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Manufacturing solution found in productivity, not subsidy

31 August 2011

The National Farmers’ Federation (NFF) is calling on the Government to ensure the future of Australia’s manufacturing sector, without resorting to protectionist measures.

NFF President Jock Laurie says that it is in the interests of farmers to see a strong and vibrant manufacturing industry in Australia, particularly food manufacturing, without compromising Australia’s long running position against protectionism.

“Agriculture is one industry that has learnt how to become globally competitive through policies that focus on productivity, rather than jeopardising our position in the international trading community through trade-distorting subsidies,” Mr Laurie said.

“Our farmers export around two-thirds of our domestic produce, and we do so competitively in the most distorted area of international goods trade.

“Achieving this was a long and difficult process for Australian farmers, but ultimately shows that it can be achieved in other trade exposed sectors, like manufacturing, as well as agriculture,” Mr Laurie said.

“Of course, the high Australian dollar and the multi-speed economy are placing considerable pressures on our local manufacturing sector, just as they are for farmers.

“The NFF supports a floating dollar and recognises that monetary policy can be an effective means of keeping inflation stable and low, ensuring that the Australian economy grows sustainably, without eroding our living standards.

“However, we are concerned that the Reserve Bank of Australia pays little regard to the impact of monetary policy on the Australian dollar in setting interest rates, and, as a result, little regard to the fortunes of Australia’s trade exposed industries like agriculture and manufacturing.

“The NFF argues that now is the time for the RBA to broaden its mandate in setting interest rates to take into account the impact of its decisions on the Australian dollar – creating a policy, rather than a subsidy, solution,” Mr Laurie said.

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