Prime Minister Scott Morrison has announced a plan to stimulate Australia’s manufacturing industry as part of measures aimed at rebuilding the economy, creating jobs and recovering from the recession.

Morrison made the announcement on 1 October in an address to the National Press Club. Under the plan, around $1.5bn in new funding will be invested over the next four years in the Modern Manufacturing Strategy, in a bid to make Australian manufacturers more competitive, resilient and able to scale-up to take on the world.

“We make things in Australia. We do it well. We need to keep making things in Australia. And with this strategy, we will,” said Morrison. “The COVID crisis opens a new chapter for Australian manufacturing as a revitalised source of high-wage jobs, valuable exports and national income.

“Our Modern Manufacturing Strategy is at the heart of our JobMaker plan. It starts with creating a stable and competitive business environment to grow our all parts of our manufacturing sector, but it does not end there. It will play to Australia’s strengths, improve collaboration and commercialisation, and create a sector that is modern, dynamic and highly skilled.

“Through this Strategy, we are determined to ensure government, industry and the research and education sectors are all working in the one direction to build scale in our manufacturing sector. Manufacturing is critical to Australia’s economic future, to the prosperity of our regions and to the capabilities that underpin the success of so many other industries.”

Minister for Industry, Science and Technology Karen Andrews said the strategy reflects the lessons learned during the COVID-19 pandemic, as well as extensive work with industry before that: “Our manufacturers have risen to the challenge to deliver during COVID-19 and now, we’re unlocking their potential to deliver for our future. By playing to our strengths, strategically investing and boosting the role of science and technology in industry, we can open up new markets and take more of our quality products to the world. This Strategy sends a clear signal that not only is Australia open for business, but we mean business.”

The centrepiece of the Strategy is the $1.3bn Modern Manufacturing Initiative (MMI), which will see the Government strategically invest in projects that help manufacturers to scale up and create jobs.

The MMI will support projects within six National Manufacturing Priorities that the Government believes reflect Australia’s established competitive advantages or emerging areas of priority:

  • Resources technology and critical minerals processing.
  • Food and beverage.
  • Medical products.
  • Recycling and clean energy.
  • Defence.
  • Space.

Industry will be engaged to co-design tailored road maps for each of the priority sectors to set clear goals over the next two, five and 10 years, and identify the barriers and opportunities that will guide action and investment.

“This is about Australia playing to its strengths and the Government strategically investing in areas of manufacturing where we know we have an edge and that can deliver the jobs we need,” Minister Andrews said.

The Strategy will also address the competitiveness of individual manufacturers in these priority sectors, with a $52.8m expansion of the Manufacturing Modernisation Fund. A $107.2m Supply Chain Resilience Initiative will support projects that address an identified supply chain vulnerability.

Innovation and Science Australia will be repurposed as Industry Innovation and Science Australia, to provide a long-term perspective on growing the manufacturing sector and strong industry advice to Government throughout the implementation of the Strategy.

The Government is also comprehensively reviewing existing industry programs to better align them with the strategy. As part of this, it will provide an additional $50m to the Industry Growth Centres initiative to support projects in the priority areas out until the end of June 2022.