WeRise · Policy platform
Manufacturing
Key findings
- 901,000 jobsManufacturing directly employed 901,000 people in Australia at June 2025 – more workers than can be treated as a residual part of the economy. Source: Australian Bureau of Statistics · Australian Industry, 2024–25 · 2026
- $48.73 billionManufacturing generated $48.73 billion in industry value added in 2024–25 on the ABS Australian Industry measure. Source: Australian Bureau of Statistics · Australian Industry, 2024–25 · 2026
- $15 billionAustralia’s National Reconstruction Fund has a $15 billion mandate to invest in priority industrial capability, but only $584.4 million had been announced by the end of FY2024–25. Source: National Reconstruction Fund Corporation · Annual Report 2024–25 · 2025
- 40% by 2030The European Union’s Net-Zero Industry Act sets a benchmark for EU manufacturing capacity to meet at least 40% of annual deployment needs for strategic net-zero technologies by 2030. Source: European Commission · Net-Zero Industry Act · 2024
Part 01
The Case for Change
Why Manufacturing matters
Make What Matters
Australia needs strategic capability – not isolation, and not dependence by default.
Australia is not too small to manufacture; it is too important to leave critical capability entirely to chance. Manufacturing employed 901,000 people at June 2025 and produced $48.73 billion in industry value added in 2024–25.5 These are not abstract figures. They represent skilled trades, engineers, technicians, laboratory staff, warehouse teams, maintenance workers, designers, suppliers and regional communities whose knowledge becomes difficult to recreate once it leaves.
WeRise rejects the false choice between an open economy and domestic capacity. Australia should trade widely, cooperate with developing economies, welcome ethical imports and participate in global supply chains. But a trading nation also needs the ability to make or rapidly scale the goods whose absence would endanger lives, energy security or the functioning of essential services. An isolated continent at the end of long shipping routes should not discover in a crisis that it has no viable source of key medical products, power-system equipment or industrial spare parts.
The evidence is already visible in medicines. The TGA defines a national shortage as a situation in which supply is not likely to meet normal or projected Australian demand at any point over the next six months.6 Its medicine-shortages database is an important transparency measure; however, substitution arrangements, emergency imports and clinician workarounds are evidence of a system under pressure, not a substitute for resilient supply. Critical medicines need a national resilience framework: a defined essential-medicines list, mapped upstream inputs, domestic or trusted-partner production pathways, minimum stockholding and surge-capacity contracts.
The same logic applies to the clean-energy transition. Australia has significant mineral resources and growing renewable-energy potential, but raw-resource abundance does not automatically become industrial prosperity. The Commonwealth’s National Battery Strategy commits $523.2 million through the Battery Breakthrough Initiative, with an additional $20.3 million for capability-building and a $1.7 billion Future Made in Australia Innovation Fund that can support clean-energy manufacturing.7 This is the right direction. The missing task is integration: mining and processing, technical education, research translation, affordable renewable power, industrial sites, ports, public purchasing, recycling and end-of-life stewardship must operate as one strategy.
Strategic manufacturing is also a jobs and regional-development policy, but it must be a better jobs policy than the old model. Public support should not subsidise low wages, labour hire churn, unsafe workplaces, or companies that take grants and move intellectual property offshore. Every major agreement should publish milestones and require secure employment, training and apprenticeships, First Nations participation, gender equity plans, supplier development, emissions reduction, local research collaboration and repayment or equity-return mechanisms if commitments are not met.
Australia has begun to rebuild the institutional tools. The $15 billion NRF is designed to facilitate finance into priority industrial areas; its original mandate allocated up to $3 billion for renewables and low-emission technologies, $1.5 billion for medical manufacturing, and $1 billion each for value-adding in resources, critical technologies and advanced manufacturing.8 By FY2024–25, however, the corporation had announced $584.4 million across 10 investments.9 The challenge is not merely to spend faster. It is to invest with enough discipline that Australians can see what each dollar achieved.
