One on One - Melinda Cilento

AMT: Tell us about CEDA and what its aims and objectives are as an organisation.

Melinda Cilento: CEDA has been around for about 60 years now. We are a member-based organisation; we’re passionately committed to advancing good public policy debates in Australia with a view to driving better policy outcomes that support social and economic development in Australia.

 

AMT: What areas of policy are you seeking to influence?

MC: I’m relatively new to the role. For me, the priority this year is to actually take a bit of a step back from the agenda that we’ve had in recent years and reaffirm our purpose by exploring the whole concept of economic development. It’s a phrase we use in our title, but when you think about a country that’s now grown consistently for 27 years, and we are an advanced developed economy, I think it’s time to circle back to the concept of economic development and have a conversation about what that actually means, what we think that means for the future, and then to think about what the key policy issues are that underpin that.

So we’ve got a piece of work coming out in the very near term that’s going to look at the issue of inequality which is something people have been talking a lot about. And I think that leads to the broader question about what is the purpose of economic development. We’re going to do some attitudinal work – looking at exploring community attitudes about economic development and policy priorities. Then we’re going to look at releasing some research that really unpicks the concept of economic development and what that means for Australia now. What does it mean for business, what does it mean for the community, and what sort of agenda is required to support 21^st century economic development?

 

AMT: Can you go into a bit more detail about what sort of programs and activities you run for members?

MC: One of the key things that we do is run events. In fact when you join the organisation one of the things that first strikes you is just how much activity there is around the events and the huge appetite for and interest in CEDA events. We literally run hundreds of events a year around the country. And those events aim to inform people about some of the key issues facing our economy and society, and to give people an opportunity to engage in those issues, and for constructive public conversations to be held around those issues without it becoming too contested, if I can put it that way. This is a really important aspect of our agenda and work.

Of course we also undertake our own research, and we release a number of publications each year which seek to steer public debate and raise awareness around issues that we think are particularly important at that point in time for the future of Australia.

Those are two of the main things that we do. We’ve also got a leadership program – the Copland Leadership Program – that we run. So there are a lot of different ways we connect with our members and with the wider community.

 

AMT: How much of your work focuses on the manufacturing industry and companies in that area?

MC: We did some research in 2014 that looked specifically at advanced manufacturing. However, I think a lot of the work that we do, the broader policy agenda that we address, has relevance to all sectors and particularly those sectors that are at the forefront of competing in global marketplaces. So everything, from looking at taxation policy to budget settings, has relevance to the manufacturing sector.

 

AMT: We often hear that a well-developed manufacturing sector is a vital component in having an advanced economy. What’s your view on that?

MC: I think having a diverse economic base is a really important factor to economic resilience. In some ways we’ve seen that the diversity of our economy, particularly relative to other economies in the world, has helped us see our way through some of the big global challenges that hit other countries hard. If you rely very heavily on one sector, when it turns down you feel the ripple effects throughout the rest of the economy. So a diverse economy that’s able to engage across many markets and sectors is fundamental I think, and it’s fundamental to creating the employment opportunities that we need.

The interesting thing about manufacturing in this country is that I think it’s almost a glass-half-empty conversation. We tend to talk so much about the demise of manufacturing sectors – the car industry and the like – and I think in a way it almost risks casting a negative tone, when what I think we need to do is actually embrace the fact that we do have a vibrant manufacturing sector. We do have an emerging, growing, thriving advanced manufacturing sector. And we need to be focussing more on that, and showcasing that we are able to do these things well and we are able to compete. We need to focus a bit more on what we’re able to do rather than sectors which I think a lot of countries have demonstrably failed to compete effectively in.

 

AMT: What would you say are the strengths which the industry in Australia can bring that we can capitalise on in a global market?

MC: Well if I take a step back and look at what other people sing our praises for, I think we’ve got a fantastic education system; we produce high-quality graduates. When I go overseas and people talk about Australia and they talk about Australians working overseas, the things they talk about are the skills, the adaptability of the workforce and the workers, the innovative approach that Australians tend to bring, and again I think we tend not to sing our praises on that, but they’re all tremendous strengths.

We’ve got sectors that I think we can build upon.  To do that we need to focus on our strengths and success. One of the things we tend to do, even in areas we do well, is to simply define our strengths in a really narrow way. For example, in the resources sector we say: “We rip things out of the ground and sell them overseas.” Well, actually if you’re involved in LNG, it’s a bit more complex than that and there’s a tremendous application of technology and innovation in those businesses as they evolve to be cost-competitive and the like. So again I think there’s a simplistic narrative that we use around our economy, which doesn’t do it justice.

 

AMT: What do you see as the biggest challenges facing manufacturing in Australia?

MC: I think obviously if you look at the nature of the Australian economy and Australia’s place in the world geographically, we’re a big country with long distances between markets. Obviously making sure that we are making the right investments in infrastructure is fundamental. Transport infrastructure is really fundamental, making sure that those businesses can connect across the country but also connect into global marketplaces. I think that’s a real challenge and we need to be really alert to that.

