Australian Government response: Driving Advanced Manufacturing in Australia inquiry and report

The Australian Government welcomes the report of the House of Representatives Standing Committee on Industry, Science and Resources on developing advanced manufacturing: Sovereign, smart, sustainable - Driving advanced manufacturing in Australia. The government agrees or agrees in principle to 6 of the 10 recommendations and is pursuing initiatives supporting the intent of the remaining 4 recommendations. 

The government is committed to making our future here, making the most of our potential, and making sure the benefits are widely shared. Our $22.7 billion Future Made in Australia Plan will drive advanced manufacturing in Australia, helping us to maximise the economic benefits of the move to net zero and secure Australia’s place in a changing global landscape. This will build a stronger, more diversified and resilient economy. We are committed to ensuring Australian manufacturers are part of the immense opportunities on offer from the most significant change underway since the industrial revolution. We will capitalise on our competitive advantages, encourage and facilitate investment and create more secure jobs to drive our national success. 

As part of our plan, the 2024-25 Budget National Interest Framework Supporting Paper identified how assessments against the National Interest Framework informed policy decisions in the Budget. Government investments in line with the net zero transformation stream of the National Interest Framework focused on renewable hydrogen, green metals and low carbon liquid fuels, and investments aligned with the economic security and resilience stream focused on refining and processing critical minerals and clean energy manufacturing. 

We have announced a $1.7 billion Future Made in Australia Innovation Fund to fund the deployment of innovative technologies and facilities linked to priority sectors. Our National Battery Strategy will lead ‘the charge’ towards a competitive and diverse battery industry – the global demand for batteries is set to quadruple by 2030 as the world transitions to net zero. An investment of $523.2 million in the Battery Breakthrough initiative will support manufacturers to move up the battery value chain in Australia. A consultation process on unlocking green metals opportunities for a Future Made in Australia closed on 14 July 2024. We will also invest in projects that develop, diversify and transform Australia’s industrial and manufacturing capability through the $15 billion National Reconstruction Fund. Our National Rail Procurement and Manufacturing Strategy will help build scale and efficiency in the sector, promoting investment and making the sector more globally competitive.

Backing our science, know-how and smarts ensures we can turn our great ideas into national prosperity. We are helping start-ups scale and grow through the Industry Growth Program and ensuring even more of our great university research is commercialised through the $1.6 billion Australia’s Economic Accelerator program. The Australian and Queensland Governments are jointly investing almost $1 billion in PsiQuantum to build the world’s first utility-scale fault tolerant quantum computer in Brisbane. As part of this investment PsiQuantum will establish partnerships with the local quantum industry and advanced manufacturing clusters. We are focused on accelerating our future technological potential in advanced manufacturing. We have released a National Robotics Strategy to harness the benefits of robotics and automation across our economy and help revive Australian manufacturing.

Education is fundamental to creating opportunity and supports the government’s vision for a Future Made in Australia. The government is investing in the skills and expertise needed to underpin a strong advanced manufacturing industry. This includes programs in advanced apprenticeships and Industry 4.0. The new, 5-year National Skills Agreement includes national 4 priorities, where all governments have agreed focussed action is required, including supporting the net zero transformation and ensuring Australia’s digital and technology capability. 

The government thanks the committee for its work and is pleased to provide this detailed response. This response demonstrates the government’s focus on A Future Made in Australia and our support for rebuilding manufacturing in Australia.

The government notes this recommendation. 

The government recognises the importance of making opportunities to manufacturers visible and accessible, and pathways for investors easier. 

As part of the government’s Future Made in Australia plan, we are creating a new front door for investors with major, transformational investment proposals to make it simpler to invest in Australia and attract more global and domestic capital. The front door will complement and leverage existing institutions, including the Net Zero Economy Authority, which is focussing on supporting what regions need to transition effectively to net zero - including identifying and facilitating investment. 

The front door will:

• provide a single point of contact for investors and companies with major investment proposals 
• deliver a joined-up approach to investment attraction and facilitation
• identify priority projects related to the government’s Future Made in Australia agenda
• support strengthened and streamlined approvals decisions
• connect investors with the government’s specialist investment vehicles.

The government is streamlining approval processes in ways that strengthen standards. Through smarter use of data, better decision-making processes and appropriate resourcing, the government is delivering faster pathways to better decisions on environmental, energy, planning, cultural heritage and foreign investment approvals. 

The government is seeking to better integrate its programs designed to support small and medium enterprises (SMEs) as they grow and develop. The Industry Growth Program, which supports innovative small and medium enterprises undertaking commercialisation and growth activities, has been designed to focus on the same priority areas as the $15 billion National Reconstruction Fund. This will provide a clear pathway for our entrepreneurs to turn their ideas into thriving businesses in Australia and expand the pipeline of investment-ready projects for the National Reconstruction Fund Corporation to consider in coming years. 

