May 30th 2020

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Articles from this issue:

COVER STORY Why success has eluded our automotive industry

EDITORIAL Will survival instincts drive new industry policies?

CANBERRA OBSERVED What's China's beef with our barley?

MANUFACTURING Reversing a bad trend

PUBLIC HEALTH Inquiries needed into major covid19 outbreaks

NATIONAL AFFAIRS ABS makes employment figures bend over backwards

NATIONAL AFFAIRS Green 'charities' continue to undermine development

NATIONAL AFFAIRS Royal commission denies Principle of fairness to Cardinal Pell

REFLECTION Woman is ... the answer to a question

ECONOMICS Breaking the shackles of deep globalisation

TRADE AND INDUSTRY Alarm bell is ringing loud on China's trade threats

ASIAN AFFAIRS Taiwan an island of sanity in a sea of contagion

COVID19 LOCKDOWN Should churches be the first to reopen?

HUMOUR Troubling sino-signs at batflu press conference

MUSIC Let's be thankful for small mercies: No Eurovision!

CINEMA Onward: Recovering the everyday magic




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Will survival instincts drive new industry policies?

by Patrick J. Byrne

News Weekly, May 30, 2020

A perfect economic storm on a scale not seen since the 1930s has been created by the covid19 economic crisis, China asserting its power across the region and problems resulting from four decades of deep globalisation.

The political lesson of the 1930s is that, when unemployment numbers mount, federal and state governments that fail promptly to deliver policies to grow new industries face certain electoral defeat.

Australians now want real effective policies, not political talk.

They want new industries as the country comes out of the crisis, partly because global supply chains are likely to be disrupted well into the future, partly to “firewall” Australia strategically from Beijing’s expanding influence, and particularly to deliver well-paid, reliable jobs for many workers whose old jobs will not return.

The Federal Government has made one promising move by appointing Andrew Liveris, who headed U.S. President Donald Trump’s American Manufacturing Council, as one of eight members of the National Covid19 Coordination Commission. The Commission is headed by Neville Power, former managing director and chief executive of Fortescue Metals.

A graduate in chemical engineering from the University of Queensland, Liveris is former executive chairman of the now merged DowDuPont and sits on the board of directors of IBM, Worley Parsons and Saudi Aramco, on the advisory board of Sumitomo Mitsui Banking Corporation and NEOM.

After his appointment, Liveris was immediately outspoken about the need to build or rebuild key strategic industries.

He told The Australian (March 29 and April 7) that the crisis was a wake-up call about the dangers of Australia putting all its eggs in the China basket. Given that policymakers and businesses are bracing for a dramatic downturn, he said that the manufacturing task force is important for revitalising industries.

Liveris has suggested some important industries that Australia has the potential to develop.

First, clearly Australia needs to be more self-sufficient in producing health-care equipment.

Second, Australia has the food products and expertise in paper and plastics packaging to “become the No. 1 packaged food exporter in the world,” capable of competing with Switzerland, France, the United States and Japan.

Third, a more efficient Australian-owned coastal shipping service to compete with road transport.

Fourth, given our abundance of raw materials, a petrochemicals industry, which is a big multiplier into the economy, should be a “no-brainer”, Liveris says.

Fifth, critical for developing new industries will be low-cost energy. To that end he says that an east-coast gas pipeline network is needed to supply the nation’s abundant natural for gas industry. A proportion of Australia’s gas production should be reserved for domestic use, as is mandated in the U.S.

It is important to have “energy input costs which are comparable with other energy-competitive nations”, Liveris said. This would encourage back to Australia some of those industries driven offshore because of rising energy costs.

“Natural gas can be our silver bullet. We have an abundance of gas. We can have gas storage and generation and transmission. We could put together a plan within minutes and execute it in a few months and get more gas supply in a year,” Liveris said.

Sixth, he says that Australia needs a national apprenticeship scheme like the one operating in Germany. It needs to equip people not just for plumbing, carpentry and electrical trades, but for modern “digital trades” in robotics, automated process control systems and artificial intelligence.

In the short term, the covid19 crisis will almost certainly slash economic growth. At the same time, this crisis is an opportunity to envisage a more sensible, less intrusive model of globalisation that allows nations like Australia to strengthen their strategic industries and rebuild the long-suffering and shrinking middle class.

A strong middle class provides a stable consumer base that drives productive investment and long-term economic growth. It is necessary for robust entrepreneurship and innovation, provides a stable economic base for families, and creates a property-owning democracy that encourages civic engagement.

After the long absence of industry policy from the economic policy toolkit of Australian governments, it will take organised industry groups to tell government how new industries can be built and what support policies they need governments to deliver.

If that happens, political survival instincts will drive the necessary changes.

Patrick J. Byrne is national president of the National Civic Council.

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