From the Ministry

A year of opportunity for Australian manufacturing

As much as we all hoped the ringing in of the New Year would magically erase the challenges of 2020 and COVID-19, the reality is that the world remains in a state of flux.

This insidious virus is continuing to write its own rules, affecting lives and livelihoods in every corner of the globe. But fortunately, as Australians, we enter 2021 in one of the strongest positions in the world, with genuine optimism that better times are ahead. It’s an optimism that is well justified. Even in the midst of the darkest days of COVID-19, foundations were being laid for our social and economic recovery from the pandemic. Central to that recovery and our economic future is manufacturing. Our $1.5bn Modern Manufacturing Strategy is a game changer, which will drive the growth of manufacturing and the creation of jobs for Australians both now and for generations to come. The Strategy, announced as part of the Budget, is designed to make our manufacturers more competitive, resilient and able to scale up to take on the world. Work is already well underway on the centerpiece of the Strategy – the $1.3bn Modern Manufacturing Initiative – which will see the Government strategically invest in projects that help manufacturers to scale up and create jobs. To achieve that, we’re being more targeted than ever, with our investments to be directed to six National Manufacturing Priorities: Resources Technology and Critical Minerals Processing; Food and Beverage; Medical Products; Recycling and Clean Energy; Defence; and Space. These are areas where we have a comparative advantage, have the capacity to harness emerging opportunities, or need to support our strategic interests. We cannot scale up in every area of manufacturing and we need to focus on areas where we know we have an edge and that can deliver the jobs we need. The National Manufacturing Priorities identified often have high-margin opportunities, highly skilled workforces, proximity to emerging markets, a reputation for highquality products and standards, and world-leading science and research capabilities. Another element of our Strategy is a second round of the Manufacturing Modernisation Fund, which builds on the success of round one in April last year. Applications for this $52.8m round are currently being assessed, with the money to begin rolling out the door in the coming months. These grants of between $100,000 and $1m will help businesses to invest in new technology to increase productivity, create new jobs and drive economic growth. The grants give manufacturing businesses the confidence and certainty they need to invest in transformational changes to deliver new and innovative products and services, all while creating jobs. But it’s far from money for nothing. Successful businesses are required to match any government funding at least three to one. This is part of our Government’s mantra of providing a hand-up, not a hand-out, and backing businesses that are willing to back themselves and grow. But the many elements of the Modern Manufacturing Strategy are not the only way in which the Morrison Government is supporting Australian manufacturers. The recent Budget included billions of dollars in incentives designed to encourage our manufacturers to invest – from the expansion of the instant asset write-off, record investment in skills, and making energy more affordable and reliable. Our Accelerating Commercialisation grants are also helping companies take their innovations to market, in turn creating new manufacturing opportunities in Australia. Since they were launched in 2014, we have invested more than $240m in helping Aussie businesses take their products to the world. Among the recent recipients is Queensland company Naturo. It will use its $1m grant to build a pilot manufacturing plant in Coolum for its world-first patented technology to process milk, that allows it to stay fresh for up to 60 days. The grant will also pave the way for the company to build a full-scale facility in regional Tasmania. Companies such as Naturo are pushing the boundaries of the possible and I’m so impressed by their ingenuity and determination to use science and technology to turn bold ideas into job-creating realities. This product has incredible export potential, allowing fresh milk to be exported by sea to new markets in Asia and around the world. Like Naturo, our Government knows that science and technology will be crucial to building industry capability and improving productivity. Enabling digital technologies, such as artificial intelligence, blockchain and cyber security, will also help our manufacturers to create entirely new products, processes and business models. There are clearly opportunities for manufacturers to improve their technology, processes and practices. Not only will these support businesses to be more competitive but they will have spill-overs across the economy. For that reason, the Budget also included an additional $459m in funding for the CSIRO to address the impacts of COVID-19 on its commercial activities and ensure it is able to continue its critical work with industry. It’s important to emphasise this is additional funding. All up the Morrison Government is investing $3.8bn into the CSIRO over the next four years. We’re also injecting $2bn into the Research & Development Tax Incentive (RDTI). The RDTI will continue to provide generous support to encourage innovative Australian manufacturers to invest in more R&D, so they can remain competitive in an increasingly global works and create the jobs and growth we need. When you consider all of these investments, along with the decisive action our government is taking, you can see our manufacturers are primed to deliver. It bodes well for 2021 becoming the year of opportunity for Australian manufacturing.