07/09/2011 - 10:34

Gillard’s right on manufacturing

07/09/2011 - 10:34

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Things are pretty tough for Julia Gillard – she’s copping it from both sides of politics at the moment.

IT has not been a happy year for Julia Gillard; nothing seems to be going right. Yet on one issue the prime minister made exactly the right call, only to anger sections of her own party and the union movement.

Support for an inquiry into Australia’s manufacturing industry gained some traction on the east coast when steel manufacturer BlueScope announced it was cutting 1,000 jobs because it was losing export markets, with the high Australian dollar being a key factor.

In an export-oriented nation that’s pretty chilling news for any federal government; and in this case the jobs are being lost in Labor heartland.

The prime minister would have known she was not going to win the Labor popularity stakes when she dismissed suggestions that she had agreed to a manufacturing inquiry during a meeting with industry and union leaders in Canberra. 

She also knew the call for an inquiry was code for some form of increased protection for the manufacturing sector, parts of which are doing it tough in the current climate. But that would reverse the policy to reduce protection kick-started in the early 1970s by the Whitlam Labor government, which introduced a general 25 per cent cut in tariffs.

That strategy has caused plenty of pain, especially in manufacturing states such as Victoria and South Australia. The sector has changed considerably, with leaner operations relying on new technology to remain competitive.

However Ms Gillard was effectively saying that there’s no turning back – Australia’s manufacturers must adapt to the changing climate.

As chilling as it may appear, it is good news for Western Australia, which has very little manufacturing. But local consumers would be paying the higher prices for Australian goods if protection were increased.

Premier Colin Barnett expressed concern in parliament about ‘the wave of protectionism’ going through the Labor Party and parts of the manufacturing sector.

Mr Barnett says the level of local content in resource projects within WA is close to 90 per cent. On offshore projects it has been between 50 and 60 per cent, although he concedes this has slipped in recent times. These are mainly in Commonwealth waters, however, and the premier urged Labor MPs to lobby their federal colleagues for more local participation.

Mr Barnett appears to have had some success jawboning companies such as Chevron to award more local work for its $43 billion LNG plant on Barrow Island.

Chevron says contracts valued at $14 billion have gone to Australian industry. They include a $2 billion deal signed with CBI-Kentz in July, which will create 1,650 jobs. In addition, AGC at Kwinana won a steel fabrication contract worth $50 million, and Civmec at Henderson will supply 10,000 tonnes of structural steel for Barrow Island over the next 18 months, creating 60 jobs.

While Kwinana is concerned about high levels of youth unemployment, Mr Barnett has warned that increased protection could be counterproductive for WA.

He says 132 WA firms are involved in mineral exploration, development and mining services across Africa. One, Ausdrill, not only has most of its 2,000 Australian employees in WA, it also has a workforce of 2,400 in Africa.

“If we were to close the doors, we would cut off the opportunity for exploration, mining and mineral service companies from this state to provide over 75 per cent of all of Australia’s mining investment activity in Africa,” Mr Barnett warned.  

It’s hard to see Ms Gillard’s stocks getting any lower, even though her call on the manufacturing inquiry issue was correct. But with sections of Labor’s left – ironically her own faction – snapping at her heels, she probably welcomes any support, even from a Liberal premier such as Mr Barnett.

MacTiernan for mayor

YOU could almost hear the sighs of relief from both sides of politics when former Labor minister, Alannah MacTiernan, announced that she would run for mayor of the Vincent City Council in the upcoming local government elections. From the Labor side, her decision has almost certainly put paid to any move for a comeback in state politics, despite a significant level of support for her to lead the Labor Party, which has been losing ground in recent opinion polls.

The government would be relieved, as well. Before she quit Harvest Terrace last year to unsuccessfully contest the federal seat of Canning, Ms MacTiernan had proved to be a formidable force on the opposition benches, honing in on the checks and balances linked with the new $1 billion Royalties for Regions bonanza.

So apparently the belief on both sides is that Ms MacTiernan will become immersed in the detail of heading up the inner-city council should she be successful, as she almost certainly will. 

Wrong.

My tip is that the new job will give her a platform to directly take on the government, with issues such as transport and planning likely to provide fertile ground. Ms MacTiernan has always enjoyed locking horns with government heavies such as Colin Barnett, Troy Buswell and Brendon Grylls, and the sparring is likely to resume.

If she does achieve a high profile as mayor, which is virtually assured, it could be at the expense of the opposition. 

That means Labor spokesmen and women will need to be on their mettle to ensure they are not pushed into the background. They will have to lift their game.

The irony is that while Ms MacTiernan is generally popular in the electorate, it is a different story within her own party. 

The first internal issue is that she is a change agent. She wants internal reforms – a bigger say for ordinary members and a reduction in the influence of factions and unions. 

You can see why that approach finds trouble gaining support from the powerbrokers, as membership stagnates.

Another issue, her critics say, is that some of her ideas come from way out of left field.

What is undeniable is that she pushed the Perth-Mandurah railway through on the freeway route, despite some strong opposition.

And many who dealt with her as planning minister said that while they didn’t always agree, decisions on complex matters were actually made, instead of the issues being shelved in the ‘too-hard basket’.

So as mayor, Ms MacTiernan won’t hesitate to take it up to the government, when necessary. The consequence could well be that both ministers and their Labor opposition will be under more pressure. And the new mayor will be able to operate without the constraints that applied when she was a member of the parliamentary Labor Party. 

It promises to be an interesting ride.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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