Built Here, Built Well means using the state’s purchasing and financing power to create dependable demand for high-public-value production. It means replacing “cheapest upfront price” with whole-of-life public value: durability, repairability, local serviceability, emissions, labour standards and continuity of supply. It means open trade with enforceable labour and environmental expectations. And it means an Australia that exports more knowledge-intensive goods and useful technologies – not only raw materials – while sharing technology, investment and fair trade opportunities with neighbours across the Indo-Pacific.
Part 02
Evidence and Experience
Manufacturing: what other countries show
The New Industrial Playbook
European Union · United States · Canada · Singapore
Industrial policy has returned because governments have concluded that markets alone will underinvest in resilience, first-of-a-kind clean technology, local supply ecosystems and strategically important production. The strongest international lessons are not that every subsidy succeeds, or that Australia should imitate larger economies dollar for dollar. They are that successful approaches set a public mission, combine demand-side and supply-side tools, coordinate skills and infrastructure, and publish measurable conditions. The European Union offers a benchmark-led model; the United States shows the scale and risks of large incentives; Canada links clean-manufacturing support to tax credits and project agreements; and Singapore demonstrates long-term institutional coordination between skills, research, infrastructure and investment attraction.
European Union · Net-Zero Industry Act entered into force 29 June 2024; benchmark year 2030.
Net-Zero Industry Act (Regulation (EU) 2024/1735); a regulatory and coordination framework rather than a single fixed grant program. Member states retain responsibility for much of the direct funding. Covers strategic net-zero technologies and supply-chain components across the EU single market; the framework establishes a 2030 benchmark for manufacturing capacity.
- The Act sets a benchmark for EU manufacturing capacity to meet at least 40% of annual EU deployment needs for strategic net-zero technologies by 2030.
- It includes technologies such as solar photovoltaic, wind, batteries, heat pumps, electrolysers, grid technologies, carbon capture and storage, and sustainable alternative-fuels technologies.
- The Act includes a longer-term objective to increase the EU’s share of world production of these technologies toward 15% by 2040.
- Indicative 2030 capacity benchmarks include 550 GWh for batteries, 36 GW for wind and 31 GW for heat pumps.
- The legislation does not itself create a dedicated new central funding pool; implementation relies heavily on EU and member-state instruments.
Australia should set transparent capability benchmarks for a small list of strategically important products, rather than use vague “sovereign capability” rhetoric. Benchmarks should be tied to Australian demand – for example, a share of projected stationary-storage, grid-equipment or essential-medicines needs – and reviewed publicly, not framed as a target for total self-sufficiency.
United States · CHIPS and Science Act enacted August 2022; awards and implementation continuing through 2025.
CHIPS for America semiconductor incentives program, including $39 billion in manufacturing incentives within the broader US$52.7 billion CHIPS and Science Act appropriation. National semiconductor fabrication, packaging, supply-chain and research programs; direct awards made to major firms and consortia.
- The CHIPS and Science Act appropriated US$52.7 billion for semiconductor manufacturing incentives and research and development.
- US$39 billion was allocated to semiconductor manufacturing incentives.
- By 31 January 2025, the Commerce Department’s CHIPS Program Office had awarded up to approximately US$33.7 billion in direct funding.
- Awards were tied to specific projects, with due diligence, national-security objectives and program requirements rather than untargeted tariff protection.
- The approach has raised material concerns about cost escalation, firm bargaining power, delivery risk and the challenge of evaluating whether subsidies changed investment decisions.
Australia cannot outspend the United States in global subsidy contests. It can use the CHIPS lesson to be more selective: finance the capabilities where Australia has real resource, energy, research, geographic or demand advantages; negotiate enforceable milestones; and ensure public return through equity, revenue sharing, loans, clawbacks or public-interest licensing.
Canada · Net Zero Accelerator established 2020; clean-manufacturing and EV supply-chain tax-credit expansion in 2024.
Strategic Innovation Fund’s Net Zero Accelerator, combined with a 30% Clean Technology Manufacturing Investment Tax Credit and a proposed 10% EV Supply Chain Investment Tax Credit for eligible building costs. The Net Zero Accelerator is an $8 billion program supporting industrial decarbonisation, clean technology and battery ecosystems; project-level assistance has supported vehicle, battery and materials manufacturing.
