?
I wonder if those in the Government would consider this suggestion for without a drastic change in policy it seems likely that manufacturing in Australia will cease to exist within the next decade.
Roger La Salle, is the creator of the “Matrix Thinking”™ technique and is widely sought after as an international speaker on Innovation, Opportunity and business development. He is the author of four books, Director and former CEO of the Innovation Centre of Victoria (INNOVIC) as well as a number of companies both in Australian and overseas. He has been responsible for a number of successful technology start-ups and in 2004 was a regular panellist on the ABC New Inventors TV program. In 2005 he was appointed to the “Chair of Innovation” at “The Queens University” in Belfast. Matrix Thinking is now used in more than 26 countries and licensed to one of the world’s largest consulting firms. www.matrixthinking.com
Posted on February 13, 2012 by Stephen from BAM
The Clever Country – if only!
© Roger La Salle 2011
www.matrixthinking.com
Australians are indeed clever
Australian engineers and scientists are indeed world class, much like New Zealanders we “punch much above our weight”. Numerous examples could be cited including the Interscan Microwave aircraft landing system of the 1970’s that beat all comers, including the USA and Germany in demonstrating the best technology. Cochlear and Resmed are other examples and it is pretty well accepted that we excel in the biomedical sciences.
Australians are great technologists but still our economy relies on the resources sector and with the decline in our manufacturing base, a growing emphasis on tourism and services in general.
The Governments part
In an endeavour to inspire innovation and investment in the sciences and “brain work” the Government over many years has provided accelerated investment allowance in the form of tax claims as R&D incentives. One may well ask if this is working as a real research incentive? Further, one may well ask just how easily it can be rorted by unscrupulous would be entrepreneurs?
The problem with the present system is that it comes at a great cost to Government whether successes are generated or not. Further, if you do happen to succeed with a new endeavour, you get punished.
Yes, in Australia we pump money in to the front end at great risk, then if you do succeed you get punished with a tax on your profits.
A Better Alternative
The search for an alternative should be made with the mindset of SME’s, not that of big businesses that should not need incentives to research and innovate.
The system embraced should strike at the very heart of business by rewarding success and encouraging profit.
Thus a better system may include the following attributes:
• No cost to government
• Ultimate reward to Government with taxes on wages if the innovation is an export success that creates employment
• Clearly focuses innovation at export markets
• Can be readily audited
Such a system may seem like “snake oil”, but perhaps could be implemented with the following guidelines:
• No government money is used in seeding new initiatives and there are no accelerated investment write offs
• A tax holiday will be provided for a period, (suggested 3 years) for all income generated from exports where sales have been made to places where patents or formal IP protection is claimed (This could include registered designs, copyright and plant breeders rights)
If such a system were to be introduced I believe the shift in the mindset of SME’s and entrepreneurs would be almost instantaneous, focused and profound.
In short entrepreneurs would be saying – “Find me an export opportunity that I can protect with IPR and let me at it”.
The Naysayers
Doubtless there will be an endless stream of critics to the above suggestion, but one may question if the present system really works? Is it achieving its aim, what is the cost to Government and for what return and finally, how easy is it to rort?
Where to from here?
Let’s start the debate!
Posted on January 12, 2012 by Stephen from BAM
This article appeared in the Sunshine Coast Daily…
THE Federal Government should consider ways to make sure Australia Day products were made in Australia, former Australia Day Committee chairman Lisa Curry said yesterday.
She was speaking after it was revealed that most Australia Day products – from flags to stubby holders – available on the Sunshine Coast were manufactured overseas.
Ms Curry, who headed the committee that weighs up national Australia Day honours, said the country’s national day was important, as was supporting Australian business.
“IT’S obviously better all round if the products can be made in Australia – particularly those that are being sold in association with Australia Day,” she said.
Ms Curry (pictured) said the Federal Government could consider assisting Australian businesses that manufactured items carrying images of the Australian flag.
And she agreed that, alternatively, the government could consider banning imports that carried Australian flag images.
“The reality of the situation is that times are tough our there, and if people want a flag to celebrate our national day, they are more likely to pay $5 than $30,” she said
“But if the Australian-made products’ prices were more competitive, that’s something else altogether.”
