Speech to the AiG PIR National Conference, Canberra

Thank you for the opportunity to be here today.

I want to begin by reflecting on where we were two or so years ago in order to put our present challenges in context.

In 2008, together – the unions and the employers in this industry - faced a massive challenge with the global financial crisis.  We could see a tsunami of job losses and unemployment, and a huge threat to the future of manufacturing.

Two years ago when I last talked here, our union was  still worried of course about the effects of the global financial crisis and its aftermath, but we were talking about the ‘green shoots’ of recovery.

What we have been facing this last 2 years is the impact of the high dollar.

So we still have big challenges ahead of course.

We have lost nearly 110,000 manufacturing jobs in the last three years. If Treasury projections about the high dollar are to be believed there is still a substantial amount pain ahead.

And I know you are all used to hearing my union talk about the challenges and making demands on the industry about the future of jobs and the future of manufacturing.

But before I get to that, I want to paint a bit of a positive picture about our sector, and to put a stake in the ground about how we as an industry need to step up to deliver for the Australian public and the Australian economy.

The Australian public are asking – what is our future and the future for our children post the mining boom? What do the jobs of the future look like? What happens when we stop digging things up and sending them overseas? 

What does a sustainable economy look like?

The public know that to have a diverse economy that delivers long term prosperity and growth, we have to have more than a mining industry.

Our public research over many years has shown us that Australians value  manufacturing and want our country to have the capacity to make things.

The public actually know that manufacturing sustains a modern economy. That it trains our tradespeople, it pays for the research and development, and it delivers innovation.  The public do understand that it anchors other industries and creates jobs downstream.

This, the public knows.

Do you know what they don’t’ know?

They don’t know that our sector still employs nearly 1 million people.

They don’t know the strength and diversity of our industry. They don’t know how much Australia still makes and how much we innovate.

People are really surprised when you tell them we have nearly 1 million people employed in manufacturing.

And when you tell them, they are even more supportive of our sector, and want Government to step up and be involved in developing, growing, protecting and investing in this industry.

Twelve months ago the AMWU began a battle over funding for the auto industry when the government abolished the Green Car Innovation Fund. That turned into a broader fight about policies to support manufacturing across all sectors. A fight to help local manufacturers benefit from the mining boom. A fight about why government defence and infrastructure contracts should be awarded locally. A fight about whether we could use the challenge of climate change as a game changing opportunity to build a clean technology industry in this country.

What we discovered in this campaign – a campaign I invite you to join us in - is that Australians want to hear more about our industry and what we are doing.

Our Manufacturing: Australia’s Future campaign began telling the story Australia needs to hear about manufacturing. Our campaign makes plain the simple but obvious truths about why Australia needs an industry based on skills, innovation and technology, not just services or natural resources.

By the end of this year, we felt we had won some major victories and shifted the public debate even more in our favour of more government investment in manufacturing.

The outcomes have been the great result on investment in clean technology from the carbon price, and in the setting up of a Manufacturing Taskforce chaired by the Prime Minister, which will meet for the first time tomorrow.

I stand here today with a lot of belief in the future of our industry and to say that our union wants to be part of growing and modernising our sector to deliver what the Australian public want – a sustainable and diverse economy with more than just mining to rely on.

Our union will of course continue to make demands on Government to support and invest in manufacturing, and we are happy to wear the tag of protectionists if we must.

But today I want to say that it is time that we as an industry also recognised that this Government has provided us – the manufacturing sector – with the greatest of opportunities for the future by taking what some will argue is the bravest of political decisions in implementing a tax on carbon pollution.

They have been brave – which is rare in politics and we as an industry must now step up and take the opportunity that the carbon tax provides for us.

The AMWU supports the Government’s plan for four reasons:

First, by putting a price on carbon now and commencing a long term, gradual and predictable reduction in fossil fuel subsidies we are making old fossil fuel intensive technologies more expensive.

 At the same time, public funding for basic, applied research, experimental development, demonstration and early stage commercialization on a new generation of emission reduction technologies reduces the time cost and risk of getting these technologies to scale and into the market. This is what the economics of climate change is all about.

