Latest news with #InnesWillox
ABC News
2 days ago
- Business
- ABC News
Ai Group boss says the industrial relations conversation is far from over as the government tries to lift productivity
Ai Group chief executive Innes Willox says the government's IR policies are inhibiting productivity. He also wants energy to cost less, and broad agreement on how to achieve de-regulation.
News.com.au
4 days ago
- Business
- News.com.au
‘We should be worried': From peanuts to paper, Australia's manufacturing industry is in crisis
Australia no longer makes much of anything at all — and the few industries we do have left are rapidly circling the drain. From cars and steel to clothing, paper, glass and now even peanut butter, the long decline of Australia's domestic manufacturing industry seemingly claims a new casualty every other week. The numbers behind the headlines are stark. According to the Australian Bureau of Statistics (ABS), in the year to June 2024, 5136 established manufacturing businesses — meaning those which had been in operation for at least five years — closed down. National employer association the Australian Industry Group warns more up-to-date numbers will be even more dire. 'Australian manufacturing as a sector slipped into recession last year and is one of the weakest performing industries in Australia today,' AI Group chief executive Innes Willox said in a statement. AI Group on Tuesday released new research highlighting the dire situation faced by Australian manufacturing as a result of 'soaring energy and input costs, skills shortages, trade risks and productivity'. 'Australian manufacturing and its almost one million employees face deepening risks unless urgent economy-wide reforms are undertaken to return the industry to growth and boost its falling productivity,' Mr Willox said. 'We should be worried. Manufacturing directly employs 930,000 people, generating over 12 per cent of our exports and 8 per cent of capex investment despite being only 5 per cent of GDP.' Mr Willox said cost pressures on the sector were 'excessive', with input prices having risen 37 per cent in the five years since the pandemic, outstripping inflation of 22 per cent. 'They are paying 48 per cent more for gas than they were in 2019, threatening the viability of energy-intensive branches of manufacturing,' he said. 'We are seeing an increase in plant closures or reduced activity in key economic sectors due to energy cost pressures.' Skills shortages are also taking a toll, with 61 per cent of trades and technician roles in the country currently difficult to fill. Trades account for 28 per cent of the manufacturing workforce. 'We also need to urgently address declining productivity in manufacturing,' Mr Willox said. 'Labour productivity in the sector has declined by 3.7 per cent over the past decade and overall productivity is down by 1 per cent. The malaise of declining productivity makes it harder for employers to deliver sustainable wage increases, and it weakens our international competitiveness at the very time trade disputes are under extra competitive pressure.' Treasurer Jim Chalmers will host an economic reform roundtable in Canberra next month bringing together political, corporate, union and community leaders. Mr Willox said the gathering would be an opportunity to 'begin a clear reform path around the issues of energy, workforce, productivity and international competitiveness'. AI Group has previously warned Australia's 'unsustainable' taxpayer-funded jobs boom is masking critical weakness in private sector employment. Nearly one in five workers in Australia is a government employee. Last year, 80 per cent of all new jobs created were either in the public service or the 'non-market' sector — government-funded industries like education or healthcare, largely through the ballooning National Disability Insurance Scheme (NDIS). Here are some of the victims of Australia's manufacturing crisis. Peanut butter Last week, Bega Group announced the closure of the 100-year-old Peanut Company of Australia (PCA), blaming 'sustained financial pressure' and ongoing annual losses of $5-10 million. PCA and its predecessors have been based in the Queensland town of Kingaroy, dubbed the Peanut Capital of Australia, since 1924. A phased shutdown of PCA's facilities in Kingaroy and Tolga will take place over the next 18 months, with up to 150 jobs at risk. Bega acquired PCA in 2017 but said it had 'not been able to establish a sustainable business model' despite a 12-month strategic review and several attempts to sell the business. The company said the shutdown comes amid growing challenges in the Australian peanut industry, including import competition, rising costs, falling production and better returns from alternative crops. South Burnett Mayor Kathy Duff said it was a 'sad day' and 'devastating news for our region'. 