Sydney Institute
Future Made in Australia: Remaking Australia for a Tougher 21st Century
I grew up in regional NSW.
Not on a large rural landholding with all the capital and confidence that comes with that.
On a small farm that we all - even the little kids – tried to nurture through to success and sustainable on-farm income.
This was a battle that the young Ayres family ultimately lost.
This is not a unique experience in Australian agriculture.
Small family farms can lose the battle for scale in an industry increasingly dominated by big agriculture, and buffeted by immense market, trade, and technological change.
It’s a familiar story.
I think of other members of my family, who, after generations of soldier-settler farming, ultimately lost the battle and retreated into town.
This might be why I love mournful country music, and why even though it is corny I feel a bit teary when I hear Tenterfield Saddler, and why my blood still boils if I listen to John Cougar Mellencamp’s “Rain on the Scarecrow”.
After the farm, we moved into town.
We lived in Glen Innes. It was a great place to do the last bit of growing up.
Glen Innes is the town that produced D’Arcy Niland - the author of great Australian novels like ‘The Shiralee’ about the hardscrabble life of rural workers and poor country families.
Despite its hardship, there was pride in that life. Pride in the resilience and toughness celebrated in bush culture.
And in Glen Innes, they were still there: old shearers, fencers and rural labourers who had worked on the railways, mustering or in the sheds.
Many of them were in the branch of the Labor Party I joined in 1991.
But none of them were working. And none of their kids or their grandkids were working with their hands.
The world had shifted around them. Australia’s economy was in transition. Manufacturing peaked after World War Two then declined as a share of GDP. The services economy flourished as we became less reliant on the land.
One of the Australian business leaders I admire is Roger Fletcher, a self-made meat industry legend who owns and operates Australia’s largest sheep abattoir in Dubbo, also grew up in Glen Innes.
I remember him telling me about the factories and good jobs that a family could rely upon that existed in Glen Innes when he left to work in droving at the age of 14 - like so many did.
The grandchildren of generations of rural workers left Glen Innes for work, study and opportunity.
So did I.
As Australia’s economy was transformed in the 1980s and 1990s, I think I was the only subscriber to the Australian Financial Review at McInerney’s Newsagency in Glen Innes.
Every Wednesday!
I was captivated by the story of the Hawke and Keating Governments changing Australia, and the role of the labour movement in the Accord. That might have made me a slightly atypical 16-year-old!
The Hawke Government’s economic reform project was accompanied by a social contract that has helped Australia remain a more equal society than many other nations. Australia’s march towards an open economy was accompanied by Medicare, superannuation, labour market adjustment programs, reforms to training and higher education.
But the transformation of the economy reshaped Australian identity. The work we did. How we thought of ourselves.
When I graduated, to spend the bulk of my working life in the Australian Manufacturing Workers Union, economic opportunity was in flux.
I saw up-close the impact on workers, their families and their communities. Apprenticeships, good jobs, businesses, large and small, disappeared from industrial heartlands, outer suburbs and country towns.
Many of these regions felt left behind. Journalist Gabrielle Chan has chronicled the divide between Canberra and what she’s characterised as “the neglected class”. She quotes former abattoir worker Ken in her terrific book Rusted Off. Ken felt politics was like a business – with protagonists seeking to outdo one another. “They aren’t worrying about the people out in Australia, they are just looking after themselves in one little corner. Bugger the ones outside.”
Upheaval can lead to alienation. Alienation can lead to anger. Anger can lead to resurgent populism.
Resurgent populism wears many faces in democracies around the world today. But a unifying feature is distrust of institutions, and a repudiation of cosmopolitanism, of globalisation.
Add a global pandemic and a febrile swamp of conspiracy theorists, far-right propagandists and increasingly sophisticated meme factories in hostile international jurisdictions - and you have the perfect recipe for social dislocation and extremist politics.
Looping back to D’Arcy Niland’s projection of Australian identity - or the “pastoral proletariat” of Russell Ward’s The Australian Legend – we need to acknowledge a couple of things.
The noble bushman is as much construct as reality.
Ward said that he was: “A practical man, rough and ready in his manners and quick to decry any appearance of affectation in others … a great improvisor, ever willing to ‘have a go’ at anything … though capable of great exertion in an emergency, he normally feels no impulse to work hard without good cause. He swears hard and consistently, gambles heavily and often, and drinks deeply on occasion.”
