The Australian Food and Grocery Council (AFGC) has welcomed elements of the Federal Budget handed down on 12 May, aimed at lifting productivity and supporting manufacturing investment, while warning that escalating instability in the Middle East could still drive renewed cost pressures across supply chains – including for packaging-related inputs and logistics.
In a statement issued following the Budget, AFGC chief executive officer Colm Maguire said measures designed to encourage investment, innovation and workforce capability were positive signals for Australia’s manufacturing sector.
“This Budget recognises lifting productivity is essential to securing Australia’s long-term economic resilience,” Maguire said.
“Commitments to support investment, encourage innovation and build workforce capability are positive signals for manufacturers operating in an increasingly challenging global environment.”
The AFGC noted that food and grocery manufacturing remains Australia’s largest manufacturing sector, employing almost 300,000 people nationally.
While the statement focused broadly on manufacturing, the comments come at a time when Australia’s packaging and processing sectors are already contending with growing concerns over global resin supply, freight disruption and higher energy costs linked to geopolitical instability in the Middle East.
Over recent months, packaging manufacturers and recyclers have warned that volatility in polymer markets – particularly polyethylene and polypropylene – is placing pressure on margins and supply continuity across the value chain.
Maguire said the latest developments overseas had the potential to drive further cost increases across manufacturing supply chains.
“Over recent days, the AFGC has highlighted the growing risks associated with disruption to global shipping and energy markets stemming from instability in the Middle East,” he said.
“These developments have the potential to increase freight, fuel and input costs right across the supply chain.”
The organisation also stressed that workforce capability and skills development would remain critical as manufacturers face labour shortages and increasing operational complexity.
“Building a pipeline of skilled workers will help improve productivity, strengthen sovereign manufacturing capability and support more sustainable growth across the sector,” Maguire said.
The AFGC said collaboration between industry and government would be essential to strengthening supply chain resilience and maintaining Australia’s competitiveness as a manufacturing destination.