The overseas products, some which have packaging saying they are “Australian designed”, are being sold across the Coast, from cheaper, discount stores to the retail giants.
However, the boss of an online website that promotes Australian-made products said Australian flags and products manufactured in this country were not that much dearer than imported items.
BuyAustralianMade.com’s Stephen Gately said China funded its manufacturing industries, which had the benefit of cheaper utilities, such as electricity.
Mr Gately said bigger Australian retailers were after as much profit as they could muster – and Australia Day products were not immune.
He said there were Australian companies that produced good products for reasonable prices.
His Melbourne-based website lists at least two companies that manufacture Australian flags and associated products.
Should Australia Day merchandise be made in Australia?
Posted on October 16, 2011 by Stephen from BAM
Below is an article relating to a survey commissioned by the Crossman PR company. Thank you Jackie for allowing us to use your commentary.
“Aussie food producers still reeling from the effects of floods, drought and pestilence now have another big headache as consumers tighten their belts and the dollar stays high.
A new nationwide poll has revealed eight in 10 Australian grocery buyers aged 18 to 64 think price is more or just as important as country of origin when purchasing food and a staggering 60% hardly ever check to see where their food comes from.
The results, revealed in the latest round of survey series Crossman Insights, initiated by Sydney-based public relations consultancy Crossman Communications using the Newspoll Online Omnibus, found that around half of Australian grocery buyers (47%) don’t care where food comes from as long as it is good quality and reasonably priced and 56% think imported food keeps Australian prices competitive.
Crossman Communications Managing Director, Jackie Crossman, said that while it’s understandable that consumers are looking to save cash wherever they can, the findings will dishearten farmers and local food manufacturers who are already doing it tough in the difficult retail environment.
“Australia produces some of the best quality food in the world and our growers and manufacturers need our support. If we favour cheap imported food over home grown produce we will jeopardise even more Australian livelihoods and jobs in the agriculture, horticulture and manufacturing sectors,” Ms Crossman said.
The Newspoll survey of more than 1000 Australian grocery buyers found that New Zealand food producers are likely to be the biggest winners in the battle for the Australian dinner plate with an overwhelming 96% of respondents confident in food coming from our nearest neighbour, including a significant 60% who are very confident.
The UK and France are also trusted suppliers with 91% and 87% support respectively, but the majority of consumers are suspicious of food from India (62%), Mexico (57%), China (56%), Thailand (55%) and Chile (53%).
Ms Crossman said with New Zealand’s clean, green image and reputation for producing quality food a clear winner with Australian consumers, local industries will need to find ways to effectively compete as more and more products cross the Tasman.
“The threat from Asian countries is much less significant though Australians could easily get turned on to food from South America – in particular Chile which is known for top quality produce – if there was a major education push from that market,” Ms Crossman said.
“In this challenging environment, where household costs are rising and consumers are intent on snapping up bargains either online or in the shops, loyalty goes out the window,” she said.
Around half of Australian grocery buyers (53%) would like to see the Federal Government providing protection to food manufacturers even if it increases the price of all foods however Crossman noted that convincing the powers that be of this could be hard when the vast majority of consumers are voting with their wallets and not even bothering to look at the country of origin.
Crossman Insights is a survey series designed to capture the thoughts and mood of heartland Australia, providing insights into issues of the moment or answers to questions we’ve always pondered but never really asked.”
Posted on September 28, 2011 by Stephen from BAM
This is a reply that was received by a BuyAustralianMade website visitor (Fiona) after sending an email to Birdseye asking for an explanation about using imported vegetables in their products.
“We refer to your recent email enquiry regarding Birds Eye frozen vegetables.
Simplot Australia operates in a global market where success is dependent on giving consumers the best quality possible at a competitive price. However, Simplot Australia’s commitment to Australian produce remains strong. We primarily source all our vegetables from Australia. In the event we are unable to obtain the quantity we require, we source the vegetables from our suppliers overseas. In compliance with the Australia New Zealand Food Standards Code, Simplot Australia abides by all labelling regulations and requirements.
