Most essential supply chains resilient: Productivity Commission

A new report by the Productivity Commission has concluded that, despite disruptions due to Covid-19 and trade tensions, “only a few” traded products are vulnerable to supply chain shocks.

The commission’s Vulnerable Supply Chains report was released on Friday, and found that most essential supply chains were resilient, and the most vulnerable imports “ included non‑essentials such as Christmas decorations, luxury watches and sparkling wine.”

Few imports went into essential goods and services, it said. 

The commission also found that supply chain risk was best managed by companies and government agencies, and businesses could generally manage via “stockpiling, contracts and diversification.”

“Except in rare circumstances, the best response does not involve using policy levers to encourage more Australian production,” said Commissioner Catherine de Fontenay in a statement. 

“Other available risk management tools include stockpiling, alternative contract design and diversification.”

The report’s release coincides with the launch of a Senate inquiry into local manufacturing capability, including the role of R&D, education and developing local supply chains.

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