28 March 2023

Manufacturers welcome Safeguard Mechanism changes: Important to sweat the details

Manufacturing Australia (MA) today welcomed the additional flexibility and tailored support for manufacturing industries included in changes to the Safeguard Mechanism, adding that the detailed design of manufacturing-specific measures would be crucial to get right.

MA Chief Executive Officer, Ben Eade, said the creation of specific rules for manufacturing was appropriate because the sector faces high levels of trade exposure and needs to remain competitive with imports, even as manufacturers invest in low emissions technologies and capabilities.

“Tailored treatment for manufacturing industries is essential if Australia is to retain globally competitive manufacturing capabilities while reducing emissions. We welcome the Federal Government’s support for manufacturing and the constructive changes that have been agreed by the crossbench,” Mr Eade said.

“These changes are sensible and pragmatic. It’s now vital that we get the details and the implementation right, to enable the multi-decade investments that are needed to underpin low emissions manufacturing. We look forward to working with the Federal Government to do that.”

Mr Eade cited reduced baseline decline rates for hard-to-abate, value added, manufacturing industries; closer examination of a carbon border adjustment mechanism; and, targeted funding for industry as the most important changes to support Australian manufacturing.

He added that the design of the threshold test for entry to a manufacturing-specific decline rate, and the proper targeting of funding support would be crucial details to get right and ensure the mechanism provides investment confidence for Australian manufacturers.

“Australia has profound opportunities to create and retain high quality jobs, and grow its manufacturing sector, through a carefully managed transition to low emissions manufacturing,” Mr Eade said.

“But it’s a high-risk transition that requires us to maintain global competitiveness even as we overcome hurdles such as proving, scaling and reducing the costs of low emissions manufacturing technologies, building critical enabling infrastructure and reducing the costs of delivered, clean, electricity.”

“Government policy that supports a stable, orderly, transition to low emissions technologies is vital if Australia is to maintain a level playing field with imports and attract sustained investment in low emissions manufacturing.”

“We will work with the government to get these details right so that we can seize opportunities in low emissions manufacturing now and in the future.”


Contact: Ben Eade, 02 6198 3285