Home' Charter : 1211 Charter Contents 32 Charter I December 2011
“The economy has become more ‘weightless’ for the past 30 or
40 years,” he says. “This is not a radical new idea or big shift. It’s a
continuation of a trend that’s been running for 30 or 40 years. All of
the new jobs have been in the services sector.”
As manufacturing fnds its new level, he says more jobs are likely
to arise in the services sector – think fnancial services, health,
professional services, even cleaning and driving.
“Every time the services sector gets bigger and the shares of
mining, farming and manufacturing sectors get smaller, the economy
becomes more ‘weightless’,” he says. “The other thing to remember
is that the services sector is labour intensive, by defnition. It employs
lots of people.”
Gittins says the ‘weightless’ services sector has provided more
than 4.5 million jobs in the past 25 years, and that the key to our
future prosperity is likely to lie more with these ‘weightless’ jobs
rather than attempting to preserve uncompetitive factories.
More to the point, we should ensure we continue to invest in
education and training so that people can capitalise on the highly
paid, high value-added, highly sought-after jobs that are part of a
knowledge economy, rather than the more menial jobs.
Gittins says Port Kembla might have lost its furnace and hundreds
of jobs – but all is not lost. He gives the example of what happened
in his hometown of Newcastle in the late 1990s when BHP fnally
closed its steelworks.
“You could have predicted that Newcastle would turn into a ghost
town, but Newcastle is doing fne,” he says. “And it’s a much nicer
place now that it doesn’t have all that pollution.
“What I’m saying is that everyone in Wollongong might be
saying ‘Oh no, we lose the steel industry, we’re dead!’ I come from
Newcastle, we already lost ours and we’re still alive and kicking.”
He says many of those who lost their jobs at BlueScope could
well be suited to working in the mining sector because they have
compatible skills such as working in heavy industry or driving trucks.
“I think a lot of those people eventually displaced from
manufacturing will end up in mining, or they’ll end up with the jobs
vacated from people in other industries who went to WA to get a bit
of the (mining) action,” he explains.
In effect, the manufacturing sector might change but there are still
opportunities out there. “You can’t be good at everything, you can’t
have everything, you’ve got to make choices and you’ve got to jiggle
it around until you’re doing the stuff that’s most advantageous,” he
says. “We’d be absolute mugs not to take advantage of this period
– which I think will last for 20 or 30 years – where the world is paying
these unbelievable prices for our minerals. I don’t think it’s a fash
in the pan – I don’t think prices will stay as high as they are, they’ll
come down – but they’ll still be a lot higher than they used to be.”
Gittins says we shouldn’t squander the opportunities. “I think
the way to squander it is to say, ‘We must protect manufacturing
from having to adjust to this new world’, ” he says. “Economists
don’t like protection and industry policy because they call it
‘picking winners’. The real risk is not that we pick winners, but
that we back losers. That is, we prop up industries for which the
tide has turned. If you succeed in doing that, you probably don’t
succeed – because if you went on for long enough, what you’d
end up with is an industrial museum.”
Back in 2006, Kevin Rudd said he wanted Australia to continue to be
“a country that actually makes things”.
Innovation and Industry Minister Kim Carr is still actively
promoting that same message, but he must have experienced
déjà vu when the October jobs forum came up with the ‘fair go’
initiative to help Australian frms get a foot in the door with regards
to securing contracts arising from the resources boom.
After all, fve months previously he’d announced the $34 million
Buy Australian at Home and Abroad campaign, “to maximise the
returns from the mining boom by more effectively linking Australian
suppliers to Australian projects”.
Carr’s well and truly on the record as saying the government
will never abandon the manufacturing sector – but that doesn’t
necessarily mean that it will stay the same. His mantra is that
innovation is the main game for manufacturers, and that they
should adapt to change and take risks, innovate – and export.
And he gives the Australian car industry as an example of a
manufacturing industry that lost its way but got back on track by
investing in R&D and embracing new technology.
But the Westpac-ACCI Survey of Industrial Trends released
in September shows the manufacturing sector still has a lot to
embrace. The quarterly survey quizzes some 300 manufacturing
companies and found yet more evidence the sector was in retreat.
It noted that infation pressures were weak, labour markets were
soft, proft expectations had dived, and investment and export
plans had weakened. On the back of this, the recent rate drop will
be most welcome.
Bill Evans, Westpac’s chief economist, says part of the reason
The government has
overestimated the impact that the
mining boom will have on inflation
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