No, we are not going to see a historic revival of manufacturing under Albanese

By Peter Roberts

It is becoming clear that the Albanese Government is not the panacea many had hoped to see leading to a reversal of the downward slide in the fortunes of Australian manufacturing.

While the government is way ahead of its coalition predecessor in tackling the key issues holding back manufacturing – it is simply up against much bigger forces that it allows for.

Prime among achievements is the tackling of skills formation through Jobs and Skills Australia, the establishment of a $15 billion National Reconstruction Fund, a focus on encouraging investment in renewable energy and a general return to better functioning government and bureaucracy free from the rorts and sheer waste of resources of the Morrison years.

But absolutely critical elements to a reversal of the decline in manufacturing that has affected the country for decades are missing.

The first is the most important – while encouraging manufacturing is a focus for the young government, it is not central to government planning and thinking. It is a ‘nice to have’, and just not the focus of the Cabinet and the government.

Secondly, there is no overall industry plan agreed to by the government that guides the many different ministries and departments that in some way affect manufacturing – be they industry, science, energy, health or defence and so on.

So while we have a focus on energy policy, these do not specifically encourage local manufacture at the scale we need – while small scale factories have been supported we have little prospect of mega-factories producing solar PV panels, wind turbines or lithium batteries.

Thirdly, just as there is no coordinating mechanism among multiple ministers, there is no coordinating body among departments and instrumentalities guiding industry and innovation policies.

But the final missing ingredient is boldness and scale.

What is a $15 billion NRF here compared to US President Joe Biden’s $740 billion Inflation Reduction Act that is supercharging the onshoring of industries from critical minerals, to semiconductors, to robotics and automation and green industries.

Europe has programmes of similar scale, and China has long subverted economic policy to the task of building critical industry supply chains.

Yes we have valuable programmes here, but they are not of the scale needed to change the direction of our multi-trillion economy.

Individual companies will benefit, yes, but the overall trajectory of industry decline is unlikely to be perturbed by the undersized quantum of our response.

The Albanese government is undoubtedly an improvement on the past. But it is too timid, too parsimonious and, well, just looking elsewhere more than it is focused on reversing the long term decline in manufacturing.

Picture: Anthony Albanese: