Question Time

MANUFACTURING SECTOR

Mr MARSHALL (Norwood—Leader of the Opposition) (14:10): My question is to the Premier. Why have 6,600 manufacturing jobs been lost in the last three months and more than 18,000 manufacturing jobs lost in South Australia since Labor was re-elected in 2010, given that growing advanced manufacturing is one of the government's four pillars in its economic statement?

The Hon. J.W. WEATHERILL (Cheltenham—Premier, Treasurer, Minister for State Development, Minister for the Public Sector, Minister for the Arts) (14:10): I thank the honourable member for his question. If he had taken the time to read the economic statement, he would realise that we address this question in great detail, but I do thank him for the opportunity to address this question. The principal cause—

Mrs Redmond interjecting:

The SPEAKER: I call the member for Heysen to order.

The Hon. J.W. WEATHERILL: The principal cause, of course, is the changing structure of the international global marketplace and the relationship that the South Australian economy has to that. Of course, in the past, under the old Playford model, we had an industrialisation model, which was high tariff walls, low costs, low wages. That was essentially the industrial—

Members interjecting:

The SPEAKER: Premier, would you be seated? I call the leader to order, and I call the member for West Torrens to order. Premier.

The Hon. J.W. WEATHERILL: The industrial legacy that we had for this state was one that was created during that very long period during the 1930s, 1940s, 1950s, 1960s and 1970s in this state. That was the model that we had, and it has been slowly unwound through the internationalisation of the Australian economy, and that has placed a particular burden on the South Australian economy. That process has been underway. It has been accelerated recently by a high Australian dollar, with our import-competing manufacturers and our exporters, of course, finding it very difficult with the high Australian dollar. Essentially, that is the big picture proposition.

The ABS publishes breakdowns of employment by industry sector every three months, and I think one of the answers to the question is that the breakdown in industry sectors does not actually accurately encapsulate the way in which manufacturing employment is now disaggregated across a range of industry sectors, and that is an observation made by Professor Göran Roos in the advanced manufacturing statement.

The latest figures indicate that in November 2012 there were 74,400 South Australians employed in manufacturing, slightly up from 73,400 in August. Manufacturing employment, of course, substantially reduced after the global financial crisis but has been hovering in the range of between 73,000 and 86,000 over the last four years. Even so—

Mrs Redmond interjecting:

The SPEAKER: I warn the member for Heysen for the first time.

The Hon. J.W. WEATHERILL: Even so, manufacturing employment is still the largest source of full-time employment in the South Australian economy. If we look at the ABS category Professional, Scientific and Technical Services, over the last 10 years we find that employment in South Australia has grown from 31,800 in February 2002 to 50,600 in November 2012, an increase of 18,700 people, which is more than the 18,200 that have left the manufacturing sector.

We are seeing a change in the nature of manufacturing. The truth is modern manufacturing is as much about services as it is about goods, and we are seeing there is a very substantial connection now between the services sector and the manufacturing service in this state.

Members interjecting:

The Hon. J.W. WEATHERILL: They don't bother to understand these things—

Mr Goldsworthy interjecting:

The SPEAKER: I call the member for Kavel to order.

Mrs Redmond interjecting:

The SPEAKER: I warn the member for Heysen for the second time. There will be no further warnings.

The Hon. J.W. WEATHERILL: A phenomenon that we are also witnessing is a large number of manufacturing firms are taking advantage of the high Australian dollar to source imports as inputs to a number of their manufactured products. We are seeing firms such as Tubemakers, which historically had produced their particular plants here for their brake lines and fuel lines and manufactured them here in South Australia. They now import the steel and then do the final elaborate transformation of that product here in South Australia.

They are now part of a global supply chain, which sources the cheaper end of the component from China and brings it here and adds value to it here. Of course, that means that there is less production, but what it does mean is that they are able to sustain their employment here in this state. So, there is a changing nature of employment. Rather than talking down manufacturing in this state, we are taking positive steps to secure an advancement in—

The SPEAKER: Premier, your time has expired. The member for Port Adelaide.