A message from Jens Goennemann

The federal budget is in deficit and won’t be back in black for a decade. This column and AMGC are party agnostic. Therefore, I will say upfront that budget blowouts are a bipartisan phenomenon going quite a few years – and rather unnecessary for a blessed country like Australia. Our deficit is a long-lasting burden. Good luck chipping away at it to whoever forms the next three to four governments.

It is beyond me why politicians anywhere in the western world tend to enter a competition every couple of years to persuade voters with cheap gifts which add very little to their bottom line. Representatives are elected to address the root causes of the challenges for their respective countries, offering well thought-out policies to tackle them, and having the guts to tell us voters what they believe is necessary to advance fair.

Most cost-of-living crises are driven by inflation, making the money in our wallets and superfunds less valuable whilst increasing the costs for home loans (if you’re lucky to have one) as well as the goods in our baskets. High energy costs in a commodity rich country for example are a result of misguided energy policies, and a voucher to cushion the blow on our energy bills does not address the root cause. Handing out vouchers with borrowed money expands inflation, hence compounding one bad policy with another.

Slicing the pie (aka the government’s tax income from us citizens) in too many and too little pieces is bad government which lacks additionality – or in plain speak, trying to do everything a little achieves nothing. Growing the pie to sufficient size in the first place is good government and allows such government to be reasonable in the first place when grabbing into our wallets.

It is Australia’s deficit in industrial capability and capacity which prevents both our GDP and the tax pie generated from it to grow to its full potential. Ranking number 102 in the world for making things is utterly disproportional to our current national wealth and should be cause for embarrassment. Our wealth is largely based on commodities which we happened to have and the world happens to need, but that demand, at least for our fossil-based commodities, will eventually disappear. So too will our luck if we don’t use the remaining runway to finally take off and build an industrial base around those areas of strength we possess.

I found myself agreeing with Business Council of Australia Chief Executive Bran Black’s assessment that the only way to arrest our decline is “by growing the size of the pie, and that means getting very competitive on how we drive more productivity through the economy.”

Australia is not unique among developed countries, including the country of my birth, in its dangerous addiction to raiding the future. We must make better use of our commodity-derived national wealth and grow opportunities for our citizens by adding value, not vouchers.

This brings me to our most resource-blessed state of Western Australia (WA) where I visited recently to chair a panel on the opportunities in wind energy supply chains at the Energy Exchange Australia (EXA) conference.

Readers will know that an important part of AMGC’s work has become our partnership with the WA government on the Wind Energy Manufacturing Co-Investment Program with some announcement on progress very soon – stay tuned.

What excites me about the partnership with the WA government is its use of commodity generated wealth to build for the State’s future – in AMGC’s case by nurturing manufacturing capability so that tax-paying and people-employing companies can participate in a meaningful way in the build of WA’s – and ideally global – wind energy systems.

In the long run, these wind energy systems will deliver green electrons which in turn can help process iron ore to iron instead of filling ships with dirt-incapsulated iron and sailing this load to other countries who would not be able to process iron ore as green as Western Australia will.

Building manufacturing capacity and capability in the wind energy sector leads to value-add and decarbonisation in the commodity sector which will ultimately broaden Western Australia’s economy. That is good policy. That is good governance. That is what people vote for.

Speaking of voting, with the Federal election now in full swing, promises will fly, ads will flood the airwaves, and leaders will battle for the chance to steer Australia’s future. But before the nation decides on 3 May, have your say!

We’re asking Australia’s manufacturing SMEs to take a short survey – tell us what’s driving your business, what’s holding you back, and what you need for a stronger future in manufacturing. It will then be our privilege to give your insights a voice.