Thursday, 30 November 2023
Industry, Science and Resources Committee; Report
On behalf of the House of Representatives Standing Committee on Industry, Science and Resources, I present the committee's report entitled Sovereign, smart, sustainable: driving advanced manufacturing in Australia, together with the minutes and proceedings. I ask leave of the House to make a short statement in connection with the report.
The Minister for Industry and Science made a reference to the Standing Committee on Industry, Science and Resources in February this year for an inquiry into developing advanced manufacturing in Australia.
And we welcomed that referral because Australia is at a crossroads when it comes to our industrial and economic development.
Manufacturing has been in decline in this country since the sixties.
Now is the time to turn that around and set Australia on a course to becoming globally competitive in advanced manufacturing.
The COVID pandemic and geopolitical tensions have shown us the folly of over-relying on imports for all the goods our society needs.
But our manufacturing self-sufficiency is the lowest in the OECD.
This can and must change.
During this inquiry, we also heard that the notion Australian-made products cannot compete with foreign alternatives is now an outdated view.
With advanced manufacturing processes and techniques, particularly Industry 4.0 technologies, Australian manufacturing can be globally competitive—including on cost.
Other developed nations that have embraced Industry 4.0 technologies are seeing manufacturing jobs return to their shores.
Robots are not replacing jobs; they are bringing them back from low-wage jurisdictions.
We heard that Australian manufacturers are already succeeding in global markets in high value-added niches, where they can compete on R&D, quality, safety and trust rather than being 2c cheaper than the competition.
The inquiry heard support for investing in the National Reconstruction Fund priority areas, as areas where our existing competitive advantages and sovereign capability needs coincide, and we welcome today's announcement by the Albanese government.
For too long, most of our mineral wealth has been exported as raw product, with little or no onshore value-adding.
This is a wasted opportunity—particularly when our critical minerals are key ingredients in global growth markets like solar panels.
Inquiry participants applauded the government investments to revive Australian manufacturing, by both the current and former Australian government, as well as our state counterparts.
They recognise that this is a long-term game, requiring long-term commitment and follow-through across political parties to draw in private sector investment.
But make no mistake: while this is ultimately a long game, Australia is also in a race against the clock right now.
Our global partners are looking to re-shore or friendly-shore their critical supply chains, and develop their own sovereign capabilities and advanced manufacturing.
Our export partners for energy commodities like coal and gas—mainstays of our export wealth—are moving to decarbonise.
Australia must act to maximise our slice of the pie in the new global growth industries, including renewable energy technologies, or be left behind.
We heard that, for advanced manufacturing to succeed in Australia at scale, key barriers must be overcome. Manufacturers are struggling to access suitable investment capital on private markets alone. Australia's low rates of commercialisation and industry-research collaboration remain problems. Worker and skills shortage were raised by almost every participant in the inquiry.
Our report does not minimise such challenges. But solutions do exist—solutions that will put Australian manufacturers on a path to working smarter and moving up the value chain.
This report makes 10 recommendations to build on the existing program of work by the Australian government. They include recommendations to better support small and medium-size manufacturers—the majority of manufacturers—to access the funding and capability development programs they need to adopt Industry 4.0 and to pursue innovative value-adding opportunities.
We note the transformative role being played by Australia's existing innovation precincts and common-use facilities and recommend that we should be building more. We suggest changes to skilled migration, education and training settings to help meet our critical workforce needs. This includes recommendations to help tap a more-diverse pool of potential advanced manufacturing workers, including women.
I thank the submitters and the witnesses to this inquiry for contributing their insights and expertise. I would especially like to thank those who hosted the committee at site visits to world-leading advanced manufacturing facilities across Australia. These visits showed us what is possible—that Australia can be a leader in the advanced manufacturing game.
I would also like to thank the secretariat for their hard work, their diligence and their forbearance. I also want to thank in particular the deputy chair, the member for Capricornia, for the spirit of bipartisanship and cooperation she brought to this inquiry.
Lastly, I'd like to thank my fellow committee members, whose sharp questioning, analysis and ideas have shaped this report and recommendations.
