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Australia’s manufacturing sector is facing a major crisis, with new research warning that tens of thousands of jobs, particularly in regional communities, are at risk of vanishing. A report by the McKell Institute has raised alarm over China’s growing dominance in the global metals industry, driven by massive government subsidies.
The study highlights that around 73,000 jobs in Australia, especially those tied to refining and smelting metals, could disappear if swift action isn’t taken. Regional areas such as Port Pirie in South Australia are especially vulnerable.
Port Pirie is home to a lead smelter that supports much of the local economy. Without urgent federal intervention, the town could lose about 2,000 residents in the first year of a potential closure — roughly 11% of its population — as workers and families are forced to move.
“South Australia simply cannot afford to lose industrial anchors such as the Port Pirie smelter – anchors that have sustained regional communities for generations,” said Ed Cavanough, CEO of the McKell Institute.
China’s industrial subsidies have skyrocketed, with an estimated $407 billion invested in 2019 alone — a figure that now likely surpasses the country’s defence spending. These subsidies allow Chinese companies to flood global markets with cheaper refined metals, undermining Australia’s competitiveness.
“In the short term, China’s geoeconomic strategy is about bringing heavy industry back home. In the long term, it’s about weakening the manufacturing capacity of countries like Australia,” Cavanough warned.
Currently, Australia’s response has been reactive, working plant by plant to address the threats. The McKell Institute insists that this fragmented approach is unsustainable.
“Right now, the government is playing industrial whack-a-mole,” said Cavanough. “We need a cohesive national strategy to secure the future of these jobs and the towns that rely on them.”
The report calls on the Albanese Government to urgently develop a national plan to protect these vital regional industries before it’s too late.