This rendering of Australian identity is also exclusionary – women, Indigenous Australians, migrants don’t get much of a look in.
But this idea of ourselves remains deep etched in Australian culture. It’s potent because it points to an enduring truth.
Australians are fundamentally good people.
Aspirational, resilient and resourceful.
Battlers and strivers.
We work hard to give our kids a better life.
We know our neighbours. We take pride in our communities. We want to grab hold of the things that make working- and middle-class towns and suburbs great places to live and bring up families.
We want the regions that thrived in the past to go on thriving. We want the places that powered Australia for the last century to go on powering the country in the next century. We want that continuity; that sense that opportunity endures when economies and societies change.
Australians understand change. We understand risk – we live on an island continent at the bottom of the world.
Australians just want some agency in all the flux.
We want to shape our own destiny at home and in the world.
We want to be woven into the Australian story. We like to feel part of a larger project; we don’t want to feel left out or left behind.
The Albanese Government want to put pride and belonging back into regional Australia, not because we are myth makers or sentimental, but because Australia is strongest when all our communities are strong.
The world is changing fast. The rate of change is accelerating.
Our own region is the focus of intensifying geopolitical competition.
The fastest growing region of the world in human history, undergoing two great shifts. Firstly, the transition of billions of people from low and middle incomes to middle and high incomes. Secondly, the transition from high emissions to net zero emissions.
All the while, the region is the focus of intense major power competition and disruption.
The worsening climate threatens agriculture, for example inundating productive rice growing delta country in the Mekong with salt water, intensifying weather patterns - longer droughts, bigger floods - and all that impact upon incomes, food security and the attendant consequences for peace and national security.
And so much more.
All these shifts underscore the point – we are a long way from the complacency that characterised the Abbott, Turnbull, and Morrison decade.
As the Prime Minister said back in April - we need to aim high, be bold and build big to match the size of the opportunity in front of us. We have to get cracking.
Australia has unlimited potential.
But we do not have unlimited time.
If we don’t seize this moment, it will pass.
If we don’t take this chance, we won’t get another.
If we don’t act to shape the future, the future will shape us.
I’d put it this way: the world doesn’t owe Australia a living.
We all have to work for it.
The IMF – it must be said, no great fan of industry policy - noted recently targeted interventions were back everywhere, and particularly in developed economies.
This surge in measures had been driven by the largest economies in the world – China, the European Union and the United States.
A blog by three IMF analysts published in April noted the pandemic, heightened geopolitical tensions and the climate crisis “raised concerns about the resilience of supply chains, economic and national security, and more generally about the ability of markets to allocate resources efficiently and address these concerns.”
Governments had come under pressure to do more to deal with existential risk, and to shore up sovereign capability. The blog noted there had been more than 2,500 industrial policy interventions in 2023, and that advanced economies had been more active than emerging markets, which is against the trend of the past ten years. The IMF is always concerned about the risks of misallocated resources.
But it’s clear the global consensus has shifted. Waiting until crisis strikes to address vulnerabilities is in the long run too expensive. Australia needs to build the industrial capability to solve national challenges and bring economic weight, technological capacity, investment and trade to be an effective part of the region of the world in which we live.
To give our people the skills and education required to navigate the challenges, but also to contribute to solving national challenges.
To lift national productivity.
To harness all of our capacity, our national institutions, our people, firms and industry to make Australia more resilient in a region we shape in Australia’s interest.
Of course, the first step to a national response to a more challenging environment is to have an evidence-based approach - to be clear about the nature of the challenge.
To see the world as it is, not how we wish it to be.
Our political opponents blinkered by their own ideological predispositions are unable to make a rational assessment of the challenges that will shape Australia’s future.
Some, including in the Greens political party, see the urgency of the twin challenges of climate and energy, albeit with an utterly impractical approach to the policy response for Australia in our region. But they can’t see the security challenge. For them, the rising risk of competition turning to confrontation or conflict is fake news, and any national effort to build
effective deterrence anathema.
Others, within the right of our political system, singularly focus on the security challenge but cannot bring themselves to accept the basic facts of physics, technology and economics engaged by the twin climate and energy challenges.
That leaves just Labor, without bipartisanship, to prosecute the national interest challenges, the overlapping questions of how to secure Australia’s position in a more difficult world, where our future can’t be taken for granted.
