MANUFACTURING SECTOR, SOUTH AUSTRALIA

Mr HAMILTON-SMITH (Waite) (16:41): I rise to talk about challenges facing the state's industry sector, particularly manufacturing. Labor's Thinker in Residence, Professor Göran Roos, has today exposed 10 years of Rann/Weatherill government failure on manufacturing in a damning critique of the major problems from wine to factories and industry sites across the state. Professor Göran Roos has proven to be one of the most useful and appropriate Thinkers in Residence to date. I must say, some of them have been questionable.

He knows what he is talking about, and in a stroke of a pen he has exposed 10 years of Labor inaction. He has and will reiterate when he speaks to a large gathering at the Town Hall tonight the point that South Australia's wine industry under Labor's leadership has become 'lazy, and has lost its innovative edge.' Roos has identified a need for better management across industry sectors and has warned that half of South Australia's firms are at risk of collapse in the face of better-led overseas competition—half of South Australia's firms.

This is a signal bell of failure by Labor over 10 years. Professor Roos implies that industry in South Australia has 'squandered a lot of time' under Labor leadership. This report explains why jobs and investment in South Australia have fallen behind other states. I met with Mr Roos last week. I understand he is putting out a publication this week, with a more detailed publication to follow towards the end of October. It should be read by all decision and policy makers. We have too many low value added firms when we should be in the high wage, high-value added sector.

The current state Labor government, including the incoming premier (the current Minister for Education), has failed to help South Australia's businesses to migrate up the value chain, to improve their management skills, or to invest in more research and training. Professor Roos reinforces the state Liberals' long held view that trying to compete on price in a high cost environment is futile and that gains must be achieved through innovation, science and entrepreneurship.

I agree with Professor Roos that manufacturers face a perfect storm. Labor needs to help firms invest in their own R&D and training rather than cutting labour costs in the hope of survival. Professor Roos has accused government in general of measuring its success on the basis of how much you manage to spend, not what you get for it—a very potent observation and an accurate one.

All this exposes Labor's failure. Labor has talked up defence and mining while manufacturing has languished without leadership or support. They have cut research and development by closing Playford Capital and cutting funding to Innovate SA, most importantly BioInnovation SA, the Venture Capital Board, and many others. Here is a Thinker in Residence who on this occasion has delivered a sting.

I want to point out to the house that the Treasurer has indicated today that he is going off to the tax summit next week—another important issue for manufacturing and business, tax reform—with no clear idea of what he wants from it. He was reported in the media today as saying, 'We don't have a list of specific outcomes we expect to see come out of the forum.' Then he says, 'We will go to the tax forum with an open mind.' I put to the house that the Treasurer will be going to the tax summit with an empty mind, with no ideas on tax reform and with no plan for change.

In other words, there is a huge blank in the Treasurer's view and he will be unable to spell out whether he has any ideas at all on tax reform so urgently needed by manufacturers and business. Businesses across the state will be disappointed to find that after 10 years this government has no plans for reform. I am asking today whether the government made a submission to the Gillard tax summit or not and I am asking the incoming premier whether he has a view on this, because he should have.

The state Liberals hosted a tax summit in 2008. I have given copies of the report to the Treasurer today and I have asked him to read it before he goes to the tax summit next week, because it summarises the concerns by industry about the need for reform for property taxes and stamp duties, stamp duties on business transactions, taxes on motorists and licence fees, taxes on insurance and changes to payroll tax. All of this is vitally important and it has been ignored by the state Labor government. They must lead for South Australia, not simply refuse to create waves for their Labor colleagues in Canberra.