The Importance of Australian Owned and Australia Made

In the midst of the constant coverage on mainstream and social media around COVID-19, there is an emerging groundswell of support to revitalise Australia owned and made products. This is across all sectors from mining to manufacturing to food production to medical engineering. Australia has seen many high-profile industries leave our shores (for example car manufacturing) in recent years. In the light of the current crisis, many countries, including our own, are beginning to look to their own capacity or lack thereof to supply their own needs. This has led many to raise the question: is COVID-19 causing the reverse of globalisation. Especially as we see in countries in lockdown, begin to redivert their focus and funds back to domestic products and services to survive. It goes to show how much we rely on foreign countries and their exports, many are asking that maybe we should be looking for domestic alternatives, and not only for the short term but even after the COVID-19 saga. Since the COVID-19 outbreak, and the recent lockdowns, the purchasing of Australian owned goods and services have been expanded to a wide range of industries within our community, including medical equipment, mining and construction and manufactured goods.

Mining and Resources

The media hype on the condition of the mining sector results from the fact that the mining industry plays a fundamental role in the stabilisation of Australia’s economy. The mining industry alone brings in over $148 billon to the Australian economy every year. In metals alone in 2018, the Australian economy had a $115 billion boost.
Apart from the economic value, the mining sector supports local people, and communities. In 2018 alone, there were 132 000 people employed by the mining industry. Every year we see these numbers rise. A growing issue however has been noticed, with the increased workforce, there has been an increase in work production, and hence mineral ore excavation, especially as we see the opening of new mines often, which is nothing to be complaining about. However, the majority of these ores are being exported. We are selling more ore materials, by sending them overseas, and then importing to cover our energy needs. For example, even though we export fuel and gas, we import the oil and gas that the Australian people actually use. We are seeing a major growth in exports of our resources, but a decline in their value and local production, which is harming our local economies that rely on this energy.

In these difficult times, BHP is trying to support their local suppliers by reducing their payment terms, from 30 days to 7. Accelerating the payment of over $100 million to small businesses in the aim of boosting the local economy, and helping out local businesses. Alongside these changes, BHP has also set aside a $6 million fund to assist their labour hire companies and their employees. These one off payments will assist people who have been quarantined after entering Australia and are not entitled to sick leave.

Construction

In the construction industry, things aren’t looking that much brighter. Major companies and industries that rely on imports, are having major delay in project progression and are experiencing a fall in profits. With the Australian government limiting imports and exports to a bare minimum, there have been major setbacks in industries such as civil construction. The majority of the construction industries supply chain, which includes materials, metals and machinery (especially structural steel and glass), are imported from China, which has now resulted in major shortages. Even if Australia was in the state of active importation of Chinese goods, the supply would be limited, with the current state of emergency in China. Some economists have projected that this supply chain hiatus from China may last until at least July/August, or maybe even longer.

This is a contributing factor as to why the public has made a push for Australian companies to buy Australian made products. It’s not only supporting Australian businesses, but the current demand would be able to be filled with our own current supply. This would only be possible if we were reliant on our own resources, rather than imported foreign products and services.
The most immediate impact is affecting subcontractors, who have seen the widespread construction hiatus, leaving them with cancelled jobs, and/or postponed jobs to an unknown date. There are concerns that if this situation isn’t resolved soon, that these small businesses that supply equipment and materials for these large construction industries will be unemployed.

The major issues that the COVID-19 virus has triggered in the civil construction industry is:

Risk – since the outbreak, there has been a spike in not an only financial risk but physical risk, for all parties involved. With COVID-19’s high infection rate and isolation response, it has limited the amount of construction work that can be achieved whilst on site. This directly affects the key milestones that are in place for time management, deadlines, delivery risks, and arrangement of advanced payments, all placed into jeopardy. Especially, as it doesn’t seem that end is in sight.
Change in Contractual Terms – time allocation of jobs, an extension must be granted, which over a longer period of time costs money, for the hiring of equipment, shipping delays and worker wages. All of which when summed, can add to quite a debt. With less money going into companies, and a lot going out, the imbalance quickly puts businesses in the deep end.
Tender Evaluation – there has been a shift in focus back to the financial capabilities of a party to be able to complete the tender. Alongside this, the labour availability has fallen due to the isolation laws and on top of it all supply chains that have been rendered immobile. All these factors are connected, which sets off a domino effect of impacts within the industry.
Security – there is a risk in the security of being able to complete the project at all. With the impact of the COVID-19 crisis on the economy, it may no longer be economically viable to complete the project.

These are only a few of many factors that are critically impacted by the COVID 19 outbreak, and the resulting political response (such as the forced closing of the non-essential workforce, and isolation). The government’s stimulus package is providing some relief, but it cannot hold the upcoming wave of dynamic changes and adaptive measures as a result of COVID 19. Meaning, when the situation resolves itself, there will be a major shortage of subcontractors and materials. The industry will require a buffer time, to allow for the business machine to begin moving again, this spans from the restart of importation and exportation of goods to update in legislative measures and finally, the reintroduction of the workforce into an unisolated society. Only after this time is given, that we will see the momentum of our businesses pick up speed, and return to a stable work environment. How much time will be needed for this to occur, and for things to go back to normal, my guess is as good as yours.

