Federal Politics

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$1b plan to boost local suppliers

New laws will be introduced to support Australia's manufacturing industry as part of a $1 billion federal government package announced Sunday.

The government's A Plan for Australian Jobs aims to shore up local jobs and tap into a bigger slice of the resources pie while making a concerted play for the growing Asian market.

The plan is the government's long-awaited response to the manufacturing taskforce and is predicted to be worth $1.6 billion a year in extra work to local business.

It has been backed by the manufacturing union and key industry players.

A key plank is an Australian Jobs Act that requires projects worth more than $500 million to include an Australian Industry Participation plan, levelling the playing field for local suppliers.

The government will also spend $500 million on 10 new Industry Innovation Precincts by 2014, one of which will be based in south-east Melbourne.


Launching the plan at Boeing's Fishermans Bend plant on Sunday, Prime Minister Julia Gillard said it was essential to stop manufacturing and jobs being forced offshore by the cripplingly high Australian dollar.

“I believe modern Australia can have a great blue-collar future. By that I mean that we can continue to be a manufacturing nation, we can be a nation in which people make their living through blue-collar jobs – blue-collar jobs that aren't intermittent or insecure or poorly paid, blue-collar jobs that are highly skilled and highly paid.”

Ms Gillard also pressed the need for Australia to tap into the rapid growth of Asia's burgeoning middle class, expected to number three billion by 2030.

“We are in the right place of the world to sell things to the booming Asian region.

“We are living in a region of huge growth and change, we need to be supporting our businesses as they seize those exports and seek to grow.”

Victoria's manufacturing sector is worth $28 billion a year to the state economy and employs more than 310,000 people.

With jobs a key focus of Labor's re-election strategy, the government is keen to keep unions onside without riling big business.

A manufacturing leaders' group will be chaired by Boeing Australia and South Pacific president Ian Thomas to provide advice about manufacturing industry policy.

Mr Thomas said a focus on innovation is crucial in keeping the manufacturing sector afloat.

“Australia obviously has a great manufacturing heritage and I think this will really set us on the path to ensuring a very strong manufacturing future.”

Industry & Innovation minister Greg Combet said Australia has a significant pipeline of private sector investment, but sectors such as manufacturing are being squeezed by the unfavourable exchange rate.

To fund the $1 billion package the government will remove the R&D Tax Incentive for a group of about 15 companies with annual Australian turnovers of $20 billion or more.

Australian Manufacturing Workers Union national secretary Paul Bastian said the most promising part of the plan was the prospect of tapping into the wealth generated by the resources sector.

“There are lots of projects in Australia, so lowering the threshold to $500 million is a major change. Every billion dollars we drag out of the resource sector, into local content, into our factory floors, sustains or creates 10,000 jobs in this country.”

Mr Bastian said the plan marks a clear line between the Labor Party and the Coalition.

“For us this election is a referendum on jobs. You only have to contrast this package with what we see from the Opposition. It's time for Tony Abbott to stop saying no. It's time for Tony Abbott to say yes to the future of manufacturing in this country, yes to Australian jobs and yes to this package.”