Simplot Australia aims to deal only with reputable suppliers that are willing to apply our strict quality standards. Supplier relationships are benchmarked and evaluated to deliver continuous improvement in quality and service. The company audits major suppliers to ensure that they comply with the Simplot Australia Supplier Guidelines or are working actively to achieve them. Simplot Australia insists on honesty, integrity and fairness in all relationships with business partners.
Currently, we are sourcing our Baby Corn from China. In the event of a shortfall in Australian produce we also source Broccoli and Cauliflower from China.
If you require clarification of an ingredient in a particular product please feel free to contact our Consumer Information Department on our toll free number 1800 061 279. Our office hours are Monday to Friday 9am to 4pm EST.
Thank you for taking the time to contact us.
Kind Regards
Consumer Information Department
Simplot Australia Pty Ltd
Australia 1800 061 279
New Zealand 0800 448 613 “
Posted on August 31, 2011 by Stephen from BAM
Mine sites in Australia
The Australia I want to live in – treats people with respect, still makes things, is capable of being self-sustaining, determines its own future, provides an increasing range of employment opportunities, encourages people to have a go and has maximized the opportunities of our natural resources.
I believe that it makes no sense that we are selling our natural resources for $100’s per tonne and then importing them back at $10,000’s per tonne as finished products.
I believe we must value add the natural resources, by refining and manufacturing.
I believe buying Australian grown produce is better for our health, the environment and our farmers future.
Other people believe
- we don’t need a manufacturing sector
- we should be importing produce that we already grow in Australia
- we should be taking our services offshore
- the mining sector alone will secure the future of our nation
What do you believe?
At BuyAustralianMade we support Australian Manufacturing, Australian Growers and Australian delivered services by promoting their products and making it easy for shoppers and others to find them.
You can . . .
Help create employment opportunities for your neighbours, your kids, your kids kids and yourself
Help businesses invest in research and development, drive innovation and develop new ways of doing things
Help build a more sustainable Australia
What you buy will help decide the sort of Australia that we all live in.
Support Australian Manufacturing, Australian Growers and Australian Delivered Services by buying their products and services
Posted on August 30, 2011 by Stephen from BAM
Industry, unions, and Government have met to discuss manufacturing in Australia.
I hope they examined these points in their discussions….
- Manufacturing is responsible for lots of innovation. Without innovation how are we expected to develop new technologies and new industries.
- Manufacturing spends a lot of money on research and development according to an article written by Roy Green ( Dean of UTS Business School) the amount spent on R&D is around $4.5 billion every year.
- Manufacturing contributes to our external trade balance. We just don’t export stuff dug out of the ground, we need to have other sectors contributing to ensure our trade balance is favourable.
- Manufacturing employs over 1 million people, 5 times more than mining.
- There are many businesses who rely on the manufacturing sector to use their services, these businesses also employ people. Wthout a vibrant manufacturing sector many of these bsuinesses would close down. The knock-on effect when Pac Brands shifted production offshore showed this, 1000′s more lost jobs as a result of manufacturing being shifted offshore.
- Current mining exports are not enough to offset the increase in the number of imports resulting in our trade balance being unfavourable. We need to increase consumption of our onshore manufactured products and reduce imports.
- Germany is one of the few European countries which is not in financial turmoil. They have a strong and growing manufacturing sector, shouldn’t we be learning from that.
- High wages in Australia when compared against Asia is a simplistic reason to why decisions are made to shift manufacturing offshore.
- The amount of home manufactured products used in the mining sector is ONLY 10% of total useage.
- The manufacturing sector employs one in five engineers and provides core skills development which then can be deployed into other sectors.
- Without a sound manufacturing sector we are at risk of loosing skills, IP and research that have taken generation to build but little more than a generation to dismantle
A vibrant Australian manufacturing is not about being protectionist it is about be SMART and thinking of the FUTURE and NOT putting short term profits ahead of what is the RIGHT thing to do.
Posted on August 24, 2011 by Stephen from BAM
There is a lot of discussion about Australian manufacturing at the moment AND so there should be. But it should not stop at discussion there needs to be action otherwise future generations in Australia will be burdened with an insecure future in many different ways.
