Ayres on the govt’s $15bn ‘re-industrialisation’ plan

Joseph Brookes
Senior Reporter

The Albanese government’s $15 billion plan to re-industrialise Australia with advanced manufacturing and critical technologies will recast the private sector into “genuine partners” that help solve national challenges, according to Assistant Minister for Manufacturing Tim Ayres.

Mr Ayres, who will on Tuesday announce an expansion of precision manufacturing facilities for ANCA in east Melbourne is expected to create around 300 jobs, says the $15 billion National Reconstruction Fund (NRF) will have impact and integrity after controversy dogged the previous government’s $1.5 billion manufacturing program.

Assistant Minister for Manufacturing Tim Ayres wants manufacturing firms to become “genuine partners” that help solve national challenges

ANCA was originally announced as a recipient of the $3 million grant from the Morrison government’s Modern Manufacturing Initiative during the election campaign last April. But the execution of an agreement has been held up by concerns the grant program had been politicised by the former government.

Many more grants from the Modern Manufacturing Initiative totalling nearly $1 billion are yet to be finalised. Industry minister Ed Husic has now asked the Industry department to report weekly on its progress signing off on the grants.

All these grants will be honoured after a review of the program cleared the previous government’s decisions, but the Albanese government also wants to get moving on what it says is a more cohesive and impactful program that finally moves the needle on Australian manufacturing.

“We’ve got enormous opportunities to shift Australia up the value chain at every point in the technological complexity of manufacturing. From food manufacturing to lithium batteries, all the way through to advanced tool making products like ANCA,” Mr Ayres told InnovationAus.com.

ANCA manufactures high end precision machine tools at its Melbourne headquarters, while its less complex machines are made overseas. The company exports to a global market, helping companies like Apple supplier Foxconn to sharpen the tools it needs to make iPhones and iPads.

The $3 million federal grant from the Modern Manufacturing Initiative’s integration and translation stream will allow ANCA to build a new designated precision manufacturing cell in east Melbourne, that will mean around 330 jobs, according to the government.

“This kind of capability will assist Australia in all sorts of facets of manufacturing,” Mr Ayres said.

“This ACNA capability that this grant funding will secure is going to be good for good for manufacturing right across the economy.”

The Albanese government’s manufacturing push centres on a new $15 billion NRF, which will provide loans, equity investments and guarantees to projects in priority areas. $1 billion has already been earmarked for advanced manufacturing.

Formulated while Labor was in Opposition the plan is a response to what Mr Ayres describes as “dismal” rankings on global rankings for measure like economic complexity, manufacturing self-sufficiency and manufacturing’s share of GDP – each among the lowest in the OECD.

“These [low rankings] are a clarion call now for government to engage with the challenge of rebuilding industrial capability,” Mr Ayres said.

“That that’s why in Opposition we developed the single biggest Australian peacetime industry policy offering in our history. It’s a $15 billion fund that will revolutionise government’s engagement with the task of re-industrialising the Australian economy.”

Mr Ayres says the fund will have obvious goals of employment and economic outcomes but will also be a strategic play to help solve “big national challenges” like the climate crisis, food security and public services.

A public consultation on the NRF is underway while a Senate committee scrutinises the enabling legislation. But the government still has to set up a board and investment mandates for the NRF, which it wants operating like the Clean Energy Financing Corporation set up by the Gillard government in 2012.

While it won’t necessarily spell the end of direct grants, the NRF does mark a “recasting” of the relationship between government and the private sector into a “genuine partnership”, according to Mr Ayres.

He doesn’t want that partnership to end with the last agreed milestone payment in a grant.

“We want to work with firms in collaboration to assist their development along the [Technology Readiness Level] scale to assist their commercialisation. But also to work with them to solve problems that matter for Australia where the government can have a genuine partnership,” he told InnovationAus.com.

“For example, in the transport sector. To reduce transport emissions, to improve the reliability of our public transport, to lift up performance of our freight systems. These are all great manufacturing opportunities. And the government’s $15 billion National Reconstruction Fund is all about a genuine partnership with the private sector to achieve those objectives.”

The consultation process and funding profile for the establishment of the NRF suggest it should be up and running by next financial year. But Mr Ayres won’t promise a launch date yet.

A Senate inquiry into the NRF legislation is expected to report by mid March before the National Reconstruction Fund bill is debated. Mr Ayres says the Albanese government has a mandate for the policy.

“This is an important reform that the government took to the election and had a very high profile. I’m confident that Parliament will support that. But we need to work through the [parliamentary] process.”

After pork barrelling scandals plagued the last government, Mr Ayres will promise better integrity, including the NRF board making independent investment conditions guided by an investment mandate.

“We’re going to manage public money really carefully. This is investment money that will need to satisfy investment criteria, as well as the public policy purpose that’s set out.”

Do you know more? Contact James Riley via Email.

1 Comment
  1. David Heath 1 year ago

    We need to reverse the previous ‘rightist’ governments’ hatred of heavy manufacturing.

    If we have no significant vehicle manufacturing industry, then we have no capacity for anything harder. We NEED to bring it back.

    Next, we must not continue to be the world’s quarry. Right now, two of our biggest experts are red rocks and black rocks. The implication here is that the world believes we don’t know what to do with them. Further, this contributes to global warming through the transport of unrefined products across the seas.

    Of course we cannot easily build the infrastructure need for this – people, facilities and energy close to the mine sites, so this will require a big improvement in out rail network. In fact doing so will also reduce the pollution caused by thousands of trucks running long-distance on our highways.

    We gave given up our ability to do many things merely because it is cheaper to do it elsewhere. That has been a big mistake.

    We can no longer refine our fuel, we manufacture very few consumer goods etc.

    This will be a long process to reverse the utterly incomprehensible decision by Joe Hockey to ‘dare’ the car manufacturers to leave.

    Let’s get on with it.

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