Letter to the editor: Good plan but no land
This letter was sent to national and Victorian media
Prime Minister Scott Morrison’s promise of $1.5 billion to grow innovative manufacturing is welcome news nationally, in lockdown-blighted Victoria and in my patch – the municipality of Frankston in southeast Melbourne.
We have just 31 local jobs per 100 residents and high youth unemployment, but our biggest industrial precinct at Carrum Downs has been a huge success story and has created job growth 13 times higher than the regional average. It employs 8600 people and produces $3.65 billion in annual economic activity – one-third of Frankston’s economy.
But there’s a catch: the precinct is full. The last land sold this year and the local council steadfastly refuses to find more land for industry.
Carrum Downs has world-leading manufacturers in three of the PM’s six priority areas – medical products, recycling, and food and beverage. For example, Nutech produces a germ retardant paint, Replas creates products from recycled plastic, Remedy Kombucha makes a wildly successful, sugar-free health drink, and Roma Foods’ Orgran brand exports vegan products to 75 countries including gluten-free pasta to Italy.
We want our IP-rich companies to be able to expand, to make things here, not be given a ticket out of Frankston, or even Victoria, with all its attendant negative consequences.
Ginevra Hosking, CEO Committee for Greater Frankston
1 October 2020
This letter was sent to local media
Prime Minister Scott Morrison’s promise of $1.5 billion to grow innovative manufacturing as part of pandemic recovery is welcome news nationally, in locked down Melbourne and in Frankston.
Frankston municipality has just 31 local jobs per 100 residents and high youth unemployment, but our biggest industrial precinct at Carrum Downs has been a huge success. Businesses in the precinct have created job growth 13 times higher than the southeast average. They employ 8600 people and produce $3.65 billion in annual economic activity – one-third of the municipality’s economy, more important economically than Frankston’s CBD.
But there’s a catch – the precinct is full. The last industrial zone land sold this year and Frankston Council steadfastly refuses to find more for industry despite advocacy by business owners, employees and job placement agencies. Hopefully, the new council will have a more enlightened attitude to job creation.
Carrum Downs has world-leading manufacturers in three of the Prime Minister’s six priority areas – medical products, recycling and clean energy, and food and beverage. For example, Nutech Paint produces a germ retardant paint, Replas has made products from recycled plastic since 1991, Remedy Kombucha makes a wildly successful, sugar-free health drink, and Roma Foods’ Orgran brand exports vegan products to 75 countries including gluten-free pasta to Italy.
We’ve already lost businesses wanting to stay due to lack of industrial land. Frankston Concrete Products moved to Dandenong South and recycler Sims Metal went to Noble Park (both lost premises to Kananook train stabling). The federal government’s multi-year manufacturing strategy won’t benefit new businesses in Frankston because there’s no room for them.
We want our IP-rich companies to be able to expand, “to make things here”, as the Prime Minister said, not be given a one-way ticket out of Frankston, or even Victoria, with all its attendant negative consequences.
Ginevra Hosking CEO Committee for Greater Frankston
$1.5b to turbocharge manufacturing
VICTORIAN medical, food and beverage businesses will become world leaders in a $1.5bn budget plan to kickstart the nation’s manufacturing sector and create 300,000 jobs.
Scott Morrison’s spending blitz aims to unleash a new era of manufacturing supremacy, turbocharging businesses to invent new products, scale up and swarm global markets.
Grants worth up to $80m will be pumped into six priority areas where Australia has a competitive advantage: medical, defence, recycling and clean energy, food and beverage, space, and resources and minerals. Victoria’s expertise in the food and beverage and medical sectors puts it at the forefront, with regional manufacturing hubs in Ballarat, Bendigo and Shepparton to set an example. “We make things in Australia. We do it well. We need to keep making things … and with this strategy, we will,” the Prime Minister will say on Thursday.
The six priority sectors to receive the new funding will be resources technology and critical minerals processing; food and beverage manufacturing; medical products; clean energy and recycling; defence; and space.
