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Smart growth - the Jobs Plan

Tuesday, 5 March 2013
Author: John Spoehr, The Adelaide Review

Federal Labor is certainly not policy shy. Hardly a week passes by without a major policy announcement. The $1 billion Jobs Plan now joins the Minerals Resource Rent Tax, the National Disability Insurance Scheme and the Clean Energy Future package.

The Jobs Plan brings together some important ingredients of successful industry policy. It recognises the need to substantially increase Australia's investment in building successful collaborations between industry and researchers to help foster innovation and boost productivity growth. It acknowledges that Australian manufacturing firms are under enormous pressure and need support to restructure, diversify and compete on value rather than on cost.

An important plank of the Jobs Plan is its strategy to extract a higher industry and workforce development divident from major resource projects. The Government has announced that it will legislate to try and boost Australian industry participation in projects over $500m. It has fallen short of mandating local content provisions but will require major projects to 'embed Australian industry opportunity officers' in their global supply offices. It will also strengthen anti dumping provisions to prevent unfair competition from overseas companies.

The Goverment will provide around $500m for up to 10 new Industry Precincts to help build productive collaborations between businesses and to strengthen research and development partnerships with universities. This has the potential to significantly advance the industry cluster and networking agenda in Australia, an agenda that has strong support from both the business community and unions. South Australia will be a major player in the proposed manufacturing precinct according to the announcement. This is very welcome and timely given the release of the South Australian Government's 'Manufacturing Works' strategy late last year.

Notwithstanding major disappointments like the failure of the Mineral Resource Rent Tax to raise respectable revenue for the Government, there is much to admire about Labor's policy agenda and stewardship of the Australian economy during one of the most difficult economic periods since the Great Depression. Its stimulus package has been vindicated - the austerity policies implemented in Britain, Irelandk, Spain and Greece have led to stagnation and fuelled unemployment. The problem for Federal Labor is that its policies are being drowned out by political noise - a combination of acts of leadership destabiilsation and corruption playing out in the New South Wales branch. While the latest polls suggest that the Coalition is in a commanding position there is a lot of political water to go under the bridge before the September 14 election.

The Coalition is under pressure to do more than criticise and oppose now. It has to present as a credible and trustworthy alternative government. That means it will have to start releasing some policy detail sooner rather than later. While a more disciplined and determined Tony Abbott is likely to resist this pressure he won't be able to for much longer. A small target strategy is risky. In partiulcar it draws attention to the Coalition's past policy track record and the deeply unpopular WorkChoices legislation.

There is no hiding the reality that most Coalition MPs are keen to reinvent rather than abandon the WorkChoices industrial relations agenda. WorkChoices is not so much dead and bured as Tony Abbott claims, but living on in the hearts and minds of most of his colleagues. While Labor and the union movement will campaing hard on this over coming months it won't generate the political swing that it needs to retain government unless there is a major blunder by the Coalition on how it funds its election promises or a damaging scandal.

Strange days are these. That famous political adage, 'The economy, stupid' coined by the larger than life US presidential political advisor to Bill Clinton, James Carville, doesn't seem to apply in Australia. Political orthodoxy suggests that electoral fortunes rise and fall in tandem with booms and slumps and perceptions about how effective a government is in managing the economy. By these measures Labor should be doing betterin the polls than it is. It did a commendable job reducing the impact of the Global Financial Crisis on Australia. Economic growth has been sustained and unemployment low by international standards. The Stimulus Package worked and recession was avoided. None of this seems to matter a great deal now.

Labor's electoral fortunes will be shaped in great part by the performance of the Coalition. If Tony Abbott remains relatively disciplined, and he and his team avoid any major election costing gaffes. we will almost certainly see a change of government this year. The big sleeper in all of this is the Labor leadership. Will Julia Gillard lead Labor to election and could she win the apparently unwinnable election and become a Labor icon? Could Kevin Rudd or Bill Shorten snatch victory from the jaws of defeat? What about Greg Combet? It is set to be one of the most interesting election campaigns in recent history.


Associate Professor John Spoehr (email)
Executive Director
Australian Workplace Innovation and Social Research Centre (WISeR)
The University of Adelaide
Business: (08) 8313 3350

The Adelaide Review (email)
Level 8, 33 Franklin Street
Adelaide 5000
Business: 7129 1060