Senator PATRICK (South Australia) (16:25): I move: That the Senate— (a) notes that: (i.) Australia has a propensity to simply export its raw materials and commodities to countries that then profit by doing the value add and selling it back to us, and (ii.) this approach denies Australia economic activity and job opportunities; and (b) calls on the Australian Government to adjust policy and support settings to ensure we value add before exporting. Just to make sure everyone's clear on what we're talking about, I have moved a motion that the Senate note that Australia has a propensity to simply export its raw materials and commodities to countries that then profit by doing the value-add and selling it back to us, and that this approach denies Australia economic activity and job opportunities. The motion calls on the government to adjust policy and support settings to ensure that we value-add before exporting. That's what we're here debating today. I want to go back to the Governor-General's speech on the first day of this parliament. I want to make it very clear that I'm not being disrespectful to the Governor-General—the Governor-General simply reads out the speech of the government. I found that speech to be lacking in vision. It talked about housekeeping stuff. It talked about education. It talked about the NDIS. It talked about health, mental health, aged care, training—all very important things, but there was nothing that set a vision. Had Labor not lost the unlosable election, they would have had all of those things in the Governor-General's speech as well. I am always careful about what I do. Having listened to the speech, I then went to my office and read it again. I even grabbed the speech and shook it to try and get some vision to fall out of it. Then I squeezed it, and I still couldn't get any vision to drain from the paper. What I was looking for was something that said, 'Here's the current pie; how do we make that a bigger pie to share around? How do we make it a tastier pie?' That's what I was looking for. Today we've got a government wandering around in the dark. What I'm trying to do here today is to switch a light on for the government, to provide some vision. Consistent with my collegial activities here in this chamber, I always give some advice to Senator Brockman in relation to his speeches. I'm turning on a light, and I'd like the government to see, and I'm going to be sitting here waiting to see what Senator Brockman says after me and whether or not he just switches the light back off. We'll have to wait and see what he does. Value-adding is taking raw materials through some level of processing to add value. I'll keep it simple for the moment. Instead of just exporting our iron ore, we can turn it into steel—that's a really simple example. As we do that, we create jobs. We create economic activity. And, because we're not exporting the iron ore and having it brought back in a more valuable form as an import, it even helps to improve our balance of trade. It's something we ought to be looking at. I am going to give some examples. Lithium: Australia has an abundance of lithium and the world is hungry for lithium. We have lithium-ion batteries in our iPhones and in our iPads—and in our Samsungs, just to be neutral. We have them in wall banks. They're going into electric vehicles. Tesla is one. But it's not just Tesla; the car market has actually indicated to the world that it intends to get rid of internal combustion engine cars in a number of jurisdictions starting around the 2025 to 2030 mark. Norway is doing an incredible job right now transitioning across to electric vehicles. Australia's not doing well in that regard, but we've got all this lithium and there's a huge market for it. In 2050, the lithium market worldwide, in terms of the first stage—mining and concentration—will be worth about $12 billion. We have about 60 per cent of the lithium deposits in the world, so we can take 60 per cent of $12 billion. Or we could refine and process that lithium, and the number for that, in 2025, is projected to be around $41 billion. If we go to the next stage of the electrochemical processes, it's $297 billion. Then, to produce cells, it's up to $424 billion, and, to the assembly of battery systems, it's $1.3 trillion. There's your choice: we could either have 60 per cent of $12 billion of economic activity or we could go for trillions. It seems the choice we've made is that we're going to export our lithium to other countries to generate that value. Some of those countries are likely to take the money they earn from that and spend it exercising soft power against us, so there's even a national interest and a national security element associated with what we're talking about today. Everyone knows Mr Lee Kuan Yew, the leader of Singapore for so many years. He always said that you've got to have a strong economy and a strong defence force such that you're independent. But he made the point that you can't have a strong defence force without a strong economy. Another example would be steel. At question time today I asked questions about Whyalla. At Whyalla we have a steel long-products manufacturing capability. Steel is really important. If you're not doing steel, you're not doing any manufacturing. In