Understanding the biggest pro-manufacturing agenda in Australia’s history

The whole of my working life to date has been spent in and around Australia’s manufacturing, construction and engineering sectors.

As a trade union official with the AMWU, I advocated not just for the rights and conditions of ordinary Australians in the industrial relations context, but also for the importance of the sector as a whole in national interests.

I took that line with various governments and public sector regulators, because I knew that an Australia lacking in strong and resilient manufacturing capability was in fact an Australia lacking in strength and resilience, full stop.

The work that Australian apprentices, workers, supervisors and engineers do in the manufacturing sector truly matters for the living standards of every Australian citizen.

The past few decades have been tough for this sector.

Despite the hard work, capital investment, skills upgrades and world-class research that happens every day in Australian manufacturing, there has been a tendency on the part of some to talk Australian industry down.

I’ve always resisted that, and I continue to resist it.

Because Australia’s history and geography, as well as its place in a rapidly changing world, make this country’s sovereign manufacturing capability as vital as it has ever been.

This is a really important moment for Australia. There is zero room for complacency about Australia’s capacity to meet some of the big national challenges in front of us.

The geopolitical situation is tougher than it has been at any previous moment in my adult life. The region in which we live, southeast Asia and the Pacific, is the theatre for many of the competition and uncertainty.

Australia’s economic resilience, demonstrated by the trade volatility at the moment, the imposition of tariffs on our economy and many economies around the world, should be seen as one of the many utilities in times of national crisis.

Little comforts come from knowing that we are still strong when external shocks arrive.

That’s nothing of the challenge of decarbonising Australian industry, reducing carbon emissions in ways that enhance, rather than undermine, our ability to win Australia’s regions.

Together, those challenges point me to a few conclusions.

First, manufacturing and industrial capability are going to be central to Australia and Australians being able to navigate our way through the next few decades.

Second, the structural decline in Australia’s industrial capability over the last two decades is nothing less than a self-imposed handicap on our ability to solve the basic problems.

The weak productivity growth, the declining diversity of Australia’s export mix, the decline in research and development in research and development, each of these things is driven, at least in part, by the erosion of our manufacturing sector.

Since the Albanese Labor Government came to office, we have been delivering the biggest pro-manufacturing agenda in Australia’s history.

That agenda includes $22.7 billion Future Made in Australia package, comprised of production credits, concessional and other measures; the National Reconstruction Fund, which will invest $15 billion worth of public finance into Australia’s industrial development in areas of future competitive advantage; and the Strategic Examination of Research and Development, which will report to me on how Australia’s R&D system can get the very best value out of Australia’s smartest researchers.

And I’ve been consulting with industry on the design of the new $8 billion Net Zero Fund, which will help crowd-in private investment to support world-leading Australian manufacturing.

In October, I accompanied the Prime Minister on his trip to the United States. Our extraordinary and successful visit to Washington DC reaffirms for me that Australia’s purposeful engagement overseas have an important role to play in the next phase of our industrial development.

The concrete outcomes of the visit were a new Critical Minerals Agreement between Australia and the United States that builds on all of Australia’s existing competitive advantages.

The Prime Minister is fond of saying that Australia has the whole periodic table underneath our feet.

This continent is rich in very rare or critical mineral that really matters in the twenty-first century economy — for clean energy and battery technologies, defence supply chains and IT manufacturing.

In addition, Australia has the world’s best wind and solar resources. And we are geographically located on the doorstep of the fastest growing markets the world has ever seen.

The agreements deliver on the promise of a Future Made in Australia by securing joint investment, long-term agreements and the United States as a customer — and our partners in Japan as well — in new critical minerals mining and processing initiatives.

That partnership means the acceleration of Western Australia’s lithium extraction, processing and refining capability, a critical mineral that the world needs to produce semiconductors and to feed into manufacturing here at home.

It will mean that Australia’s Nolans Rare Earths project in the Northern Territory will produce neodymium and praseodymium — key components in the powerful magnets needed in electric motors, fibre-optics and much else.

In sum, the agreement offers an $8.5 billion pipeline of investment, and that is just the start.

The Albanese Government wants Australia could be producing 10% of the world’s alumina production before long, and the Arafura project in the Northern Territory could be the source of 5% of the world’s rare earths.

There is a long way to go, of course. But a really strong foundation for rejuvenating regional industries, preserving good jobs and lifting Australia’s economic resilience has been laid.

The Critical Minerals Agreements show that Australia and its partners are invested in the future of new regional industrial capability in this critical area.

And thanks to the manufacturing sector’s highly engaged workforce, talented managerial leadership, vocational education and training settings and its vibrant networks of ideas — industry-led forums among them — I have no doubt Australian industry will rise to the challenges of the moment and turn them into opportunity.

Tim Ayres
Minister for Industry and Science

This article was originally published in Industry Update Manufacturing Magazine, October 2025.