In opening the latest Furniture, Cabinets, Joinery (FCJ) Industry Leaders Forum, held at Parliament House Canberra on Thursday 20 August, the Hon Karen Andrews MP, Parliamentary Secretary to the Minister for Industry & Science, confirmed the Government’s commitment to the FCJ sector and to small manufacturing businesses in general.
The Forum was the fifth and final in a series of Industry Leaders Forums convened around Australia during 2014/2015 by the FCJ Alliance (FCJA), with the support of the Commonwealth Government’s Department of Industry and Science. The purpose of the Forums was to identify the core issues confronting the FCJ industry throughout Australia and consequently derive a policy framework to drive the industry’s ongoing development over coming years. The FCJA developed an Industry Position Paper based on the deliberations of the previous four Forum meetings and this was circulated to all attendees, including Government representatives, prior to the Canberra Forum to stimulate debate on the day.
In introducing the Parliamentary Secretary to open the Forum, the FCJA’s Chairman Ron Scott, highlighted that it is the small to medium size business owners that epitomise Australia’s FCJ industries that are the heart and soul of Australia’s economy and it is the FCJ companies that are creating jobs, and as such that the industry needs and deserves a champion in Canberra.
Ms Andrews responded that she is already a strong advocate for the work the FCJA is doing on behalf of the industry and that she will continue to support the industry. Ms Andrews confirmed that she is happy to consult on all issues, is open to hear industry views and will continue to work with the FCJA and its members to resolve issues of concern.
The Parliamentary Secretary continued that she is well aware of the challenges confronting the industry and recognises that we still have a long way to go on many of them. But the Government, and she personally, is already working closely with the industry to address certain issues, notably regarding product that is not compliant with Australian standards/regulations (including product that may be compliant in itself, but is not installed properly or maintained properly). This issue is firmly on the Agenda of the Building Ministers’ Forum (BMF) and a Commonwealth/State/Territory Senior Officers Working Group has been established to investigate the issue and report back to the BMF Ministers.
Ms Andrews said that she was also heartened by the obvious innovation going on in the FCJ sector. She commented on the highly innovative activities she had the privilege to witness when visiting a number of FCJ businesses on the Gold Coast which the FCJA had facilitated. She reaffirmed the Government’s commitment to innovation, but noted that while there was clearly a high degree of innovation in the FCJ industry it was not necessarily very visible. This is an area where Ms Andrews suggested that the Government and the industry (through FCJA) could work closely together to promote the industry’s capabilities and get the right message out in the marketplace.
Ms Andrews also encouraged everyone in the industry to make contact with AusIndustry as there are many programmes that AusIndustry delivers that can help the individual businesses. Indeed, AusIndustry has followed up with all the FCJ businesses that Ms Andrews visited, to ensure they have the opportunity to maximise returns from the assistance that the Government does provide. The Parliamentary Secretary noted that there was merit in forging closer collaboration between AusIndustry and the FCJA to ensure that more FCJ companies could be introduced to the relevant programmes. The Parliamentary Secretary’s Office is currently engaged with AusIndustry/the Department on this issue.
In conclusion, Ms Andrews congratulated the industry on the comprehensiveness and focus of the Industry Position Paper developed by the FCJA, as it highlights that the industry understands what is needed to ensure a strong future and is prepared to take action to achieve that. The Parliamentary Secretary asked the FCJA to determine the core priorities for the industry that could be taken to the Minister and she committed to work with the industry to progress these.
Ron Scott warmly thanked Ms Andrews for her comments and obvious support for the industry. Ron stated that this is important for the industry to hear as it is one where the businesses are largely run by the people that own them, have a heavy investment in them and have a real passion for what they do. As such, he is concerned that much Government rhetoric about Australian industry acknowledges that 97% of businesses in this country are SME’s, but industry policy and programme delivery still seems heavily focussed on big business and multinationals. Ron was concerned that this particularly seems to be the case with the Advanced Manufacturing Growth Centre to be chaired by Andrew Stevens.
Ron stressed that it is vital that the Government understands the contribution that the FCJ industry makes to the Australian economy. He reiterated that it employs more than 130,000 people around Australia and accounts for $33 billion turnover annually in its manufacturing activity alone (leave aside the multiplier effect of businesses servicing/supplying this sector and the subsequent distribution, wholesale and retail activity focussed on FCJ product). Moreover, to survive as small businesses, companies need to be highly innovative but because of their size they often miss out on the support that Government does provide.
Nonetheless, there is much the Government can do to transform the FCJ industry and help the various businesses become more competitive and develop skills to ensure business sustainability. Assistance with skills development (especially business/management skills), mentoring, design integration and innovation, and collaborative product and market development is vital, Ron highlighted. But such assistance will only be relevant if Government truly understands how manufacturing works in Australia and in particular, how small business works.
In response, Ms Andrews reiterated that the Government is committed to manufacturing in Australia and she expressed confidence in the Growth Centres to be able to help develop a structure to ensure a strong manufacturing base in this country. Moreover, she was firmly of the belief that Australia’s FCJ industry is clearly and absolutely a part of Advanced Manufacturing and as such the FCJA and the industry it represents will need to work with the Advanced Manufacturing Growth Centre.
Tracey Gramlick, FCJA Board Member and CEO, Australian Windows Association continued with the formal presentations at the Forum. Tracey noted the Parliamentary Secretary’s ongoing openness to hear industry views and concerns and in particular acknowledged the support Ms Andrews has given to the issue of non-compliant building products. Tracey updated the Industry Leaders Forum on what has been happening with compliance issues, noting that for the first time in 10 years, when industry first started raising concerns about this issue, some progress finally seems to be being made, in large part because all parties have come together to pursue the issue with a common voice.
