12 May 2020


There’s no doubt that we’ve had some very difficult months to get on top of the coronavirus pandemic in Australia and there will be more challenging times ahead as we reopen our economy and manage any clusters where they occur. As the reopening gets underway, we have an opportunity to imagine what a post-pandemic economy may look like across Australia. That economy should be built on a bedrock of secure, well-paid jobs across a broad range of industries, with workers and small businesses having options to build careers so that they can care for their families and make a life well into the future.

It should also include a strong manufacturing industry. To achieve this, governments must arrest the contraction of manufacturing that has sadly been occurring in Australia over the past seven years under the conservative government and develop a new plan to make our manufacturing sector a growing and vibrant part of our economy. Between 2011 and 2016, the ABS census data shows over 200,000 manufacturing jobs have disappeared. What was once an industry that we were all very proud of, that contributed to 14 per cent to our gross domestic product in 1996, manufacturing now makes just around 5.5 per cent of GDP. Yet at the same time, Australians have been buying more manufactured goods than ever. Our demand for them is growing, but the products that we want to buy are increasingly not being made here in Australia or by Australians.

Manufacturing can and must be part of Australia’s future economic security and this point has been well made by experts around our country. As the coronavirus has well illustrated, our definition of sovereign capability must be expanded to include all areas of the Australian economy, many of them centring on domestic manufacturing capacity. When we make what we need to get through a crisis like the coronavirus, that puts us a step ahead strategically and makes it easier to get through difficult times. It’s a simple equation: the more we make here, the more self-reliant we are and the better we will be able to face another crisis in the future.

This isn’t about being anti-trade, far from it. Australia is a very proud nation that trades with many countries around the world and, in particular, in the Asia region. But if we can make something here, why shouldn’t we? And further, if we can diversify our trade relations to ensure that we’re not overly dependent on one single trade partner for our prosperity, why don’t we? As the recent events concerning many of our barley growers and meat producers have shown, this is just prudent economic management.

But arresting the decline in manufacturing will require careful and considered policy-making and implementation by government. We will need to carefully map our current skills and capabilities in manufacturing and make new investments in industries that are performing well, like agriculture. We should use government procurement processes to lead the way in buying and using Australian-made goods.

Getting the taxation settings right will also be an important part of the discussion we need to have in this place. And that means—as Jim Stamford points out in a recent paper for the Australian Institute looking at tax incentives, to name just one example—that our future commitment to innovation must be far greater than just political slogans. We will need to make real investment in research and development. It should be carefully targeted to encourage small and medium enterprises in supply chains, and not just make life easier for big multinational companies as, unfortunately, this government seems to prefer. Strong local manufacturing offers employment, creates opportunities and helps add to the country’s prosperity.