For once i agree with Andy RR. and will speculate a little further based on my own experience.
Firstly it's not "labour costs" that are killing industry, its "employment costs".
Let me give you some examples.
"Workers Compensation" this is a giant rort and every manager I know has a story of rorting. I won't bore you with mine unless asked.
"Industrial relations law" I had a retrenched worker fill out a form the size of a small bit of toilet paper alleging he was paid the wrong wage for Sixteen years. This resulted in a Federal workplace audit that cost me six weeks of management time and Five thousand dollars.
"Occupational Health and Safety" While I am a fervent believer in the application of this, it is now a new home for oxygen thieves.
"Anti Discrimination Law" Enough said.
"Taxation" - which doesn't differentiate between income streams based on risk and stability. Why do farmers get "drought" aid but manufacturers don't? Then of course there is the dreaded fringe benefits tax which makes things like overseas travel on business a real pain. Then of course there is taxation disincentives to do with entrepreneurial matters.
"Infrastructure" allow energy suppliers to price gouge and every other little bit of government to do the same.
"Cost of living"? we have world class rent seekers such as Coles and Woolworths driving that.
"Cost of housing"? We have overseas investors driving that.
That is just the start of my list. I'm sure we could add more.
The actual wages? Not an issue in my opinion. Australians individually are pretty efficient and smart workers they are much more multi skilled and innovative than Americans and not hide bound like Europeans, nor as venal and criminal as some Asians. Our individual productivity is high.
Public Holidays? We have less than America.
"working hours"? We work more hours than Americans.
My own experience of high tech manufacturing is that we are very competitive, but lack of patient capital and taxation mean that the best strategy for someone like the Ozrunways boys - Shagpile and all, is to build their business to the point where someone like Jeppesen buys it and takes it offshore.
To put that another way, once Ozrunways gets to a certain size in number of employees, all the additional Australian regulatory costs I've mentioned will expand exponentially and destroy profitability unless it goes offshore.