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PM Declares the Start of a New Age in Manufacturing, but What Does it Really Mean?

Asia Manufacturing Review Team | Friday, 12 April 2024

 Asia Manufacturing Review Team

Anthony Albanese's set piece policy announcement on Thursday was not short on ambition. According to the prime minister, his administration is leading a "new wave" of public engagement in the business sector.

He announced his determination to participate in the worldwide "revolution" of governments placing their hands on the scales to promote local enterprises, citing examples from the US, the EU, Japan, Korea, Canada, and China.

"We need to be willing to break with old orthodoxies and pull new levers to advance the national interest … combining market tools with government action."

Put another way, flooding the market with public funds to invest in clean energy, advanced technology, and other "future" sectors.

For many years, Western politicians have abhorred the notion of "picking winners," while this is less of an issue for Asian economies.

However, there's evidence that this is shifting. The Biden administration in the United States has poured billions into private investment, causing other developed nations to copy it in fear.

Furthermore, China, the master of intervention arts, has risen to prominence in the markets for electric vehicles and solar panels.

However, the PM remained vague when asked how precisely Australia might profit from this new "green rush."

His introduction of a new Future Made in Australia Act was, at least for the time being, more of a rehash of previous initiatives, along with a new logo for an already-existing manufacturing fund.

However, new law implies new developments, most likely in the area of budget.

What do professionals and global experience have to say about our chances of doing it right?

A little stride or a massive leap for the government?

According to Dr. Hamilton, Australia ought to have "learned the hard way over many decades" that it was challenging to be at the front of the pack.

"We have spent many billions of dollars before cruelly tying the working lives of tens of thousands of young Australians to an industry with no real future,"he added, mentioning the car industry.

"We poured billions of dollars in subsidies into the Australian auto industry for decades, ignoring its long-term unviability, and it never developed into a sector that could survive on its own.

Much more upbeat are the prime minister and his treasurer, Jim Chalmers. Mr Chalmers is a well-known admirer of Italian economist Mariana Mazzucato, who was in Australia recently to share her views. She contends that the greatest successful innovations in history have resulted from partnerships between the public and private sectors on "missions," such as the moon landing.

The goals of the government are more personal, but they are no less lofty.

"Our potential is boundless," Mr. Albanese declared. "We know that there is a world of opportunity out there – and we know the world won't wait for us."