This progress is reflected in the Building Ministers’ Forum focus and the Working Group it has established (as previously identified by the Parliamentary Secretary), the current Senate Inquiry into non-complaint building products, and the ACCC Consultation Paper on draft criteria for adopting international standards and risk assessment. Tracey reaffirmed that the industry is committed to work collaboratively on this issue to ensure a sound outcome to overcome the current lack of verification of compliance, the insufficient visible regulatory authority, and the lack of enforcement and penalties for non-conformance.
Darren Doggett, FCJA Board Member and President Australian Shop and Office Fitting Industry Association, expanded on what needs to be done to ensure a vibrant FCJ industry for the future. Darren highlighted that it would be in everybody’s interest to build a strong profile for a “Brand Australia” that reflected high standards, workmanship, service and design & innovation to which all FCJ businesses should aspire and then promote the fact that this is what you get when you buy Australian product. But to do this, we need a fundamental change in how we run businesses in Australia, with further focus and education on design, management and marketing skills, and encouraging businesses (which are largely small) to work together collaboratively to achieve better outcomes, thus generating an industrial base that is attractive for young people to work in. Ultimately, Darren believes we can - and need to - be recognised as the Centre of Excellence in FCJ manufacturing in the world.
Jane Calvert, National President Forestry, Furnishing, Building products and Manufacturing Division of the CFMEU, strongly welcomed the FCJA’s work in developing the Industry Position Paper stating that it highlights all the key areas of concern on which the Union is advocating and that the CFMEU endorses all recommendations made, specifically in relation to the issues of non-compliant product, illegal logging, unfair trade, training and mentoring and Government procurement.
Jane stressed though that a key cause for concern is the immediate threat of the China Australia Free Trade Agreement (CHAFTA) for this industry. It will cut $161m in industry assistance over the next 4 years with no offsetting benefit to the Australian industry. Indeed, China gets to protect its paper and wood products industry for eternity whereas we have given it all away, especially as the Agreement does not call for any environmental or labour standards to be upheld. Jane stressed that while Government may regard industry assistance as dead, industry policy must not be allowed to be buried and she advocated strong action on these grounds.
Other issues raised by participants at the Forum included:
- Concern over the lack of industry data available which makes it difficult to assess the true nature of the industry and how it is actually performing
- Skills that are needed today and in the future are vastly different to what they were 20 years ago, yet many of the current training packages and training providers do not reflect state of the art developments
- The skills needs of the industry are not merely vocational; the industry is a “pyramid employer” demanding a vast range of skill sets that are anchored in the design and craftsmanship capability of the manufacturer
- The role of digital technologies and digital marketing are vital to the industries future development, let this is not well understood by the industry at large
- Government Procurement should pay due regard to the adherence to standards and conditions expected to be met by Australian industry, including with regard to environmental sustainability and social and workplace practices, regardless where product is sourced
- There is a place for standards in Australian industry, but it is vital that all parties comply with such standards and there would seem to be merit in introducing an FCJ Industry Certification Scheme by which all suppliers/producers must abide
- Reiteration of the significance of the FCJ industries as a whole – as Brett Ambrose, FCJA Board Member and MD of Blum Australia pointed out, “how many other Committee Rooms in Parliament House are filled with the representatives of the industry that is responsible for every feature in that Committee Room, from chairs, conference table, desks to the doors, windows and joinery that are all vital to the integrity and function of the Committee Room”.
Darren Atkinson, Manager Advanced Manufacturing Section, Department of Industry & Science, then responded to the issues raised, advising that the Government had found the Forum process very positive. The Forum deliberations have provided a valuable basis for determining and understanding the industry views and in particular the Department has welcomed the professional way in which the industry was represented by the FCJA and the way in which it engaged with the Government.
Both the Department and the Minister’s Office have appreciated the proactive approach taken by the FCJA, first in developing the Strategic Industry Plan and now the Industry Position Paper as both provide a useful focal point for the Government. It is heartening to see that the FCJA identified the problems, challenges and potential solutions. He praised the strong positive vision for the industry as articulated by speakers on the day such as Darren Doggett.
Darren Atkinson noted that while the development of the Position Paper may be seen by industry as the end of the 18 month Forum process, it is really just the beginning of stronger engagement with the Government. Darren reaffirmed that the Parliamentary Secretary is a big supporter of the FCJ industry and accepted the need for an even stronger engagement between the FCJA, AusIndustry and the Department. However, many of the issues raised in the Position Paper fall within the portfolio responsibility of other Ministers and Departments, and indeed some are State rather than Federal issues. However, Darren undertook to work closely with the FCJA to help identify the appropriate contact points in these other portfolios and to facilitate connection with these. The Government’s further engagement with the FCJA would also include work to develop better data on advanced manufacturing including the FCJ sector.
Darren also sought to reassure the Forum participants that it is not the intention of the Growth Centres to reflect big business interests. He stated that one of the core issues for the Growth Centres will be to identify ways in which to engage SME’s so that they can better benefit from the activities of the larger multi-national companies. He believed this could become a major role for FCJA to pursue with the Advanced Manufacturing Growth Centre, which he reiterated clearly encompasses the FCJ industries, and he encouraged the FCJA to engage with the Centres Chair, Andrew Stevens.