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Manufacturing stimulus announced as PM manages budget expectation
Scott Morrison has announced plans to bolster Australia’s local manufacturing as a way to help recover from the pandemic while managing expectations of a quick economic recovery.
Manufacturing stimulus announced as PM manages budget expectation
Scott Morrison has announced plans to bolster Australia’s local manufacturing as a way to help recover from the pandemic while managing expectations of a quick economic recovery.
Speaking at the National Press Club, the Prime Minister announced the country was investing an additional $1.5 billion in specific industry measurers over and above what they are doing tax, energy and infrastructure.
Under the manufacturing strategy unveiled on Wednesday, $107 million will be dedicated to strengthening supply lines for essential goods.
That money will prioritise medicines and medical products, with the goal of boosting Australia’s ability to provide critical supplies for itself during surges in demand.
A separate $1.3 billion will be spent over the next four years, starting in the first half of 2021, to help manufacturers upscale their businesses, with additional focus on turning concepts into finished product, and integrating into global supply chains.
“Manufacturing employs some 860,000 Australians, and prior to the pandemic it generated more than $100 billion in value for our economy each year and over $50 billion in exports,” Mr Morrison said in his speech.
“It is also a large driver of research and development. Manufacturing contributes around a quarter of total R&D investment in Australia, roughly four times its share of the economy.”
Mr Morrison said under the new strategy, the goal for the Australian manufacturing industry was for it to be productive, collaborative and highly skilled.
“Long gone are the days of trying to compete with labour-intensive, low-cost manufacturing economies,” Mr Morrison said.
“Gone too are any pretensions of protectionism as a viable strategy for domestic manufacturing.”
“That’s not where our future is. Manufacturing in Australia has been transformed and will continue to transform; today it is more agile, more dynamic and less monolithic.”
The Prime Minister also pointed to the hardships the Australian economy is currently facing.
While highlighting Australia was in a better position than most to assess how its economy would perform and that the government had made the right choice in pushing the budget back, the country is still living through “the most uncertain times any of us have seen”.
“Our economic response has meant that, despite the hardships that Australians have suffered, Australia is still one of just a handful of economies, along with South Korea, Taiwan and Norway, leading the world in both the economic and the health response to the pandemic,” Mr Morrison said.
He pointed to the importance of next week’s budget as a way to help Australia get back on track.
“We can do everything we can to boost Australia’s economy through the measures that will be in next week’s budget and in the JobMaker plan over the next five years,” Mr Morrison said.
“But we will also be vulnerable to the global economy... in that environment, I think the Treasury’s task, and the Reserve Bank’s task for that matter is very, very difficult.”
During question time, Mr Morrison was reluctant to explain how some of the measures set to be announced in next week’s budget, including changes to income tax, would boost the national economy.
“I never tell people what to do with their own money,” Mr Morrison said in response to a question on how people could be incentivised to spend the savings of tax cuts.
“When you’re talking about income tax cuts, they’re just getting to keep more of what they earn. In these times we have seen, particularly when it comes to retail and household items, we have seen quite extraordinarily an increase in response in those areas, and that has responded to the aggregate demand stimulus we have put into the economy,” he said.
“But I’m not going to get into an edict to Australians on how they should spend their money. There’s plenty of people out there who want to tell people how to spend their money, but the Liberal and National parties are not two of those organisations.”
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