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Being the world’s quary is not enough, says Minister for Innovation, Senator Kim Carr


The following opinion piece was today released as a media release from the office of Senator Kim Carr, Minister for Innovation, Industry, Science and Research, first published in The Age Politics, Wednesday 29 September 2010.

There has been much misguided speculation recently about Australia’s mining boom and what it means for the broader national economy and manufacturing.

Some have portrayed the mining sector as an insatiable beast. A beast whose demand for resources, labour and capital must be fed – whatever the consequences for the rest of the economy.

According to this school of thought, the mining sector is so central to our livelihoods that we should sacrifice everything to it. And the beast, in exchange, will carry the nation into a leaner, meaner future. We’ll rip our scarce capital and labour from the so called ‘inefficient’ industries, and somehow thrive as little more than the world’s quarry.

This uni-dimensional, all-or-nothing approach is flawed for a number of reasons.

For starters, let’s put things in perspective. Mining is 8 per cent of GDP and 1.4 per cent of employment. Manufacturing is 10.2 per cent of GDP and 9.2 per cent of employment.

Mining is growing fast, but nothing lasts forever, no matter how welcome it is today. It would be bold and naive to think that the income we currently enjoy from the resources sector will continue unabated. Putting all our eggs into one basket simply doesn’t make sense.

One of the reasons we have weathered the global financial crisis so well is the depth and diversity of our economy. We cannot afford to become so focused on mining – or any one sector – that our economy becomes unbalanced.

Can we really celebrate the concept of a two-speed economy – where some parts of the country are prosperous and other parts are left to wither on the vine?

Do we genuinely believe that the workers and communities we sacrifice will be reborn without cost?

Surely an equitable, prosperous and just society is based on a diverse economic base where innovation, wealth creation and employment occurs across a broad spectrum and is not concentrated in any single sector.

Now is not the time to abandon the diversity that constitutes the very strength and resilience of the Australian economy.

What we need to do is ensure that not just the mining sector – but all sectors of our economy are in tip top shape.

Contrary to the knockers, this does not mean propping up ‘inefficient’ industries, it does not mean interfering with markets, and it certainly does not mean artificially restricting the free flow of resources within the economy.

But it does involve having a vision of what we want the Australian economy to look like in 10, 20 and 30 years time. And it means taking the necessary, but difficult decisions, to make this happen.

This Government has long believed in innovative manufacturing and the inherent value of making things. We cannot fall into the trap of losing our manufacturing skills – because once gone, they are not easily recovered.

Manufacturing is critical to our future. By having a manufacturing sector we avoid simply becoming the world’s quarry, we add value to the resources we mine, we create high-tech and high-wage jobs and we attract the investment in research and development that only comes from having a manufacturing capacity.

Mining and manufacturing are complementary – the ‘either or’ approach does both sectors a disservice and ignores the complex and inter-related nature of our modern economy.

So this is why we are setting about the process of revitalising, and reinvigorating manufacturing in Australia. In our innovation and industry statement Powering Ideas we set out concrete plans and initiatives to invest in innovation and industry and to move our economy, including manufacturing industries, forward.

In essence we believe in a broad-based, resilient and sustainable Australian economy. We believe that the innovation agenda should provide opportunities for all – every region, every community, and every Australian.

This is why we are investing so heavily in universities and science research programs to enhance the productive capacity of our society.

It is why we are introducing a research and development tax credit that will give stronger incentives to innovate to new businesses, and small and medium sized firms.

It is why we have established a national Enterprise Connect network that provides thousands of firms access to the best advice, technology and research.

It is why we created Commercialisation Australia to turn good ideas into viable commercial products.

It is why we are driving innovation and renewal in established industries through the New Car Plan for a Greener Future; and a retargeted $406 million Textiles, Clothing and Footwear package.
There will always be room for mining, manufacturing and all other sectors to participate in and contribute to the national economy.

The great challenge we face is to make sure that all sectors are healthy and productive – contributing to our nation, providing valuable jobs for Australian workers and generating national income that benefits us all.

In the interests of all Australians, this government will continue to work towards meeting that challenge.

Senator Kim Carr is Minister for Innovation, Industry, Science and Research. This piece was first published in The Age Politics, Wednesday 29 September 2010. It is also available on the Media Centre for Senator the Hon. Kim Carr Minister for Innovation, Industry, Science and Research website.