Interview with ABC Southern Queensland, Breakfast

David Iliffe and Belinda Sanders
Manufacturing Modernisation Fund

David Iliffe: Well, as I mentioned, there is a campaign to try to boost manufacturing in Australia, and this campaign- well this situation has been heightened by the growing tensions between Australia and China. This country is very dependent on China for many products that are manufactured there. When was the last time you saw something in the big retail chains that didn't say made in China for instance?

Belinda Sanders: The Federal Government has set up what's called the Manufacturing Modernisation Fund, and the Minister for Industry, Science and Technology Karen Andrews is launching round two in Toowoomba this morning. Minister, good morning. 

Karen Andrews: Good morning. 

Belinda Sanders: What are you hoping this Manufacturing Modernisation Fund will achieve?

Karen Andrews: Well, this is a real kick start to Australian manufacturing. So, we know that we have, actually, a really strong manufacturing base right across Australia, but it does need some support. We want our manufacturers to grow, so the funding that we’re opening today, which is the second round of the Manufacturing Modernisation Fund, will support businesses to do things such as upgrade their technologies, look at their equipment so that they can really make sure they're maximising their productivity. 

Belinda Sanders: Were you happy with the take up in the first round?

Karen Andrews: Absolutely. We had a very strong response to round one of this program. It indicates that there are many, many manufacturers out there, and I'm very confident that we will have a second round where there is a significant number of applicants. 

Belinda Sanders: Is there anything different between the first and second round?

Karen Andrews: This round will focus on our six National Manufacturing Priorities. So, we announced those as part of the budget in October, so just quickly; it’s resources technology critical minerals processing, food and beverage, medical products, recycling and clean energy, defence, and space. So, they’re our national priorities, and the funding will be focused on manufacturers who are manufacturing in these key priority areas. And of course in the Toowoomba region, you have food and beverage manufacturers. You actually have an emerging space sector too, which brings into play USQ.

Belinda Sanders: And are you anticipating the Toowoomba region will feature in this second round? And did they feature in the first, I might add?

Karen Andrews: Well look, yes. There- this is a real opportunity for Toowoomba and the region, because you have Wellcamp Airport there, you actually have all the right ingredients to have a very thriving manufacturing sector. So, I would expect that from the Toowoomba region, we will pick up manufacturers from food and beverage. Certainly, we've got some opportunities in space, and we will be looking at, over the longer term, how the Federal Government can work in your region to make sure that we are growing manufacturing.

Belinda Sanders: Manufacturing in Australia, you would have to say, in recent decades has been on the decline - technology and the car industry would be two examples. One of the things why- one of the reasons why that is raised is the cost of wages. Can we ever get over that even with a Manufacturing Modernisation Fund?

Karen Andrews: Look, I believe we can. Now, clearly, the two biggest inputs for most of our manufacturers is the cost of energy, which we're working to get down, and the cost of labour. Now, we are a high-wage nation, but the opportunities for us are to look at where we have distinct differences, and that's why we have named the National Manufacturing Priorities, and we're focusing on value rather than the cost of manufacturing.

So, a good example with what happened, really at the height of COVID-19, where it was quite difficult for us to secure supplies of PPE, we had to ramp up our manufacturing. Whilst we had some capability, we actually are not necessarily competitive with other nations for the high production, the big scale of the things such as surgical masks. But where we did excel was in the production of invasive ventilators. So, it's demonstrated to us that our niche needs to be at the high end, at the significant value-add, rather than at the mass produced goods.

Belinda Sanders: But do you think that cost will still come into it, when and if the world opens up to pre-COVID import standards? You know, will people pick cost over quality regardless, as it seems they have done in the past?

Karen Andrews: Yeah. Look, for some people, cost will always be the reason that they buy a particular product, and we understand that. But what we are trying to do is make sure that our manufacturers are producing high quality goods so that it's actually a better buy over the longer term, because it's not going to require so much repair, it's not going to require so much maintenance. So, that is the aim for us to be able to do that.

But look, clearly at the moment, there is a significant ground swell of support for Aussie made, Aussie grown, Aussie made products. We need to capture that now and deliver. And I say we, as in governments at all levels, and also the Australian community. So, we are actively supporting Australian manufacturers, but we want people to shop locally, to look at how they can support our Aussie businesses and particularly our Aussie manufacturers. 

Belinda Sanders: You're right. There is support for Australian made at the moment, but is that partly due to the fact that there are tensions in China? And if those tensions are resolved, then the next trend in terms of, perhaps, that Australian made will wane and the manufacturing industry will pay the price?

Karen Andrews: I think Australians always want us to be able to make stuff here in Australia, so I think that sentiment is going to remain. What we have to do is work together and make sure that we are demonstrating the value of Aussie goods. Now, we are a nation of only 25 million people, so export is going to be very significant to us. And we've long had a strategy that would diversify our export markets, so we will be continuing to do that. And there is actually a stream specifically for export work under the manufacturing strategy that we have released. So, we will continue to be pushing to develop overseas markets.

I'm very confident that this groundswell will be maintained. I also think that Aussies are prepared to pay a premium to support their mates, to support businesses in Australia, but there is a limit to what that premium is likely to be. Now, I don't have an exact figure for that. People are prepared to pay a little bit more, but like anything, they don't want to be taken for a ride. 

Belinda Sanders: Minister Andrews, thank you very much for your time. 

Karen Andrews: It's a pleasure. Take care. 

Belinda Sanders: That’s the Minister for Industry, Science and Technology Karen Andrews there.