A recent public address underscored the role that regions like the Hunter play in revitalising Australia’s manufacturing.
Announced in the Federal Budget 2024/25, the $22.7 billion Future Made in Australia investment package aims to secure industrial benefits and enhance the nation’s global economic standing through a transition to Net Zero.
“This Future Made in Australia package is the biggest pro-manufacturing package in Australian history,” said assistant minister for Trade and for a Future Made in Australia, Senator Tim Ayres.
To foster this growth, the package prioritises the use of private sector investment to help ignite Australia’s energy transition.
“All investment is welcome. The Future Made in Australia is about driving the big transformational nation-building investments in manufacturing capability,” said Ayres.
“It is designed to attract the investment of the world’s best manufacturers.”
The Hunter Valley, which in the past has been an Australian industrial superpower and stands to benefit from the package, was the focus of a recent conversation between Ayres, Jenny Marchant and Dan Cox from ABC Newcastle.
The interview went into depth regarding the role that industrial regions like the Hunter have in rebuilding Australian manufacturing.
“The benefits, the investment, will disproportionately happen in big industrial regions like the Hunter,” he said.
“That’s where the energy and metals processing and manufacturing capability is, and that’s where we’re driving investment towards.
“The Hunter is Australia’s largest regional economy.”
Balancing foreign investment and local capabilities
Ayres said that a large focus of his role is to ensure local businesses from regional areas are benefiting from private sector investment once attained.
“I want to make sure that as we move this agenda forward, that we’re doing it with local industry, so that firms in the supply chain benefit,” he said.
“We’ve got the world’s best industrial capability in the Hunter. The energy powerhouse of the country with a rich industrial history.”
Ayres envisions a seamless transition into the future landscape as the region already practices harmony between anchor investment companies and smaller firms.
“The big anchor investment industries like Tomago Aluminium – like the power stations, like the big metal manufacturers, like rail manufacturing – all have a supply chain of smaller firms who’ve got engineering capability, like Valley Engineering,” said Ayres.
“That’s the way that the Hunter Valley economy already works.”
Despite seeming as though smaller companies may get lost in the shadow of larger manufacturers, Ayres insisted that they are instead the ones that stand to benefit the most.
“And that’s where the big job opportunities are,” he said.
The power of wind
The co-existence between larger conglomerates and smaller firms on renewables projects, such as offshore wind, has the potential to drive thousands of jobs in construction.
“Big projects like offshore wind have the potential to drive thousands of jobs in construction, around 1000 jobs in operations and maintenance, but also to sustain thousands and thousands of jobs,” he said.
Ayres said the Hunter and other regions will provide opportunities for the next generation of apprentices and cadets to engage in this industrial transformation.
“We’ve got fantastic young kids at school now who will have opportunities for apprenticeships, for engineering cadetships,” he said.
“We want to make sure that every one of them gets the strongest opportunity possible.”
Not only are the projects set to create thousands of jobs, but Ayres said they will drive billions of dollars in local economic benefit.
“These kinds of projects, big battery storage projects, manufacturing projects, they are all going to drive… billions of dollars’ worth of opportunities for the local economy,” said Ayres.
Aware of some Hunter community’s opposition to wind power, Ayres said that the projects will undergo proper approval to ensure environmental suitability to the region.
Ensuring private investment grow worthy industries
Another line of questioning from the ABC interview was whether federal government involvement is essential to stimulate private industry investment.
Ayres said that this process isn’t used specifically in Australia, but by Governments all around the world who want to speed up nation-wide industrial transformations.
“We want to be at the big table, bringing the biggest manufacturers here, bringing their expertise to support Australian manufacturing,” he said.
“It’s in our national interest to act in order to secure our future economic resilience… to secure the future shape of an Australian economy where we are going to need to be making more things here in Australia.
“We’re going to need to be more resilient and that means rebuilding Australian manufacturing. That’s what a Future Made in Australia is all about.”
Ayres described the investment as a part of a two-pronged plan to lift current national economic circumstances.
“One is focusing on the here and now questions of cost of living, putting downward pressure on inflation,” said Ayres.
“There’s also the question about the future shape of the Australian economy and making sure that we’re safe, that we’re resilient and that we’ve got a prosperous economic future that the region shares in.”
Shifting from broader economic strategy, Ayres addressed the decision-making behind how the package will identify and correct the recipients for long term growth. He cited the National Interest Framework as the path forward for this selection process. The framework puts strict parameters around government decision making now and into the future.
“… The National Interest Framework is… Legislation to put strong guardrails around government decision making now, but also into the future, so that what we’re supporting is industries that are in the national interest and industries that are going to have a future comparative advantage,” he said.
“If we just leave these questions to the market, then Australia will be predominantly a less complex economy where we’re just exporting commodities offshore rather than adding value here.”
Ayres said that ensuring selected industries can stand independently of government funding hinges on attracting private sector investments that are sustainable.
“Predominantly the measures here are Production Tax Credits, which are about foregone future revenue for investments that we are driving into Australia. And those tax credits only become payable when the firm manufactures in Australia,” he said.
“All the issues about future sustainability, future scale and capacity are being driven into the model. Investments will only occur where they are sustainable and where they’re going to have future markets and future comparative advantage.”
Ayres said that the framework ensures that the package remains to its point of creating future jobs in manufacturing and creating an economy that competes globally.
“That’s the point of the Future Made in Australia process. That’s why the National Interest Framework is at the heart of it,” he said.
“And that is why the predominant measure is the Production Tax Credits that are no regrets measures backing future investment that will change the shape of the modern Australian economy and mean that there are good jobs in future manufacturing and that we’re an economy that makes things and competes at global scale.”
As he prepared for an appearance at the University of Newcastle forum, Ayres re-emphasised that a key focus of Future Made in Australia is to direct benefits toward regions like the Hunter.
“Today’s meeting with 100 plus local manufacturers and local organisations is about making sure that we’re driving the benefits for good, skilled local jobs and training opportunities for young people in the Hunter,” he said.