'It has rocked our community, as Kingaroy is the home of peanuts and the silos are an iconic part of the region's history — that is why they are heritage listed,' she said. Bega said it would continue to operate facilities in Crestmead and Malanda, along with its existing distribution network in Queensland. Cars Nearly a century of car manufacturing in Australia officially came to an end in October 2017 with the closure of Holden's Elizabeth factory near Adelaide, following Toyota and Ford out the door. Mitsubishi had already closed its Australian plants in 2004 and 2008. High local costs and rising competition from cheap imports made Australia's car industry unsustainable, and the refusal of the federal government to continue propping up manufacturers with millions of dollars in subsidies was the final nail in the coffin. Then Prime Minister Malcolm Turnbull insisted it was simply due to 'changes in market taste' towards SUVs and small cars, and denied the federal government was to blame. 'People stopped buying the sedans being made in Australia,' he said. 'The manufacturers who've progressively closed their operations in Australia have made it clear it's not because of a failure of government subsidies.' The car industry had argued that no country could sustain an automotive manufacturing base without some combination of tax incentives, import tariffs or government assistance. 'The Australian market is too small and the industry cannot fully exploit economies of scale,' Professor Abbas Valadkhani from Swinburne University of Technology wrote in 2016. 'It is very difficult to compete when labour costs in some Asian countries are only one-fourth of that of Australia.' Tyres Bridgestone, Australia's last tyre manufacturer, finally rolled out the door in 2010 after 45 years. The Japanese tyre giant blamed the closure of its Australian and New Zealand factories on 'international competitive forces' that had made the operations 'no longer viable'. Around 600 jobs were lost at the Adelaide plant, with another 275 in Christchurch. 'As the last tyre manufacturer in Australia and New Zealand, we have all worked hard over many years to avoid today's decision,' former Bridgestone Australia senior executive director Andrew Moffatt said at the time. 'However, the unfortunate reality is that Bridgestone Australia Ltd. can no longer commercially justify the continued operation of these facilities. We are proud of the fact that we have managed to keep these two manufacturing facilities open for so long and have provided employment and economic benefits to so many people over such a long period.' US-based Goodyear had announced the closure of its last Melbourne factory, South Pacific Tyres, two years earlier. The company also blamed Australia's high costs, saying the move would save it around $US35 million ($54 million) a year. 'Going forward, our efforts will be focused on increasing production of high-value-added tyres in low-cost operations to support growth in these segments in Asia-Pacific markets, including Australia and New Zealand,' Goodyear chairman and chief executive Robert J. Keegan said at the time. Glass Oceania Glass, Australia's last manufacturer of architectural glass, collapsed into insolvency earlier this year after posting a $1.2 million annual loss. The Melbourne-based company had supplied glass for homes and offices since 1856. 'Our glass is featured in many of Australia's most iconic buildings, including the Australian Parliament House,' its website noted. Oceania Glass, which employed 260 people, had previously complained to the federal government's Anti-Dumping Commission it was unable to compete with cheaper imports from China and Thailand, after tariffs were removed during the pandemic. Australian Workers' Union Victorian secretary Ronnie Hayden warned in February that there would be a 'tsunami of cheap products dumped in Australia' if the commission took too long to investigate complaints. 'If we don't give the Anti-Dumping Commission more powers and more resources, then we are not going to be ready to deal with this, and there'll be a lot more factories closing down in the future,' Mr Hayden told the Herald Sun. 'It's glass but it's also like steel will be next. The steel industry are on the knees with the amount of steel that's been brought into the country, when we know we can make it here.' Clothes Australia once had a thriving clothing and apparel manufacturing sector, but those jobs have long since moved overseas to factories in Asia with only a handful of niche or specialist producers remaining. The dismantling of Australia's protectionist tariff system beginning in the 1980s all but wiped out local industry, resulting in thousands of job losses as iconic names like Pacific Brands' Bonds and Berlei closed down their factories one by one. In 1985, the textile industry employed 20,300 people while clothing and footwear manufacturing supported 71,900 jobs, according to the ABS. At the time, imports only accounted for 25 per cent of the clothing sold in Australia. Today, local manufacturing employs fewer than 1000 workers, and less than 5 per cent of Australian clothing is made in the country. 'Over the past decades, clothing and textiles manufacturing has declined to around 1.5 per cent of Australia's manufacturing output, as activities have been offshored to countries with cheap labour,' the Australian Fashion Council (AFC) said in a 2022 report. 