Renewed call for Australia to accelerate efforts to reindustrialise

Australia’s industrial history is a testament to resilience, adaptation and innovation. From its early days as a colony reliant on agricultural exports, Australia rapidly industrialised during the 19th and 20th centuries, driven by the mining boom, manufacturing growth and the development of key infrastructure.

Industries such as steel, shipbuilding, textiles and automotive production became cornerstones of the economy, supported by skilled labour and technological advancements. By mid-20th century, Australia’s industrial sector played a pivotal role in its economic stability, ensuring domestic production capabilities and fostering global trade relationships.

However, the latter part of the 20th century witnessed a shift towards economic liberalisation and globalisation, which saw Australia de-industrialise at a significant pace. Manufacturing declined as industries relocated overseas in pursuit of cheaper labour and production costs. Australia increasingly relied on its resources sector and service economy, leaving domestic production and supply chains vulnerable to external shocks.

This dependence became starkly apparent during the COVID-19 pandemic, which disrupted global supply lines and underscored the risks of over-reliance on imports for essential goods.

Today, in an era of great power competition, the strategic imperative for Australia to reindustrialise is more pressing than ever. Geopolitical tensions, particularly in the Indo-Pacific, are reshaping global trade dynamics and exposing vulnerabilities in national supply chains.

Reindustrialisation offers a pathway to strengthen Australia’s economic sovereignty, enhance national security and build resilience against external pressures. It also presents an opportunity to advance clean energy transitions, create high-value jobs and foster technological innovation.

To achieve this, robust policy and regulatory frameworks are essential. Government investment in research and development, along with incentives for advanced manufacturing and green technologies, will be critical in revitalising industrial capacity.

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Strategic partnerships with allies can bolster Australia’s access to cutting-edge technologies and facilitate the co-development of resilient supply chains. Furthermore, targeted education and training programs will ensure a skilled workforce capable of meeting the demands of a modern industrial economy.

Equally important is a regulatory environment that balances market competitiveness with national interests. Streamlining regulations for domestic production, addressing energy costs and implementing trade policies that safeguard Australian industries will provide the foundation for sustainable reindustrialisation. Policies must also promote equitable regional development, ensuring that the benefits of industrial revitalisation are felt across urban and rural areas alike.

As Australia navigates an increasingly uncertain global landscape, reindustrialisation is not merely an economic objective but a strategic necessity. By embracing forward-looking policies and regulatory reforms, Australia can reclaim its industrial legacy, secure its future and reaffirm its position as a resilient and adaptive nation in a changing world.

Highlighting the growing importance of reindustrialisation for Australia’s ongoing economic, political and strategic stability is Joseph Zeller – senior manager at the Australian Maritime Safety Authority and a serving naval officer – in a piece titled Australia’s strategic blindspot: Deindustrialisation and the threat to national resilience for the Australian Institute of International Affairs.

Industrial capacity central to national resilience

By now, it is well known that Australia’s economy is a shadow of its former self, with much of the nation’s traditional industrial base now skating along on virtually at a subsistence level as the nation rapidly slides towards banana republic territory, as predicted by former Singaporean statesman Lee Kuan Yew in the 1980s.

Now, yes, I hear those voices in the back shouting that Australia has turned a page through initiatives like the Albanese government’s signature “A future made in Australia” policy and mechanisms like the AU$15 billion National Reconstruction Fund along with the Defence Industry Development Strategy, respectively.

Yet for all the bluster, successive Australian governments over the past decade, in particular, have placed increasing emphasis on building national resilience and security through various policy mechanisms, sought to effectively reindustrialise the nation, with little to no major progress despite the best of intentions.

For Zeller, addressing this enduring challenge needs to become priority number one for Australia’s policymakers, especially as the nation has long grappled with the enduring legacy of de-industrialisation that really kicked into high gear in the late 1990s.

Zeller detailed the continuing impacts of this and the way in which Australia’s de-industrialisation intersects and influences our relationships with the world and region and our enduring national security and resilience, saying, “Chief among these is the legacy of de-industrialisation, which has left the nation overly reliant on global supply chains for essential goods, diminished its economic resilience, and undermined its ability to respond to strategic threats. When combined with an over-reliance on imported fuel, misaligned naval capabilities, and the absence of a cohesive grand strategy, these vulnerabilities risk consigning Australia to strategic irrelevance in an increasingly contested region.”

Building on this, Zeller added, “Australia’s embrace of free-market principles in the late 20th century brought short-term economic gains but at the cost of long-term resilience. Policymakers prioritised economic efficiency and global integration over domestic capacity, outsourcing key industries and hollowing out manufacturing. The closure of BHP’s Newcastle steelworks in 1999 marked a turning point, symbolising the decline of Australian industry. Once the economic and social heart of Newcastle, the steelworks provided thousands of jobs and anchored a proud industrial community.”

Now to be fair, at the time the global and regional environment, as well as the consensus among the community of nations, economists, political pundits, historians and the like was that the “End of History” would continue forever as economic liberalisation and globalisation would bring about an end to the nation-state conflict as the world edged ever closer to liberal-democratic values and systems of government.

The reality of this, as we now know is vastly different, despite the best intentions of the expert class, this has failed to eventuate and we are now bearing witness to the return of global multipolarity and competing nation states often driven by their own historic, cultural, religious, economic and political ambitions and designs for their region and the global order, more broadly.

Beijing and the People’s Republic of China has been at the forefront of this, but is joined by a growing number of established and emerging powers from Russia, to India, Brazil and Iran to rogue nations like North Korea, each of whom share common grievances with the post-Second World War order and a desire to develop a robust economic, political and strategic position in a new global paradigm.