times of defence we do want to have a capability to work with steel, to produce steel. So, instead of just exporting our iron ore, we could be assisting Mr Guptha with his proposal to greatly expand Whyalla into a steel powerhouse—to take Whyalla from a population of 22,000 to a population of 80,000 workers generating product. And we could use that product here in Australia, once again improving our balance of trade. We've got opportunities here. We've got rail. The government has indicated there will be a huge rail program out into the forwards, which could all be produced in Whyalla. I think the figure is 262,000 tonnes of steel. The other thing we could be doing is producing transmission towers. We are building an interconnector between South Australia and New South Wales to the benefit of both states. That will be built by ElectraNet. There's a danger because ElectraNet is significantly owned by Chinese shareholders. I'm sure that, when looking at price, they would happily go to overseas steel entities for cheaper steel, but that's short-sighted. We could be producing that steel in Australia and putting it into those transmission lines and therefore reinforcing our capability and creating our own jobs at the same time. There's a difference between price and value. Value-adding brings about jobs, value-adding brings about economic activity and, as I said before, value-adding enhances things like our balance of trade. What do we need to be doing about this? Here's the mud map of what we can do to execute a vision. Start off by making sure we assist existing industry. I've got a great report—it's one of my favourite reports—Manufacturing (still) matters, by Jim Stanford, working for the Australia Institute. It goes back a couple of years, to June 2016. It spells out the state of our manufacturing industry. Sadly, although back in 2000 we had 1.1 million people working in manufacturing, in 2016, when the report was written, we had something like 850,000 people working in manufacturing. As a percentage of GDP, manufacturing has collapsed. I think we're sitting up there with Botswana at the moment, in terms of numbers—and we are purportedly a First World country. That's one of the things we need to do. We need to concentrate on manufacturing. We've got to make sure we've got a critical mass happening too, because you can have a situation—and we know this from the closing of the car-manufacturing industry in both South Australia and Victoria—where you take away one business that is working in the engineering field, and suddenly the two other organisations or companies next to it, which relied on it for product, now have to source that overseas. It makes their job harder, and another one knocks off, and then suddenly you lose the critical mass necessary to have a thriving manufacturing industry. We need to be assisting businesses that might have a risk-averse mind as to investing in something like a second stage of lithium processing. We need to make sure that our input costs are low. This is where we've had a terrible failing in terms of energy costs in this country. That's really creaming manufacturing. It's fettering investment in these value-add enterprises. We have to change something. We have to do something about this. We have to be mindful of transport costs, particularly when we're moving raw materials to a processing point. But maybe we don't have to move the stuff. If we had the right infrastructure supporting the value-add entities—if we made sure there were roads, facilities, hospitals and schools nearby—that would also be of great assistance. We need to make sure we've got the right R&D incentives. We haven't got that right, here in Australia. We want to have companies being able to invest in new ideas and know that they are supported in doing so. We also need to make sure we have the correct intellectual property framework. We also need to encourage clustering. We do a fantastic job with wine in Australia—and an exceptional job in South Australia, I might add. We do that particularly in terms of exports, because we have an entire market working together to establish a fantastic brand in relation to our wines. Sure, they compete locally, and that's all good, but they are working together internationally to make sure that we can do the value-add here in Australia and export a top-quality drop all around the world. We need to have DFAT responding with measures in relation to other countries that breach World Trade Organization rules. Instead of turning a blind eye to what some of these other countries are doing that gives advantage to their local industry, we need to be calling that out if it's against World Trade Organization rules. Particularly in the case of steel, but in other industries as well, we need to be thinking about making sure we have really solid antidumping laws. We basically need to have policies and structures in place that allow us to appreciate the value-add and to get the benefit of the economic activity. We need to map out that vision. Unfortunately the government are on a merry-go-round. They're going round and round and round. Sure, that's a ride, but it's not a journey, and we need to be on a journey. We need to be on a value-add journey. We need to stop just exporting rocks.