Industry groups and local manufacturers, including Kimberly-Clark Australia, have voiced approval of the government's Future Made in Australia Act announced by Prime Minister Anthony Albanese, although there's recognition that the plan needs "fleshing out".
Strategically timed ahead of the budget in May, the PM has unveiled a vision for economic reform under the banner of the Future Made in Australia Act, which includes investing in advanced manufacturing and renewables as well as upskilling the nation’s workforce.
Albanese said the country needed to be “clear-eyed” about the economic realities of this decade and the government a “more strategic, more sophisticated and a more constructive contributor”. The reform would “drive growth, improve competition, lift productivity and create the next generation of prosperity and opportunity”.
Albanese drew a picture of a changed economic world, with countries restructuring their economies on a scale as significant as the industrial and information revolution, but faster.
“Domestic economic policy settings are being re-shaped by a new set of global economic imperatives. And domestic economic priorities are re-shaping trade policy.
“Nations are drawing an explicit link between economic security and national security,” he said, going on to cite changes in government economic policies across the world.
The US has implemented a ‘small yard, high fence’ approach to critical industries, and introduced the Inflation Reduction Act (US$400 billion to support clean energy industry) and CHIPS Act (US$280 billion to boost semiconductor manufacturing). The EU introduced its European Economic Security Strategy, Japan has the Economic Security Promotion Act, Korea is framing its economic policy around a National Security Strategy, and Canada has brought in new rules to tighten foreign direct investment in its significant critical mineral reserves.
“All these countries are investing in their industrial base, their manufacturing capability, and their economic sovereignty.
“This is not old-fashioned protectionism or isolationism – it is the new competition,” he said.
“We must recognise there is a new and widespread willingness to make economic interventions on the basis of national interest and national sovereignty.
“The heavy lifting of economic transition and industrial transformation is not being done by individuals, companies, or communities on their own. It is being facilitated, enabled, and empowered by national Governments from every point on the political spectrum.
“Because this is not about ideology, it’s about opportunity – and it’s about urgency.
“Securing jobs, attracting investment, and building prosperity has never been a polite and gentle process where every nation gets a turn – it’s always a contest, it’s always a race.
“Governed by rules, driven by competition. And Australia can’t afford to sit on the sidelines.”
“We’re building an economy with more good jobs for fair wages. We’re building the infrastructure and clean energy to power new growth. We’re training people in new technology. That’s what I mean when I say a future made in Australia.”
Response from local manufacturers has been positive, although there's general acknowledgement that there is still much detail to emerge on the plan.
Belinda Driscoll, managing director at Kimberly-Clark Australia, said, “There is no doubt local manufacturing is an essential part of Australia’s economy and it's crucial in this challenging market that the government looks to provide adequate support for local manufacturers to remain competitive and for local manufacturing to remain viable.
“With this in mind, we are delighted to hear of the Prime Minister’s plans. Decisions such as the ‘Future Made in Australia Act’ have a far-reaching impact – both directly for businesses and indirectly for the communities they operate in.
“We look forward to seeing how the Future Made in Australia Act develops in the months to come.”
Kimberly-Clark's manufacturing facility in South Australia produces over 85,000 tonnes of packaged products per annum for the Kleenex, VIVA and Scott brands. It contributes half a billion dollars to GDP, and supports over 2600 jobs in Australia.
A closer look: Future Made In Australia
So, what will the Future Made in Australia Act actually do? According to Albanese it will bring together – in a comprehensive and co-ordinated way – a whole package of new and existing initiatives.
Existing programs – the National Reconstruction Fund, Solar Sunshot, Hydrogen Headstart, Critical Minerals Facility, Net Zero Economy Authority – will come under the Act, as will any new initiative that falls into this net:
- affordable and reliable clean energy;
- a better and fairer education system;
- skilled workers, secure jobs, fair wages;
- modern infrastructure;
- shared ambition with business and private capital; and
- and a positive regulatory environment.
“Our government is investing in manufacturing to make more things here. We’re building the infrastructure and clean energy to power new growth. We’re training people in new technologies. We’re facilitating private sector innovation and catalysing new investment. We’re building an economy with more secure work and fairer wages. That’s what I mean by a future made in Australia. A future where we compete and win for the great prize of new prosperity.
“And win our way – by staying true to the values that make this the greatest country on earth. Fairness at work, equality in society, compassion and dignity in our social safety net and an unshakeable belief in opportunity for all. Reform that holds no-one back, progress that leaves no-one behind. A stronger, fairer, and more prosperous future – made right here in Australia,” he said.
