Thursday, 14 May 2020
Coronavirus has presented Australia with less of an opportunity and more of an imperative to fundamentally change for the better. One significant change required is the development of a national resilience strategy. This strategy will identify ways in which we can diversify and de-risk across critical supply chains, and so ensure that Australia remains fit to meet the changed world ahead.
The difficulty we have faced recently in securing additional surgical masks from overseas is emblematic of the wider requirement to better identify and mitigate supply chain risks. Australian ingenuity and resolve saw the domestic production capabilities of Australia for surgical masks increase from two million masks per year to around 200 million masks per year. And the challenge now is to identify where else we need to fix unhealthy levels of dependence.
The Institute for Economic Research reports that 90 per cent of Australia's medicines are imported and around one-third of Australians rely on daily prescribed medicines. Australia has almost no capacity to manufacture any active pharmaceutical product for essential medicines. A supply chain disruption of lifesaving medicines is also not just some far-off, distant possibility. In fact, last year, here in Australia, there was a shortage of the lifesaving EpiPen Jr, used to treat anaphylactic reactions in children. Manufacturing and quality failures in the supply chain caused Australian suppliers to run out in December 2019.
As an island nation, separated from much of the world by vast ocean distances, Australia must also continue enhancing its liquid fuel security. At the end of February, Australia had 81 days worth of oil supplies which included 25 days of stocks in overseas ports and in transit to Australia. We're in the process of closing the gap on our 90-day stockpiling commitment under the International Energy Agency treaty, and our Minister for Energy and Emissions Reduction, Angus Taylor, has committed $94 million to buy oil at the currently low global prices to be stored at the United States Strategic Petroleum Reserve. This is Australia's first government-owned oil reserve for domestic fuel security, and Minister Taylor has also flagged our next move to establish significant onshore liquid fuel storage. It's also essential that we retain a capacity to refine fuel here in Australia.
Recent years have seen an overreliance on overseas students in the university education sector. The high fees paid by foreign students have now been greatly disrupted. Here again, we must diversify and derisk if we are to avoid massive disruptions in the future.
The process of creating a national resilience strategy would involve an assessment to identify, alongside essential medicines, liquid fuels and tertiary education, where else Australia is exposed to an unbalanced supply chain risk. To achieve national resilience, we will also need a far more efficient workforce in the post-COVID environment, so we must consider labour and energy costs which are essential ingredients for viable domestic manufacturing. Another example where Australia is already on the right track is the establishment last year of the Critical Minerals Facilitation Office under the Critical Minerals Strategy initiative, similar to that which has also been developed in the United States This is a very welcome step and Australia must now provide our developing critical minerals miners with tangible support if we expect to see any shift in global market dominance in critical minerals. We need to put our shoulder to the wheel in support of great Australian critical minerals miners like Northern Minerals in my home state of Western Australia.
Even a few weeks ago, calls for a national resilience strategy would scarcely have resonated. The blow which has been delivered by COVID-19 has changed everything. We must now meet this changed world as it is, in all its complexity and with all its challenges, with the confidence to make our own changes and to secure Australia's future.