Looming reports hold out chances of change in R&D, manufacturing

Andrew Liveris bangs the drum about better manufacturing policy. Hopefully that’ll mean changes to government R&D plans.

Andrew Liveris. Picture: Lyndon Mechielsen

Manufacturing tsar Andrew Liveris rightly bangs the drum about government and industry better co-ordinating manufacturing policy, which hopefully will see wholesale changes to government plans on research and development.

R&D is like motherhood - something that everyone wants to support but in this case it‘s not being done correctly.

West Australian senator Slade Brockman’s economics committee is examining the government’s changes to the research and development tax incentive, and is due to report towards the end of this month.

DuluxGroup chief Patrick Houlihan is critical of proposals to reward R&D intensity, which is measured by spending as a percentage of costs.

In his case it costs around $1.4 billion a year to turn on the lights at his manufacturing facilities. Which means if he spends $200 million a year on R&D the intensity will be less than a foreign-based company with just an R&D lab in this country but all the costs elsewhere.

It makes little sense to be throwing taxpayer support to an offshore-based company which is doing its heavy lifting somewhere else.

The aim of the game is to create a more resilient industrial base which employs more people in Australia.

The Nippon Paint-owned DuluxGroup is Melbourne based and produces one million litres of decorative paint each week for the rest of the country.

Thankfully it was spared the Victorian government axe.

R&D incentives have suffered in recent years from constant tinkering as governments try to save money or do things differently.

Hopefully in this climate the new policy will be solid and make sense.

DuluxGroup managing director Patrick Houlihan. Picture: AAP

The aforementioned Andrew Liveris has completed his report to the government on manufacturing policy, which works from the fact that much of what is needed already exists in Australia.

It just needs to be co-ordinated better to make the most of the country’s resources and free companies to make their own way forward.

The final report is before state and federal ministers with an emphasis around an overarching co-ordination role to make the most of what exists.

Liveris is quoted often on the need for cheaper gas prices but also sees the final leg of the energy equation being some form of carbon price mechanism.

Most companies already make decisions based on internal prices. The only people to wake up are those sitting on the government benches in Canberra.

Liveris’s chosen sectors are now well known, including food and agtech, healthcare, biotech, critical minerals, energy and advanced building materials.

Onshoring is already happening post-COVID-19, but is another theme.

The message from there is to aggregate centres of excellence and hold them accountable.