More natural gas, faster project approvals and lower company tax are critical to achieving “economic sovereignty” and a stronger Australian manufacturing sector, according to the industry minister, Karen Andrews.
Andrews will address the National Press Club on Wednesday, calling on governments to streamline project approvals and foreshadowing a role for the National Covid-19 Coordination Commission to develop Australian manufacturing.
The speech comes after employment and education department officials told the Covid-19 Senate inquiry the commission will take on a greater role in skills development as an element of industry policy.
The commission has a broad remit from unclogging supply chains and ensuring adequate supplies of personal protective equipment to job creation policies. The chair, Nev Power, the former Fortescue Metals chief executive, has spruiked projects like a Narrabri fertiliser plant and the role of gas in Australia’s economic recovery.
According to an advanced copy of the speech, Andrews will say that Australia faces a “long road ahead” and one of the markers for success is “to secure our nation’s economic sovereignty by building an even stronger local manufacturing sector”.
Andrews says Australian manufacturers had stepped up in the crisis, and are now expected to produce more than 200m surgical masks in 2020 when previous estimates suggested it would struggle to make 37m.
The industry minister compares the Morrison government to the manufacturing sector, making a virtue of her government’s “practical approach”.
“While scaffolded by a strong belief system and commitment to Australian values, we are not ideologues.”
Andrews says she was “working to change the fate of Australian manufacturing … long before this global pandemic”.
“Long before this virus laid bare our need to secure economic sovereignty, we have been mapping the way forward and working, with a whole of government approach, to create the conditions for Australian manufacturing to grow.”
Andrews says the building blocks for a manufacturing sector are “both complex and deceptively simple”.
These include: cheaper gas and electricity, a highly skilled workforce, reduced red tape, greater collaboration between research and industry, support to commercialise “good ideas”, improved access to export markets and “lower taxes and a stronger economy”.
“One of the other areas which I believe is crucial is simplifying red tape and regulation to fast-track interaction with all levels of government.
“That’s perhaps the biggest positive impact we can make without further demand on taxpayer support.”
Andrews says it is “not good enough” that – according to Manufacturing Australia – a factory can be approved and built in the US in less time than it can be approved in Australia.
“I see a big role for governments in streamlining those processes and facilitating new project approvals or upgrades.”
Government should “facilitate rather than over-regulate”, Andrews says, suggesting that the national cabinet process can help “reduce the hurdles businesses face when they are seeking to invest”.
The minister proposes aligning government programs, so that governments are not “duplicating” or competing with each other to attract industry, wasting taxpayer funding.
Andrews says the government will not nationalise industries or propose government ownership, but cites a $215m manufacturing modernisation fund as a measure to “back businesses that back themselves”.
Andrews says Australia should focus on areas of comparative advantage including mining and agriculture technologies, minerals processing, food and beverage manufacturing and “areas of national priority” including pharmaceuticals, medical technology, defence, energy, space, waste and recycling.
Andrews says the Covid commission is “feeding into the strong work my department and I have put in over the past 18 months”.
On Monday Jane Halton, a commissioner of the Covid commission, said the body would “turn our focus to what is actually going to get our economy kickstarted”.
“What we want to be able to see is an increase in productivity in our economy,” she said. “And we will be working with the government on what some of those ideas might be.”