Secondly, the legislation provides special assistance to steel and other trade exposed emission intensive industries to adjust and protect jobs; and it provides additional support to help industries like manufacturing invest in more energy efficient plant and equipment to reduce their carbon footprint and their long term energy costs.

This support package also helps protect the purchasing power of low and middle income families with an assistance package of tax cuts and social wage increases.

Thirdly, by acting now we have the opportunity to create new industries and jobs in clean technology. Broadly defined, the clean tech industry is estimated as a $6 trillion global industry. This is a game changing opportunity for Australia’s manufacturing industry and for many of our service industries. In the UK more than 55,000 firms are involved in the clean tech industry and more than 17,000 of them are manufacturers.

With the combination of a price on carbon, incentives for new clean technologies and appropriate polices to ensure high levels of Australian industry participation we can create thousands of new jobs and build a clean tech industry of substance in this country.

Fourthly by acting now are we are taking out an insurance policy for the nation against the threat of carbon tariffs and other penalties being imposed on us by our trading partners in the future. To say no and threaten to roll it back, in my assessment, puts thousands of Australian jobs at risk and threatens to push electricity costs by winding back structural investment the in energy sector.

 To stand still and deny the need to price carbon or even the existence of climate change is, in my opinion, a recipe for disaster. We will be forced by the rest of the world to do far more over a much shorter time period of time which will undermine the job security of workers in existing industries and send offshore the jobs from the high growth clean tech industries of the future.

In 2009 the AiG surveyed its members and found that 70% of firms had not done anything about becoming more energy efficient in the previous 5 years. Even worse, 60% had no intention of doing anything within the next two years.
Business was not going to do this by itself. That is why we now have a carbon price. Now that there are incentives, it’s in all of our interest to work together and avoid the sticks and take advantage of the carrots.
The Clean Energy Finance Corporation provides up to $10 billion worth of funding to help clean energy programs access capital where private capital is not available.
The Australian Renewable Energy Agency will manage an additional $3.2 billion worth of existing grants.
There is a further $1.2 billion Clean Technology Program which is for businesses to improve their efficiency.
With the high dollar and other unusual extra pressures on manufacturing expected to remain for at least the next 12 months, the government may have to be flexible about the $3 to $1 ratio for investment and innovation funding in the short term.

The AMWU will support this approach for businesses that develop viable programs but require better co-investment ratios to get them off the ground. It may be that the difference can be made up over the long term.
There are many more programs which we can take advantage of. Programs like the $330 million Low Carbon Communities program helps low income households, local governments and community organisations save energy.
This isn’t money for business, but it is money that will create demand for efficient, energy saving products – and which companies in this room are ready to take advantage of those new markets? It is possible to make some of those things here, rather than leave it to importers.

Legislating Australia’s carbon pricing regime still leaves important issues to be resolved. We need to ensure our existing manufacturers become more energy efficient and can access the funds to diversify into the new opportunities.  We need to ensure greater collaboration between our engineers and our universities and science agencies that develop the new technologies and our manufacturers and service providers who can make it here.

 We need to export and attract new global investment to be part of the world cleantech industry which means making sure we have the right support programs and delivery agencies that work together rather than doing their own thing in isolated silos.

The big picture here for us must be a shared agenda that can be played out over a decade to assist our manufacturing industry to both seize the opportunities provided by the new carbon tax, and to get competitive and get access to international markets.

 If Government, business and unions can develop and implement such an agenda over the next several years and make it work, then I think the prospects for Australian manufacturing during the next decade and beyond are very bright indeed. This is what we will be endeavouring to achieve through the Prime Minister’s Manufacturing Taskforce.

My union will keep fighting to keep manufacturing growing and prosperous.

Our members want us to. The Australian public want us to.

We have never had a better opportunity than the one before us now, and I urge the industry to step up to the plate.

We are an industry that actually employs nearly 5 times as many people as mining, and are present not just in the boom states, but in every major city and regional town.

We are the heart and soul of the sustainable economy, and it’s time we worked together to make that a key part of the story of Australian Manufacturing’s future.

Thanks for your time.

Contact Person: Tim Chapman
Contact Email: tim.chapman [at] amwu.asn.au

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