Indicative of the need to build Australia’s industrial base, the Therapeutic Drug Administration (TDA) says the nation is short 432 pharmaceutical drugs, with 42 critically short.
The TDA began monitoring shortages when the covid-19 pandemic struck. Now many Australians are reportedly taking stop-gap measures for chronic health conditions.
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Australia used to have a large government-owned pharmaceutical company, CSL, but under privatisation policies it was sold to American interests.
In response to Australia’s global supply chain vulnerability being exposed by the pandemic, the National Party’s policy initiatives committee has produced a welcome 20-page policy paper, Australian Manufacturing 2035, setting out a plan to double manufacturing employment (that is, another 800,000 jobs) over the next 15 years.
It says the pandemic has caused an economic crisis “not seen in generations”, which has exposed the nation’s heavy reliance on other countries for manufactured goods.
The paper expresses concern at China’s dominant position in so many key global commodities, accounting for “more than half of the world’s production of steel, copper, aluminium and rare earths”.
“The Nationals’ paper is the first time in decades that an Australian political party has broken with fundamentalist economic policies to propose building industries in the national interest.” – Patrick J. Byrne
The Nationals’ paper proposes nine key policies.
1. Strengthen Australian government procurement policies to back Australian manufacturing first.
To that end, the report says that, in 2015-16, Commonwealth agencies reported spending of $57 billion across 70,338 contracts. Almost 10,000 of the businesses supplying these goods and services were small to medium-sized businesses.
2. Establish a concessional lending facility for investments in our manufacturing capacity by expanding the remit of the Regional Investment Corporation to include new low-cost, long-term finance for strategic manufacturing industries.
The paper points out that other countries have government-backed lending facilities to support investments in manufacturing. There are 13 in Europe, with others in China, Japan, Singapore and India. The most famous of these is the German Development Bank (KfW), with over $800 billion of assets and 6,500 employees.
3. There is an urgent need to build modern coal-fired power stations and to invest in gas to help manufacturing industries.
The Australian Energy Market Operator says the nation will require six to 19 gigawatts of reliable power to back up renewables over the next 20 years, that is, four to 12 coal-fired power stations.
The paper warns that Australia has gone from having some of the most affordable energy in the world to some of the highest electricity prices for business. “If we cannot turn this around, there will be little hope of increasing investment in Australian manufacturing.”
4. Take countervailing action to protect strategic industries where subsidies in other countries have an adverse impact on Australia’s ability to develop strategic industries.
To this end, it proposes that the Anti-Dumping Commission provide a detailed report on the extent of subsidies provided by other countries to businesses in the six key strategic industries: resources technology and critical minerals processing; manufacturing of food and beverages; medical products; recycling and clean energy; defence production; and space.
Such investigations may provide weight for the need to provide like-for-like subsidies to Australian industries.
5. To expand development in the regions, the paper proposes creating decentralised Offices of Regional Manufacturing in Gladstone and Newcastle with a mandate to achieve specific growth targets in Australian manufacturing’s priority areas.
6. The paper urges providing tax incentives, including accelerated depreciation, to encourage investment in manufacturing capital.
7. As many regional and rural communities still struggle to attract enough of the skilled and experienced professionals required to maintain and grow their communities, there is an opportunity for government to support better integration between regional universities, TAFE, schools, manufacturers and supporting businesses in training, skills development, and research and development (R&D).
8. There is an urgent need to fund exploration to find a new domestic oil province. In 2000, Australia produced enough raw petroleum to supply 95 per cent of domestic demand. By 2018, this figure had dropped to 49 per cent.
9. Finally, the paper proposes increasing trade-promotion efforts and grow exports for our manufacturing industries.
The Nationals’ paper echoes the NCC’s White Paper, Manufacturing: Double Production by 2035.
The NCC’s paper adds other necessary policies to build manufacturing, especially declaring critical industries as “strategic industries”, which exempts them from World Trade Organisation and free trade agreement rules; ensuring that new industries remain in Australian hands, or else they will run the risk of being taken over and moved offshore; and a readiness to impose import restrictions, if necessary, as the United States now does on a range of Chinese goods into America.
The Nationals’ paper is the first time in decades that an Australian political party has broken with fundamentalist economic policies to propose building industries in the national interest.
Patrick J. Byrne is national president of the National Civic Council.