Senator Tim Ayres explores how Australia is rebuilding industrial strength with decisive policy, strategic investment and a renewed focus on national capability.
Despite the challenges facing Australian manufacturing firms and workers today, there are many reasons to be optimistic about the sector’s future. The Federal Government is using every lever available to lock in strong foundations for Australian industry over the coming years.
The world has changed
For a couple of decades, industry policy was unfashionable. Ideas about sovereign capability and the national interest repeatedly came off second best against the cold logic of the global marketplace. Between 1990 and 2020, manufacturing’s share of Australian economic output fell from 14.8 per cent to 5.9 percent according to the Reserve Bank of Australia (RBA).
In the 2010s, sectors like automotive manufacturing were driven offshore, irrespective of the industrial and management capability, skills and research and development capacity that were surrendered along the way. Australians in blue-collar jobs in regional and outer suburban areas, who had worked hard to lift productivity and efficiency, bore the brunt of this change and decline. So did the individual regions and suburbs that relied upon this investment.
The COVID-19 pandemic and the geopolitical uncertainty that followed it – not least of all in our own region – underscored what those of us who have spent a lifetime in and around Australian manufacturing already knew: that Australia is stronger and more resilient when it has dynamic industries and homegrown industrial capability.
Today, Australian industry faces a new set of challenges. Global overcapacity and unfair subsidisation in other markets make us uncompetitive in core production. Trade volatility and unfair practices, like dumping, put Australian jobs at risk. The lost decade on energy – where local competitive gas became harder to find and disinvestment in the electricity system undermined electricity supply (just as firms moved to electrify many industrial processes) – means a lot of hard work needs to happen to secure Australia’s future energy advantage.
Investors at home and abroad are looking at Australia’s current and future competitive advantages and strategic potential with renewed focus. The Federal Government is giving investors clear incentives to commit to the industries Australia needs to build economic resilience, competitiveness, and good jobs.
Not forfeiting Australia’s future
Faced with stark choices, this government acted to secure Australia’s industrial future. In January, with global market distortions and corporate neglect jeopardising Whyalla Steelworks, the Federal Government and the South Australian Government jointly intervened to provide an ambitious, long-term plan that is already lifting the efficiency, technological capability and safety of that facility. The competitive tender process for new ownership remains underway, and in the meantime the facility has taken on additional workers to meet growing demand for its steel output.
Since my own appointment to this portfolio in May, I’ve been engaged with the owners, workers, unions and state governments responsible for industrial smelters all around Australia. The lead smelter at Port Pirie and zinc smelter in Hobart, both owned by Nyrstar; the copper smelter at Mt Isa and associated refinery in Townsville, both owned by Glencore.
In partnership with state governments, the Federal Government has invested in the future of Nyrstar and Glencore’s smelting facilities so they can invest in new opportunities and efficiencies that situate Australian industry higher up the global critical minerals and strategic materials value chains. The Port Pirie smelter, for instance, has the potential to provide 40 per cent of the American market’s demand for antimony, a critical mineral used in battery technologies and for reinforced plating in defence manufacturing, derived from lead waste. The pilot plant is producing its first processed antimony metal now for sale early next year.
The alternative to constructive partnerships between the Commonwealth, states and corporate owners of these facilities would have been to forfeit a bright future for critical minerals and strategic materials processing in Australia. In doing so, we would have forfeited the good regional jobs and upstream businesses that are underpinned by these anchor facilities. While government cannot protect every job at every facility from exposure to global market pressures, it can work constructively and creatively with firms and state governments to bridge the cheap coal-fired power of the past and the large volumes of renewable energy that will power Australia’s industrial future.
A fair playing field for industry
At the same time, this government has been engaged in a mission to help provide Australian industry with a fairer playing field, in recognition of the fact that international commitment to free and fair trade has declined.
In April, the Prime Minister committed $5 million to raise the monitoring and compliance capabilities of Australia’s Anti-Dumping Commission. In September, the Treasurer, Trade Minister and I built on that work with our announcement that responsibility for anti-dumping safeguards and trade remedies would be relocated from the Productivity Commission to the Anti-Dumping Commission. These reforms will make Australia’s anti-dumping system stronger, more responsive and fit for purpose in a more uncertain trading environment.
In the meantime, I’m acting decisively on the advice of the Commissioner to combat the harmful effects of dumping on local firms and jobs. The new duties I have imposed on certain metal manufactured products demonstrates my commitment to a fair go for Australian manufacturing.
Critical minerals
Industry policy has also been at the centre of some of Australia’s most important bilateral relationships in recent months. In October, I joined the Prime Minister and the Minister for Resources in Washington D.C., where Australia and the United States signed the new Critical Minerals Agreement to develop an $8.5 billion pipeline of critical mineral and rare earth projects – and that’s just the beginning. The public and private investments unlocked through that pipeline will make Australia a strategically essential partner in the mine-to-metals supply chains that matter for the world’s IT, clean energy and defence technology capabilities.
The first project in that international pipeline is the Alcoa-Sojitz joint venture to recover gallium from the Wagerup aluminium refinery, which I visited in November. Processed gallium is a vital input for semiconductor manufacturing and a range of defence technologies, among other things. That project – driven by joint investment from the United States as well as Japan, another vital investment partner for Australia – will take Australian industry higher up the value chain, deliver more good jobs in existing industrial regions and make Australia more economically resilient.
An ambitious National Reconstruction Fund
This year has also seen strong foundations laid for an ambitious, purposeful and risk-tolerant National Reconstruction Fund that attracts private sector investment and delivers good jobs in areas of strategic importance for Australian industry.
To date, the $15 billion Fund has made important investments that will give Australia a stake in world-leading capabilities in AI-capable medical and health technologies, quantum capability and cybersecurity, and new production capacity in the critical minerals that the world needs for clean energy manufactures. In the year to 1 November, the Fund made more than $679 million worth of investments.
Looking ahead with confidence
The world won’t suddenly get easier in 2026, but I’m looking forward to a positive year for Australian manufacturing, building on the strong foundations we’ve laid this year. I’ll be watching closely to monitor the efficacy and timeliness of Australia’s anti-dumping system, making sure that it keeps pace with the fast-moving developments of the global trade environment.
I’ll also be working with the National Reconstruction Fund to make sure that its investments are sufficiently ambitious and tolerant of short-term risk. The Minister for Finance and I have issued the Fund with a new Statement of Expectations that sets out our goal to see an ambitious but achievable investment target of $1.5 billion by the end of this financial year. And within its original capitalisation, the Fund will deliver the new $5 billion Net Zero Fund to make targeted investments that drive electrification and adoption of new technology across Australian manufacturing.
Industry leaders and manufacturing workers across Australia tell me that they are up for the challenge. I was pleased to see their positivity confirmed by the Australian Bureau of Statistics, which captured a record-breaking seven per cent increase in monthly turnover in manufacturing in September – driven largely by activity in metals and metal product manufactures.
Turning back the tide of deindustrialisation isn’t easy. But it is essential. The progress we’ve made in 2025 – on Australia’s critical minerals processing and export capability, anti-dumping system and National Reconstruction Fund among other things – will stand Australia in good stead for the months and years to come.
