Federal Resources Minister Matt Canavan spoke about maximising the potential in manufacturing during his CEDA speech.
Federal Resources Minister Matt Canavan spoke about maximising the potential in manufacturing during his CEDA speech.

Canavan’s calls to maximise manufacturing

MATT Canavan fears Australia is losing its potential to make use of the nation's natural resources advantages.

Speaking at Brisbane's CEDA Future of Australia's resources sector conference yesterday,

The Federal Minister for Resources stressed the need to convert the nation's opportunities into Australian-based manufacturing jobs.

Senator Canavan said a key recommendation of last year's Resources 2030 Taskforce Report had been value-adding in manufacturing to create jobs.

"It's a key reason why we keep banging on about the need to support and develop reliable, base load, dispatchable power to support those jobs in the manufacturing industry," he said.

"It's why I think we absolutely should still be a country that makes things. There's an unfortunate narrative that has been allowed to develop that (says) we can't be a manufacturing country.

"I think that's rubbish."

Senator Canavan highlighted the lacklustre economic output since 2000 - pointing out the manufacturing sector had grown by just three per cent in almost 20 years.

About 175,000 manufacturing jobs had been lost since the start of the century, he said, and his concern was where the sector is headed.

GDP had grown by 72 per cent in that time, but the only two manufacturing industries that had grown were food and mills.

"I don't think it's any coincidence that those two industries are what we have natural advantages in at the natural resource level," Senator Canavan said.

"It's really a tale of two halves in the last 20 years, particularly in the metals manufacturing industry.

"In the first seven years of this century, growth in our metals manufacturing industry actually outstripped GDP - it went up by about a third while GDP only grew by about a quarter.

"In the last 12 years it has all be reversed, particularly for metals manufacturing, where it has fallen by six per cent over that period."

Senator Canavan said one of the major contributing factors was the higher electricity prices in place since 2007.

From 1990 to 2005 power prices fell by 20 per cent and helped drive economic growth, he said.

A diverse power system that did not "put all its eggs into one basket" was needed to have a strong-growing economy, the Minister said.

"Too often in debating energy at the moment it is said you've either got to have all renewables or all nuclear or all coal.

"We've got to have all different types of energy to have a diverse, successful, strong growing economy. There are different horses for different courses," he said.