RATs and Australian Manufacturing

Rapid Antigen Tests (RATs) are an essential part of the Coalition government’s new policy framework for the current “Omicron phase” of the pandemic. RATs are essential for workplaces, schools, nursing homes and other locations at the heart of daily life.

It is false to assume that Omicron is less damaging than Delta, or even that Delta has gone away. The other obvious risk is that there will be another mutation into a new variant, requiring a new response.

The main purpose of the RATs is to get workers back in production and distribution, so that profit-making does not fall. It’s workers who make the economic world go around, not the businesses that employ them.

Deliberately, the government has set this policy knowing that there is insufficient supply of RATs to match the requirements of its own policy. Meanwhile, the supply chain crisis distracts from the making and supply of PCR tests.

Australia, overwhelmingly, relies on offshore manufacturing of RATs, but it didn’t have to be this way – and it still does not. Dependence on imported RATs could and should have been avoided. Locally made RATs have been possible but neglected or ignored.

Recently, the ABC reported on the potential for Australian mass manufacturing of RATs, but producers claimed they had received little support from the government to develop this capacity. One Australian firm has now set up manufacturing operations in the USA. In fact, the ABC report appeared the same day that the government confirmed the closure of 2 flagship funding schemes that would have helped these manufacturers and their potential workforces (see below).

Making RATs in Australia?

Remember the Coalition government’s Manufacturing Task Force (MTF)? It grew out of the initial policy decisions of the Coalition government, after the initial spread of COVID-19 in March 2020. Those initial responses included JobSeeker, JobKeeper, JobMaker, and a tripartite National COVID-19 Coordination Commission (NCCC). The manufacture of RATs here in Australia was, and still is, a task that should be prioritised by any MTF. But it has not been – a gross failure that contradicts the Prime Minister’s “can-do capitalism” slogan.

The NCCC was headed by Nev Power, former CEO of Andrew Forrest’s Fortescue Metals Group. PM Morrison said that the NCCC would work with all arms and departments of government, and ensure public and private sector cooperation. The functions of the Commission included to "drive the development and co-ordination of staged and proportionate plans on critical non-health factors,” such as:

  • transport and logistics challenges;
  • industry co-ordination and adjustment;
  • labour and workforce planning;
  • delivery of essential services and maintenance of critical infrastructure;
  • support to vulnerable Australians; and
  • input of scientific and technological expertise.

The availability and supply of RATs (and locally made vaccines) is relevant to each of these goals. Yet Nev Power’s first contribution was to promote the expansion of the gas industry as a priority for manufacturing. Even government supporters within manufacturing were questioning whether, indeed, the Commission’s recommendations were responsive to the circumstances.

The NCCC’s MTF was headed by Andrew Liveris, arising from his previous role in manufacturing policy with the USA’s former Obama administration. The MTF included Innes Willox from the Australian Industry Group (AiG) and two unionists: Paul Bastian, then the National Secretary of the Australian Manufacturing Workers Union, and Dan Walton, from the Australian Workers Union.

During his tenure, Bastian advocated publicly and strongly for a “make it here” approach to manufacturing, as a core element of the COVID-19 response strategy (see, for example, his interview on ABC Radio National). RATs could have been manufactured to meet at least a significant share of our needs, if not also for export.

Just a few months later, on 1st October 2020, Morrison announced a new, $1.5 billion, 4 year Modern Manufacturing Strategy. Unfortunately, $1.5 billion barely compensates for, or provides enough to drive the reversal of, the Australian manufacturing employers’ capital strike that is ongoing. And PM Morrison said not a word about either the NCCC or the MTF in his announcement of the strategy.

For just a few days, an excited Morrison promoted the impression that his government takes manufacturing seriously, and discussed a “pivot” to manufacturing. Of course, anyone who has been working in or taking manufacturing seriously knows that this enthusiasm is the opposite of the long-term winding down of manufacturing that the Coalition government has overseen – even as it gave full-throated support to the resources sector and corporate mining interests.

The government’s new manufacturing plan included:

  • Aligning research and innovation capabilities and programs to priority areas;
  • Setting National Manufacturing Priorities and developing road maps for action; and
  • Making supply chains more resilient to external shocks including through a Supply Chain Resilience Initiative.

Measured against these goals, the failure of this policy failure is evident. One of the 6 priority industries in the plan was “Medical Products”. Obviously, RATs fit within this industry. One of the funding streams was for Medical products. But the scheme was shut down in December 2021, as was its associated “Integration Scheme”, thus compounding the policy failure.

The architects of failure and their challengers

The local manufacture and supply of RATs is a perfect example of what both the MTF and associated Strategy should have been driving. Dealing with supply problems and speeding up new, necessary products should have been a prime task.

PM Morrison shut down the NCCC in May 2021, with its work apparently “concluded”. Nev Power had done his job on behalf of Australian mining: making sure that the mass of Australians would not benefit from a manufacturing industry that leveraged off mineral resources. By then, Power has become Chair of the Perth Airport (among other things), and soon after was accused of flouting the WA government’s travel restrictions. Andrew Liveris, Chair of the MMT, has not addressed RATs and other medical products essential for an anti-COVID strategy.

Instead of a vehicle to promote the gas industry, the MTF should have taken stock of existing and potential capability in medical products manufacturing, especially testing technologies. Just like the AMWU then and since has been pushing: “buy Australian”.

The Business Council of Australia’s (BCA) CEO, Tim Reed, dodged discussing domestic manufacturing of RATs when recently interviewed on the ABC. Similarly, AiG’s Innes Willox has been silent on the need for domestic RAT production. Instead, he attacked the Australian Council of Trade Unions’ (ACTU)  proposal that employers should ensure and pay for an adequate supply of RATs if they wanted their employees at work. Willox described this as unrealistic, even though some employers are doing it already. If it’s a requirement for work from which the employer will get a profit, then the employer should pay (such as in the case of high-vis workwear with company branding).

The ACTU emphasises that the Australian people are still living in a crisis, not coming out of one, and that the unavailability of RATs is a big part of that crisis. They are correct to urge workers to take direct control of their own safety.

The failure (deliberate or otherwise) of Morrison’s manufacturing policy to ensure that RATs are made in Australia is a big part of what has been correctly described as “one of the worst public policy failures in Australia’s history."

The road ahead

When it comes to what Australian manufacturing should be doing, only the AMWU has shown the foresight to clarify – nearly 2 years ago – what needed to be done.

Paul Bastian has saidthere is a need, we believe, to establish a task force in some of our key industries, such as food, defence, mining, and engineering. To look at two things: not just to see how we can localise our supply chains, but also to look importantly at our capability gap and how we might be able to fill those gaps in our manufacturing sector.”

A real deal for manufacturing jobs, including in medical products, requires a fundamental change in direction. This should be a critical issue in this year’s federal election.