Last week, the Minister for Industry, Science and Technology, the Hon. Karen Andrews, announced funding to support manufacturers in Australia. I'm going to begin by saying Labor welcomes this funding and any funding for the industry to help it grow and become more globally competitive. But—and there is a big 'but'—this announcement of some $50 million is but a slap in the face, frankly, after the Liberal government has slashed some $4 billion in research and development tax incentives since taking office. It's a short-term quick fix to a problem that needs a long-term solution, and that solution is more investment with research and development.
As the shadow assistant minister for manufacturing, I've begun meeting with numerous manufacturers, industry bodies and academics from around the country and all of them have reiterated how important research and development is to the future of manufacturing industries in Australia. In May this year, the Productivity Commission highlighted in PC productivity bulletin that investment in research and development is falling and the share of business innovators is no longer growing. It reads:
The current weakness in labour productivity can be partly attributed to a marked slowdown in investment in capital …
This is troubling because investment typically embodies new technologies, which complement people's skill development and innovation. This is especially so for investment in research and development, where capital stocks are now falling.
It appears that the government's answer to the problem is throwing a small amount of cash at businesses to upgrade their technology and develop their skills to grow labour productivity. But the simple fact is that this is but a drop in the ocean. It is not enough and it is not a long-term answer to the problems associated with the lack of investment that Australia is experiencing. We do need to do something to drive more capital investment into Australian industry, particularly into research and development.
I firmly believe that government has a clear role in driving this investment. In fact, the 2017 Sector competitiveness plan by the Advanced Manufacturing Growth Centre has set out actions for a Commonwealth government. They've proposed improving the design of Australian government support for business-led R&D as they say it's currently 'not suited to achieving different research and development outcomes required for the global competitiveness that our nation needs, nor does it deliver the new technology and growth our nation needs to prosper.'
They also argue that the government should be approaching research and development in two ways: direct research and development investment in higher risk and longer-term projects, and through research and development tax incentives to incentivise business to carry out their research and development here in Australia. What are the risks of not investing in this way? As the Productivity Commission has said, the investment has, in part, already led to a loss of labour productivity in our nation. Australia will continue to lose its economic complexity, which is the knowledge intensity of the economy, by considering the knowledge intensity of the products it exports. So without this within our economy we're likely to become more reliant on imports than producing unique products for export. This is simply not on.
We've had a strong record in Labor on research and development. We went to the election with a strong plan. A lot of the debate at the moment is around the way the economy is, and rightly so. While we talk about infrastructure and investment as a fix to the sluggish economy, we cannot leave this issue of research and development, and creating investment leverage off that, alone. We have to get in there and make sure that we are supporting research and development in our nation.