SEMMA warns mounting costs, tax burdens and policy gaps are stifling local manufacturers, urging for protections for domestic industry and focus on local jobs content.
It seems that at every turn, local manufacturers and our supply chain are being asked to either cut costs or pay more tax, navigate endless rolls of red tape and battle for what’s fair in a global marketplace. However, at SEMMA, we believe our local jobs content should not be compromised for profit.
It doesn’t matter what you produce, the result is the same – less after-tax profit. Less for investment, less for hiring that new apprentice or recent graduate. Less for R&D, less for growth and innovation. Less inspiration – and as businesses know all too well – unless your product is the latest whiz-bang innovation or hot topic – it just doesn’t get the attention or support it deserves, unless you’re on the “winners list” like green energy, SRL or AUKUS.
Australia’s economy has flatlined. According to the ABS, in 2024, Victoria had the highest number of businesses going bust – 129,000. And according to the Victorian Parliamentary Budget Office, Victoria is also the most taxed state in all of Australia at $5408 per person in 2025-26 according to the Victorian Parliamentary Budget Office.
Some sectors seem immune to these economic pressures – like rail and defence – but in the end, when we look at the recent situation with access to diesel fuel, we all pay more through the supply chain. It’s understanding the ‘sector silo’ that can be the difference when it comes to financial survival for SMEs.
It’s good practice not to focus on one sector but to have a cross-section of industries that you supply to and vice-versa. And it is always good practice to buy locally manufactured goods.
Our local jobs content must be safe-guarded. SEMMA recently provided a submission to the Productivity Commission in the application of a Safeguard on fabricated structural steel. Our local suppliers and manufacturers must be protected, or we risk reputations and lives. And those OEMs in rail and defence (for example) must abide by our local jobs content rules. New regulations come into play in Victoria on 1 July, and we will have a new Local Jobs Content Commissioner who will need to hit the ground running.
While SEMMA might be based in the southeast of Melbourne, we have an eye on the national economy and our place in it. Nationally, manufacturing is the sixth largest industry, generating $137b in value-added output and employs 930,000 people. It contributes 12.4 per cent to Australia’s exports and 7.9 per cent to capital expenditure (AI Group 2024).
In late April, SEMMA will present the first of five Australian Manufacturing BLUEPRINT 2026 Election Forum Series. Five forums each focused on one of our five pillars of growth to invigorate industry. The first pillar is Economic and will feature financial sector and industry experts, and those from the political sphere, followed by an interactive panel. It’s an opportunity for manufacturers to come together to discuss, debate and dissect current policy and offer solutions through our BLUEPRINT platform.
Manufacturers make our economy. It’s time policy makers recognised and acknowledged the contribution our manufacturing sector makes to the Australian way of life. If you’d like to have your say, join us.
Become a SEMMA member and we’ll keep raising the profile and voice of SME manufacturing. www.semma.com.au