'However, with increased automation, clothing and textiles can become more capital intensive, positioning Australia as a potential textiles manufacturing powerhouse, particularly for high-quality goods.' The peak body noted that as a result of Covid, many Australian brands were 'now looking to manufacture locally to deliver vertical, sustainable and de-risked supply chains'. Paper Australia no longer makes its own white paper. Opal Australian Paper, a subsidiary of Japanese paper giant Nippon, was forced to cease white paper production at its Maryvale mill in Victoria's Latrobe Valley in December 2022, leading to 200 job losses. The company had been devastated by court decision a month earlier which crippled its ability to make paper. Government-owned timber business VicForests lost a Supreme Court case which found it was not doing enough to protect endangered wildlife including two possum species, forcing it to scale back timber harvesting in parts of rural Victoria. VicForests was a massive supplier for Opal Australian Paper and the company was unable to find a suitable replacement to continue producing white paper. Opal announced a further 220 job cuts across Australia and New Zealand last year. In a memo to staff obtained by the ABC, the company blamed 'a series of unplanned challenges' including Covid and rising energy costs, as well as 'market disruptions' from the cessation of white paper production that were 'continuing to severely impact Opal's financial performance'. The Maryvale mill, one of the Latrobe Valley's largest employers, still manufactures brown paper products. Steel The Whyalla wipe-out may still arrive, just a few years later than forecast. Australia's $29 billion steel industry is effectively on life support, after decades of decline in the face of rising costs and competition from Asian producers. BHP's Newcastle Steelworks, which opened in 1914 and employed up to 16,000 people at its peak, closed in 1999 in what was, at the time, the biggest-ever blow to Australian industry. While the broader industry employs some 110,000 workers, today there are just two steel producers, BlueScope's Port Kembla plant in NSW and the troubled Whyalla Steelworks in South Australia. Whyalla was built by BHP in 1941, spun off as OneSteel in 2000 and renamed Arrium in 2012. It collapsed into administration in 2016 before being rescued by British billionaire Sanjeev Gupta's GFG Alliance in 2017, but promised upgrades to the plant did not eventuate. The South Australian government again forced the Whyalla Steelworks into administration in February, citing concerns about underinvestment by GFG and the plant's financial viability. Administrators KordaMentha revealed in March the steelworks was losing $1.5 million a day, totalling $319 million in the seven months to January, before its collapse leaving $1.34 billion in debts. A sale process is currently underway, with reports BlueScope has been granted a rare right-of-last refusal in the deal. BlueScope, the country's largest steelmaker, was last year handed nearly $140 million by the federal government to upgrade its Port Kembla plant, as part of a $200 million rescue package that included $63 million for Whyalla. In 2017, a parliamentary inquiry into the future of Australia's steel industry warned that rising power prices were affecting the viability of steel and other energy-intensive industries. 'The committee is concerned that without remedial measures and a tenable bipartisan plan to reduce energy costs, the future of the Australian steel industry remains in doubt,' the report said. Plastics Australia's largest plastics maker, Qenos, collapsed into administration last year, blaming multimillion-dollar losses amid soaring gas prices. The Chinese-owned chemical manufacturer produced plastic resin products extensively used across household and industrial packaging. Qenos employed 700 people and operated plants at Altona in Melbourne and Botany in Sydney, which ceased operations earlier in 2023. At the time, AI Group's Mr Willox warned the decision to place Qenos into administration 'reflects the erosion of key pillars of Australia's industrial landscape — and risks causing much more'. 'A whole range of industrial and commercial products depends on the flow of resources and materials between oil and gas producers, refiners, chemicals businesses like Qenos, intermediate manufacturers of products like food and beverage packaging, and downstream users like food processors,' he said. 'Any house in Australia will have multiple polyethylene products in it. The closure of the ExxonMobil refinery in Victoria in 2021, driven by age and the pressures of the pandemic, dealt a blow to Qenos and many other businesses in the industrial ecosystem.' But Mr Willox said 'most of all, the long-term rise in natural gas prices eroded Qenos's competitiveness and its prospects'. 'Prices rose over the past decade because of the takeoff of LNG exports, the erosion of Southern gas production, and the lack of adequate planning to manage these long-foreseen developments,' he said. Other Australian plastics and chemical manufacturers have gone under or moved operations offshore in recent years. Adelaide-based wheelie bin maker Trident Plastics — one of the largest custom moulders in Australia — collapsed in 2023. Rising gas prices and increasing international competition were also cited by Dow Chemical in its decision to shut its Altona plant in 2019.