- Canada’s Net Zero Accelerator has an $8 billion envelope for industrial decarbonisation, transformation and clean-technology or battery-ecosystem projects.
- The Clean Technology Manufacturing Investment Tax Credit covers 30% of eligible costs for new machinery and equipment used to manufacture or process clean technologies and to extract, process or recycle critical minerals.
- The EV Supply Chain Investment Tax Credit was designed as a 10% credit for eligible building costs in EV assembly, battery production and cathode-active-material production.
- The program uses project agreements alongside tax instruments, rather than relying on a single policy lever.
- Canada’s Auditor General has examined whether the program delivered climate goals and value for money, illustrating the importance of independent audit from the outset.
Pairing investment finance with production, tax and procurement measures can reduce the “valley of death” between research and commercial scale-up. Australia should build audit and evaluation into every industrial program before funds are allocated, and should avoid using tax credits where direct public equity or repayable finance would achieve clearer public return.
Singapore · Long-running advanced-manufacturing and research policy; RIE2030 announced in 2026.
Research, Innovation and Enterprise investment, Economic Development Board investment attraction, skills and capability grants, energy-efficiency support and tax incentives for high-value manufacturing. Singapore has committed at least 1% of GDP to Research, Innovation and Enterprise investment on a sustained basis; RIE2030 allocates S$37 billion for research and innovation, including strategic advanced-manufacturing fields.
- Singapore has consistently invested at least 1% of GDP in Research, Innovation and Enterprise.
- Its RIE2030 masterplan allocates S$37 billion to priority areas including semiconductors, biomedical sciences, sustainability technologies and quantum computing.
- Manufacturing support combines research funding with investment attraction, infrastructure, training and business-capability programs.
- Incentives are targeted toward substantive, high-value economic activity rather than a broad preference for all domestic production.
- Singapore’s model is supported by a highly urbanised city-state economy and cannot be copied directly by a large, federal and regionally dispersed country such as Australia.
The transferable lesson is institutional coordination and sustained capability-building, not Singapore’s tax settings or scale. Australia needs durable national–state compacts linking TAFE and universities, industrial precincts, affordable clean power, migration planning, research commercialisation and procurement, especially in regional manufacturing centres.
Part 03
Costs and Trade-offs
The cost of Manufacturing
Public Investment, Public Return
The cost is real. So is the cost of doing nothing.
A full net-cost estimate cannot yet be responsibly calculated because WeRise has not finalised the program scope, eligible sectors, duration, procurement rules, financing mix or revenue-recovery mechanisms. This dossier therefore does not present a false single-dollar price. The correct fiscal question is not simply “how much will industrial policy cost?” but “what public value will each instrument purchase, what private investment will it mobilise, and what happens if the promised outcomes are not delivered?”
Australia already has a material baseline of public industrial finance: the National Reconstruction Fund has a $15 billion investment mandate, and Future Made in Australia was announced as a $22.7 billion package over 10 years from 2023–24.10 11 These are not equivalent to annual grants: the NRF can use debt, equity and guarantees, meaning some capital can be repaid, generate returns or be recycled. Whether that occurs depends on the terms of each deal, which is why transparency matters.
