Future Made in Australia: Get basics right first, business warns

The nation’s business community has called for broader reform to support economic wellbeing, with taxation, industrial relations and regulatory red tape the areas of most pressing concern.

Business Council of Australia chief executive Bran Black. Picture: Britta Campion

The nation’s business community has called for broader reform to support economic wellbeing, with taxation, industrial relations and regulatory red tape the areas of most pressing concern.

As business groups parsed the first details of the Albanese government’s Future Made in Australia plan, they warned of the need to “get the basics right first”.

Australian Chamber of Commerce and Industry chief executive officer Andrew McKellar said he had spoken to many of his members in the wake of the Albanese policy announcement regarding encouraging investment in local manufacturing and while many were supportive in principle they were looking for more ambitious reform.

“What they expressed their concern about is, they said it’s all very well to be outlining a strategy like this however, you’ve got to get the basics right first, you’ve got to attend to the things that really do affect broader competitiveness in the first instance,” Mr McKellar told The Weekend Australian.

Meanwhile, corporate leaders were especially concerned about the lack of success when it comes to the government’s “picking winners” and the track record of the wrong investments made in the wrong sectors for the wrong reasons, other than it being cushioned by taxpayer subsidies.

Flight Centre managing director Graham Turner told The Weekend Australian that governments for the past 50 years had tried similar things but with little success. “It all comes down to the high cost of manufacturing in Australia and the fact we struggle to compete against other countries including the US, the UK and a lot of Asia,” he said.

“It has all gone the other way in Australia. We have lost our car industry because we can’t compete.”

He said high wages were not a bad thing but in manufacturing they meant we were priced out of the global market: “We are a lucky country in mining but not so in manufacturing.”

John Wagner, a co-founder and director at Queensland construction and infrastructure group Wagners, welcomed the Albanese policy as essential for the nation’s economic security. “It is absolutely essential that we arc up Australian manufacturing so I think it is great policy although I await further details,” he said.

Mr Wagner said it was vital for Australia to develop a sovereign manufacturing capability in critical areas including hydrogen, sustainable aviation fuel and missile production. “The implementation needs to happen quickly” he said.

ACCI’s Mr McKeller pointed to corporate tax rates and IR policy as worrying gaps.

“At the moment businesses are really concerned about issues like a competitive tax policy not being addressed, we’ve got a higher company tax rate compared to many other competitors – including all the ones that were listed as part of (Albanese’s) speech.

“We’ve just gone through a process where the government has tied business in knots with industrial relations, so making it much harder to employ people going forward and that’s not a good thing.

Mr McKellar said it was accepted wisdom among his 400,000 members that we needed to de-risk Australia’s supply chains and grow sovereign capabilities, but to do so a policy needed to be well designed and coming at a time when the basics of tax, IR and red tape are also properly addressed.

“We are not saying it is a bad idea, or not saying it isn’t something the government shouldn’t be doing, but the overwhelming message I got from my members is they want to see the urgent priorities dealt with. Get the basics right, Be ambitious about what we want to do with taxation, company tax, and let’s address red tape and get that right.”