Hansard 2008-11-13 Manufacturing: regional Victoria

BACKGROUND:
On 13 November 2008, Mr Peter Kavanagh DLP MLC for Western Victoria asked in Parliament Mr Lenders the Acting Minister for Industry and Trade about government action that had been taken in recent weeks to ensure the survival of manufacturing in regional Victoria
Mr Kavanagh’s comments in Parliament on Hansard are below:


HANSARD:
Title: Manufacturing: regional and rural Victoria
House: COUNCIL
Activity: Questions without Notice
Members: KAVANAGH; LENDERS
Date: 13 November 2008
Page: 5014

Manufacturing: regional and rural Victoria

Mr KAVANAGH (Western Victoria) -- My question without notice is for the Treasurer in his capacity as Acting Minister for Industry and Trade, and it relates to manufacturing policy. Recent closures, including partial closures, in Ballarat and Geelong indicate that, partially due to the current global economic climate, regional manufacturers in Victoria are under unprecedented stress. I ask: while we await the government's manufacturing strategy, what actions, such as innovations or changes to policy, has the government taken in recent weeks to ensure the survival of manufacturing in regional Victoria?

Mr LENDERS (Acting Minister for Industry and Trade) -- I thank Mr Kavanagh for his question and his interest in regional manufacturing. Mr Kavanagh's question was: while awaiting a manufacturing statement, what is the government doing in the short term, in the interim, in regional areas?

The actions we have been taking in manufacturing for a period of time -- what we have done and what will be put into place -- have been specifically directed towards regional Victoria. I will be very brief on this.

Victoria was the first state to bring in a Regional Infrastructure Development Fund (RIDF), and it was brought in by this Labor government. It was opposed in this house by the Liberals and The Nationals in the first instance, and it was only passed when it was introduced a second time. The significance of the fund is that in Mr Kavanagh's electorate and in all other regional electorates there is now the capacity for the state government to work with local government and with industry to build on infrastructure to assist in manufacturing. I could give numerous examples across the state of where that sort of infrastructure has been the key for new manufacturing to be able to come into an area.

Secondly, the Victorian industry participation policy that we were discussing before in this house was brought in by this government to assist manufacturing. There are ongoing examples of this: reductions in payroll tax which came into effect on 1 July, helping manufacturing; reductions in land tax which came in on 1 July, helping manufacturing; and the cut to WorkCover premiums which came in on 1 July, helping manufacturers. In addition to that -- and this is obviously nothing to do with the government -- for those manufacturers relying on exports the Australian dollar has gone from around US98 cents, I think the

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figure was, in late May down to the high 60s now. That is obviously assisting regional manufacturers.

More immediate than that is the investment the government has made in infrastructure in some industries in regional Victoria. This is not in Mr Kavanagh's electorate, but as an example, investment in infrastructure has meant that concrete castings for some road projects are being built in the Latrobe Valley. It is a $4 billion infrastructure project, and much of that money goes into manufactured products. That is happening now.

Mr Koch interjected.

Mr LENDERS -- Mr Koch interjects about John Valves in Ballarat. Yesterday the head of Regional Development Victoria was there. We are in ongoing dialogue in the area to find a buyer for that company and work it through.

These are not easy times, and Mr Kavanagh is certainly not implying they are. What he is saying is: what are we doing in the interim? In the interim we are working with companies and we are working with their workforces. Those policies relating to RIDF, WorkCover, policies land tax, stamp duties and payroll tax are all assisting manufacturing. Many of these things are only kicking in now; these policy initiatives are just coming into place. There is a lot more to be done. The manufacturing statement will articulate a lot of the things we are doing and the things we will do. Mr Kavanagh and I both share a great regard for manufacturing, particularly in regional Victoria. This state has a great future, and this government will work with manufacturing to deliver on that.

Supplementary question

Mr KAVANAGH (Western Victoria) -- Of the changes the minister just outlined, I ask: which of them represent responses to the new international environment in finance and the economy that has developed in the last couple of months?

Mr LENDERS (Acting Minister for Industry and Trade) -- All of them. There is not a single item that alone assists an individual manufacturer -- it is a collection. All the things I mentioned in relation to the budget -- land tax, stamp duty, payroll tax and WorkCover premiums -- assist in reducing the burden on manufacturers. The single largest issue for a manufacturer who relies on exports is the fluctuating dollar, and the government can claim no credit for that -- that is obviously an international factor.

The other thing I did not mention which is making a significant difference to manufacturers now is the intervention of the national government along with most other G20 governments in stabilising the banking system.

Banks are now lending to banks again, and banks are lending to customers again. We are seeing the effects of that guarantee flowing through. Similarly share markets are partly stabilising. The share market has gone down a long, long way, but we are seeing governments attempting to address that volatility at a national and international level with the freeze on short selling and a range of other things.

Together, all these are necessary for business confidence and consumer confidence, which will assist manufacturing. There is no single answer, as Mr Kavanagh well knows, and he is not implying there is. All of these measures come together to assist manufacturing. I think anybody who believes a single manufacturing statement or a single action by a government will make a difference is ignoring the fact that there are multiple factors coming together.

We have strategies and they are all coming together, but we are working with individual manufacturers in what are, particularly for those who do not export, trying times in the current environment.