Highlighting this, Zeller detailed, “In a de-globalised world, where supply chains are increasingly weaponised or disrupted, this reliance represents a profound strategic vulnerability.”

Responding to these issues requires Australia to embrace a more coherent and consistent strategy, beyond what has been tried to date, and a willingness to learn from the successes and failures of others in an ideologically neutral and pragmatic manner.

Addressing this only becomes more important as Zeller explained, saying, “For Australia, the erosion of its industrial base is not merely an economic issue but a profound strategic and societal vulnerability, exposing the nation to external shocks and diminishing its ability to respond to emerging threats in an increasingly uncertain world.”

Learn the lessons, consistency and coherent strategy key

Recognising this, Zeller explained, “Critics of reindustrialisation often raise concerns about costs and efficiency. They argue that restoring domestic industries could lead to higher prices for consumers and reduced competitiveness in global markets. Additionally, some caution that protectionist policies risk fostering inefficiency and may stifle innovation. These concerns merit careful consideration but do not outweigh the strategic imperative of rebuilding industrial capacity.

Importantly, Zeller warned that the costs of not acting will need a thorough analysis and assessment, saying, “First, the cost of inaction far exceeds the investment required for reindustrialisation. Recent crises have demonstrated that resilience, not efficiency, is the cornerstone of sustainable prosperity.”

As Zeller detailed, many a critic of industrial policy across the West, but most vocally in Australia, is the costs associated and the strict, dogmatic adherence to ideological concepts around free trade, protectionism, subsidies and a host of other metrics in pursuit of the sacrosanct gross domestic product increasing, regardless of the per capita impact of what materially occurs.

However, despite their best efforts, it doesn’t have to be a zero sum, binary game of winners and losers and for Zeller, this is where learning from the successes of others can truly influence Australian policymakers, Australia’s national resilience and workers for the better.

Zeller highlighted this, stating, “Second, targeted reindustrialisation need not abandon market principles. Strategic investments in critical industries can be designed to complement, rather than undermine, global competitiveness. For instance, South Korea has successfully combined government support for shipbuilding and high-tech industries with global trade participation. Australia can adopt similar strategies by focusing on sectors that deliver both economic value and national resilience.”

Building on this, Zeller detailed the importance of combining the power of the private and public sectors to fully leverage and deliver a truly “whole-of-nation” strategy designed to support the nation’s broader reindustrialisation aims, saying, “Finally, concerns about inefficiency can be mitigated through robust accountability mechanisms and a focus on innovation. Policymakers must prioritise industries with strong growth potential and establish public-private partnerships to drive efficiency and technological advancement. This approach ensures that reindustrialisation strengthens, rather than burdens, the economy.”

However, it does need to be said, that given recent failures of public-private partnerships, more needs to be done to build or in some cases, rebuild trust in the model, while also guaranteeing that the reporting, auditing and other key metrics are transparent to ensure that all parties and the Australian taxpayer, where relevant, can see where their tax dollars are being spent, lest we are faced with another example of pork barreling.

Equally, we need to avoid the pitfalls of viewing reindustrialisation in 20th century terms; gone are the days of masses of manpower labouring away in factories on production lines, rather reindustrialisation in the 21st century context has the potential to truly overhaul the way in which the Australian economy is shaped, through the development of highly skilled, well-paying jobs that are resilient, competitive and reposition Australia as one of the world’s manufacturing powers.

For Zeller, delivering all of this requires a consistent and coherent strategy, both at a macro and micro level, within the broader framework of a national strategy designed to deliver a competitive, productive and rewarding future for the next generation of Australians.

Zeller detailed this final and critical point, saying, “Reindustrialisation must form part of a broader grand strategy aligning economic policy with national security imperatives. Policymakers must adopt a balanced approach, integrating elements of strategic protectionism while maintaining global engagement. This shift is essential in a world marked by rising protectionism and strategic competition.”

Final thoughts

Without sounding like a broken record, it is important to both understand and accept that Australians are going to be asked to confront and accept a number of uncomfortable realities in the coming years.

First and foremost, Australians will have to accept that while the world is increasingly becoming “multipolar”, the Indo-Pacific, in particular, is rapidly becoming the most hotly contested region in the world, and this will fundamentally reshape the position, role and security of the nation.

This period of multipolarity competition has been underpinned by the emerging economic, political, and strategic might of powers like China, India, Pakistan, Thailand, Vietnam, and the established and re-emerging capability of both South Korea and Japan, in particular, are serving to create a hotbed of competition on our doorstep.

Second, both the Australian public and our policymakers will have to accept that without a period of considered effort, investment and reform, or as I like to colloquially refer to it, our “Rocky montage” moment, current and future generations of Australians will be increasingly impoverished, living in a nation pushed around by the region’s now rising powers.

Recognising this array of challenges and opportunities, both the Australian public and its policymakers need to look beyond the myopic lens of short-termism that has traditionally dominated our diplomatic, strategic, and economic policy making since Federation.

Again, as I have said multiple times before, we need to see Australia begin to play the long game to fully capitalise on the opportunities that are transforming the Indo-Pacific.

The most important question now becomes, when will we see a more detailed analysis and response to the challenges and opportunities facing Australia, and when will we see both a narrative and strategy that better helps industry and the Australian public understand the challenges faced and opportunities we have presented before us?

As events continue to unfold throughout the region and China continues to throw its economic, political and strategic weight around, can Australia afford to remain a secondary power or does it need to embrace a larger, more independent role in an era of increasing great power competition?

Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific region and what you would like to see from Australia’s political leaders in terms of partisan and bipartisan agenda setting in the comments section below, or get in touch at This email address is being protected from spambots. You need JavaScript enabled to view it. or at This email address is being protected from spambots. You need JavaScript enabled to view it..