Daily Mail
6 days ago
- Business
- Daily Mail
Australia's unemployment rate highest since 2021
Australia's unemployment rate has shot up to the highest level since late 2021, when Sydney and Melbourne were emerging from Covid lockdowns. The jobless rate of 4.3 percent in June was the highest since November 2021, with 33,600 people losing their jobs and boosting the prospect of an August rate cut. This occurred as the number of full-time jobs fell by 38,000 while 40,000 part-time jobs were created, signaling a sharp drop in working hours. Canberra, the home of federal public servants, had Australia's lowest jobless rate of 3.6 percent. This was a result of federal government spending hitting the highest level since 1986 outside of the pandemic. Australian Industry Group chief executive Innes Willox said public sector job growth was holding up as private sector demand for labour weakened. 'For over a year, there has been negligible job growth in the private market sector, with government-supported employment in the public and non-market sectors doing the heavy lifting,' he said. 'A rise in unemployment to its highest level since the pandemic points to the impact that our weak private sector is having on the labour market. 'With the private market sector accounting for two-thirds of employment in Australia, it was inevitable that its sustained weakness would eventually spill over to the broader labour market. It appears this problem is now coming home to roost.' Unemployment was higher than average in New South Wales and Victoria where migrant numbers are highest. 'Excessive migration has played a significant role in pummelling Australia's economic productivity ,' Institute of Public Affairs deputy executive director Daniel Wild said. 'It has created extended periods of negative per capita economic growth, and exacerbated the housing and rental crises. Australia's unemployment rate also rose for the first time since December even though the Reserve Bank had cut interest rates in February and May. The latest jobless data from the Australian Bureau of Statistics is also worse than the RBA was forecasting in its May statement on monetary policy , with the 4.3 percent figure slightly higher than the 4.2 percent level it had predicted. The bad news on the labour market could make the Reserve Bank more inclined to cut rates on August 12 should upcoming June quarter inflation data show a moderation in underlying price pressures. KPMG chief economist Brendan Rynne said the fact that 34,000 more people are looking for work would make a rate cut next month more likely. 'While quarterly inflation data is still a week or so away, today's data will reinforce the weakness that is continuing within the private side of the Australian economy , and even by itself should be enough for the RBA to drop the cash rate at its next meeting,' he said. The RBA surprised financial markets earlier this month when it kept the cash rate on hold at 3.85 percent. Governor Michele Bullock argued the underlying inflation rate of 2.9 percent was still too high in the March quarter, even though it is within the RBA's two to three percent target. AMP economist My Bui said just 2,000 new jobs were created in June, compared with market expectations of 20,000, which suggested the labour market was softening, with employers mainly hiring new part-time staff. 'Today's jobs data suggests a potentially broad weakening in the labour market,' she said. 'The composition of jobs gains was also weak.' This also suggested unemployment was now at a level less likely to fuel inflationary wage increases. 'We believe that the state of the Australian labour market is more balanced than tight and is not a source of inflationary pressures, warranting a rate cut in the August meeting,' Ms Bui said. AMP is expecting the RBA to cut rates in August, November, February and May, which would take the cash rate down to 2.85 percent for the first time since December 2022. That is slightly more optimistic than the futures market pricing for a 3.1 percent cash rate by early next year. Victoria was by far Australia's worst performing labour market with the highest jobless rate of 4.6 percent, even though Melbourne receives a large share of overseas migration . New South Wales and South Australia had higher-than-average jobless rates of 4.4 percent. Queensland and Western Australia had below-average rates of 4.1 percent. The Australian Capital Territory, the home of federal public servants in Canberra, had the lowest jobless rate of 3.6 percent, which was better than Tasmania's 3.8 percent level and the Northern Territory's 3.9 percent. National unemployment has risen despite rapid population growth, with 447,620 migrants moving to Australia on a permanent and long-term basis in the year to May. This was 33.6 percent higher than the 335,000 level Treasury forecast for the 2024-25 financial year that ended in June.
