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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
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ADVANCED MANUFACTURING STRATEGY

Mr MARSHALL (Norwood—Leader of the Opposition) (14:13): My question is to the Premier. As growing advanced manufacturing is one of the Premier's four pillars in his economic statement, why have job cuts been announced at Broens SA, Priority Engineering and now Saab Systems, all in the last few weeks?

The Hon. J.W. WEATHERILL (Cheltenham—Premier, Treasurer, Minister for State Development, Minister for the Public Sector, Minister for the Arts) (14:13): I thank the honourable member for his question, but the observation doesn't match up with the point we made about advanced manufacturing needing to be the focus. The reason advanced manufacturing has to be the focus is precisely because of a number of changes in our manufacturing sector; that is, the high Australian dollar, created in part by the resources boom, is placing pressure on traditional forms of manufacturing.

Cheaper imports come in and exports become more difficult to sell if price is the only means by which you seek to compete, so you have to compete on the basis of value. The way you compete on the basis of value is that you go up the technological chain in terms of your product innovation. You innovate with new business models, you innovate with new marketing techniques and you find new ways of reaching customers in new places.

Mrs Redmond: So, these people weren't advanced manufacturing.

The Hon. J.W. WEATHERILL: That's precisely the challenge that I did set out in the economic statement—

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

The Hon. J.W. WEATHERILL: —and it's precisely the matter about which there has been absolutely no response from the opposition, not even a comment about whether that was the correct—

Mr VAN HOLST PELLEKAAN: Point of order.

The SPEAKER: I anticipate that the member for Stuart's point of order is going to be that the Premier is not responsible to the house for Her Majesty's opposition.

An honourable member: Loyal opposition.

The SPEAKER: Loyal opposition. I uphold that point of order, before I have even heard it.

The Hon. J.W. WEATHERILL: Thank you, Mr Speaker. So, the cause of a decline in manufacturing is the very question that we set out in detail. We acknowledge the challenge in this sector and we set out the pathway to get there. We've published a detailed advanced manufacturing strategy for the future in South Australia and we are methodically working our way through that very document.

The truth is that the mining sector and the defence sector, which were the early economic strategies of this government—and they remain important strategies of this government—are necessarily only transitional strategies, because the truth is that every defence contract is subject to the whim of a national government, and we might find this very soon, if there happens to be a change in the federal government. It is one contract decision away. It is not a market decision: it is basically a federal government decision-making process.

In much the same way, mining is very much held captive to the price of commodities, the fluctuations in commodity markets, and mines do deplete. So, that is why our strategy does move to this next phase where we seek to imbed the opportunities that are being created in defence and mining and create an advanced manufacturing culture that draws on them, for instance, mining services that supply the answers to the very questions these mines are posing so that they can go on supplying those services long after those mines are depleted.

In the case of defence, we are not just pitching for a defence contract, but a particular component of the defence contract that might have applications in the civil area and might have applications all around the world. We're beginning to see this. We are seeing companies like SAGE Automation that are pitching into mining and defence, but they're finding that they're getting a niche there in advanced manufacturing processes that they're using across a whole range of sectors. So, that is what the advanced manufacturing strategy is about, and the fact that from time to time there are businesses that close and those that open does not affect the overall strategy.

That is what we must focus on. It is not about one individual project, and this is the point that I have been seeking to make. We shouldn't be analysing one individual project and, from that, declaring that the world is at an end or that the streets are going to be paved with gold. It is the long-term strategy that we're focusing on—the strategy we have laid out in detail, about which there should be a serious public debate.

The SPEAKER: The Premier's time has expired. For multiple offending, I call the member for Morialta and the deputy leader to order, and I warn the member for Heysen for the first time.

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