Taskforce calls for more manufacturing-related research, sovereign wealth fund

The prime minister’s manufacturing taskforce calls for researchers, research agencies and business to work together to encourage innovation. AAP

The Prime Minister’s Taskforce on Manufacturing has made 41 recommendations to address the major challenges facing Australia’s manufacturing sector, including diverting funds into manufacturing-related research, the investigation of a sovereign wealth fund, business tax cuts, and an increase in infrastructure investment.

The taskforce has argued manufacturing is an important part of the Australian economy, but faces significant challenges including the high Australian dollar, the strength of the resources boom, and increased competition from China.

“If we lose manufacturing we risk losing the vital skills that Australia needs to build our future,” said Ai Group chief executive and taskforce member Innes Wilcox.

“Once we lose those skills we risk never getting them back.”

The report’s authors also warned of the need to assist the manufacturing industry before the mining boom comes to an end.

“When the mining boom ends, and in fact well before that, when the construction phase ends and the resource requirements fall back, we cannot afford to face a vacuum that takes ten or twenty years to fill,” the report’s authors wrote.

Taskforce member and ACTU secretary Dave Oliver agreed.

“We can’t just rely on the mining boom, because the mining boom will eventually bust,” Mr Oliver said.

Minister for Industry & Innovation Greg Combet highlighted the importance of the taskforce’s recommendations related to the dissemination and application of knowledge.

“This calls for researchers, research agencies and business to rethink how they can best work together to encourage innovation.,” Minister Combet said in a statement.

UTS Business School dean, and taskforce member, Roy Green said it’s critical that the university sector gets involved in the exercise, taking advantage of the innovation hubs, or “smart precincts” recommended by the taskforce.

The taskforce has recommended the expansion of the Enterprise Connect program, and the development of management and innovation capability at workplace level via “smarter workplaces”.

“There’s a recognition that we are good at doing start-up activity, but not so much at expanding small to medium enterprises and repositioning them higher up the value chain,” Professor Green said.

Professor Green also highlighted the acknowledgement that Australia will be operating in a high-cost environment for some time, particularly with the high Australian dollar.

However Mr Combet said the government did not support the recommendation for further investigation of a sovereign wealth fund, something that is seen as one way to help ring-fence the Australian dollar from the effects of the mining boom.

Professor Green said Norway was one example of a resource-based economy using a sovereign wealth fund to quarantine the exchange rate, but that the taskforce’s other policy proposals were valid irrespective of where the currency sits.

“And if the currency remains high then all the more reason for adopting the policies we’ve set out.”