Australian Manufacturing - where are you?

[Rorschach]

I remember Al Grassby and Gough Whitlam. I remember the UN and the Lima Declaration. I continue to hear people blaming them and it for our devastated manufacturing base. But the issue is more complicated than that, and a declaration is not a treaty. All governments and business leaders are to blame for the decline in manufacturing and for the short-sighted decisions that have brought us to this point. The following article is from a US adviser, who says Australia should be exporting finished products rather than raw materials. He says our manufacturers are the "canary in the coal mines".

Use energy resources at home: Liveris
By Colin Brinsden, AAP Economics Correspondent, AAP Updated October 17, 2012, 4:18 pm

A top US business adviser has warned that Australia should be using its energy sources to build up its manufacturing sector rather than just exporting the raw materials.

Australian-born president, chairman and CEO of US manufacturing giant Dow Chemical Andrew Liveris believes that while Australia has put in an "incredible" performance in the past decade, this has masked serious weaknesses in the economy.

"I believe that mask is truly starting to slip," Mr Liveris told the National Press Club in Canberra on Wednesday.

Mr Liveris, who is also co-chair of President Barack Obama's Advanced Manufacturing Partnership, said the economy had been allowed to become "unbalanced" through its reliance on a booming resources sector, which has been supported by policies from both sides of politics.

In contrast, a large number of manufacturers have "passed the tipping point", either scaling back or closing altogether.

"The manufacturing sector has been the canary in the coal mines," he said.

He said since the 2008-2009 global financial crisis, 100,0000 manufacturing jobs had been lost, primarily due to a lack of competitive domestic energy and power, despite being a country that has both in surplus.

That is because Australia tends to export the base raw material, including vast amounts of natural gas overseas.

"With this gas, Australia's fuelled the manufacturing needs of other countries and created thousands and millions of jobs overseas all to the detriment of the domestic manufacturing sector," he said.

"I believe that Australia should have a balanced economy with manufacturing, not on the sidelines, but part of its centre."

He said it should be Australia exporting the finished product, rather than the base product.

This advice came as a report by the Australian Industry Group (Ai Group) and the Plastics and Chemicals Industries Association (PACIA) found that an insufficient gas supply may constrain the domestic economy.

It says each petajoule of gas shifted away from industrial use towards exports means giving up $255 million in lost industrial output for a $12 million gain in export output.

"That is, for every dollar gained $21 is lost," the report says.

It says a secure local gas supply is fundamentally important to a number of industries, yet gas exports are predicted to rise from two million tonnes in 2015 to up to 24 million tonnes in 2023.

"This is a major issue for Australia's national interest, it's a major issue related to job security going forward, it's a major issue related to the development of new advanced manufacturing and value add industries within Australia," Ai Group chief executive Innes Willox told ABC radio.

Westpac chief economist Bill Evans believes that recent interest rate cuts by the Reserve Bank of Australia (RBA) have been aimed at stimulating non-mining sectors to complement the growth mix when mining slows.

He said the minutes of the RBA's October board meeting released on Tuesday supported an expectation for a further rate reduction in November.

"Ongoing concerns with global risks, recognition that the labour market is softening, and emphasis on the slowdown in mining investment all point to a board which believes there is more work to be done," Mr Evans said.

[mantra]

I remember Al Grassby and Gough Whitlam. I remember the UN and the Lima Declaration. I continue to hear people blaming them and it for our devastated manufacturing base. But the issue is more complicated than that, and a declaration is not a treaty. All governments and business leaders are to blame for the decline in manufacturing and for the short-sighted decisions that have brought us to this point. The following article is from a US adviser, who says Australia should be exporting finished products rather than raw materials. He says our manufacturers are the "canary in the coal mines".

"With this gas, Australia's fuelled the manufacturing needs of other countries and created thousands and millions of jobs overseas all to the detriment of the domestic manufacturing sector," he said.

"I believe that Australia should have a balanced economy with manufacturing, not on the sidelines, but part of its centre."

He said it should be Australia exporting the finished product, rather than the base product.

Westpac chief economist Bill Evans believes that recent interest rate cuts by the Reserve Bank of Australia (RBA) have been aimed at stimulating non-mining sectors to complement the growth mix when mining slows.

He said the minutes of the RBA's October board meeting released on Tuesday supported an expectation for a further rate reduction in November.

"Ongoing concerns with global risks, recognition that the labour market is softening, and emphasis on the slowdown in mining investment all point to a board which believes there is more work to be done," Mr Evans said.

Wages are being blamed, but as you pointed out above, the decline in manufacturing began decades ago. We should be producing quality products which would be a buffer for us against future financial crises. Why should China become wealthy off our backs?

Westpac's CE is lying. They have been sending thousands of jobs offshore for years and supporting the mining companies. One reason we should be concerned is that the 4 big banks have been investing heavily in mining and the decline is going to show on their bottom line eventually, but it will be passed onto us.

I haven't looked at our trade figures lately, but they've been abysmal for years. It's not sustainable to keep consuming more than we produce, but that's what we're doing.

[Outlaw Yogi]

Couple of generalisations here, but fact all the same.

Paul Keating destroyed one third of Australia's manufacturing base by raising interest rates to 18% during his "recession we had to have". The strategy supposedly was to reduce imports, but in reality many products formerly made in Australia now can only be obtained from over seas.

Then Howard and Vaile signed the AUSFTA which allows foreign companies to set up business here without having to comply with the same rules and regulations Australian businesses do, thus giving an unfair advantage to foreign firms. So naturally many of our manufacturers went offshore. My father's company used to manufacture in OZ, now the product is made in China.

Recently the fed govt was looking into how they can prevent a mining company bringing in foreign workers (150 of on 465 visas I think) but there's nothing they can do, unless we pull out of WTO free trade agreements that Latham rolled over on and Conroy had a pretend inquirery into back in 2004. I knew this would happen sooner or later.

[Outlaw Yogi]

unless we pull out of WTO free trade agreements that Latham rolled over on and Conroy had a pretend inquirery into back in 2004. I knew this would happen sooner or later.

SELF CORRECTION: Pardon my mistake, it was Emerson not Conroy who had the pretend enquirery into AUSFTA in 2004.

[Rorschach]

That's more like it. Not that they both aren't idiots, but Emerson is a first class fool.
Thanks Yogi.