Industry groups respond
The Prime Minister’s plan generated widespread support from industry bodies, including the Advanced Manufacturing Growth Centre (AMGC), whose CEO, Jens Goennemann, said there was a lot riding on Albanese’s announcement.
“An inspiring speech, a gesture, or media release is only the beginning. The real job must be done by real companies, real entrepreneurs, and real people with real skills getting their hands dirty to keep the environment clean – in concert with Government,” Goennemann said.
He said the AMGC welcomed the prime minister’s enthusiasm and was encouraged by his pledge to proactively “back Australia’s comparative advantages”.
“The winds of change are well and truly blowing. Let’s lean into it and make it an agent of change and opportunity.”
The Australian Packaging & Processing Machinery Association (APPMA), whose members supply machinery, equipment and services to the manufacturing sector, is of the view that skills training will need to be a strong focus.
APPMA CEO Michael Moran said, “The Future Made in Australia Act will be highly dependent on the creation of a highly skilled and motivated workforce to drive and support innovation, technology and productivity improvements within diverse industry groups. A collaborative long-term approach between industry, Government and the education sectors will go a long way in addressing this challenge.”
For national employer association Ai Group CEO Innes Willox, while the “broad contours” of the plan foreshadowed several positive directions, it needs to be fleshed out before judgements made.
“The most obvious risks in today’s announcement relate to the policy and political failures over more than a decade that impede our progress. Too often, government policies distort activity, create unintended consequences and are slow to adapt as circumstances change and flaws are exposed. Yet we are today invited to make a leap of faith that more government guidance and support is the answer to our ills. Industry will naturally view the promise of more government intervention with suspicion, if not alarm,” Willox said.
The challenge for the government in delivering Future Made, will be getting itself to deliver on existing responsibilities and new commitments, he said.
For the welding industry body, Weld Australia, the act presents a critical opportunity to bolster local economic participation, particularly in the renewable energy transition.
But CEO Geoff Crittenden said, “It is essential that specific, enforceable local content requirements are formally incorporated into the Future Made in Australia Act.
“Australian businesses have long advocated for specific, measurable local content requirements in government contracts. However, tangible examples of local content procurement policies are yet to materialise in Australia.
“Besieged by vague specifications, a lack of enforcement, and loopholes that allow for non-compliance, the initiatives have struggled to provide local businesses with a fair shot at government contracts. Current requirements are fragmented across state jurisdictions and often fail to lead to new production capacity. Without action, the Future Made in Australia Act will be just as toothless.
“The federal government must work with the state and territory governments to implement a coordinated, nation-wide approach to local content requirements to maximise impact and enable new production capacity. The government must be specific when it comes to the use of Australian materials and components, and registers of business providers and their level of domestic versus foreign ownership.”
Clean Energy Council CEO, Kane Thornton, said the plan is backed by a substantial policy agenda, putting renewable energy at the centre of the nation’s economic future.
“The highlighted areas of hydrogen, green metals and advanced clean energy manufacturing and assembly are genuine opportunities for Australia to expand, grow and diversify our economy centred around clean energy and create further demand for a large and skilled clean energy workforce,” he said.
“We look forward to working closely with the Commonwealth on the proposed legislation to set Australia up to unlock its natural advantages in clean energy.”
Not surprisingly, the Australian Manufacturing Workers’ Union (AMWU) has applauded the plan.
National secretary Steve Murphy said the proposed legislation supports the union’s Aussie Made campaign.
“This is the biggest policy shift we’ve seen in our lifetime,” he said.
“Australia can be a renewable energy superpower by building capacity in our domestic manufacturing sector; we are hopeful Australia can move beyond its ‘dig-and-ship’ reputation and capture the full value chain in renewable energy manufacturing.”
Ed's note: In light of this 'Future Made in Australia' announcement, one can't help but ask: what about supporting existing manufacturing industries that are fundamental to our way of life, which are on the brink of closure? Our local polyethylene (PE) manufacturing capability is under threat as Qenos, the only PE manufacturer in the country, looks set to close. PE is widely used in packaging for food, personal care and household products; it is used extensively in the construction and housing sectors. The loss of this capability will seriously undermine Australia's ambitions for a circular economy for plastics. If Government's policy signals are more favourable, then the business case for the company maintaining a manufacturing presence in Australia may be stronger.