WeRise should build a staged program around a small number of missions and publish a yearly public-value ledger. Grants should be exceptional and conditional. Prefer equity, concessional loans, revenue-contingent finance, advance purchase commitments and competitive production contracts where feasible. Costs must include public administration, grid and transport upgrades, training and environmental safeguards. Offsets should include repayments and returns, avoided emergency procurement, tax receipts, export earnings, lower imported-fuel exposure, and the economic value of continuity during shocks. Many of these offsets require modelling before they can be stated as verified budget figures. []
LEDGER
| Item | Amount | Note |
|---|---|---|
| National Reconstruction Fund investment capacity | -$15.0 billion | Existing Commonwealth specialist investment vehicle; potential cost to budget depends on investment structure, impairment and returns rather than headline commitments alone. |
| Future Made in Australia announced package | -$22.7 billion over 10 years from 2023–24 | Existing announced policy baseline across priority industries and associated measures; not all expenditure is direct manufacturing subsidy. |
| National Reconstruction Fund investments announced to FY2024–25 | -$584.4 million | Ten investments announced in FY2024–25; this is committed investment activity, not a measure of total program cost. |
| Battery Breakthrough Initiative | -$523.2 million | Existing production-incentive measure directed to high-value battery-manufacturing opportunities. |
| Public return from equity, loans, guarantees and revenue sharing | Unquantified | Must be reported deal by deal; returns depend on instrument design and project performance. |
| Private co-investment mobilised | Unquantified | A central performance measure, but no aggregate, independently verified WeRise program estimate is yet available. |
| Avoided disruption and emergency procurement costs | Unquantified | Potential benefit from resilient essential supply chains; requires scenario modelling and product-level risk assessment. |
| Net cost estimate | Not yet estimable | Publish an independently costed, mission-by-mission 10-year fiscal statement before adoption as an Active Position. |
The strongest objections to Manufacturing
The strongest argument against a new manufacturing strategy is that Australia has tried industry protection before and should not return to a system that keeps inefficient firms alive, raises consumer prices and rewards politically connected businesses.
This concern is serious. Australia’s historical tariff regime imposed real economy-wide costs, and the Productivity Commission documented a long fall in manufacturing assistance from an effective rate of around 35% in 1970–71 to 1.5% in 2017–18.1 A poorly designed policy could repeat the error through opaque grants rather than tariffs.
The response is not “subsidies are always good.” It is that strategic capability should be purchased only where the public benefit is clear and market failure is identifiable: essential supply security, first-of-a-kind clean technology, genuine coordination failures, public infrastructure needs, or nationally significant research translation.
Support should be contestable, conditional, published, independently evaluated and sunsetted. If a project cannot meet agreed milestones, the public should recover value where legally feasible.
A second objection is that Australia’s domestic market is too small and labour costs too high to compete with major manufacturing powers.
In mass, standardised consumer products, that may be true. Australia should not attempt blanket self-sufficiency or a subsidy contest with the United States, China or the European Union. But scale is not the only source of advantage. Australia can compete in high-trust, high-quality, low-emissions and resource-linked niches; in products where freight, service, traceability, reliability and secure supply matter; and in regional markets that value durable partnerships. Singapore’s approach demonstrates the importance of concentrating on high-value capability rather than trying to make everything.13
A third objection is that industrial policy risks trade retaliation or conflict with Australia’s international obligations.
That risk is real. Domestic-content rules can be legally complex, especially where procurement agreements apply. WeRise should obtain formal trade-law advice, use non-discriminatory performance criteria wherever possible, and design measures around resilience, emissions, labour standards, innovation and transparent public value rather than crude nationality tests. Australia can also work with trading partners on diversified, ethical supply chains, technology transfer and regional production partnerships.
A fourth objection is climate-related: more domestic manufacturing could increase emissions, water use, mining impacts and local pollution.
This is a decisive reason to make environmental safeguards integral rather than optional. No project should receive support without credible emissions trajectories, renewable-power plans, water and waste management, community consultation, circular-economy obligations and independent environmental regulation. “Made in Australia” cannot be a licence to externalise environmental harm.
A fifth objection is fiscal risk.
Governments have limited administrative capacity, and firms may capture the process. The Canadian experience demonstrates why audit and value-for-money scrutiny must be built into major investment programs.14 WeRise should establish a public project register, publish all subsidies and concessions above a low threshold, require ministerial reasons for exceptions, empower the Auditor-General to review projects, include worker and community representation in governance, and prohibit political donations by firms receiving major strategic-industry support for the life of the agreement.
Part 04
The Australian Design
How Manufacturing would work in Australia
A National Capability Compact
Targeted missions, fair conditions and transparent public value.
