One on One: Jeremy Rockliff

AMT: Firstly, what’s the current situation for manufacturing in Tasmania and what are the big trends affecting the sector?

Jeremy Rockliff: Well our economy’s very diversified – we’ve got mining, forestry, agriculture, horticulture, aquaculture – and advanced manufacturing plays a key role in all of those industries, particularly aquaculture, which is expanding, agriculture and food production. But also we’ve developed a reputation with Elphinstone and Caterpillar for developing high-quality, world-class heavy machinery and mining equipment. So I guess our diversity is our strength in terms of our economy in Australia. Of course one of our disadvantages is scale, but in the last 12 months we’ve recognised the fact that advanced manufacturing is a key component of our economy and an important one, following on from a summit that we held in May 2015.

The Tasmanian Advanced Manufacturing Summit was held following Caterpillar’s decision to centralise its operations at its Rayong facility in Thailand, which saw 280 direct jobs taken out of our manufacturing heartland around the city of Burnie in the north-west. Of course it also affected a lot of satellite businesses that in many respects were direct suppliers of high-quality components in the advanced manufacturing space to Caterpillar. What we realised was a lot of those high-quality, skilled businesses had too much exposure to Caterpillar, and the decision to centralise operations did impact on those businesses as well. So from the Advanced Manufacturing Summit we developed an Advanced Manufacturing Plan for the state, which encompasses the key areas that we’re going to focus on in the advanced manufacturing space over the next couple of years.

We also took some key suppliers of Caterpillar to Rayong to get an appreciation of whether some of those businesses could continue that relationship, and that was very responsive. But we’ve also invited a lot of businesses and people to Tasmania to see exactly what our capability is in terms of the advanced manufacturing space. The feedback had been overwhelmingly positive, and indeed some people have been surprised at the level of expertise in terms of the businesses and most particularly the skilled employees we have in Tasmania in the advanced manufacturing space, which is pleasing, but also a message to us that we have to develop our workforce skills, and then in fact increase them if we’re going to maintain a competitive advanced manufacturing industry in Tasmania.

 

AMT: The case of Caterpillar has a lot of parallels with the closure of automotive manufacturing in Victoria and South Australia, and its knock-on effect through the supply chain there.

JR: Well, it was a huge blow. Burnie is renowned as the industrial heartland of Tasmania in many respects, and it did make a dent in confidence. People thought that those 280 job losses plus the flow-on effects to those supply businesses would have a big impact, and initially that impact was felt. But we set up a Caterpillar Transition Taskforce, which I chaired, and the State Government provided some investment for that, including grants to advanced manufacturing businesses that had viable propositions to put forward, that would employ people for the longer term. And that was largely successful – some 150 jobs were created out of that process, some employees were retained by Caterpillar within the region.

So in terms of the impact initially, it was hard-felt, but also I believe an opportunity to diversify our advanced manufacturing base, but also to recognise the fact that we do have some very skilled businesses and employees in Tasmania, which we need to celebrate more and advertise what our capabilities are. We’ve made a lot of effort to promote our advanced manufacturing capability, and moving forward we’re focusing on some key areas where we want to build our capability as well, such as maritime, resources. A key focus is defence. With 2.2% of Australia’s population, we only have 0.03% of defence contracts, and we’re working very hard in that space. Antarctic is another area where we have a lot of experience as a state.

 

AMT: What are the biggest challenges companies there are facing?

JR: One of the big challenges is still that supply chain dependency. Some of the smaller manufacturers have a reliance on larger manufacturers, where decisions such as the one Caterpillar has made does have an impact more broadly than just the direct job losses. But there’s been a realisation since that time among those smaller businesses that they do need to diversify. They’re good at what they do. What other opportunities lie out there in other sectors that they could produce high-quality parts or components for, so they can spread their risk more effectively? Part of the Advanced Manufacturing Plan is to assist with that.

We’ve also got to be really vigilant to the fact that we’ve got to maintain a very skilled workforce as well. This is where our public training provider TasTAFE is very important but also our private providers, encouraging people into the industry firstly but also making sure that businesses receive the highest-quality training possible. Maintaining those workforce skills will be a challenge as well.

 

AMT: And are the greatest strengths of Tasmanian manufacturing?

JR: I think the strength of the sector is the fact that, in terms of the overall importance of advanced manufacturing to the state, Tasmania is a very diversified economy, but also resource-based industries are very important to Tasmania, which require machinery, either on the water with aquaculture, or in the mines, out in the forests, or in food production. So that diversified economy assists the advanced manufacturing.

Another strength is that our advanced manufacturing businesses have come together in the last two years and recognised that they need a voice as well. So it’s a far more united sector than it used to be, that is working together, less fragmented, and has a real focus on promoting Tasmania as a whole in terms of its advanced manufacturing capability. We had 160 industry representatives at the Advanced Manufacturing Summit in 2015, and as a result of that, an advanced manufacturing industry group was formed. They’ve actually set up an advanced manufacturing centre of excellence in Burnie. It’s a far more united and focused group.

