Mirabella’s spectre haunts Australian manufacturing

Australia’s manufacturing sector, already suffering a loss of confidence, would hardly be cheered by the latest half-hearted program furtively introduced by the Abbott Government.

The same hastily cobbled together program was pulled out of the hat by then Shadow Industry Minister Sophie Mirabella shortly before the election.

It was a bad program then. It is still a bad program now.

As the Budget papers reveal, the $50 million ‘Manufacturing Transition Grants Programme’ is only funded for $2.6 million in 2014-15 (Budget Paper No.2 p. 168)

Manufacturing firms have a few short weeks to apply to a program that is embarrassingly undercooked. It is such an insignificant program, it is not even listed on the Australian Government’s Science, Research and Innovation Tables (SRI) for 2014-2015.

As the Australian Industry Group Performance of Manufacturing Index released yesterday shows, manufacturing business confidence is collapsing, with Ai Group Chief Executive Innes Willox concerned that job losses in the sector will continue.

Two months after the repeal of the carbon price, these figures clearly demonstrate that the carbon tax had no impact on the decline in manufacturing activity 

Far more damaging to Australia’s manufacturing sector are cuts to the Abbott Government’s industry co-investment and innovation programs – like Commercialisation Australia, the Innovation and Investment Fund, Enterprise Connect and the R&D Tax Incentive.

The SRI tables show the Abbott Government is cutting almost $400 million in science, research and innovation funding in just one short year, which includes around $340 million cut from programs that encourage business investment in R&D.

The SRI tables also reveal that the number of new firms undertaking R&D through the R&D Tax Incentive in 2011-12 rose by almost 50 per cent under Labor, with a further increase of almost 10 per cent in 2012-13.

This is the very program the Government is proposing to cut, with legislation currently before the Senate to restrict a number of large Australian firms from accessing the incentive.

This comes on top of a $620 million cut to the R&D Tax Incentive in the Budget – yet another measure Australians were not told about before the election.

Recent data released by the Department of Industry shows that firms in the manufacturing sector represent the second largest share of R&D Tax Incentive registrations (33.4 per cent), behind services (47.2 per cent).

Given the current state of Australian manufacturing, cuts to programs that incentivise R&D in our manufacturing sector are just unfathomable.

Labor urgently calls on the Abbott Government to stop destroying confidence in the manufacturing sector. Do this, or risk sending more Australian jobs offshore.

Source: “R&D Tax Incentive continues to attract strong interest


Be the first to comment

Please check your e-mail for a link to activate your account.