The Albanese government’s first budget sees the end of the Morrison government’s Modern Manufacturing Strategy grants scheme to make way for the $15 billion National Reconstruction Fund (NFR), with major funding commitments to boost skills and stimulate manufacturing in regional areas announced by federal treasurer Dr Jim Chalmers.
In his budget speech, Chalmers said savings measures of $506.4 million had been found in the Industry, Science and Resources portfolio, including $303.7 million from the reversal of uncommitted Modern Manufacturing Initiative funding and the decision to not proceed with the third round of the Manufacturing Modernisation Fund.
Tasmanian operations for fresh produce company Costa Group and Ingham’s received $2.1 and $11.1 million respectively, and New South Wales’ Central Coast will be home to a $17.2 million pilot food manufacturing innovation hub.
The not-for-profit manufacturing industry body, Central Coast Industry Connect (CCIC), prepared a strategic business case for the hub last year with Food Innovation Australia Ltd (FIAL) and industry partner TrendPac. The business case was supported by Regional Development Australia Central Coast, the University of Newcastle and major food manufacturing companies Sara Lee, Mars Food, Sanitarium, and Agrana Australia.
It became an election commitment for the current government, with support from the local member for Dobell Emma McBride and then shadow industry and innovation minister Ed Husic.
The hub is designed to grow the local food sector and attract food manufacturers from outside the region. It will provide a purpose-built facility to house scale up food businesses, a range of pilot facilities and a skills hub servicing the local food and beverage manufacturing sector.
CCIC executive director Frank Sammut said the Central Coast has a major food and beverage manufacturing sector, contributing $1.4 billion in output for the region.
“CCIC has worked on this project for the past five years with Regional Development Australia Central Coast and our stake holders, and to now see it being one step closer to reality is exciting and a great opportunity for the region.
“This is a key element in the establishment of a food and beverage manufacturing ecosystem in the region. Coupled with the work CCIC is doing with Star Scientific on hydrogen to produce heat for food processing and our work in managing the industry’s food and trade waste, this project will put the Central Coast on the map as a major contributor to the national food processing industry by becoming a competitive food manufacturing and innovation destination.”
The Australian Food & Grocery Council (AFGC) said the budget’s focus on budget repair and strengthening the nation’s economy and sovereign capabilities was a good start. Its focus on Australian industry, regional growth and building a skilled workforce, particularly after the challenges of recent years, was welcomed.
But national employer association Ai Group said the budget risked “tinkering at the edges”, with critical productivity issues only addressed through positive initiatives to boost the workforce and trades base.
AiGroup CEO Innes Willox said a “bolder and broader policy agenda” was needed to address entrenched low productivity.
“The question is whether the budget does enough to fortify the economy against these structural challenges, by boosting productivity, curtailing spending, and supporting business and household confidence. More could have been done to propel the economy through these challenging times.
“The Government’s proposed workplace relations reforms will do little to lift productivity which is the foundation for sustainable foundation for real incomes growth, employment generation and business confidence,” Innes said.
For the AFGC, the NRF is recognition of the importance of domestic industry and sovereign manufacturing.
Key budget highlights for the food and beverage manufacturing sector
- $1 billion over the next three years for the new Growing Regions Program and the Precincts and Partnerships Program for grants and funding partnerships in regional Australia;
- $135.5 million over four years from 2022–23 to develop domestic manufacturing capabilities and skills;
- $921.7 million over five years from 2022-23 to develop a national Vocational Education and Training system to address skills shortages. This includes $871.7 million over five years from 2022-23 to support an additional 480,000 fee-free TAFE and vocational education places in industries and regions with skills shortages;
- $485.5 million over four years from 2022-23 to create an additional 20,000 Commonwealth Supported Places at universities and other higher education providers, commencing in 2023 and 2024;
- $2.1 million to support an expansion of the Costa Group berry distribution centre in East Devonport, Tasmania;
- $10.1 million to support Flinders University’s Factory of the Future in South Australia;
- $11.1 million to support upgrades to Ingham’s Sorell poultry facility in Tasmania;
- $17.2 million for a pilot Food Manufacturing Innovation Hub in NSW;
- An increase in permanent migration levels from 160,000 to 195,000, which will help ease critical workforce and skills pressures;
- $1.9 billion in equity for the construction of common user marine infrastructure within the Middle Arm Sustainable Development Precinct;
- $400 million for the Queensland Inland Freight route between Mungindi and Charters Towers, and
- $400 million for Beef Corridors across regional Queensland; and
- $1 billion over five years for the Priority Community Infrastructure Program, which includes $120 million for the Central Australia Plan;
The Australian Academy of Technological Sciences & Engineering (ATSE) was pleased with funding announcements including $13.5 million of the NRF for developing the country’s critical technology capability, and $5.8 million for Women in STEM Entrepreneurship Grants (WISE), and the decision to create 20,000 new university places in critical shortage areas including engineering.
ATSE president Professor Hugh Bradlow said, “while this is a step in the right direction, large-scale action is needed to deliver the tens of thousands of engineers that will be needed to fulfil the Government’s ambitious and necessary decarbonisation and manufacturing agendas.”
Bradlow added that ATSE hoped to see a “decisive plan for increasing the number of STEM professionals, including engineers and the 1.2 million new tech jobs the Government has previously committed to”.
Chalmers said the budget was “just the beginning”, with key savings measures coming from increasing taxes for multinational companies, extending tax compliance programs, and increasing ATO resources for tax compliance. While the Budget leaves room for wider tax reform, Chalmers said that tax reform was not the only way to deal with the structural challenges in the Budget.
Willox said, “The current Productivity Commission five-yearly review will provide the platform for a much more substantial and sorely needed policy response in the budget next May.”