Our Buy Local policy is working well for the sector in terms of ensuring that local businesses get the best opportunities possible in terms of tendered work from the Government. Just recently, Southern Prospect, based just outside Burnie, won the tender for 100 metro buses.

 

AMT: We hear a lot how Australian manufacturers need to get into export markets and global supply chains, but the tyranny of distance is often an impediment. For Tasmania that obstacle is even greater, so how can it be overcome?

JR: All Tasmanian exporters face this challenge, and I think 90% of what we produce in Tasmania is exported, and increasingly we’ve become well known for producing high-quality product. Everything we do – whether it be food, or technology, or advanced manufactured components – has to be at the absolute premium in quality, so that those purchasing our product know that it’s the highest quality in the world, and therefore that if there’s a price premium associated with it, that premium’s well and truly worth it. That’s the space we’ll always have to be in given our challenges with distance but also scale as well, in terms of economies of scale.

 

AMT: What sort of policy initiatives is the Tasmanian state government engaged in to support local manufacturing?

JR: Well, we’ve brought together industry representatives, as I said earlier – the industry’s far more united now, and we’re supporting that industry group financially. Our Buy Local policy is supporting our advanced manufacturing base as well, ensuring local businesses get the best possible opportunity of government tenders and those types of things.

The Caterpillar Transition Taskforce was a good example of where the Government provided grants to businesses that we innovative in the sector, could demonstrate longevity, and could demonstrate that any grant received was going to go into innovative projects that could employ people.

Also, there’s investing in promoting the sector, with the promotional materials that we’ve produced telling the world about our very strong capability here in Tasmania, and being active in that space. And we have a very clear strategy in place in terms of our Advanced Manufacturing Plan.

 

AMT: What would you like to see from Federal Government to help the industry in Tasmania?

JR: The Federal Government does have a key role to play here, and we’d like to see the Federal Government become very highly attuned to the capabilities we have in place here in Tasmania. It’s of benefit to the Federal Government to get a true understanding of what we do have to offer in terms of our businesses and the level of skills we have got – and we can clearly demonstrate that. I guess from that point of view as well, a very robust vocational education and training sector is very important, which the Federal Government has some responsibility for.

Again it’s in their interest to better understand our capability here, and that’s the Tasmanian Government’s job to ensure that we’re actively in the face of Federal Government demonstrating that we do have capability when it comes to defence, for example. We do punch above our weight, we do deserve more of that defence spend. And we have the capability.

 

AMT: Tell us about your professional background and how you wound up in your current role?

JR: I’m a farmer by trade. I operated a family farm when I came back from agricultural college in New Zealand, where I spent a couple of years. I was farming for 12 years, and I still live on the farm – my wife and father run the farm at the moment but obviously I maintain a keen interest in it. I was elected to Parliament when I was 32; this is my 15th year in Parliament.

I obviously have a keen industry focus through agriculture, and through agriculture an appreciation of research, development & extension, innovation, technology, how far machinery on farms has come in terms of its capability, which can assist in all sorts of areas, not only making operations more efficient but also soil conservation and those types of things.

Although I’m a farmer by trade, my path to politics is reasonably varied, in terms of advocacy for farming and rural life and regional areas. I also had a background in drug and alcohol areas; I was a Lifeline telephone counsellor for a number of years. So a number of paths brought me to politics.

 

AMT: What might an ordinary day in your job entail? You’ve got a pretty diverse portfolio.

JR: Yes, I’ve got Education & Training, Primary Industries & Water, and Racing, so my day is varied. From visiting schools, training, TAFE… visiting all those sites, getting in there and having a good look at what’s happening. We’ve got a lot of investment in water development in Tasmania in recent years; between 2008 and 2018 we’ll probably see a billion dollars of investment in water infrastructure, which is extraordinary for our small population size. So again it’s diversifying our economy, getting water in non-traditional areas and increasing our agricultural capability, which of course then creates demand for more machinery.

But in my role as Deputy Premier and Member for Braddon, when the Caterpillar announcement happened, my involvement in the Caterpillar Transition Taskforce was a real eye-opener for me. Having taken a dozen businesses away to Thailand with me on a trade mission, and visiting all those businesses within the advanced manufacturing space, I got a real appreciation of our capability here in Tasmania, and I place a much higher value on advanced manufacturing than I once did, because I simply didn’t have the intimate knowledge of what our capabilities are. We’ve got some very skilled people down here, and I was just blown away when I got the opportunity to take a far more active interest in what we’ve got here in Tasmania. I was pleased to have that opportunity, albeit an opportunity that came from less than favourable circumstances.

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