Australia's manufacturing sector to receive AU$1.5b boost from federal government

To ramp up R&D, commercialisation, and technology adoption across six priority industries.
Written by Aimee Chanthadavong, Contributor

Six industries -- resources technology and critical minerals, food beverages, medical products, recycling and clean energy, space, and defence -- have all been promised a piece of the Australian government's AU$1.5 billion manufacturing revitalisation package over the next four years, starting in 2021.

"The objective is to build scale and capture income in high value areas of manufacturing where Australia either has established competitive strength or emerging priorities," Prime Minister Scott Morrison said, during his pre-budget speech at the National Press Club on Thursday.

"This will require our manufacturing sector to be even more productive and highly skilled, to be more collaborative at the leading edge of R&D, commercialisation, and technology adoption, to be more outward-looking, and be searching relentlessly for footholds in global markets."

Of the AU$1.5 billion, which is the latest pledge by the Morrison government ahead of the federal budget next Tuesday, AU$1.3 billion will be used to encourage businesses to collaborate with other businesses, commercialise ideas, and integrate with international markets and supply chains.

Morrison added, the government will target priority areas and invest in "cross-cutting technologies and processes that enhance production efficiencies, such as automation digitalisation data analytics, artificial intelligence, and other enabling technologies which make everything else work".

Another AU$52.8 million will be distributed for the federal government's existing manufacturing modernisation fund designed to support "transformational investment in technologies and processes".

See also: 89% of manufacturing companies have reported business impacts due to COVID-19 (TechRepublic)

Morrison added the government will partner with industry before April next to draw up plans for the next two, five, and 10 years. These plans will also include benchmarks such as how many jobs are created, what are the levels of R&D, and how much investment has been made.

The modern manufacturing strategy also includes AU$50 million for the government's industry growth centres initiative, aimed to support projects in the six priority areas until the end of June 2022.

There are also plans to refresh the Innovation and Science Australia board, which will continue to be led by Andrew Stevens, former head of the Advanced Manufacturing Growth Centre, as well as to conduct a "comprehensive review" of existing programs that fall under the Industry, Science, and Technology portfolio to ensure they align better with the strategy.

The federal government's pledge to the manufacturing sector coincides with BHP's plans to commit up to AU$450 million for contracts with Australia's mining, equipment, technology, and services (METS) sector. The company said it will work directly and through its major technology providers to source more local products and services, and invest in technology pilots and emerging businesses.

Earlier this week, the federal government announced its AU$800 million Digital Business Package, which includes expanding its digital identity system, rolling out the Consumer Data Right, introducing a one-stop shop for business registry, and throwing money at blockchain trials.

Shadow Minister for Science Brendan O'Connor and Shadow Assistant Minister for Manufacturing Louise Pratt have jointly accused the Morrison government's latest announcement as "nothing more than a re-packaged, re-announcement".

"Today's AU$1.5 billion is less than what this government is cutting from the Research and Development Tax Incentive -- an initiative crucial to our advanced manufacturing future," they said. 
"The Morrison government's bill before parliament will rip nearly AU$2 billion out of research and development, which will directly hurt Australian manufacturing.

The six priority areas announced today were all identified in Labor's 2012 PM's Manufacturing Taskforce Report and announced in the 2013 Plan for Australian Jobs, raising the question - where has this government been for last seven years?"

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