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$1bn jobs plan for blue collar workers

Julia Gillard has announced a $1 billion package to boost Australian manufacturing and innovation that will be paid for by scrapping about $1bn in tax incentives for up to 20 of the nation’s biggest companies.

The Prime Minister, announcing the plan in Melbourne today, said it had three components.

“It’s about making sure that we win more of the work available here in Australia; it’s about supporting our businesses so they can seize more of the work in our region of the world, more export, more opportunities and consequently more jobs; and it’s about supporting small businesses to grow.”

She said the key to this was innovation – “it’s doing things differently, it’s doing them better”.

The plan forms a centrepiece of a government push to recapture support among blue collar voters whom some senior Labor figures fear are considering switching their support to Tony Abbott.

Under the plan, announced by the prime minister and outlined by Innovation and Industry Minister Greg Combet, businesses planning projects worth more than $500 million would be obliged by an Australian Jobs Act to do “Australian industry participation plans”, obliging them to identify opportunities for local firms.

The system would be overseen by an Australian Industry Participation Authority.

Mr Combet said the government’s advice was that this would add between $1.6 billion to $6.4 billion of economic activity per year, which he expected would lead to a significant increase in jobs.

The government would also establish a new Anti-Dumping Authority, at a cost of $24.4 million, to ensure there was a “fair and level playing field” for Australian manufacturers and an Automotive Supplier Advocate to lift the level of Australian-made vehicles in government fleets.

The second key part of the package involves the establishment up to 10 Industry Innovation Precincts to link best research and business opportunities in growing markets, while the third part of the package aimed to support small and medium-size businesses, underpinned by a $350 million Industry Investment Fund.

The plan will be financed by scrapping the research and development tax incentive to companies with a turnover of more than $20 billion within the Australian economy.

“To finance a $1 billion plan for Australian jobs, some tough choices did need to be made and we have decided that some of the biggest businesses in our nation can forgo an extra research and development tax credit in order to fund this package,” Ms Gillard said.

Opposition Industry spokeswoman Sophie Mirabella said the industry statement that had been promised as imminent for close to a year was finally announced today.

“We now know why: the Government has been laboriously rebadging old programs, churning over old policy, and shifting money around to pretend its all new.

“The centrepiece of Labor’s statement today is industry precincts but this is a re-announcement of a 2011 promise to deliver the Industrial Research Transformation Hubs. This program has been repeatedly delayed, but has now been given a coat of paint and changed name to give the look of something new. Labor won’t deliver on these precincts because it hasnt delivered on the same plans for the past three years,” Ms Mirabella said.

Mr Combet said 15 to 20 companies were expected to be affected and those companies would still have ordinary research and development tax deductability.

Asked whether those companies had been spoken to, Mr Combet said: “We will be doing so. They will be listening closely to the announcement, but there has been a lot of discussion with many firms about the R and D tax incentive over a period of time and includiing the development of this policy position.”

He said he expected that many of the larger firms would be “very supportive, of not necessarily the R and D change, but certainly the initiatives that we have announced”.

Ms Gillard called it “a plan for Australian jobs, a plan for the future”.

She said while the Australian economy had emerged from the global financial crisis in better shape than most, it was under “stress and strain” and challenged by the strength of the Australian dollar.

“In this environment there are some who say slash workers wages and conditions and try and be a low-wage, low-cost economy,” she said. “As prime minister, I specifically reject that as a plan for Australia’s future. As a Labor prime minister, my vision for working Australians is of a high-skill high-wage future. I want modern Australia to be a place where there are great blue-collar jobs, secure jobs, high wage jobs, high skill jobs.”

The Australian Workers Union described the “rescue” package as a game changer for Australia’s manufacturing sector.

AWU National Secretary Paul Howes said the plan put manufacturing front and centre in the national political conversation.

“The Federal Government understands that the future of Australian jobs is the most important issue facing this country today.

“The sustained high level of the Australian dollar, which is now recognised as the most over-valued currency in the world, and shrinking global demand have hit Australian manufacturers for six.

The Australia Manufacturing Workers Union has welcomed the government’s strong commitment to jobs and local manufacturing through its “Plan for Australian Jobs”.

National Secretary of the AMWU Paul Bastian said that the manufacturing industry, from vehicles to food, faced serious challenges from a high dollar, lost productivity and a failure to buy local  which demands a national plan.

“The Plan for Australian Jobs is evidence of a government being prepared to make a serious commitment to Australian jobs now and into the future.”

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