In the 1970s the Federal Government backed the building of a coal fired power station in Gladstone that would power a new aluminium smelter at Boyne Island. Even the Labor leader at the time, Gough Whitlam, backed the plan telling Parliament that “power was the determining factor in the development of natural resources in the area and the attraction of greater human resources to the area.”
That decision has created thousands of jobs in Central Queensland and expanded Australia’s industrial strength. We are a significant producer of aluminium and the world’s largest exporter of bauxite and alumina – the products that are converted into aluminium.
The last decade, however, has seen a decline in our capacity to convert raw materials into finished goods. Since 2007, our production of bauxite has increased by more than 50 per cent, yet our aluminium production has fallen by 20 per cent.
We are exporting more raw materials to the world but less manufactured goods.
The decline in aluminium production is reflected in the decline of our broader industrial production. In 2020 Australia produced fewer manufactured goods than we did in 2010. That is the first time on record that our industrial production has fallen over a decade.
Late last year we hit a new low of Australians employed in manufacturing at fewer than 850,000 people.
To reverse this decline we need a frank discussion about why we are in this mess and what we must do to restore Australia’s industrial strength. Too often politicians give glib answers to these questions like there will be lots of jobs in renewables, or hydrogen is on the way to save us all. These don’t tackle the real problems afflicting Australian manufacturing.
The Nationals Backbench Policy Committee – that I Chair in Canberra – has developed a 9 point plan to double jobs in Australian manufacturing.
We are producing less because our power prices have skyrocketed and some foreign countries are giving huge subsidies to their industries in contravention of international trade rules.
We used to have some of the cheaper power prices in the world but now our prices are the 5th highest in the developed world.
Since China joined the WTO in 2001 it has blatantly subsidised domestic production. Some studies estimate that 80 per cent of the profits of Chinese steel firms’ come from government subsidies.
So to restore our manufacturing strength the Nationals Backbench committee proposes to deal with these two fundamental problems.
We should get back to building the cheapest most reliable power around, which for us is coal fired power. Why should we send our high-quality product overseas for them to make the stuff we buy back in Big W and Kmart?
We should protect our own industries and jobs when they are on the receiving end of unfair competition. If other countries subsidise their steel production we should respond with our own protective measures to protect Australian jobs.
The Nationals Committee also proposes to make those building government funded projects to use more Australian content, to expand our efforts to open up new markets, to provide tax incentives and low cost finance for manufacturing investments in regional areas and to improve training for manufacturing skills.
We also believe that we should establish Offices of Regional Manufacturing in Gladstone and Newcastle so that we build on Australia’s proud history of making stuff in regional towns.
The aluminium investments in Gladstone in the 1970s were the result of governments forcing companies that mined our bauxite to also invest in facilities that could process that bauxite into higher valued products. There was no similar attempt to force gas producers to use some of the gas in Australia when the large LNG investments came to Gladstone in the 2010s.
That was a mistake. We need to return to a focus on making things again. That is how we will ensure that our country has the strength to withstand the more threatening environment in our region and provide high paying jobs for young Australians.