To help small and medium sized businesses navigate government support and access business and community networks, the government has the AusIndustry Regional Managers network in place (which sits within the Department of Industry, Science and Resources) to provide impartial and trusted guidance tailored to local businesses. In addition, the government supports the work of the Industry Capability Network Limited, which provides access to experienced industry procurement and supply chain specialists who introduce small and medium enterprises to projects large and small across Australia and New Zealand. 

The government also centralises information, grants, services, and support from across 3 levels of government through business.gov.au as a ‘shopfront’ to support businesses. 

While the government will not be establishing a National Advanced Manufacturing Commissioner at this time, government has used similar models to address specific manufacturing challenges. The recently established National Rail Manufacturing Advocate is encouraging a coordinated approach with state and territory governments, developing industry capability and supporting competitiveness in the rail manufacturing sector. 

Quantum Australia also provides a ‘front door’ to our quantum technology industry, bringing together over 50 organisations across the sector to drive adoption of quantum technologies across the economy and connect quantum researchers and firms to adjacent industries. This complements our transformational investment to build the first world’s first utility-scale fault tolerant quantum computer in Australia.

The government notes this recommendation. 

The Future Made in Australia plan will maximise the economic and industrial benefits of the move to net zero and secure Australia’s place in a changing global economic and strategic landscape. The 2024-25 Budget measures seek to rebuild manufacturing particularly in high-skilled, high value-add areas consistent with Australia’s comparative advantages and build capability in areas of national interest.

The government’s $22.7 billion Future Made in Australia plan includes targeted production incentives to scale up priority industries, aligning incentives to invest with the national interest, targeting ‘green premiums’ that are not yet reflected in market prices, and investing efficiently in mitigating the risks of excess supply chain concentration. 

Through the National Interest Framework, the government is bringing a rigorous economic lens to decision making for public investments, supported through 2 streams:

1. The Net Zero Transformation Stream which relates to where: 

a. a sector could have a sustained comparative advantage in a net zero global economy 

b. public investment is likely to be needed for the sector to make a significant contribution to emissions reduction at an efficient cost. 

2. The Economic Resilience and Security Stream which relates to where: 

a. some level of domestic capability in the sector is a necessary or an efficient way to deliver economic resilience and security 

b. the private sector will not deliver the necessary investment in the sector in the absence of government support.

We are driving advanced manufacturing and the transition to net zero through our commitment to a Future Made in Australia. Support for key areas like critical minerals, hydrogen, batteries, solar and clean energy manufacturing will help build a stronger, more diversified and resilient economy. Our Future Made in Australia Budget package includes:

• A Critical Minerals Production Tax Incentive from 1 July 2027 to support downstream refining and processing of Australia’s 31 critical minerals to improve supply chain resilience, estimated at $7.0 billion over 11 years from 2023–24 (and an average of $1.5 billion per year from 2034–35 to 2040–41).
• A Hydrogen Production Tax Incentive from 1 July 2027 for producers of renewable hydrogen to support the growth of a competitive hydrogen industry and Australia’s decarbonisation, estimated at $6.7 billion over ten years from 2024–25 (and an average of $1.1 billion per year from 2034–35 to 2040–41).
• $2 billion ($1.3 billion over ten years from 2024–25 and an average of $151.6 million per year from 2034–35 to 2038–39) for an additional round of the Hydrogen Headstart program to bridge the green premium for early-mover renewable hydrogen projects.
• A $1.7 billion Future Made in Australia Innovation Fund has been announced as part of the Future Made in Australia package. The fund will support innovation, commercialisation, pilot and demonstration projects and early stage development in priority sectors, consistent with ARENA’s existing technology mandate, including renewable hydrogen, green metals, low carbon liquid fuels and clean energy technology manufacturing such as batteries. The fund will be administered by the Australian Renewable Energy Agency.
• $1.0 billion Solar Sunshot program to promote the development of solar manufacturing capabilities, and improve the industry’s supply chain resilience through production incentives and other forms of grant-based support.
• The $523.2 million Battery Breakthrough to support manufacturers to move up the battery value chain in Australia. It will provide a targeted production incentive to support our battery manufacturers to build scale across the value chain. The incentive will focus on producing high-value battery products in Australia’s areas of advantage – such as stationary energy storage.
• The $20.3 million Building Future Battery Capabilities measure to build our future battery capabilities and strengthen national collaboration.
• $18.1 million over 6 years from 2024–25 for foundational initiatives to expedite the emergence of Australia’s green metals industry, enhanced industry and research collaboration, exploration of opportunities to improve the use of Australian scrap metal, and further consultation on incentives to support the production of green iron, steel, alumina and aluminium.
• $20.9 million over 4 years from 2024–25 (and $1.2 million per year ongoing) to undertake further consultation on incentives to support the production of, and demand for, low carbon liquid fuels, as well as the development of a low carbon liquid fuels certification scheme through the Guarantee of Origin Scheme.
• $11.4 million over four years (and $1.1 million per year ongoing) to fast track the initial phase of the Guarantee of Origin Scheme for green hydrogen and bring forward work on green metals, including green iron, steel and aluminium.