‘We make things in Australia’: PM’s plan to boost manufacturing
Industry will be promised $1.5 billion to sustain local manufacturing as part of a budget plan that aims to secure a “sovereign capability” in six priority areas ranging from food to medicine and clean energy.
Prime Minister Scott Morrison will name the target industries in a major speech on Thursday that sets out ambitions to build global scale in each sector, with the promise of public funding to lure big investors. “We make things in Australia. We do it well. We need to keep making things in Australia. And with this strategy, we will,” Mr Morrison says in a draft of the speech.
Five days out from the federal budget, the Prime Minister will use the speech to signal flagship measures to cut tax, build new infrastructure, fund more skills development and “rebuild the economy” from the recession. Mining giant BHP Billiton will back the government message by announcing an $800 million outlay on skills, engineering and technology on Thursday, saying this would include at least 2500 more apprentices and trainees.
The government estimates its manufacturing plan could create 80,000 direct jobs and about 300,000 more indirect jobs by helping companies modernise their factories and ramp up exports. The six priority sectors to receive the new funding will be resources technology and critical minerals processing; food and beverage manufacturing; medical products; clean energy and recycling; defence; and space.
“The reality is we cannot and should not seek to reach global scale in a large number of sectors,” Mr Morrison says in a draft of the speech to the National Press Club. “Don’t try to do everything. It’s all about alignment, across different levels of government, with industry and with the research and education sectors.”
Industry Minister Karen Andrews has talked of expanding food exports, for instance, so Australia adds value to its farm produce, and to produce batteries that add value to the country’s rare earths and other raw materials.
The $1.5 billion is new money to be spent over four years on three components including a Manufacturing Modernisation Fund, which will offer $52.8 million in grants to local companies within three months.
The grants will only be offered to companies in the six priority areas and will be conditional on industry committing $3 for every $1 in public funds, with the new money adding to an initial round of funding last April. The government estimated the last funding round would create 2600 jobs and the next round could do the same. Companies can apply for amounts between $100,000 and $1 million. The second component will be a $107.2 million Supply Chain Resilience Initiative to identify areas where Australia needs a domestic capability for emergencies, a problem exposed in medical products during the pandemic.
The third and largest component will be a $1.3 billion Modern Manufacturing Initiative, which will open in the first half of next year to offer grants for major projects. In the same way the government allocated $150 million last year to support Australian space companies work with NASA, the new fund is meant to attract big investors from overseas and build “economies of scale” in local production.
Labor industry spokesman Brendan O’Connor has dismissed the government’s talk so far of a new plan for manufacturing, pointing to the closure of car-making as one of the failures of the Coalition’s time in power since 2013. “They’ve spent seven years attacking and undermining Australian manufacturing and now they want Australians to believe they support manufacturing – what a waste of years of economic growth and taxpayers’ money,” Mr O’Connor said on Monday.
The government estimates manufacturing employed 860,000 workers and generated about $50 billion in exports before the pandemic.
One day after Labor leader Anthony Albanese accused the Prime Minister of dodging responsibility for the “Morrison recession” and being too slow to help those in need, Mr Morrison will promise a budget that can “cushion the blow” of the pandemic. The government’s argument is that other countries have been hit much harder and that 700,000 more jobs would have been lost in Australia were it not for federal stimulus measures.
In a signal that income tax cuts are likely to be brought forward in the budget, Mr Morrison will point to the governmnent’s record in reducing taxes. “Australians are keeping more of what they earn, as promised. And there will be more,” he says.
Under the BHP plan to be announced on Thursday, the mining giant will spend $300 million over five years on 2,500 new apprenticeships, and $450 million to source more local products and services in Australian mining and technology businesses. “Providing apprenticeships, skills and training opportunities for Australians of all ages and all walks of life, particularly in our regional communities, is a commitment we can make to help Australia bounce back,” BHP chief executive Mike Henry said.