Menu

Militarising Australian industrial policy: a dead end?

The editorial celebrating the twentieth edition of Futures of Work argued that geopolitics, and in particular the ‘new cold war’, are infrequently considered as a foundation for work futures. Systemic geopolitical competition, the editorial suggested, is significant in driving technical and industrial change. The editorial pointed to Robert Kurz’s understanding – outlined elsewhere in this issue – of the constitutive relationship between capitalist development, hot and cold wars, and the production of military means and civil-military dual-use technologies. This is a dark underbelly that analysis of the future of work cannot deny.

Recent Australian government policy initiatives to reverse manufacturing decline have been built on a set of assumptions about changes that fall under the general description of the ‘Fourth Industrial Revolution’, or ‘Industry 4.0’ (i4.0). In a series of articles we have been critical of the concept and its application and implications in Australia, where it has been enthusiastically adopted by the Coalition government and, most recently, become intertwined with an increased militarisation of industrial policy.

 

Extractivism and Australia’s manufacturing crisis  

Before COVID-19 struck, the Australian Manufacturing Forum painted a gloomy picture. It argued that antipathy to value-adding activities such as manufacturing, in favour of industries that require little more than digging up resources and shipping them out, has left Australia dangerously dependent on quarrying. The combined effects of trade liberalisation and its ‘resources curse’ has been a steep decline in employment in manufacturing industry.

Two key events brought national attention to Australia’s declining state of manufacturing. First, the pandemic highlighted a major domestic shortage of all personal protective equipment (PPE) items. Andrew Liveris, a special adviser to the Australian National COVID-19 Commission, pointed to Australia’s current standing of 87th in the Harvard Growth Labs Economic Complexity Index, and suggested that the country needed onshore access to the basics of healthcare, energy, defence, technology, food, and water.

Second, rising political tensions with China has resulted in concerns about defence capabilities. In a 2020 report, the Australian Army Research Centre concluded that ‘Australia is lacking in productive capacity in many important areas of war readiness’. Crucially, for critical minerals for defence technologies, the capabilities of Australia do not extend far past the extraction of the ore, except for the processing of aluminium.

What emerged out of this complex national and international context was the development of a highly militarised modern manufacturing policy.

 

Militarisation and the modern manufacturing initiative

Kate Louis of the Australian Industry Group indicated that the business community’s support for the Coalition government’s 2016 defence industry policy statement signalled a shift away from off-the-shelf purchasing to building a local industrial base in defence. A strategic update released in 2020 foreshadowed a large Australian sovereign defence industry, promotion of defence exports, investment in research and increasing Australian industry capability and content. Defence, as well as military-related sectors like space, now number among Australia’s National Manufacturing Priorities.

The Australian Army Research Centre’s  report pointed to the military implications of food production and medical supplies. The strategic importance of resources and critical minerals is obvious. Australia’s defence interests and capabilities, however, are deeply embedded with US global interests which come to define value-adding opportunities. The recent Australia, UK, US Alliance (AUKUS) has further cemented this geopolitical dynamic.

 

Squandering Australia’s lithium opportunity

Despite the range of value-adding possibilities for Australia’s lithium industries, it appears that the militarisation of industry policy, within AUKUS, will see Australia’s economic transformation continue to support US global interests. Specifically, the export of mineral resources will continue to serve US strategic industrial development. A Biden Administration report on the vulnerability of supply chains, determined that despite significant natural resource endowments of battery-related materials (i.e., lithium), Australia has not yet developed a broader ecosystem for manufacturing advanced batteries.

The jobs at stake in missing opportunities to develop lithium value chains in Australia should not be underestimated. The Future Battery Industries Cooperative Research Centre has reported that the  battery industries could add 34,700 Australian jobs by 2030.

Despite the significant potential of its industrial capabilities to add value to lithium via manufacturing processes, Australia remains an ‘anomaly’ amongst advanced economies. Its industrial policy focuses on economic growth, not economic development. With this strategy, Australia will remain at the base of global supply chains, with mines already employing relatively few people and even less in future, as technological investment impacts extensively the nature and number of jobs in the resources sector.

 

AUKUS sinks Australian jobs

In terms of defence hardware, the militarisation of Australia’s industrial policy has been presented as a way to regenerate regional areas devastated by deindustrialisation. Government initiatives are sold to the local communities as capable of generating employment for displaced manufacturing workers.

The AUKUS nuclear submarines deal was trumpeted as bringing a ‘huge multiplier’ to local industry in South Australia. However, Australian trade unions have broken with the federal ALP’s support for AUKUS to condemn the agreement’s destruction of potentially thousands of Australian jobs in local manufacturing. The Naval Group contract committed to 60 percent local content and, despite the inevitable argument over what this actually meant, the AUKUS deal makes no comparable local content commitment. It has been reported more than 1100 shipyard and subs jobs are in doubt due to the cancelled contract. There is a widely held and more fundamental question as to whether the submarines will ever actually be constructed in Port Adelaide. In any case, there will be little technological transfer and relatively few skilled jobs.

***

Australia has struggled to escape what Guy Pearse more than a decade ago termed ‘quarry vision’ and its location in a global extractivist relationship, particularly with China. With a militarised industrial policy now locked into AUKUS and driven by the US, that seems unlikely to change in any significant way. These initiatives are unlikely to produce any significantly positive effect on either the number or nature of jobs within the manufacturing industry.

 

Darryn Snell is Associate Professor at RMIT University. Mark Dean is Laurie Carmichael Distinguished Research Fellow at the Carmichael Centre, within the Centre for Future Work at The Australia Institute. Al Rainnie is a Research Professor at the University of South Australia.

Image credit: myphotobank.com.au