Or worse still, as I believe it is for Peter Dutton’s Liberals and Nationals, framed entirely through a negative partisan lens.
A lens through which they only see a pathway to victory if they convince Australians that they have clearly lost.
Australia deserves much better.
This Albanese Government is engaging every tool of statecraft to secure a better future for Australia.
More effective defence and deterrence.
Deeper diplomatic engagement in our region and with our partners
Strengthening the resilience, sovereignty and economic growth of the Pacific states with whom we share the Blue Continent
Deeper economic trade and investment in our region through the SEA Economic strategy- building a dense mesh of interconnected trade and investment relationships rather than hub and spoke supply chain models.
Shared approaches to key issues in our region- energy security, emissions reduction, food security and agricultural development
All of this statecraft directed toward our security, as well as economic resilience.
And our statecraft includes industrial policy, too.
The biggest pro-manufacturing package in Australian history, the Future Made in Australia agenda:
- $7 billion critical minerals production tax credit;
- $6.7 billion tax credit for green hydrogen production;
- $1.3 billion for Round 2 of Hydrogen Headstart;
- Additional funding for ARENA, support and incentives for battery production, solar cell commercialisation and manufacture.
All in all, the Future Made in Australia announcements in the 24/25 Budget total just under $23 billion over the next 10 years.
When you add to that the work led by my colleague, Minister Ed Husic, principally the $15 billion National Reconstruction Fund and the $392 million Industry Growth Programme, and Minister Chris Bowen, with the Capacity Investment Scheme and the $20 billion Rewiring the Nation build, you get a sense of the Albanese Government’s ambition for Australian industry and to secure Australia’s energy future.
It is the biggest, most ambitious pro-manufacturing package by any Australian Government in Australian history.
It is large and ambitious because the national interest demands that it be proportionate to both the scale of the national challenge and to the national efforts led by governments all around the world.
It is neither old school protectionism, nor is it dogmatic neoliberalism.
It is mission focussed on a series of critical national interest questions that will determine whether Australia is safe, economically secure and resilient in a more challenging world.
And it is guided by the National Interest Framework, making sure our agenda is grounded in rigorous analysis, and that our policies are targeted and have the best possible chance of success.
That is the stronger, better future we can shape together for Australia.
But what about Australians themselves, particularly the Australian men and women in the regional and outer suburban communities that I started with?
This is where the desiccated economists amongst us might apply the sterile term “spillover benefits”.
It means manufacturing returns to their communities.
Clean new modern manufacturing in areas of production where Australia can be confident about projecting into export markets around the region and around the world.
With new investment in manufacturing comes good new jobs.
Good jobs that young families can build a quality life around. That communities can count on.
A Future Made in Australia delivers good quality trades apprenticeships and careers for boys and girls at school today in engineering science and technology.
Good jobs with purpose – that contribute to a stronger and more resilient Australia.
Engineers, trades and technical roles for young Australians who will be part of not just a resurgent manufacturing sector, but a vast nation building project – decarbonising our industrial processes, building a secure energy system and conquering technical challenges in new manufacturing that builds national resilience, security and a good life for their communities.
That shapes a future for those outer suburban, industrial and country communities where the economy works to build a good society, not the other way around.
And that has such a profound social and democratic effect. Strengthening society and democracy, in a world where democracy has been in retreat, by honouring the social
contract and delivering good jobs and industry with national purpose.
But it is a train that leaves the station only once.
Australia may have the world’s best mineral resources under the ground – every mineral sought after as the world undergoes this giant industrial transformation. Above the ground: the best solar and wind resources, proximity to the world’s fastest growing markets and a smart, tough and hardworking people.
The only resource we don’t have is time to waste.
No time to waste with partisan self-interest or negative hyper-partisanship.
Certainly not the chaos and torpor that defined the Liberals and Nationals in Government, with all of the disinvestment and loss of national prestige that involved.
I can tell you that I feel this responsibility intensely.
My own life – a very fortunate life indeed – growing up in country NSW and working in Australian manufacturing indelibly impress upon me the value of good jobs education and investment in these communities and how important practical government can be shaping good local outcomes.
My twin assistant ministerial portfolios of Manufacturing and Trade, with the former now shifted to be a responsibility to the Prime Minister on Future Made in Australia, have given me a bird’s eye view of not just the scope of the national challenges that we must address, but also of the community and nation building potential of the Future Made in Australia Act.
I can’t wait to get on with it.
