Manufacturing Prosperity Conference

Opening

Thank you to Rodin Genoff, Co-Chair of Clusters Asia Pacific and Conference Convenor.

Paul Holloway, South Australian Minister for Trade & Industry; Marilyn Baker, Playford City Mayor, distinguished guests, ladies and gentlemen,

Today's conference on manufacturing prosperity has been badged as a conference for anyone interested in the future of manufacturing.

In a city like Adelaide that has such a strong manufacturing tradition this allows for broad participation.

As a proud South Australian, keen to bring greater opportunities to this community, I am delighted to have been asked to open today's conference.

The conference comes at a time when manufacturing in Australia is facing great challenges - particularly from the tremendous growth of manufacturing capacity in China - but also great opportunities.

The manufacturing sector has been, and remains, a critical part of Australia's economic success story.

It accounts for 11% of our economy. It generates $88 billion in income, and it employs 1.1 million Australians.

While its share of GDP has declined, it has nevertheless grown by 43% in real terms over the last 20 years.

These impressive figures, however, hide a fundamental transformation of the industry over the last 20 to 30 years.

The industry, as a result of massive reduction in tariff protection and increasing competition from abroad, has declined in the more labour intensive and less capital intensive industries - such as textiles clothing and footwear….

….but increased markedly in the more capital intensive and higher value-added industries such as machinery and equipment.

Consequently, while we have seen considerable real growth in the industry, the number of workers in manufacturing is roughly the same as 20 years ago.

Australian manufacturing has also become much more outwardly focused. Manufactured exports have grown by an overage of 10% a year over the last 20 years. They are now worth $35 billion and account for 28 per cent of our total merchandise exports.

Passenger motor vehicle exports, medicines and exports of professional, scientific and controlling instruments have been particularly successful.

But to maintain this position, and to match the successes of the past in the period ahead will require continued transformation and innovation.

Significant challenges lie ahead: the Australian dollar has appreciated, higher resource prices increase the input costs for manufacturers, and there are significantly greater competitive pressures, particularly from the unprecedented manufacturing growth of China and some other newly industrialised countries.

Australian manufacturing will have to continue to develop niche markets, to leverage technological advancements and to integrate themselves into global supply chains.

But although the growth in countries such as China presents challenges, we should not forget that it also provides tremendous opportunities for Australian manufacturers.

The Australian Government will continue to pursue policies that allow manufacturers to take advantage of these opportunities.

We continue to push for the lowering of barriers to Australian exports through multilateral and bilateral free trade agreements.

We will also continue to promote emerging exporters through Austrade and through its significant research investments.

Through the broader economic policies we continue to strive to make the labour market more flexible, to maintain low interest rates and keep tax rates competitive.

Throughout today, you will hear about the competitiveness and future of Australian manufacturing from keynote speakers, including Dr Frank Gelber, Chief Economist at BIS Shrapnel; Damon Cantwell, Partner, Automotive and Manufacturing, Deloitte; and Paul Holloway, State Minister for Trade and Industry. They will be exploring some of the themes that I have briefly touched on.

It will be an exciting conference and I look forward to hearing of the outcomes from it.

Before I finish, I have two additional honours. The first is to formally launch a new $1 million foundation - The SKILLED Trades Foundation - that will promote trade skills and careers for young people looking for a career in the Australian manufacturing industry.

The Foundation has been created by the SKILLED Group and is in honour of SKILLS founder Frank Hargrave AO in recognition of his life long commitment to the development and promotion of technical trades skills for Australian Industry.

This is a terrific initiative…it will be incredibly valuable at a time when we have serious skills shortages in the trades…and I congratulate the SKILLED Group for making this foundation happen.

The second is to announce the formation of a global consortia called Beyond Automation that will be based right here in Adelaide.

This consortia of 6 companies from Malaysia, Germany and Australia, will establish a new company that can provide global turn-key solutions to high technology manufacturing companies.

In simple terms, this means it will be able to design and build a factory anywhere in the world, or take an existing production facility and turn it into a global state of the art manufacturer of the future.

This consortia has partly come about from the support of the Australian Government through Invest Australia.

Congratulations to the Priority Engineering Services, Adelaide Laser and the four international companies involved in the consortia.

All of these companies are represented here today and I understand that they will officially sign the consortia agreement today to create one of the world's newest, clever technology, and automation companies.

This is a great example of the future of manufacturing and I wish you great success.

Thank you.

ENDS