List of Recommendations

Recommendation 1

6.10

The committee recommends that the Australian Government consider the periodic review of R&D, commercialisation, and investment incentives and tax arrangements to ensure they facilitate the growth of Australia's manufacturing industry and investment including:

the range of activities covered by mechanisms like the R&D Tax Incentive (RDTI);

that the incentives and arrangements encourage the development of self-sustaining manufacturing ecosystems incorporating innovation, collaboration, commercialisation and investment, particularly in the advanced manufacturing sector;

with regard to the minimisation, as far as possible administrative overheads for participants, and the availability of support mechanisms for participants, in particular small and medium enterprises (SMEs);

the effectiveness of governance, implementation, and reporting; and

consideration of any further mechanisms that would improve R&D, commercialisation, and investment outcomes.

Recommendation 2

6.11

The committee recommends that the Australian Government establish a Manufacturing Industry Fund to provide a range of co-investment incentives to the manufacturing industry in conjunction with the private sector.1

Recommendation 3

6.12

The committee recommends that the Australian Government consider the establishment of a Superannuation Task Force to explore, develop and recommend structural changes and possible incentives-based programs and regulations to increase the level of Australian superannuation fund investment in Australian manufacturing industries, particularly those with an export focus

Recommendation 4

6.13

The committee recommends that the Australian Government consider significant increases to manufacturing R&D and commercialisation support to improve international competitiveness and stimulate the development of self-sustaining manufacturing ecosystems through:

expanded investment in industry growth centres and cooperative research centres (CRCs) in alignment with the national priorities, and with view to improving collaboration between training institutions and industry, in particular;

the establishment of a Research Translation Fund to fund large projects which encourage R&D and the commercialisation of innovative products, processes, and services;

sponsoring the development of advice and resources for finance providers and investors by industry bodies, to improve understanding and reduce risk perceptions of the manufacturing industry, leading to greater investment;

the establishment of an expert working group, with industry representation, to support the design and implementation of the patent box scheme.

Recommendation 5

6.18

The committee recommends that the Skills National Cabinet Reform Committee, in collaboration with relevant stakeholders, fast track reform of the VET sector nationally through the development and implementation of a national action plan. The plan should have regard to:

prioritising the agreement to and implementation of VET sector recommendations from the Review of the Australian Qualifications Framework;2

improving skills and training quality and delivery, responsiveness and collaboration with industry;

addressing skills shortages; and

ensuring that VET courses, particularly in occupations with current or forecast skills shortages, are accessible and affordable.

Recommendation 6

6.19

The committee recommends that the Australian Government address manufacturing skills shortages by considering the following initiatives:

the creation of a minimum ratio of apprenticeships on all
directly-government-funded projects, in consultation with employers, industry and unions;

higher wages for apprentices to encourage the take up and completion of apprenticeships;

exploring the benefits of an employer wage subsidy to cover the first 18 months of costs associated with adult apprenticeships;

the provision of additional funding to higher education providers through the Research Training Program, to enable better support higher degree research students; and

collaboration with the university sector to encourage more industrial PhDs (inclusive of industry placements), including targeted additional assistance for employers engaging PhD interns and cadets.

Recommendation 7

6.23

The committee recommends that the Fair Work Commission review industrial awards and the 2016 Building Code, with input from manufacturing industry groups, employers, and unions, to ensure fair wages and conditions for Australian workers, including:

that pay rates are fair and just, including for apprentices, trainees, cadets, and interns, and workers with varying qualifications and experience; and

mechanisms that promote cooperation between workplaces, employers and workers, including through the involvement of unions.

Recommendation 8

6.24

The committee recommends that the Human Rights Commission, in conjunction with other government agencies, manufacturing industry groups and employers, and unions, take steps to improve the diversity of workers in manufacturing industry through:

the establishment of an expert working group to deliver an action plan to improve diversity, including how targets can be linked to government funding initiatives, and supporting implementation advice; and

the implementation of any necessary industrial relations reforms.

Recommendation 9

6.27

That Government tenders preference bidders who have sustainable supply chains that maximise the use of local suppliers, manufacturers, and service providers and which are committed to developing the domestic manufacturing industry, and that are sustainable.

Recommendation 10

6.28

That the Commonwealth Procurement Rules (CPR) be reviewed for possible amendments that would support the development of Australia’s domestic manufacturing capabilities and employment/training opportunities, and that this review also includes an appraisal of the appropriateness of current exemptions from Subclause 4.7 of the CPR for goods and services listed in Appendix A of the CPR.

Recommendation 11

6.29

That both Federal and State Governments adopt procurement policies which maximise both domestic production and the provision of local jobs, and that the Commonwealth take on a more active role in facilitating national coordination in industry development, so as to ensure that multiple states are not all trying to replicate identical outcomes when a differentiated result which leverages each state’s existing strengths and assets may be more preferable.

Recommendation 12

6.32

That all future trade deals negotiated by the Australian Government avoid the inclusion of provisions that would have the effect of restricting the Commonwealth’s procurement arrangements from any form of preference for the purpose of providing for the full, fair and reasonable participation of local enterprises, including manufacturing companies, in government contracts as outlined in Commonwealth, state and territory industry participation policies and successor programs and policies.

Recommendation 13

6.35

The committee recommends that the Australian Government amend the Australian Jobs Act 2013 to stimulate activity and create jobs through lowering the current major project threshold amount from $500 million.

Recommendation 14

6.36

The committee recommends that the Australian Government develop minimum ratios of apprentices to tradespeople, with mandatory use of these ratios on all directly-funded government projects.

Recommendation 15

6.44

That the Australian Government continue to support green hydrogen as a potential longer-term alternative to gas use in manufacturing.

Recommendation 16

6.45

Establish a CRC for Sustainable Manufacturing to operationalise hydrogen and to identify opportunities that would support the development of a green metals industry powered by clean energy.

Recommendation 17

6.46

That the Australian Government continues to recognise the importance of the supply and affordability of gas in the future of Australian manufacturing, including through greater cooperation between environmental departments at Commonwealth and State Levels on approvals.

Recommendation 18

6.49

That the Australian Government prioritise the need to maintain domestic electrical equipment testing capabilities, including if necessary, interventions to ensure the ongoing operation of the Lane Cove Testing Facility.

Recommendation 19

6.52

Establish a working group with representatives from both employers and unions to examine policy options to secure and strengthen domestic pharmaceutical supply chains.

1

The Fund should the flexibility to assist a range of manufacturing sectors (including emerging sectors) and private entities, using a variety of mechanisms, such as direct support for flagship projects, equity, concessional loans, guarantees, and other means that deliver a positive return on investment (ROI).

The Fund should particularly look to accelerate Australia's clean export industries, through funding of a wide range of technologies such as hydrogen, green metals, and battery manufacturing, and assist their transition to full market competition.

For example through minimum guaranteed revenues using mechanism like Contracts for Difference: Department for Business, Energy & Industrial Strategy (UK), Policy paper: contracts for difference, 13 December 2021 (accessed 15 January 2022); UK Government, Electricity Market Reform: Contracts for Difference: How Contracts for Difference (CfDs) will work under Electricity Market Reform, 7 August 2013 (accessed 15 January 2022).
2

Department of Education, Skills and Employment (DESE), Australian Qualifications Framework Review, 24 November 2020 (accessed 25 January 2022).

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