Manufacturing vision drives Scott Morrison’s blueprint for future

Scott Morrison will focus on the government’s long-term plan to support industry and advanced manufacturing this week

Scott Morrison will deliver a major pre-budget address at the National Press Club on Thursday and will spend the week outlining government support for small business and the digital economy Picture: David Mariuz

Scott Morrison’s multibillion-dollar manufacturing strategy will be a centrepiece of the federal government’s five-year blueprint to create millions of “future” jobs and reshape Australia’s post-pandemic economy.

Ahead of next Tuesday’s budget, the Prime Minister will this week focus on the government’s long-term plan to support industry and advanced manufacturing, as the nation emerges from the COVID-19 economic crisis.

The manufacturing strategy, combined with reskilling workers and providing tools for businesses to modernise operations, will form a key plank of Josh Frydenberg’s budget pitch to get Australians back into jobs as coronavirus welfare payments are phased out. Mr Morrison, who will deliver a major pre-budget address at the National Press Club on Thursday, will outline government support for small business and the digital economy ahead of unveiling the strategy, which is aimed at boosting Australia’s ability to manufacture industrial goods locally.

The Australian understands the strategy will focus on defence industry capacity and supporting growth across the medical technology, biotech, agriculture and food technology, fintech and resources sectors. CSIRO, the nation’s peak science and research agency, is expected to have its remit expanded to support improvements in the commercialisation of research and enhanced collaboration between universities, governments and the private sector.

The manufacturing strategy will form a key plank of Josh Frydenberg’s budget pitch to get Australians back into jobs. Picture: Gary Ramage

A dramatic scaling up of Australia’s advanced technology and manufacturing capacity will underpin the government’s long-term jobs strategy, which aims to expand industry through smarter investment and by a strategic focus on emerging technologies and research.

The shift in narrative to longer-term economic ambition coincides with the JobSeeker and JobKeeper payments reducing on Friday and Monday, as part of the government’s strategy to taper off the temporary welfare schemes.

The government’s COVID-19 welfare and stimulus payments, national gas plan, technology investment road map and industrial relations reform roundtables have laid the groundwork for the manufacturing strategy.

Labor leader Anthony Albanese Picture: Flavio Brancaleone

“There’s a third and most important part of our economic plan, and that’s to build for the future. That is to ensure that we have reliable, affordable energy in Australia to support manufacturing industries,” Mr Morrison said on Saturday.

“Manufacturing is important, defence industries are incredibly important as part of that industrial element of our economy. And we have deliberately put defence industry and our procurement as part of our manufacturing plan in this country, which builds jobs not just now.

“All of this is building technological and manufacturing, advanced manufacturing capabilities in Australia, which will underpin our income and jobs and livelihoods in the future.”

The Australian understands the government’s spending commitments will be targeted and not replicate previous big-spending manufacturing funds that propped up failing industries.

Existing programs — like the $100m Advanced Manufacturing Fund and $47.5m manufacturing growth fund — have previously been used to encourage investment in science and research.

Labor leader Anthony Albanese earlier this month pushed the government to assist regional manufacturers, suggesting the commonwealth could use its purchasing power to fund business expansion.

“Over the next 20 years, Australian states will invest billions of dollars in new trains and new lines for them to run on,” the Opposition Leader said.

“We’ll need hundreds of rail carriages in the next few decades. And we should build them here.

“We need to use the power of government purchasing to help revive and grow manufacturing in this nation,” Mr Albanese said.

Nationals Senate leader Bridget McKenzie said manufacturing must be a “key component” of next week’s budget after the sector “shrunk far too much over the past 30 years”.

The former Nationals deputy leader called for the creation of regional manufacturing hubs around the country, based on the federal government’s regional and city deals model that brings together all levels of government to agree on priorities.

“You join the dots between universities, local businesses, existing strengths within a particular location and capitalise and build a (manufacturing) network there,” she told The Australian.

“To create that though, you also need to be investing in enabling infrastructure. That isn’t just the hard bridges, road, rail — it’s also the digital connectivity piece which is essential.

“Access to capital for new and existing entrants to grow their manufacturing footprint is really important, too. How you choose to do that, there are a range of mechanisms you can use.”

Mr Morrison on Saturday singled out the defence and space industries, ag processing, and new energy technologies supporting steel and aluminium production as critical in Australia’s recovery and rebuilding “for the future”.

Processing rare earths and critical minerals, the development of battery technologies and increased collaboration between small and medium businesses, major private sector firms, universities and governments are understood to be key features of the manufacturing strategy.

In an interview with The Australian in July, Ms Andrews said she was talking with CSIRO chief executive Larry Marshall about expanding the agency’s involvement in unlocking new manufacturing opportunities and working more closely with universities, industries and researchers.

“What we are missing here is the commercialisation of that research, the partnership between our researchers, whether its through the CSIRO or the universities and making sure we’re maximising IP,” she said.

The CSIRO this month published a COVID recovery report noting opportunities in high-value technology manufacturing.