THE TROUBLE WITH MANUFACTURING

Ahron Young, Sky News Melbourne Reporter

16 February 2012

Don't let the title fool you, this trouble with manufacturing isn't about how expensive it is to do business in this state, the trouble with manufacturing is getting our message out to the world that Victoria, and Australia, can produce results.

While Qantas, Alcoa, and ANZ Bank are deciding how many jobs will be scrapped across Victoria, the government is preparing to go on a trade mission to India next week to try and show the Indians how well Victorians work and operate. The Premier has come under fire for leaving the state at a time of "job cuts chaos" as some of my Victorian colleagues in the press have begun calling it, but a trip to India might be just what the jobs doctor ordered. The irony is impeccable: Ted Baillieu flying to India, at a time when Telstra is under fire for asking redundant Australians to train their replacements across the Indian Ocean.

We cannot compete on price. But neither can Apple. Neither can Audi, and neither can any first world government. One day too, China, India and the Philippines will go through the same issues facing Victoria and Australia now - we want nice things, and we want to be paid enough to afford them. You only live once, so why not? But we can't afford to wait until developing countries reach that stag - by the time they do, it'll be curtains for our manufacturers. Victoria shouldn't compete on price, we must compete on efficiency, knowledge, and our standard of living.

On Thursday, as the Engineers Union received the news from Qantas that up to 500 jobs would go from either Melbourne, Avalon or the Brisbane maintenance base, they knew that Melbourne would be safe. Why? Because it can turn around a 737 faster than anywhere in the world. Think of the fuel savings when you maintain them in Australia, rather than the airport costs etc of sending a short range domestic 737 to Manilla or Singapore. The situation at ANZ is tricky, as the bank shifts away from being an Australian and New Zealand bank, to instead a super regional bank with offices across Asia. This has to happen. Australian businesses must transform if we want to stay in the game.

Manufacturing is to Victoria what the mining boom is to WA and Queensland. The only difference is that manufacturing isn't a boom. It contributed $30bn a year to the Victorian economy. It can't be saved by the government, and nor should it.

But the government, and business, need to find a way to turn our industry into sought after goods. We can't compete on price.

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