There has been much dissecting of the 2024-25 Federal Budget by some eminently qualified people. For Advanced Manufacturing Growth Centre (AMGC) MD, Dr Jenns Goennemann, the budget was one of the most manufacturing-labelled, but there was a notable overlooked constituency – highly successful smaller enterprises.
I had two immediate reactions to the May Budget. One was a question about inflationary pressures, with $24 billion in added spending over the forward estimates, and the lion’s share of this is in the next two years.
The impact of those spendings on inflation remains to be seen. The same applies on additionality – will these spendings make a noticeable impact? After much discussion, we are no closer to knowing the answer. Only time will tell.
The second reaction was that for one of the most manufacturing-labelled budgets I can remember – there was an overlooked constituency. I am talking about our immeasurably capable yet smaller enterprises – those manufacturers who are willing and worthwhile to grow from small to medium.
Regarding the overall narrative around manufacturing in the 2024-25 Budget, I felt our high-achieving manufacturers – the ones with the potential to internationalise and scale – were overlooked, regardless of the sectors they serve.
Given our history, AMGC has skin in this game. We have spent our existence connecting to, learning from, and ultimately backing the kinds of companies I am concerned about.
Since their AMGC-backed projects have been completed, many have scaled up handsomely by attracting further funding from the capital market. Many have also received multiple visits from politicians keen to find out what ‘good’ looks like and how those companies can help support the government’s agenda.
Based on AMGC’s project portfolio and experience, approximately five years is all it takes to move the needle and commercialise world-leading technologies and products, which in turn boost the nation’s capability, lifts its complexity, and generates local prosperity.
Take for example Alpha HPA in Queensland, a company that just five years ago employed under 20 staff. Today the company has a market capitalisation of close to $1 billion dollars, will employ up to 250 staff, and is well on its way to exporting high-purity alumina to the world – its project with AMGC was to prove out its core technologies in a pilot plant.
Or, Provectus Algae, a biomanufacturer making high value products for use in the agriculture, food, and later medical sectors. From its Noosa base, the company has proven its manufacturing process and turned out its first products that are being purchased by customers – with assistance from AMGC.
In both instances we are not talking about billions of dollars in support, but targeted, appropriately sized and supported co-investment into companies that have the knowhow, the capability, and the paying customers to generate prosperity onshore. It is a formula that AMGC knows works well and has the evidence data to back it up.
We are also not talking about a handful of jobs, or insignificant capability uplift, but a return on investment (ROI) delivered from the anticipated creation of 4300 new local jobs and $1.6 billion in additional revenues – all from carefully managing $50 million of taxpayers’ dollars. If my bank offered me returns of almost 25:1 I wouldn’t have to be asked twice.
With that in mind, for A Future Made in Australia budget, I believe it has missed manufacturers, like the two above, who hold the most promise for our country and the ones that can deliver the greatest bang for investment buck.
This pipeline is about to run dry, unfortunate news for other government schemes that rely on its capabilities to address Australia’s, and the world’s, most pressing problems.
