Anthony Albanese flags that ‘Made in Australia’ is no jobs bonanza

Anthony Albanese flags the policy will not be a major driver of jobs, saying locally-made products such as solar panels will be able to compete against Chinese imports.

Anthony Albanese says Australia can compete globally in solar panel manufacturing because it is no longer as labour intensive.

Anthony Albanese has flagged his Future Made in Australia policy will not be a major driver of jobs, saying locally made products such as solar panels will be able to compete against Chinese imports because “mechanisation” has made manufacturing less labour intensive and therefore cheaper than in the 1970s and 80s.

The Prime Minister’s comments come as experts warned that the challenge of implementing the tens of billions of dollars in additional investment in sovereign capacity, renewable energy and green manufacturing will be finding enough workers in an era of skills shortages and historically low unemployment.

Mr Albanese on Thursday was challenged on Sky News whether his $1.1bn bet on creating a domestic solar manufacturing industry would ultimately fail because Australia could not compete with the scale and cost advantages of other countries.

“Well, we can be competitive because one of the things that’s happened in the global economy since the 70s and 80s, when we saw Australian jobs leave our shores because of cheaper labour, is that if you look at the production process, labour’s a far less as a proportion of the cost of production than it used to be with mechanisation that has occurred,” he said.

But following his speech to the Queensland Media Club, the Prime Minister’s made it clear that creating jobs through industry intervention remains a major selling point for Labor, saying the jobs created in the Hunter Valley as a result of solar subsidies outnumbered the loss of jobs from the closure of the decommissioned Liddell power station.

“One of the things that we have done is look at what the opportunity cost is of not acting, and that’s severe. That’s a loss of jobs or loss of communities, a failure to transition, because the rest of the world is moving on this,” he said.

“And so we are very positive that across the board, by government putting in place structures that facilitate and provide that catalyst for private sector activity, what we’ll see is a great many more jobs grow in the future.”

ANU professor Rod Sims said he was heartened by a reference by Mr Albanese to investing in industries where Australia has a “comparative advantage” – a term referring to a country’s ability to make something at lower cost than its trading partners.

Mr Sims, a former ACCC boss, said Australia had the potential to be a world leader in renewable power generation and green manufacturing.

But it was crucial that the government develop a proper framework to ensure the billions being funnelled into pursuing these opportunities were not diverted into industries and projects that do not have a long-term future.

“The problem with ‘Made in Australia’ is you can make anything in Australia. It doesn’t provide a framework. But I’ll happily wait and see what comes in future and in the budget,” Mr Sims said.

UNSW professor Richard Holden said there was an element of the Prime Minister and his government “fetishising” manufacturing over other sectors of the economy.

“There’s nothing wrong with manufacturing jobs if they are sustainable, and nothing wrong with investing in industries if we think we can compete. Then again, there’s nothing wrong with services jobs, either, and they make up the overwhelming share of jobs in the economy,” Professor Holden said.

“I’m not against some form of industrial policy, but we need to be smart about it, and the rules of economics haven’t suddenly changed. We still need a comparative advantage.

“So we could fill some small to modest part of the EV battery supply chain. But the idea we are going to make all the EV batteries in Australia for Australia? Not competitively we won’t.

“If we are making something at lower quality at double the cost, then it looks a lot like the 1970s, when we made crappy cars that were very expensive.”