Jobs at risk as Anthony Albanese oversees boom in busts

Almost 1650 Australian manufacturing and construction businesses have plunged into insolvency in six months, as thousands of jobs come under threat across the country.

Anthony Albanese, with, from left, Tony Burke, Terri Butler and Jim Chalmers at Tritium’s Brisbane factory in 2022. The plant is now to close. Picture: Toby Zerna

Almost 1650 manufacturing and construction businesses have plunged into insolvency in just six months, with thousands of jobs under threat as companies move offshore and shut operations in ­response to rising power prices, supply chain pressures, labour shortages and high inflation.

Australian Securities & Investments Commission data reveals a surge in manufacturing and building company insolvencies in the first half of 2023-24, heaping pressure on the Albanese government to increase support for distressed manufacturers and construction firms.

After Australian Bureau of Statistics figures last month revealed a sharp fall in manufacturing productivity in 2022-23, ASIC insolvency statistics show 243 manufacturers called in administrators between July and December. Over the same period, 1387 construction companies entered into administration.

In a warning sign for the government, the half-year snapshot puts Australia on track to record a higher number of manufacturing and construction insolvencies compared with the previous financial year.

Spikes in business failures were also registered across the accommodation and food services, retail, transport, postal and warehousing, healthcare and social assistance, and professional, scientific and technical services sectors.

Ramping up attacks on Labor’s marquee manufacturing and housing off-budget funds, Deputy Opposition Leader Sussan Ley said “Australian manufacturers and builders have been thrown off a cliff and into Labor’s valley of death”.

Since mid-2022, major employers across the country have axed hundreds of jobs. Alcoa last week announced it was shutting its Kwinana refinery in Western Australia that employs 1100 workers. Cash-strapped fast-charging company Tritium in November announced it was closing its Brisbane factory with hundreds of jobs at risk. And homegrown confectionary brand Sara Lee in October entered into voluntary administration.

The January 10 ASIC insolvency statistics compare the first six months of the past three financial years and reveals an increase in distressed businesses in 2023-24. Across the first six months of 2021-22, 565 construction firms and 84 manufacturers entered external administration.

A spokeswoman for Industry Minister Ed Husic on Tuesday attacked the Coalition for hounding “auto manufacturers out of the country”.

“Our government wants a future made in Australia; it’s why we’re committed to the hard task of rebuilding manufacturing after nearly a decade of Coalition neglect,” the spokeswoman said.

“That won’t be easy or quick to achieve but we’re committed to it.

“We’re not in the business of taking advice from the biggest culprits behind the contraction of Australian manufacturing. If the Liberals and Nationals actually cared about Australian manufacturing, they wouldn’t have voted against the NRF.”

Anthony Albanese was this week forced to defend his $15bn National Reconstruction Fund, which replaced Scott Morrison’s axed Modern Manufacturing Initiative, over concerns that companies could not apply for funding via the funding vehicle’s website.

Following passage of the NRF-enabling legislation in March last year, it took eight months before Mr Husic and Finance Minister Katy Gallagher on November 30 unveiled the NRF’s investment mandate. The NRF, led by chair Martijn Wilder, has been directed to invest in seven priority areas ­including renewables and low-emissions technologies, medical science, transport, defence capabilities and technologies, and value-adds in resources, agriculture and fisheries.

Ms Ley said just over a year out from the 2025 federal election, the NRF is “yet to release a single dollar to an Australian firm, while insolvencies are skyrocketing”.

Coalition analysis of announcements by manufacturing companies since mid-2022 estimates that more than 3000 jobs have been lost or are under threat.

“Labor promised they would ‘rebuild Australian manufacturing’ but instead they are delivering an industrial graveyard, a graveyard which is now littered with once great Australian businesses,” Ms Ley said.

“Labor bet the house on the NRF and it is not working. It is the wrong policy at the wrong time. Aussie manufacturers doing it tough today don’t need Anthony Albanese as a business partner, they need cheaper power bills, less red tape, and their government to deliver an economic plan.”

The opposition industry and small business spokeswoman said “Australians are being smashed by a cost-of-living crisis and a housing crunch”.

“Labor has spent over 18 months issuing press releases instead of delivering an economic plan to bring down prices across the supply chain,” she said.

Builders have reported the average time for a house to be completed has blown out to 14 months compared with six-to-nine months ahead of the pandemic.

The Australian Construction Industry Forum in November warned that bankruptcies were running at “an annualised rate of around 3000 a year, roughly twice the pre-Covid level”.

ABS construction data on Tuesday showed new home building approvals remained flat, with the number of dwellings approved in November falling in NSW, Tasmania, Queensland and South Australia.

Housing Minister Julie Collins, who did not respond to The Australian, on Monday announced applications had opened for the first round of funding for social and affordable homes under the $10bn Housing Australia Future Fund and the National Housing Accord.

The government has pledged to work with institutional investors, including superannuation funds, to help fund 40,000 social and affordable rental homes.

Under pressure to unlock funding to turbocharge modern manufacturing, the Prime Minister on Monday declared the NRF had been “open for business from November”.

The NRF website’s “what we do” page, which was last updated on October 30, on Tuesday included a section titled “We’re just getting started”.

“The National Reconstruction Fund Corporation (NRFC) was established on 18 September 2023 and is currently in its set-up phase. We are developing formal processes to evaluate financing proposals. We will publish our investment policies on our website once they are finalised,” the website says.

Mr Albanese this week said “the money is available now … the money was put in the budget and was made available when the legislation was passed”.

“The National Reconstruction Fund board will independently examine any submissions which are made to it. As I said, the NRF published its investment mandate in November. I’ll examine the issue of the website,” Mr Albanese told ABC Radio.

The Prime Minister added: “We want to make sure that we make more things here, that we produce more jobs here, that we don’t just concentrate, for example, on digging up resources.”