The government has provided up to $1.2 billion in strategic investments in priority critical minerals projects including up to $655.0 million under the $4 billion Critical Minerals Facility and up to $400.0 million through the Northern Australia Infrastructure Facility. 

The Moderna Partnership is a notable example of the manufacturing initiatives that are being undertaken to strengthen Australia’s capability for developing messenger ribonucleic acid (mRNA) vaccines against respiratory diseases including, but not limited to COVID-19, Respiratory Syncytial Virus (RSV) and seasonal influenza, subject to successful trials and regulatory approvals. The investment by the Australian and Victorian Governments and Moderna provides improved national resilience to future respiratory outbreaks and pandemics. The manufacturing facility currently being built in Clayton, Victoria, will be the first of its kind in the southern hemisphere and will provide Australia with advanced capability and manufacturing jobs for many years to come.

The government agrees in principle with this recommendation.

The Buy Australian Plan is a significant government procurement reform program which aims to use the government’s buying power to support all businesses to deliver better value for money, grow the local economy and strengthen our domestic industry and manufacturing capability. Under this, the Department of Finance (Finance) is providing procurement and contract management training to the Australian Public Service to support officials and decision makers in assessing and determining value for money from tender responses to maximise value for taxpayer dollars in delivering positive economic, social and environmental outcomes for Australians. 

The government, via Finance, regularly reviews the Commonwealth Procurement Framework, including the Commonwealth Procurement Rules (CPRs). The framework is non-discriminatory and continues to guide officials to consider and balance numerous factors including achieving value for money and economic benefits to the broader Australian economy, while remaining consistent with Australia’s international trade obligations. The government is currently in the process of refreshing its suite of procurement guidance that will include consideration of broader domestic economic benefits in procurement.

In addition, the government announced in the 2023-24 Budget that it is making further enhancements to AusTender and more information on procurements will be reported publicly. Under the Australian Industry Participation (AIP) National Framework, governments have committed to adopting a consistent national approach to industry participation for works relating to government investment. To support the delivery of the 82 per cent renewable energy target, the government has formed the National Renewable Energy Supply Chain Action Plan with states and territories which will also strengthen supply chains of key inputs required for clean energy.

Under the Buy Australian Plan, the government has undertaken a series of industry sector scans to identify common and sector specific procurement barriers for industry. The scan outcomes support engagement with the states and territories on AIP approaches and opportunities to maximise industry participation in government procurement.

Under the National Rail Manufacturing Plan, the National Rolling Stock Procurement Pipeline (the Pipeline) was launched on 27 May 2024. The Pipeline brings together data from states and territories to make government rail procurement more visible at a national level and allows users to view data through interactive charts or a more comprehensive data table that links to specific state and territory projects. The Pipeline will support industry to plan for future work and make informed investment decisions. 

The government agrees in principle with this recommendation.

The government makes significant investments in many government and non-government organisations including the CSIRO. This ecosystem of investments includes our Cooperative Research Centres and National Collaborative Research Infrastructure Strategy facilities. Industry is also encouraged to innovate and grow through measures such as the Research and Development Tax Incentive.

The $2.2 billion research translation and commercialisation agenda invests in initiatives to reform Australia’s research commercialisation landscape. This agenda includes significant investment in aligned CSIRO activities, such as providing $150.0 million over 5 years from 2021–22 to expand the CSIRO Innovation Fund, managed by Main Sequence, to accelerate the commercialisation of research and increase industry collaboration as part of Australia’s Economic Accelerator program.

A practical demonstration of industry-research collaboration is the Australian National Fabrication Facility (ANFF) project. This includes the Melbourne Centre for Nanofabrication, a joint venture between 7 universities and CSIRO, and its commercial arm that assists researchers and early-stage entities who have used ANFF equipment to launch new businesses. 

The government will undertake a strategic examination of Australia’s research and development (R&D) system, to help secure our core science and innovation capability. 