I commend this report to the House.
by leave—I rise today to address the findings of the Standing Committee on Industry, Science and Resources inquiry into advanced manufacturing and to emphasise the critical importance of supporting our regional manufacturers and strengthening assistance to our small businesses. The committee's careful investigation has shed light on a crucial aspect of our manufacturing landscape. While expressing gratitude for government support, manufacturers, especially small businesses, find that some existing programs for innovation and commercialisation are falling short of the mark. This sentiment echoes the recent report by Industry, Innovation and Science Australia underlining the challenges faced by small businesses in the realm of collaboration and commercialisation.
It is imperative to recognise that the backbone of Australian manufacturing comprises predominantly small businesses, with the majority employing fewer than 20 individuals. These businesses form the bedrock of our economy, and their growth is paramount to our nation's prosperity. The promise of advanced manufacturing and Industry 4.0 technologies, including robotics and artificial intelligence, holds the potential to empower small businesses to compete and grow, which will enhance productivity and create jobs. Yet the committee's insights reveal a stark reality. The steep learning curve, high costs and associated risks serve as formidable deterrents to our small enterprises.
The recommendations presented in the report strive to address these barriers by advocating for investments in common-user facilities and test beds in innovation precincts. The report aims to create an environment where smaller and traditional manufacturers can embark on the Industry 4.0 journey without daunting upfront investments. Furthermore, the report's call to explore and scale up successful education and training programs for SMEs is a crucial step forward. By bringing access to knowledge and skill development we can empower more Australian SMEs to harness the potential of Industry 4.0 technologies, preventing any business from being left behind in this transformative era.
Equally significant are the recommendations urging the government to streamline investment programs and government procurement opportunities for small businesses. The acknowledgement that difficult application processes, unclear guidance and lengthy time frames have an extreme impact on resource-poor businesses is a call for actionable reform.
We must ensure that the avenues of government support are not just accessible but easily understood by our small enterprises. Furthermore, the call for additional exploration of opportunities to support and scale up successful education and training programs for SMEs is a commendable step. This will empower more Australian SMEs to benefit from Industry 4.0 technologies, preventing any businesses from being left behind.
A significant recommendation of the report is the creation of a national advanced manufacturing commissioner, acting as a centralised hub for federal and state government opportunities and support programs. This commissioner could serve as a valuable concierge service for small manufacturers, simplifying the process of navigating available opportunities.
Regional manufacturers face distinct challenges, and our support must be tailored to their local conditions. The committee rightly acknowledges the unique challenges encountered by regional manufacturers, who serve as anchors for local economies. Industries such as food and forestry production, mining, and defence equipment play pivotal roles in the region and are facing challenges like higher energy costs, difficulty in skilled workforce acquisition, lower wages and increased vulnerability to natural disasters and droughts.
Deakin University's insight into the lag in regional manufacturing's transition to high-value production emphasises a need for targeted interventions. The report's recommendation for investment in common-user advanced manufacturing facilities, specifically exploring underutilised land in regional areas, is a step in the right direction. The committee's acknowledgement of the specialisation of regional and rural economies around local anchor industries, such as agriculture or mining, underscores the importance of locally appropriate investments in common-user facilities and innovation precincts. These initiatives must be sensitive to existing industrial capabilities and needs.
The recommendations put forward by the Standing Committee for Industry, Science and Resources are not just a road map for the future of advanced manufacturing—they are a call to action for us to invest wisely, support inclusively and ensure that no business or region is left behind in the transformative journey towards Industry 4.0. Let us seize this opportunity to shape a future where our manufacturers, big and small, urban and regional, stand united in the front of innovation and progress.
In conclusion, my gratitude goes to the secretariat, specifically Lynlee, Tanya and Tessa, for their valuable efforts and support in aiding the committee to compile the inquiry report, Sovereign, smart, sustainable: Driving advanced manufacturing in Australia. Additionally, I extend my thanks to Mr Rob Mitchell, the chair of the committee, for his commitment and collaborative efforts in the pursuit of making Australian manufacturers globally competitive, and the rest of the committee for their input and commitment throughout this inquiry.
I'm sure the member for McEwen is deeply honoured to be mentioned, not by his name but by the parliamentary name! I thank the member for Capricornia for her statement with reference to the Standing Committee on Industry, Science, and Resources.