Mixed reviews for budget manufacturing boost

OPPOSITION industry spokesman Kim Carr has dismissed the $100 million manufacturing package released in the 2017 federal budget as an “unco-ordinated grab bag” of measures that will not help displaced auto workers find new jobs.

But others involved in the industry have praised the move, with the Australian Automotive Aftermarket Association (AAAA) welcoming the funding for automotive innovation laboratories similar to one operating in the United States, volunteering to run one of them.

Labor’s Senator Carr said the $100 million package did not make up for the loss of an entire advanced manufacturing industry.

“The closure of our car making industry is a national tragedy and the responsibility lies firmly with the Abbott/Turnbull government,” he said.

Senator Carr said $47.5 million of the package was a top-up for the underfunded and oversubscribed Growth Centre program in Victoria and South Australia.

In addition, he said, $24 million targeted at research projects represented only one third of the amount stripped away from the Co-operative Research Centre program in an earlier Budget.

“(It) is small compensation for the loss of an entire advanced manufacturing industry,” he said.

“History will show that it was the Liberals who actively precipitated the demise of an entire industry that still employs approximately 50,000 people directly and up to 200,000 people indirectly across Australia.” Senator Carr said the country’s automotive supply chain manufacturers were only having to transition to other industries because the Abbott-Turnbull government drove out the last of the car-makers.

But the AAAA welcomed assistance for the manufacturing sector, partly because the manufacturers who are members of the AAAA were never participants in the various Government car industry plans and never received any of those grants.

The new funds will help businesses upgrade their processes and equipment as well as support research into advanced manufacturing, said AAAA executive director Stuart Charity.

“These new federal government funding initiatives have the potential to considerably increase Australia’s manufacturing range to meet the demands of the ever growing and technologically advanced global automotive aftermarket industry,” he said.

“A sum of $10 million will be used to create two innovation labs, one each in South Australia and Victoria.

“We are very excited that the federal government is interested in our concept of establishing innovation labs in Australia.” Mr Charity said the AAAA had seen the concept at work in the SEMA Garage operation in the US.

“The AAAA first proposed the initiative of creating an automotive innovation lab to both the federal and state governments back in 2014, following our study visit to the highly successful SEMA Garage the United States,” he said.

“On our return to Australia, we gained the support of 25 automotive component manufacturers to fund a feasibility study, the results of which will outline the strongest possible case for some of this new funding to be directed to the establishment of the Australian Automotive Innovation Lab.” There are 260 AAAA member companies making parts, with 160 of those exporting products. Their output is valued at $5.2 billion, they employ 21,000 people and they export goods worth $800 million a year.

“Australia’s innovative and globally competitive automotive component manufacturers and exporters will remain long after the car manufacturing industry departs our shores,” Mr Charity said.

Mr Charity said the creation of the innovation lab would create “enormous growth potential” for AAAA member companies, as long as it was staffed by people with a thorough understanding of the local and global automotive aftermarkets.

“It is important to note that the innovation lab concept is a real-world, highly practical industry-led solution that is backed by detailed studies, the counsel of our own successful AAAA manufacturer member businesses and global automotive aftermarket component demand research.” An innovation lab would significantly reduce design timelines, especially for AAAA members who currently have to go overseas to develop products.

“The AAAA is best positioned to oversee the establishment, operation and success of the Automotive Innovation Lab, which is why we have been discussing this concept with Governments over the past 24 months,” Mr Charity said.

The AAAA’s feasibility study into the innovation lab idea is scheduled to be completed by June. The AAAA will then submit a tender to the government to become a recipient of one of the two innovation lab grants.