WeRise would establish a National Capability Compact: a 10-year, legislated framework for building production capacity in sectors where supply failure carries high public costs or where Australia can credibly create globally useful, low-emissions value chains. It would not promise to manufacture every good domestically. It would identify a limited, independently reviewed list of mission areas:
- Essential medicines, medical consumables and selected medical technologies.
- Stationary batteries, grid equipment, power electronics and renewable-energy components.
- Critical-minerals refining, green metals, specialist materials and circular recovery.
- Food, fibre and agricultural processing that strengthens regional economies and climate resilience.
- Industrial repair, spare parts, remanufacturing and additive manufacturing for essential infrastructure.
- Strategic technology and defence-adjacent capability where civilian spillovers, workforce development and accountability standards are clear.
The existing institutional base should be strengthened rather than discarded. The $15 billion NRF already has a mandate to mobilise finance across priority industrial areas.10 WeRise would retain its patient-capital role but add a statutory public-interest test: projects must demonstrate Australian value added, decent-work standards, training outcomes, emissions alignment, supply-chain resilience, research or intellectual-property benefits, and a credible pathway to commercial sustainability. Material contracts should be published, subject to limited and justified commercial-in-confidence exclusions. Firms that fail to deliver should face clawbacks, conversion of grants to repayable finance, or public equity claims.
Federal government should lead on finance, national standards, trade compliance, migration settings, Commonwealth procurement, medicine-resilience planning and research translation. States and territories should co-design industrial precincts, approvals, TAFE capacity, regional infrastructure, energy connections and local procurement. The Compact should require bilateral agreements with every state and territory, with publicly reported targets and a prohibition on subsidy races that merely move activity between jurisdictions.
Public procurement is the most underused tool. Governments purchase hospitals, transport assets, energy equipment, uniforms, medicines, buildings, defence capability and digital systems. For defined strategic categories, tenders should assess whole-of-life cost, repairability, supply continuity, carbon intensity, workforce standards, local supplier development and First Nations business participation – not only sticker price. This is not a blanket domestic preference. It is a transparent public-value framework available to any supplier that meets Australian standards and genuinely builds Australian capability.
The first 18 months should focus on mapping: essential-product risk assessments, supply-chain data, skills needs, industrial-site readiness, grid constraints and procurement baselines. Years 2–4 should fund competitive demonstration and scale-up projects, build common-user facilities and establish offtake arrangements. Years 5–10 should evaluate outcomes and either scale, redesign or wind down support. The National Battery Strategy already allocates $523.2 million for production incentives and $20.3 million for battery capabilities; WeRise should use this as an early test of whether conditions, workforce plans and Australian value added are sufficiently strong.7
Part 05
People and Transition
Who Manufacturing affects
The People Behind Capability
Resilient supply chains are about patients, workers, communities and public services.
The first beneficiaries are people who rely on essential goods but have little control over whether global supply chains work. Patients, pharmacists, aged-care residents, hospitals and disability providers are exposed when medicines or medical products are in shortage. The TGA defines a national medicine shortage as anticipated supply that will not meet normal or projected demand within the next six months.6 Shortages do not affect all Australians equally: people with chronic illness, people in regional and remote areas, people without money for private alternatives, and frontline health workers have the least room to absorb disruption.
Case study
A regional Queensland pharmacist is told that a commonly prescribed medicine is in short supply. The pharmacist may be able to identify an alternative brand, contact prescribers, explain changed dosing arrangements and manage anxious customers. But each workaround takes clinical time, and the patient may have to travel further, pay more, delay treatment or accept a less suitable substitute. A resilient medicines policy does not guarantee that no shortage will ever occur; it reduces dependence on a narrow group of overseas production sites and ensures that the public system has better information, stockholding and domestic surge options.
Workers and communities are also affected. Manufacturing employed 901,000 people at June 2025.5 These jobs span metropolitan and regional Australia, including food processing, fabricated metals, medical products, machinery, chemicals, transport equipment and advanced production. The policy should benefit existing workers through secure jobs, collective bargaining, safety protections, training and transitions into low-emissions production – not through a race to lower wages.
