Prime Minister Scott Morrison on 25 March announced the establishment of the National COVID-19 Coordination Commission (NCCC). The role of the Commission is to co-ordinate advice to the Australian Government on actions to anticipate and mitigate the economic and social impacts of the global COVID-19 pandemic.
AMTIL welcomes the establishment of the NCCC and looks forward to working with its members over the coming months. The Commission is working across business-to-business and business-to-government networks to unlock resources, break through bottlenecks and fix problems so Australian businesses and communities are supported in the months ahead.
I recently met with a few members of the Committee and discussed a number of issues and opportunities that face our sector. I discussed the three key areas that are needed to support the Australian manufacturing industry’s sustainability and growth. The need for us to continue investing in technology, continue developing the skills of our people and continuing to explore market access opportunities are paramount to a strong manufacturing sector coming out of COVID-19.
Investment in technology
AMTIL’s surveys and statistics have shown a recent decline in investment in capital equipment and machine tools. The last time we saw declines of this order were in 2009 and 2015, both resulting in a 12-24 month slump in orders. We simply cannot afford to see a slide like this again. Keeping up with the latest technology, learning how to do things better, investigating how Industry 4.0 methodologies will impact your business, etc are all important cogs in being globally competitive. We talked about the Instant Asset Write Off legislation and I spoke to the NCCC about the potential to increase the accelerated depreciation limit from $150,000 to $500,000, which would be a great incentive to investment in capital equipment.
I also talked about a persistent and consistent campaign to work with manufacturers and support them in identifying technologies, methodologies and techniques that are going to drive their businesses forward. We are currently working with the NCCC to seek government support for a five-year Technology Diffusion Program AMTIL is formulating.
Development of skills
It is no surprise to hear that skills and training, or more importantly the lack of it, continues to be a barrier to success. Coming out of COVID-19, there will be displaced workers and a pool of unemployed that will be able to be reskilled and make a difference in industry-specific roles. Given the lack of international travel, we will not have the luxury of importing skills for a period of time and will have to keep finding ways to develop local talent. We need to find better pathways from tertiary education to employment for our engineers. We spoke about the image of our industry and the need to change it. How are we going to encourage the next generation of our workforce into action?
AMTIL has plans to reinvigorate the Young Industry Ambassador Program, where 20-25-year-olds who are making their mark in our industry, go into secondary schools and talk about their story and what great employment and career opportunities there are in manufacturing. Young people spruiking to young people about great careers. We will continue working to seek government support for that activity too.
Market access
The recent crisis has resulted in many products and parts being sought locally and the concepts of reshoring and onshoring needs to continue in even greater numbers. We spoke about the need for supply chains to be developed and mechanisms for second and third-tier businesses being able to tap into major projects. The local content stipulations on government procurement needs to be reviewed and the processes for enforcing local content needs to be resourced so companies are accountable to their contracts. The “Buy Australia” mentality that we believe is going to be strengthened through the retail sector needs to be applied in a business environment too. That will be a challenge.
We discussed the need for export development to continue and possible changes to the Export Market Development Grant to extend it for businesses that have already used their quota.
We also discussed many other issues including the R&D Tax Concession turnover limit being increased from $20m to $50m, energy reform and gas & electricity costs and how the government may offer subsidies around input costs.
AMTIL is currently in the process of developing a submission to the NCCC for their consideration. We look forward to working with the Commission over the coming 12 months to help implement some programs and assistance that will help our industry recover from the COVID-19 epidemic as quickly as possible.