Manufacturing

The manufacturing industry makes up approximately 11% of Australia’s annual total export earnings and has the highest business expenditure on research and development of any other industry. This makes it a critical foundation of Australia’s economy. Hence, why there have been enquiries from all over Australia from manufacturing businesses to be designated as an essential industry during these times. It not only supports the economy but also supplies society with crucial products that people need. This comes after the federal government has said to have tasked DOW chemical CEO to come up with a long term strategy to deliver a competitive manufacturing solution during these difficult times. Reports have suggested that removing trade barriers is a speculative solution to bring more competition to the markets. For now, the manufacturing industry has been directed by the federal government to ramp up production of products that society currently needs, such as ventilators, pasta, toilet paper, hospital beds, sanitiser and other essential goods to meet the growing demand.
This has sparked a series of debates, that maybe Australian businesses are relying too much on foreign products, and that we should be looking for homegrown alternatives not only for the short term but for the long term.

Medical Industry – Equipment

As is expected, since the beginning of the COVID- 19 outbreak, there has been an exponential increase in demand for high-quality respirators. There were worries from the public and even the Australian government that there would not be enough stock to supply the demand. The government dictated to the Australian army to collect over 150 million respirators to fill the nationals emergency stockpile. However, since then there has been some backlash, with much of the public wanting Australian made respirators. However, over the last few months, we have seen incredible adoption of Australian made respirator technology from unexpected companies. Companies that have adopted the new technology to fill the demand range from vehicle manufacturers to food groups, and even family businesses adopting new goals in supplying Australia with Australian made respirators. An outstanding effort was seen by one family business in Adelaide that saw an opportunity to create a new product for the increasing demand in the market. Prior to the COVID-19 situation, this family business provided paper bags for fast food chains, such as McDonald’s and KFC. But now owner says they hope to make over 20 million masks per month by June this year. With an already mighty workforce of 3000 people, they have opened up 160 new positions for people who are struggling for employment to join their team to achieve their aspiring goal. These masks get us one step closer in finding the solution.

Ventilators

Triple Eight Race Engineering are employed for their expertise and knowledge in the Supercars Championship Racing. However, in recent months, they have found a new calling. By using their knowledge in supercars, they have collaborated with a number of medical professionals at producing a ventilator prototype to assist in the current COVID-19 crisis. In an interview with ABC, Team Principle Roland Dane said: “Engineering is engineering, so when you’re involving a control system, an electrical motor, and circuit board, it’s not too dissimilar to the parts we use on a supercar”.

Vaccine

The same Australian research team that was the first in injecting the swine flu vaccine into humans in only three months have been tasked in finding a vaccine for the COVID 19 virus that is currently disrupting the world’s equilibrium. Currently, there are animal trials that are underway, which will take approximately 3 months, and the results of these experiments are expected to surface around July. If these trials are successful they will enrol into a series of tests, the whole process, unfortunately, takes up to 12 months.
According to reports, the Australian research teams do believe that they have an advantage, as they were able to establish a platform which has proven effective with other vaccines that it has produced for H5 and H7 bird flu’s. The leading researchers have explained that the largest barrier they are currently facing is getting their experimental vaccine into humans. The trials for experimental are conservative, as studies must be solid, to prove that they are eligible for human use, and no side effects are present. There is an extensive list of requirements and tests that must be passed for a vaccine to be approved for human use. Unfortunately, time is a prominent factor in this case, as lives are on the line, and most are already struggling with isolation of 2 weeks, let alone 12 months. According to CSIRO there are a number of research teams which have adopted a variety of methods in acquiring a working vaccine, and over the next few months extensive trialling will occur.

Global Road Technology (GRT)

GRT is one of thousands of the Australian made companies that supply the mining and construction industries with the equipment and services needed to efficiently an effectively get the job done. GRT’s main products for the mining industry have an official Australian Made and Owned status. All GRT’s products are manufactured here in Australia, these products are not only served here, but are also exported to several countries around the world with recent shipments going out to India, the UAE, New Zealand, and Kuwait.
GRT also engages local equipment and component suppliers for its unique dosing units and product compatible pumps, combination of design by GRT and manufacture by industry partners here in Australia. GRT is one of thousands of companies that can supply the market demands needed here in Australia. This outbreak has proven to not only the Australian companies, but Australian people, how much we rely on foreign imports for our success. This equates to an extremely value of money leaving the country, instead of investing it into the companies on our own soil, to support our local businesses, our local and national economy, as well as our own people. It’s time for us to adjust our business relationships to support Australian businesses and the Australian people.