Lets look at some facts…
- Currently manufacturing in Australia employs around 1 million people, representing around 10% of the workforce
- Mining employs around 200 000 people, 2% of the workforce
- Employment in manufacturing has been in decline since the 1980′s when the Australian dollar was floated
- Large employers in manufacturing started moving operations offshore in the 90′s searching for lower wages
- The majority of the jobs in manufacturing are in businesses employing less than 100 people
- In 2010 Manufacturing contributed more to GDP than mining
GDP Contribution by sector
Other countries are now regretting the days when they let manufacturing diminish. Now all they are left with are service industries which are internally focused and bring in limited external currency.
Skills have been lost that are required to run effective manufacturing and future choices for the economy have been reduced. Add national security to the mix and the overall picture is not a positive one for these economies.
My view is that a strong and growing manufacturing sector in Australia must be seen as a core sector to provide options and security to this nations. We should not be letting short term circumstances like the high Australian dollar, subsidised offshore manufacturing and the “supposed” global level playing field decimate the Australian manufacturing sector.
Posted on August 16, 2011 by Stephen from BAM
I was sent this article about why we must Buy Australian Made, I thought you might be interested to read it . Credit goes to Manufacturelink.com.au for this article.
“
We Must Buy Australian Made
10 Aug 11
Mining continues to boom on the back of strong Chinese demand but Manufacturing continues to struggle with the headwinds of the high dollar, lack of protection against cheaper imports, skills issues, lack of government support and soon to come, a very unpopular tax on carbon emmissions.
What are Australia’s governments doing to protect Australia’s manufacturing base which contributes 10 per cent of GDP and represents 10 per cent of Australia’s workforce (Mining 7 per cent and 2 per cent respectively)?
A lack of policy to support domestic manufacturing, and indeed the purchasing practices of governments is of no assistance to our manufacturing industry which is renowned the world over for quality, high precision and engineering excellence.
Over the last week alone we have seen Melbourne based engineering firm Production Parts fall into the hands of receivers, a firm renowned the world over for its engineering excellence and innovation in the aerospace sphere.
SPC has announced that their Mooroopna manufacturing plant in Victoria, which processes canned tomatoes and tomato paste will close, leading to the loss of around 150 jobs. It had been a part of the local community for 70 years.
Perth-based Kresta, Australia’s largest curtains and blinds manufacturer, has announced it will outsource venetian blind manufacturing to Asia. In a bid to reduce costs, Kresta will also stop producing curtains in Perth.
This work will be taken up by its Brisbane facilty, where there is spare capacity. Overall Kresta’s workforce of more than 1,000 will be reduced by 72, including staff that will be made redundant as Kresta invests in automated manufacturing technology.
Australia once rode off the sheeps back which diminished, then manufacturing came to the fore as a large employer, and provider of a quality standard of living, now diminishing, what happens to Australia when the mining boom diminishes?”
Posted on August 3, 2011 by Stephen from BAM
Tommy, is a regular visitor to the BuyAustralianMade website and recently sent me a couple of photos taken of a table biscuit called Captains Table made by Kraft Foods.
These are the comments he included along with the photos “….commonly sold at Woolworths and other supermarkets…it has a Melbourne address on the packaging but hidden amongst the text is “made in china”.
Seems the fact that the biscuits are made in China isn’t seen as something that should be highlighted and brought to shoppers attention. What other conclusion can you come to if the Made in China statement is included in middle of other text? 
I wonder how many people would actually go to the trouble to read the text in detail in order to find out that the crackers are actually made in china. Not to many I suspect…. apart from Tommy of course. Though I must say that I am an avid label reader though if they are already featured on the BuyAustralianMade website and BuyAusMade app then I know that they are Aussie made.
And what about the COST!!!!
The price per 100 grams according to a supermarket online store is $1.54. An Australian made alternative is priced at 1.33. Now how does that work!!!! – Take the production offshore because it is cheaper to produce there and then charge more than the Australian made alternative. Are we being sold a pup here????
For gourmet Australian made crackers Tuckers produce quite a range in their Adelaide factory, you can read more about their range here www.buyaustralianmade.com.au/clients/490-tuckers-natural
Would be very interested to hear about other products that you believe are hiding the fact that they are not Australian made? Let us know so that we can share the info with other people.
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