1 October 2020
Ahead of the 2020 Federal Budget, today the Prime Minister, Hon Scott Morrison MP, commenced his pre-budget address at the National Press Club by positing that the upcoming Federal Budget will be arguably the most important since WWII.
The PM noted that we have never experienced a global recession in such an interconnected world. This global recession is occurring in real-time. Therefore, the 2020 Federal Budget will be “necessarily different in scale to those we have seen for generations.”
The PM also referred to his previously announced JobMaker Plan and noted the important work of the National COVID-19 Commission.
In launching the new Modern Manufacturing Strategy, the PM stated: “We make things in Australia, and we make them well.” Manufacturing is important to Australia’s economy, and in particular regional areas in Australia. Manufacturing ¬employs around 860,000 Australians, and prior to the COVID-19 pandemic, it generated more than $100 billion in value for our economy each year and over $50 billion in exports.
The objective of the strategy is to build large-scale production, capture income in high-value areas where Australia has established strengths or in emerging priorities, and expand access to global markets.
The strategy covers three principles:
1. Create a business environment where manufacturers can be more competitive
2. Align resources to build scale in areas of competitive strength through co-investment, covering six priority areas, being mining and resources technology, food and beverage, medical, clean energy and recycling, defence, and space, and
3. Secure sovereign capability in areas of national interest, noting that efficiency benefits of globalisation can be eroded by a global pandemic, and therefore, there is a need to identify ways to minimise future external shocks.
The strategy will be supported by co-designed roadmaps, to be developed in collaboration with business and by April and ahead of next year’s Federal Budget, and a $1.5 billion investment by the Federal Government.
This investment is in addition to other policies and plans that will also support promoting manufacturing capacity and capability, including affordable and reliable energy, tax policy, industrial relations, training and skills development, cutting regulatory red tape, and infrastructure investment.
The PM stated: “Manufacturing will play a key role in our economic recovery… this is a plan for all of Australia and all Australians. The Modern Manufacturing Strategy is based on building scale, driving collaboration, enlisting expertise for success, making science and technology work for industry and Australians, and strengthening our sovereign resilience.”
Here’s the media statement outlining the details of the strategy. I’ll forward you the published transcript of the PM’s speech in my fortnightly CEO COVID-19 Update tomorrow.
Yesterday, Hon Michael McCormack MP, the Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development, announced an additional $61.7 million investment to boost local tourism, preserve our environment as part of our economic recovery plan, and create jobs.
The funding includes:
• $33.5 million for heritage upgrades to fund conservation work, infrastructure upgrades across 23 national and world heritage sites, preserving and enhancing them while creating jobs and lasting benefits for our tourism industry.
• A $20 million reef builder shellfish restoration program to be invested in at least 11 bushfire and COVID-19-affected coastal communities to rescue native marine ecosystems from the risk of local extinction, rejuvenating local fish stocks and creating spectacular tourism dive sites in the process.
• $8.2 million to support Great Barrier Reef projects including $3.2 million to engage tourism operators in reef monitoring and conservation work, along with $5 million for Townsville’s Reef HQ.
The DPM stated: “The funding would create or support around 1,000 jobs, while assisting the recovery efforts of many regional communities affected by the pandemic and recent bushfires.”
Here’s the media statement, which includes project details, and the transcript for the DPM’s speech.
AFIA supports these announcements made by the Federal Government as being consistent with proposals and recommendations we’ve made in our Pre-Budget Submission to bring urban and regional businesses closer together and continue investment into digital transformation of manufacturing and other sectors.
Australia’s economy is highly interconnected, with urban and regional locations dependent on cross-sector business activity and supply chains, particularly in the most COVID-19 impacted parts of our economy – tourism, travel, aviation, including car rental, manufacturing and retail, as well as food, hospitality, and events management.
The increased uncertainty and interconnectivity of businesses across the supply and value chain through advancements in technology and globalisation means a ripple effect has been created, which is likely to be significant and longer term.
In our submission, we focused on three areas:
1. Initiatives and actions that stabilise the economy and support a business-led recovery.
2. Non-fiscal government support to businesses to promote growth and employment.
3. Partnership initiatives for government and business to rebuild and create a modern economy.
AFIA believes our economic recovery plan should focus on investing and making Australia a financial and technology hub, supporting primary producers and farmers in rural and regional areas, reviving, investing in and supporting the Australian manufacturing sector, supporting the retail and motor sectors, supporting food, hospitality, and events management in CBD locations, supporting regional development and tourism, and investing in building Australia’s SME sector.
Therefore, I really welcome the Government’s announcements today, and over the past week. We’ve specifically been advocating for initiatives to create jobs, stimulate investment and growth, and build a modern economy, including:
• Financial services and fintech – creating Australia as a financial and technology hub to attract offshore investment, foster R&D opportunities across our economy, incentivise onshoring jobs traditionally offshored, and export our successful financial services and fintech companies overseas (noting the Government’s digital plan announcement made on Tuesday).
• Mining and resources – leveraging our global mineral production advantage and looking at innovative ways to employ more Australians.
• Major infrastructure projects – making new investments and bringing forward capital expenditure projected in previous budget commitments, with a focus on infrastructure and community projects across Australia.
• Agriculture and manufacturing – identifying how technology can be embedded in businesses to deliver productivity and efficiency gains, supported by AFIA members that are asset and equipment finance specialists. Additionally, markets can be better used to manage current and future water and energy risk.
• Medical – investing in innovation activities including traditional and non-traditional R&D in biotech and pharmaceuticals, which will be integral to ensure that our economy grows and can withstand future crisis.
• Telecommunications, transport and logistics – identifying road, rail, aviation and maritime options for supply chains to integrate public and commercial transportation requirements and integrate with renewed thinking about better use of telecommunications and interactive service delivery.
• Workforce skills – investing in online educational programs to address skills shortages and maximise labour utilisation, with businesses taking up technologies, including robotics, 3D printing, and AI, and the shift in workforce and labour requirements.
AFIA’s members will continue to play a critical role in ensuring access to credit and fostering competition and innovation to, directly and indirectly, support advanced manufacturing and urban and regional development.