A new report from the McKell Institute has raised alarms about the precarious future of thousands of Australian manufacturing jobs, particularly in the refined metals sector, due to significant industrial subsidies announced by China. The analysis reveals that China is now investing more in industrial subsidies than in its military, aiming to revive its manufacturing industries and prevent business outsourcing.
The report highlights that up to 73,000 jobs in Australia, especially in regions reliant on refining and smelting activities, are at risk. One notable example is Port Pirie in South Australia, where local authorities warn that the lead smelter may require federal assistance to remain operational. If the smelter were to shut down, McKell Institute Chief Executive Ed Cavanough predicts that the town could see a decline of around 2,000 residents—11% of its population—within a year, predominantly affecting its most economically productive families.
Cavanough emphasised the importance of maintaining industrial pillars like the Port Pirie smelter, which have supported local communities for generations. The report advocates for federal government action to protect key industries and communities from the fallout of these international economic pressures. Suggested measures include the government acquiring stakes in businesses that receive financial support, alongside promoting domestic sourcing for national infrastructure projects.
This situation underscores a broader global trend, where countries are responding robustly to similar challenges to preserve their economic integrity. Cavanough warns that to remain resilient against future economic shocks, Australia must retain its capacities to refine and process essential metals. He criticises the current federal strategy of addressing threats to individual plants as unsustainable in the long term, calling for a more cohesive and proactive approach to ensure Australia’s industrial future.