The 2024–25 Federal Budget was a statement of intent. With over $22 billion committed to the “Future Made in Australia” plan, the Albanese government has made it clear: Australia wants to manufacture more on home soil.
The policy is built on sound logic. COVID-era supply chain breakdowns, rising geopolitical tensions, and the growing need for local capability in clean energy and critical technologies have all pushed manufacturing back into the national spotlight.
But while the government’s narrative focuses heavily on reshoring industry, not everyone in the sector agrees that local always equals better.
The budget’s manufacturing push
The Future Made in Australia initiative aims to supercharge local production in key areas including green energy, defence, and advanced manufacturing. Some of the major budget allocations include:
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$13.7 billion in production incentives for green hydrogen and critical minerals.
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$1.5 billion for manufacturing capacity building, particularly for renewable supply chains.
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Funding to expand the National Reconstruction Fund, designed to back strategic projects.
It’s a clear effort to reclaim manufacturing strength and build sovereign capability — especially in areas where relying on offshore suppliers could be seen as a strategic risk.
But is onshore always the answer?
Despite the government’s enthusiasm for local manufacturing, some in the private sector are urging a more balanced conversation — one that recognises the strengths of both onshore and offshore production.
“We’ve found that the lead time and turnaround on things like prototyping can be just too long when dealing with offshore suppliers,” says Aaron Schmidt, Director at Paraform, a design-led manufacturer based in Australia.
“But we still think that in general, 70–80% of large-scale manufacturing will be better going where the quality and price is best, and that’s not necessarily onshore.”
This view highlights a key tension in the current policy direction. While there’s broad support for building more at home — especially for high-tech and strategic industries — the idea of moving everything onshore risks overlooking some business realities.
Offshore manufacturing still offers unmatched scale, speed, and cost-efficiency in many cases. And if those relationships are strong, reliable, and quality-controlled, there’s a strong argument for maintaining them.
A smarter path: Blended strategy over ideology
What Australia’s manufacturing sector needs most isn’t nationalism — it’s flexibility.
Yes, building capability at home matters. And yes, there are strategic industries where sovereign supply is critical. But swinging the pendulum too far in one direction risks replacing one dependency with another.
Smart businesses — like Paraform — are taking a hybrid approach. Prototyping, design, and high-precision, low-volume manufacturing may be done locally for speed and control. Large-scale production, where viable, can still happen offshore — with cost, quality, and turnaround in mind.
Onshore, offshore — or just what works best?
The “Future Made in Australia” plan is an exciting step for local industry. But manufacturing strategy shouldn’t be dictated solely by geography. What matters most is capability, cost-effectiveness, and the ability to deliver — sustainably and reliably.
As Aaron Schmidt points out, there’s no one-size-fits-all answer. For many companies, the right path isn’t fully local or fully offshore — it’s a smart, strategic mix of both.
In the rush to bring industry home, we shouldn’t lose sight of the bigger picture: building a manufacturing future that is not just Australian, but adaptable, resilient, and globally competitive.