Case study
A fitter and turner in a regional industrial centre sees work become irregular as equipment is imported, repaired offshore or replaced rather than maintained. A capability compact could support a local remanufacturing and repair hub linked to TAFE, a university engineering department and public infrastructure contracts. The result is not a guaranteed job for every existing worker. It is a credible local pathway into work that uses their skills, trains apprentices and reduces downtime for public assets.
Young people and career changers benefit when manufacturing is presented as an advanced, clean and skilled field rather than a shrinking relic. Yet access must be deliberate. Women remain underrepresented in many trades and technical occupations; people with disability, migrants, First Nations communities and workers in regions undergoing energy transition can be locked out if recruitment relies on informal networks or unpaid training. WeRise should attach inclusion targets and funded supports to projects, but avoid treating targets as a substitute for safe workplaces, accessible training and enforceable labour standards.
Opposition will come from several directions. Importers and retailers may resist procurement criteria that change sourcing practices. Some multinational firms may prefer unconditional subsidies, low transparency and the ability to shift production or intellectual property offshore. Fiscal conservatives may oppose public intervention altogether, while environmental groups may rightly challenge projects that extend fossil-fuel dependence or damage land and water. The answer is not to dismiss these concerns: it is to make the policy selective, independently assessed, climate-aligned and publicly accountable.
Part 06
Related policies
Manufacturing sits within a wider set of WeRise policies.
- Economy & Work: more WeRise policies in this pillar
- WeRise: all 29 policies across seven pillars
Notes
Sources and Supporting Documents
- Australian Bureau of Statistics. Australian Industry, 2024–25 Financial Year. ABS. 2026. abs.gov.au
- Australian Bureau of Statistics. International Trade in Goods, February 2024. ABS. 2024. abs.gov.au
- Australian Government Department of Industry, Science and Resources. National Battery Strategy: Leading the Charge Towards a Competitive and Diverse Australian Battery Industry. Australian Government. 2024. industry.gov.au
- Australian Government Department of Industry, Science and Resources. Medical Science Co-investment Plan. Australian Government. 2024. industry.gov.au
- National Reconstruction Fund Corporation. Annual Report 2024–25: Year in Review. Australian Government Transparency Portal. 2025. transparency.gov.au
- National Reconstruction Fund Corporation. Corporate Plan 2025–26. NRFC. 2025. nrf.gov.au
- Therapeutic Goods Administration. Medicine Shortages Information for Health Professionals. Australian Government Department of Health, Disability and Ageing. 2022, updated. tga.gov.au
- Australian National Audit Office. Planning and Governance of COVID-19 Procurements to Increase the National Medical Stockpile. Auditor-General Report No. 22 of 2020–21. 2020. anao.gov.au
- Jobs and Skills Australia. 2025 Occupation Shortage List: Key Findings Report. Australian Government. 2025. jobsandskills.gov.au
- European Commission. Net-Zero Industry Act. European Union. 2024. commission.europa.eu
- U.S. Department of Commerce Office of Inspector General. Status Report for Commerce CHIPS Act Programs. U.S. Department of Commerce. 2025. oig.doc.gov
- Government of Canada, Transport Canada. Canada’s Action Plan for Clean On-Road Transportation. Government of Canada. 2022. tc.canada.ca
- Productivity Commission. Trade and Assistance Review 2017–18. Australian Government. 2019. pc.gov.au
- Office of the Auditor General of Canada. Strategic Innovation Fund’s Net Zero Accelerator Initiative: Independent Auditor’s Report. Government of Canada. 2024. publications.gc.ca
- European Parliamentary Research Service. Implementing the EU’s Net-Zero Industry Act. European Parliament. 2025. europarl.europa.eu
- Flinders University Australian Industrial Transformation Institute. Australian Sovereign Capability and Supply Chain Resilience. Flinders University. 2023. flinders.edu.au
- Australian Industry Group. Manufacturing in Australia: Performance and Outlook Report 2025. Ai Group. 2025. industry.gov.au
- Medical Technology Association of Australia. MTAA Endorses Budget Measures Supporting the Medical Science Co-investment Plan. MTAA. 2024. mtaa.org.au
Record