COVID-19 and manufacturing in Australia
In a few short months, the COVID-19 pandemic has put the survival systems of many countries’ economies to the test. To a considerable extent, the Australian economy and its manufacturing industry is one such example.
From financial distress to job loss and mental health issues, the capacity for sustainable self-sufficiency during these uncertain times has proven to be inadequate. For many of these issues, reliable and tangible solutions are needed as a matter of urgency.
As part of long term survival and recovery plans, the government has made various announcements towards boosting manufacturing in Australia. Preceding these plans are some of the key lessons learned since COVID-19 hit our shores.
Lessons Learned During The COVID-19 In Australia
Low-Level Self-Sufficiency – The economic strains caused by the coronavirus pandemic revealed the true level of self-sufficiency of the Australian economy. Particularly in the manufacturing sector, many industries have struggled to keep up with the sudden surge in demand for essential goods.
When compared with other OECD countries, this low level of self-sufficiency was also confirmed in research conducted by The Australia Institute For Future Work.
The Need For More Exports – Total dependence on the local demand and supply of goods and services is hardly enough to sustain all the jobs needed. The COVID-19 outbreak and subsequent recession has exposed the deep need for more export-related business within the country.
In line with this, Australia’s industry minister, Karen Andrews stated –
‘By playing to our strengths, strategically investing and boosting the role of science and technology in industry, we can open up new markets and take more of our quality products to the world.”
High Cost of Manufacturing In Australia – Manufacturing can be brought back, but at what cost? That’s the question asked by one news reporter, Ian Verrender.
While many acknowledge the need to boost manufacturing in Australia, the cost is widely unknown. Reducing manufacturing costs can help get the economy back on the path of recovery and long-term growth.
The Federal Government’s Boost for Manufacturing In Australia
Small and mid-sized businesses are the engine of the Australian economy, and small business is the machine that keeps it running. Recognizing the role that this economic unit can play, the government had pledged $1.5 billion to help sustain local manufacturing.
What this means is that qualified businesses within the sector can apply for a conditional grant running between $100,000 – $1 million.
It is also important to note that only businesses within the key stipulated areas can apply for this.
These key focus areas are –
· Medical products
· Food and beverage
· Clean energy and recycling
· Resources technology and critical minerals
The Supply Chain Resilience Initiative
the purpose of The Supply Chain Resilience Initiative is to deal with the low self-sufficiency; one of the key impacts exposed during the COVID-19 outbreak. The systems for manufacturing and supply of medical products were enormously strained.
Because of this, the government has made $107.2 million available to support businesses in this sector, with an overall aim to strengthen the supply chain.
Modernization of manufacturing processes and systems is another key area identified as showing room for improvement. The government is aiming to leverage science and technology to achieve economic recovery goals, and ultimately reduce the cost of manufacturing. In order to achieve this, the government has pledged $1.3 billion. Among other things, this modern manufacturing initiative will provide much-needed help in terms of grants and co-investments for significant projects.
At full scale, it is expected that these initiatives will result in the creation of over 80,000 direct and around 300,000 indirect jobs.
According to Scott Morrison, ‘It’s all about alignment, across different levels of government, with industry and with the research and education sectors.’
Want to know more about how the future of manufacturing in Australia and the potential opportunities that come with it? Contact our team of dedicated local employment experts today to find out how we can help.