The government agrees in principle with this recommendation.

The government already invests in programs that allow businesses to access a range of facilities, including across government agencies such as the CSIRO, the Australian Nuclear Science and Technology Organisation and the National Measurement Institute. These facilities provide access to advanced technologies and infrastructure in national priority areas. The government also makes available cutting-edge national research infrastructure through the National Collaborative Research Infrastructure Strategy (NCRIS), which supports projects by private companies, universities and research organisations. 

CSIRO and Monash University have partnered to create the Australian Manufacturing and Materials Precinct (AMMP) based in Clayton, within the southeast metropolitan region of Melbourne. The AMMP will help drive the innovation necessary for Australia’s manufacturing industry to remain competitive, locally and globally connected, and form an attractive target for talent and inbound investment. 

Flinders University is receiving $10 million from the government to establish the Factory of the Future. The Factory brings together industry to provide a world-class, advanced manufacturing test-bed for training and capability building across Industry 4.0 technologies. The facility also aims to accommodate businesses to test feasibility of advanced manufacturing and digital technologies.

ANSTO has programs that allow access to its facilities, including commercial access to the Australian Synchrotron and Lucas Heights, which provide experimental facilities including the Centre for Accelerator Science.

In the 2023-24 Budget, the government provided $14.8 million over 4 years to establish the Powering Australia Industry Growth Centre (PAIGC). The PAIGC will provide advanced technology and skills development to businesses looking to locally manufacture renewable energy technologies. 

The government notes this recommendation. 

The government will catalyse investment in new industries and jobs, including in emissions-intensive regions, as part of the net zero transition. The government will consider opportunities for precinct development in the context of its targeted industry policies, including as part of its efforts to support regions and communities attract and develop clean energy industries. This will include considering emerging opportunities identified by industry and state and territory governments.

In this regard the government is providing $10.2 million in 2024–25 for pre-feasibility studies for critical mineral common-user processing facilities in partnership with state and territory governments to enhance Australia’s capacity to process critical minerals, develop sovereign capability and economic resilience. 

Supporting the government’s Battery Strategy, it is also partnering with the Queensland government to develop a Battery Manufacturing Precinct backed by up to $100.0 million in equity from the government. The precinct will support industry collaboration and pilot-scale manufacturing of battery technologies, helping manufacturers grow their businesses.

The government agrees in principle with this recommendation.

As noted by the committee's report, the government has undertaken a number of pilot programs in advanced apprenticeships including Industry 4.0. These programs support cadetship and advanced apprenticeship course delivery models that are designed to support uptake of emerging technologies and prepare students for jobs of the future. 

Under the new National Skills Agreement (the agreement), the government is investing up to $12.6 billion over 5 years to strengthen the vocational education and training sector. The agreement commenced on 1 January 2024 and aims to address national workforce priorities including supporting the net zero transformation; developing Australia’s sovereign capability and food security; and ensuring Australia’s digital and technology capability. These sectors include many SMEs. 

As part of this commitment, the government is partnering with states and territories to establish nationally networked TAFE Centres of Excellence focussing on national priorities to help deliver a skilled workforce for strategically important industries to meet national challenges. TAFE Centres of Excellence will work with industry, Jobs and Skills Councils, universities and other stakeholders to identify skills gaps and develop new training products to better respond to emerging workforce needs by extending the apprenticeship model beyond traditional trade occupations, to higher skilled job roles. 

This work also aligns with a core theme explored through the Australian Universities Accord, which highlights the need to continually work towards an aligned tertiary education system that draws on the strengths of both sectors to support Australia’s economy and meet our skills needs. 

The Industry Growth Program provides advice and support to startups and SMEs who are investing in Industry 4.0, and also to businesses from underrepresented groups, women-led and owned businesses and others. 

The government notes this recommendation.

The government’s Migration Strategy is designed to help businesses get the skills they need to grow and be more productive.

The government announced as part of its Migration Strategy the introduction of a new temporary Skills in Demand visa. This new visa will have targeted pathways to ensure we have the temporary skilled migrants Australia needs.

• The Specialist Skills Pathway recognises that highly skilled migrants are beneficial to Australia’s national productivity, providing support to critical sovereign capabilities and potential to grow the skills and expertise of the Australian workforce.
• The Core Skills Pathway will bring in the skilled employees Australia needs now and into the future, ensuring we are able to provide ourselves with the goods and services we need to support our way of life.

In order to enable employers to fill vacancies quickly, processing this new visa will be streamlined and the government will establish a median service standard for visa processing of 21 days for the new Skills in Demand visa and 7 days for the Specialist Skills Pathway. The new Skills in Demand visa (Specialist Skills and Core Skills pathways) will be implemented in late 2024.