If we’re going to be looking at inserting ourselves into global supply chains, how we do that, how we connect into new opportunities around the world, how we make sure that we’ve got our finger on the pulse of what’s happening and vice-versa, I think they’re really big challenges for Australia. And I think there’s a risk that people assume that information and communication technologies immediately reduce or remove that challenge, and in fact I don’t think that’s the case. We can’t be complacent about our need to be connected to the rest of the world and the different ways we need to do that.

 

AMT: What measures do you think Government should be adopting to support industry in overcoming those challenges?

MC: I think we need to continue to be focussed on making sure the education system is producing the skills and quality outcomes that we need and I think infrastructure is absolutely fundamental. Government also needs to be thinking about how we connect to the world and remain open to the world.

CEDA actually did a piece of research toward the end of last year on Australia’s place in the world. We looked at this whole issue around the question of globalisation and what felt like a little bit of backlash towards that, and concerns particularly with the US and its rhetoric, and its pulling out of the Trans-Pacific Partnership (TPP). If the US was shifting in its attitude towards globalisation, what did that mean for a country like Australia? And I think firstly the facts are that the rhetoric wasn’t always matched by what’s going on on the ground, and in effect the world probably isn’t turning its back on globalisation. But more importantly that Australia has to continue to embrace that. That’s where our future is.

So whilst challenges are associated with globalisation, we need to remain an open, flexible economy, we need to be open to investment, we need to be open to imports, we need to think about how to attract and retain the skills in this country that we need. That means being open to skilled migration, and for instance, the recent changes in 457 Visa scheme caused tremendous angst around the business community and I think rightly so. I think we’ve got to be really alert to how those types of policies influence our competiveness.

 

AMT: Certainly skills issues are often an issue we hear about from AMTIL members – about how hard it is to find decent people and to retain them as well.

MC: My view for a while has been that Australia should be as open as it possibly can to the brightest people in the world. That doesn’t necessarily mean that we have an expectation that people come and stay for the rest of their lives. But that connectedness to ideas is critical… yes, you can do it over the internet, but fundamentally getting to know people and being connected to their networks at a personal level is really important.

 

AMT: Where do you see manufacturing in Australia in 10 or 20 years?

MC: Well I hope it’s thriving. I’ll take you on a slight tangent: I happened to be at a presentation of the Reserve Bank of Australia’s monetary policy statement, and there was a question asked around wages. Basically, everyone’s been talking about the need to see a bit more wages growth, and someone put the view that: “Well, I run a business, higher wages kill my business, and I think it’s outrageous that the Reserve Bank would be advocating for wages to go up.”

That perspective was interesting but in fact we should be advocating to be a highly productive, highly skilled, competitive, high-wage economy. Not high-cost but high-wage, with competitive unit labour costs because we’ve got a highly productive economy. I hope through CEDA we can really get a productivity conversation going again. Because as boring as it sounds, and I know the wider community sees productivity as a bad word because they see it as them working more hours and all the rest of it, fundamentally productivity is the source of future living standards. It is the driver of competiveness and what will enable us to succeed in advanced manufacturing and more generally productivity is what will deliver a really advanced, high-productivity, high-wage, competitive economy.

 

AMT: What sort of steps should we be taking to foster productivity?

MC: It’s interesting because immediately prior joining CEDA, I was a part-time Commissioner at the Productivity Commission. The Productivity Commission has just released its productivity review and I think there’s quite a rich agenda there that needs to be talked about a lot more and needs to be explored fully. The challenge for us is that some of the areas where we need to be exploring productivity are in services, and people struggle to get their heads around that. It sounds simplistic but I think we need to be seriously looking at how we can do more with less, and how we can drive productivity across the board through infrastructure, investment, through skill. And from the Government’s perspective, I can point to another piece of work I did in the Productivity Commission which was around data access and use. I think there are a tremendous number of areas where the Government can lift its game and where better use of data and greater transparency would actually lead to a tremendous lift in productivity, efficiency and effectiveness.

 

AMT: Can you tell us more broadly your professional background leading up to your position with CEDA today and how you came into the role?

MC: Sure. I’m an economist by training. As I said, I was at the Productivity Commission immediately prior to joining CEDA. I’ve got other board positions as well, so I sit on a couple of commercial boards. And I co-chair a not-for-profit: Reconciliation Australia. Before that, I was Deputy CEO and Chief Economist at the Business Council of Australia.

 

AMT: And what is the most satisfying aspect of your job with CEDA?

MC: The most satisfying aspect of the job is having a board that gives you the task of trying to lift the impact and voice in the public policy stage of a great organisation. I’ve tried my hand at a few different things in life. I am a company director, I’ve worked in funds management for a period of time, but I keep finding my way back into public policy. It is clearly, a real interest and passion of mine. And I think at the moment there is a real opportunity for CEDA to lift its voice, to think further about how it can impact the policy debate, and ultimately policy outcomes.

I feel like there is a real appetite for that. It’s what I hear from people when I attend CEDA events. They want genuine conversation around these really critical issues. I think a lot of people accept that many of the issues are complex and there aren’t simple answers, there are rightfully different perspectives on the right policies. But we really need to hear those conversations and debate and have thoughtful policy deliberations and really clear communications of priorities and decisions around that, so people have a sense of what the future is and a sense of consistency around policy, and so they have a belief that in 10 years’ time Australia is going to be enjoying the sorts of prosperity that we’ve seen in the past.

www.ceda.com.au