Daily Mail
16-06-2025
- Business
- Daily Mail
BREAKING NEWS Penalty rates and BREAKS could be on the chopping block under new work from home rules
Professionals working from home could be denied the right to take breaks or be paid penalty rates for weekends and public holidays if an employer group had its way. The Australian Industry Group, which represents 60,000 businesses employing a million workers, has asked the Fair Work Commission for permission to take away entitlements in exchange for allowing WFH privileges. The employer group had made the application to vary the clerks award, covering administration support staff. It has confirmed it has been participating in confidential discussions with the workplace umpire. 'It would be highly inappropriate for any party to comment on or otherwise disclose the content of discussions or developments that have occurred in the context of those proceedings,' a spokeswoman told Daily Mail Austrtalia. 'To do so would be a clear and deliberate breach of faith.' AI Group chief executive Innes Willox argued he supported work from home, after former Liberal leader Peter Dutton lost the election with an aborted plan to force Canberra-based public servants back into the office. 'The last election demonstrated the importance people place on working from home, and we know that accommodating this, when they can, is also important to many employers,' he said. 'Sadly, some in the union movement seem determined to cling to the notoriously complex web of outdated workplace laws instead of constructively and cooperatively exploring how regulation of working arrangements can be genuinely modernised in a way that is both fair and flexible for all parties.' A little more than a third or 36 per cent of Australians are now working from home with Covid lockdowns normalising the practice.
Daily Mail
12-06-2025
- Business
- Daily Mail
Showdown looming at key summit hosted by Anthony Albanese affecting millions of Australian workers
Business groups and unions are on a collision course over priorities for a planned productivity summit despite the prime minister's optimism they can find common ground. Anthony Albanese has dismissed suggestions the roundtable, which will take place in August and is aimed at finding ways to lift the nation's economic output, would amount to little more than a Canberra talkfest. 'It is not unreasonable to bring people together ... business and unions have common interests, we have a national interest in boosting productivity,' he told ABC Radio on Wednesday. But Australian Industry Group chief executive Innes Willox said it was disappointing the union movement had taken the view that 'there's nothing to see here and that is all about cutting jobs and cutting wages and it demonstrably isn't'. 'One of the frustrating conversations to have with unions is to hear them say: 'Yes, of course there'll be AI but everyone's job will stay the same,' he told Sky News. 'Unfortunately it won't but we have to prepare people for that - and that will be a massive exercise in reskilling and retraining ... that's where this productivity summit is going to be so important.' Experts are concerned about Australia's lagging growth in productivity - a key economic measure of efficiency and long-term driver of improved living standards. Working Australians must be at the centre of the summit, ACTU secretary Sally McManus said. 'We need to leave behind the idea that productivity is equated with cutting pay and making people work harder for less,' she said. Australian Chamber of Commerce and Industry chief executive Andrew McKellar said he was realistic about the potential for tangible outcomes at the roundtable. 'If it was easy, it would have been done already,' he told AAP. The scope of the Fair Work Act had grown significantly in recent years, which had a 'significant impact' on small businesses trying to hire staff, Mr McKellar said. Planned payday superannuation reforms also needed to be implemented in a way that didn't 'create a significant additional burden for small business', he added. 'We don't expect (the government) to revisit all of the industrial relations changes, but ... let's make some practical changes that make it easier for small business to create jobs and employ more people to promote productivity,' Mr McKellar said. Tax changes, cutting the regulatory burden and encouraging the uptake of digital technology would all be priorities for the business lobby, which singled out AI as a field that could make a big difference to productivity. Productivity Commission chair Danielle Wood said it was important to be clear the target was 'not about working longer hours'. 'When we're talking about labour productivity, all it means is producing more for each hour worked,' she told ABC TV. 'This is about making sure Australians have the skills, that they have access to the technology, that we have great business processes that allow all of us to get more out of each hour that we put in.' Higher productivity was ultimately what drove improvements in incomes and living standards, and technological change was the most important driver of growth, Ms Wood said. 'Australia is lagging in the adoption of AI ... so that's certainly one of the areas of opportunity that we will be looking to,' she said. The commission's most recent report showed labour productivity fell 0.1 per cent in the December quarter and dropped 1.2 per cent in the past year. Shadow treasurer Ted O'Brien said the opposition gave the government some credit for calling the summit. 'A round table. Yay!' Mr O'Brien joked during an interview on Nine's Today program. 'But look ... to be fair, at least they're recognising the problem ... so let's take that as a partial tick.'