Along with government’s broader reforms such as the new Specialist Skills Pathway, the government has announced the introduction of a National Innovation visa. The National Innovation visa, to be introduced by the end of 2024, will drive growth in sectors of national importance and attract highly talented migrants to Australia, including high-performing entrepreneurs, major investors and global researchers.

The government supports clearer pathways to permanent residency for migrants with core indemand skills, including certain specialist advanced manufacturing workers. The government has already implemented simpler and clearer pathways to permanent residence. On 25 November 2023, changes were made to provide a pathway to permanent residence for all Temporary Skill Shortage visa holders through the Temporary Residence Transition stream of the permanent Employer Nomination Scheme visa. 

As outlined in the government’s Migration Strategy, the government will improve the approach to skills recognition and assessment to better unlock the potential of migrants. 

The government will establish a robust assurance framework and new best-practice standards for skilled migration assessing authorities, which will increase Australia’s attractiveness as a destination for skilled workers, provide clearer pathways to permanent residency, and deliver quality skilled labour to Australian businesses. This includes those engaged in advanced manufacturing. 

The government agrees with this recommendation. 

The government is committed to advancing gender equality as a national priority and is taking a whole-of-government approach. Gender equality brings with it opportunities for everyone to thrive, making our economy stronger, more inclusive and more sustainable. Key to this will be breaking down unhelpful stereotypes in manufacturing careers, improve learning opportunities, and new ways of attracting and retaining underrepresented employees.

On 7 March 2024, the government released Working for Women: A Strategy for Gender Equality (the strategy). This strategy outlines the government’s vision for gender equality – an Australia where people are safe, treated with respect, have choices, and have access to resources and equal outcomes no matter their gender.

The government commissioned the independent Pathway to Diversity in STEM Review to establish what is working, what is not and where lessons can be applied to improve overall diversity in STEM. The final report, released on 13 February 2024, makes 11 recommendations on how the Government, industry and education sector can create structural and cultural change to increase the diversity of Australia’s STEM workforce. The review highlighted the importance of sharing what works to support underrepresented groups to enter and stay in STEM jobs. The government is considering the review’s recommendations and will respond in due course.

Gender equity and boosting female participation across a range of industries is at the centre of the government’s policy design. The National Reconstruction Fund Corporation’s legislation states its independent Board must have regard to the desirability of encouraging and improving economic participation by historically underrepresented groups, including women.

The Industry Growth Program provides advice and support to startups and SMEs who are investing in Industry 4.0, and also to businesses from under-represented groups, women-led and owned businesses and others.

The government agrees with this recommendation.

The government is committed to advancing gender equality and removing barriers to employment and entrepreneurship for under-represented groups pursuing careers in advanced manufacturing, including through regular review of government policies to ensure their ongoing effectiveness. 

Our Working for Women: A Strategy for Gender Equality includes an ambition to close the gender pay gap. The third priority area of the strategy – economic equality and security – includes a focus on industry gender segregation in current male-dominated industries. The Strategy outlines government actions underway, future direction for reform, and what workplaces can do to support workplace gender equality.

The Multicultural Framework Review, Towards Fairness – a multicultural Australia for all, the first major examination of the state of our Australian multiculturalism in a generation, and the government response were released on 24 July 2024. 

The government has a suite of initiatives aimed at removing barriers and increasing engagement and retention of women in STEM. The Department of Industry, Science and Resources has programs dedicated to increasing the engagement and retention of women in STEM industry leadership and pathways for girls through schooling and into high tech careers and leadership.

As noted in the response to recommendation 9, the final report of the independent Pathway to Diversity in STEM Review makes 11 recommendations on ways of removing barriers to under-represented groups participating in Australia’s STEM workforce. This includes taking a more strategic, long-term approach to increase diversity and inclusion in STEM. The government is considering these recommendations and will respond in due course. 

The government’s Future Made in Australia plan makes important investments in skills, training and education. This includes expanding support for women training in male-dominated industries 14 through $55.6 million for the Building Women’s Careers program and $38.2 million to support diversity in science, technology, engineering, and maths. 

As noted in the response to recommendation 9, gender equity and boosting female participation across a range of industries is at the centre of the government’s policy design. The National Reconstruction Fund Corporation’s legislation states its independent Board must have regard to the desirability of encouraging and improving economic participation by historically underrepresented groups, including women, first nations peoples, people with a disability and people of culturally and linguistically diverse backgrounds.

The Industry Growth Program provides advice and support to startups and SMEs who are investing in Industry 4.0, and also to businesses from underrepresented groups, women-led and owned businesses and others.