Australian bus manufacturers BusTech and Nexport - If Government Wants Australian-Made Buses, It Must Buy for the Long Term
- Written by: Stephen Cartwright OAM, Chairman and Managing Director of GoZero Group
With this comes an incredible opportunity that goes well beyond just replacing diesel buses with electric ones.
Australia has an opportunity to build a modern, competitive and sustainable local bus manufacturing industry that creates skilled jobs, develops technology, strengthens supply chains and gives governments greater security over a critical part of our public transport infrastructure.
But to do that, governments need to work with industry on the way they buy buses.
That is because you cannot build a sustainable sovereign bus manufacturing capability through ad-hoc or short-term purchasing decisions.
Every time manufacturing capability disappears, Australia loses engineering knowledge, skilled workers, apprenticeships, supplier relationships and the ability to respond quickly when demand increases.
We should not have to be rebuilding those capabilities from scratch every decade because of an inefficient procurement cycle that could easily be changed.
The bus industry is also a useful case study for a broader question facing Australia.
Do we want to remain primarily a consumer of advanced manufactured products, or do we want to retain the capability to design, engineer and manufacture strategically important products ourselves?
Buses sit at the intersection of transport, energy, manufacturing, technology and infrastructure, and the transition to zero-emission buses makes the question even more important.
The Commonwealth’s Buy Australian Plan recognises government procurement can be used to build domestic industry capability.
The NSW Treasurer has also recognised the importance of certainty, with the recently announced $6.5 billion New Electric Bus Program which is intended to provide a 10-year investment pipeline and a 50 per cent local-content target.
Longer term information like this, allows a company to recruit and train local apprentices because there is confidence that those skills will be needed in the years to follow, and it enables local component suppliers to invest alongside manufacturers.
Australia does not have to choose between value for taxpayers and Australian manufacturing, because with intelligent procurement, we can achieve both.
To do that, we need to treat government purchasing as an opportunity to build a national industry capability that delivers value for decades.
This doesn’t mean shutting out international competition, but we need to compete in a market where the rules recognise the value of resilience, skills, technology, innovation and long-term economic contribution.
Manufacturing requires investment into factories, tooling, engineering capability, apprenticeships, supply chains, technology and product development.
All of these require businesses to commit substantial capital today to prepare for demand that may not arrive for several years.
It would help if governments would look at buses not as vehicles, but as long-held public assets that consume energy, require maintenance, parts, and technical support all while carrying Australians every day for many years.
The procurement decision therefore has consequences well beyond the initial purchase price. A bus that is marginally cheaper to purchase but creates no locally skilled jobs, and no local supply-chain exposure may not represent better value over its operating life.
Australian manufacturing cannot ask taxpayers to pay a premium indefinitely. The ambition should be to use the purchasing power of governments to help Australian manufacturers reach sufficient scale to become internationally competitive.
The most valuable thing governments can give manufacturers is not a grant, but certainty.
