Topics: Modern Manufacturing Strategy
Sabra Lane: Australian manufacturers in the food, medical, clean energy, defence and space sectors could all benefit as part of the Federal Government’s plan to revitalise local manufacturing. The Prime Minister’s unveiling the $1.5 billion package during a major speech later today. To tell us more, I was joined earlier by the Industry, Science and Technology Minister Karen Andrews.
Sabra Lane: Minister, thank you so much for joining AM. Could you just explain to us, how have you picked these six industries and how will you now fine-tune the plans to have them ready by July next year?
Karen Andrews: Well, good morning. The six key priority areas that we have nominated are based on some research that we have done about Australia’s comparative and competitive strengths. And, of course, we added to that areas where we had a strategic interest, and that includes the likes of defence. So I think most Australians would acknowledge that we do have very significant strengths in resources technology, that we’re developing skills in critical minerals processing, and we’re very, very strong in food and beverage. So they are clear standouts. And then we looked at the strategic areas that includes space, defence, recycling. The Prime Minister flagged, he was very interested in doing clean energy. And then there’s medical products that has really been the focus of a lot of people’s attention and the work of government, particularly during the COVID crisis.
Sabra Lane: So now you’re going to fine tune these plans, have them ready by July. How will you decide who gets the government help? Is this just about sovereign capability or is it about job creation?
Karen Andrews: This is now about industry leading the way. So as a government, we have said very clearly that these are the strengths. This is where we are leading Australia to develop manufacturing skills. We’re building on our strengths. We’re not going to continue to be all things to all people, but we are going to have a very strong foundation. We’re making sure we’re getting the economic conditions right and that includes things such as industrial relations, skills and training. And it will, of course, assist our consumers. But we are making very sure that what we are doing is identifying our strengths and setting the direction for Australia. So this is the road to recovery.
Sabra Lane: It’s a pretty quick time frame, eight months. And by saying that it’s not going to be all things for all people, you’re picking winners.
Karen Andrews: We’re setting priorities. I see it as very different, because this is based on very sound evidence about what our comparative and our competitive strengths are and how we build on that. So if we’re going to create the jobs for the future, if we’re going to maximise our opportunities, we can’t be all things to all people. We have to provide the strong base, which is what we’re doing, but we have to very clearly signal what our strengths are to build on that.
Sabra Lane: So no apologies for picking winners?
Karen Andrews: There’s no apology for setting a strategic direction for Australia.
Sabra Lane: Some of the areas that the government has identified – space, defence, medical products – some people might think none of this is new. You’ve prioritised these areas before.
Karen Andrews: I’m actually quite happy for people to say that this is the obvious, because that’s what we want. We want people to say, yes, absolutely, this is what Australia’s strengths are. This is what we can get behind. I mean, evidence shows that 90 per cent of people in Australia want us to make more products here. This is picking up on the groundswell of support for Australian products. This is building the jobs for the future.
Sabra Lane: Talking about jobs for the future then, how quickly will we see these jobs and how many jobs will this create?
Karen Andrews: So we will open the funding round for the Manufacturing Modernisation Fund by the end of this year, so money will start to flow as quickly as we can. That’s pretty much ready to go now. Very conservative estimates are that this will provide about 80,000 direct manufacturing jobs over a 10-year period. And the evidence is that for every one job directly in manufacturing, there’s 3.6 indirect jobs. So potentially this is an over 300,000 jobs package.
Sabra Lane: Alright. But 80,000 over ten years, 8000 jobs a year?
Karen Andrews: Oh, well it’s 80,000 over ten years. But that’s a very conservative estimate. But when you actually look at it, that’s over 300,000 new jobs that are being created here, and there may well be many more. That’s a very conservative estimate. What we do know is that when priorities are set, industry, businesses get behind that. And we’ve seen examples of that happening in the space sector. We’ve seen it happening in defence industry. It is already happening with medical products. So we’re maximising those opportunities. But an important part of this program is the business to business collaboration. And that’s a significant part of the support that we are providing to bring businesses together so that we can build the scale that we need.
Sabra Lane: You talked about too, the Manufacturing Modernisation Fund that was set up last year, $50 million was put in and it was quickly exhausted. You’re putting another $50 million in. Again, how do you decide what to support here? Because, again, you’re picking winners.
Karen Andrews: We will be funding organisations that are working in those six priority areas. But what we’re looking for is science and technology, particularly technological advances that businesses want to use. So we know that we have quite high input costs at the moment with energy and also with our labour costs. If we’re going to make our businesses more productive, more efficient, we actually need to look at the part in the middle, and that’s where science and technology will be used. So we’re going to be looking for businesses that are looking to upgrade their technology in particular to bring themselves into manufacturing in the current century. That will be the priority. We are finalising what the guidelines will be so they will be ready to go in the next few weeks.
Sabra Lane: Alright. Just quickly, the Opposition points out you’ve been in power seven years. It says you’ve undermined manufacturing and pointed to the exit of car manufacturing in Australia on your watch as an example.
Karen Andrews: Look, that’s just rubbish, quite frankly. And it’s very old school thinking. We actually have been very focused on manufacturing. At the last election, that’s when we announced that we would open the funding round for a Manufacturing Modernisation stream. So it’s actually just not true. But we actually need to look to the future rather than constantly looking at the past.
Sabra Lane: Minister, thanks for joining AM this morning.
Karen Andrews: Pleasure.