Australia should reject calls triggered by the COVID-19 pandemic to subsidise domestic manufacturing, because less than 2 per cent of imports are vulnerable to international supply chain disruptions, according to the Productivity Commission.

In a blunt warning that pushes back against protectionist pressure for “reshoring”, the commission identified a limited number of essential products, including personal protective equipment (PPE), chemicals used to treat drinking water, and pharmaceuticals that came from a single, concentrated foreign source.