Manufacturing Investment Falls Short for Victoria’s South-East, Says GSEM

Why It Matters

Without deeper, targeted funding, manufacturers may delay upgrades or relocate, eroding Victoria’s industrial competitiveness. Strategic investment is essential to sustain jobs, productivity and the region’s role as a manufacturing engine.

Key Takeaways

• Budget provides AUD 20 M (~US$13 M) for food and gas sectors.
• GSEM urges dedicated fund for SME tech adoption and automation.
• Calls for industrial land plan, expanded training, and collaboration forum.
• Highlights transport connectivity as key to rail and freight efficiency.
• Welcomes renewable energy terminal, TAFE digital centre, but seeks more.

Pulse Analysis

Victoria’s manufacturing sector has long been a cornerstone of the state’s export earnings, and the south‑east corridor hosts a dense cluster of food processors, metal fabricators and emerging clean‑tech firms. The 2026‑27 budget’s AUD 20 million allocation signals political recognition of the area’s potential, yet industry leaders argue that piecemeal funding cannot address systemic challenges such as aging plant equipment, limited digital uptake, and a shortage of skilled labor. By converting a modest portion of the budget into a dedicated fund for small‑ and medium‑sized manufacturers, the state could accelerate automation, reduce energy costs, and improve global competitiveness.

Beyond capital, the alliance’s call for an industrial land plan reflects a strategic need to secure future‑proof sites for expansion. As freight corridors near Melbourne become increasingly congested, coordinated land‑use planning paired with enhanced rail and bus connectivity can lower logistics costs and attract new investors. Training initiatives, especially those linked to the new Digital, AI and Technology TAFE Centre of Excellence at Chisholm Institute, will equip the workforce with the capabilities required for Industry 4.0, bridging the skills gap that often hampers technology adoption.

If the Victorian government expands its commitment, the south‑east could evolve into a model of resilient, high‑value manufacturing, drawing on renewable energy projects like the Port of Hastings terminal to power greener production lines. Conversely, continued under‑investment risks a talent drain and relocation of firms to other Australian states or overseas hubs offering more robust support. Policymakers therefore face a clear choice: deepen funding and infrastructure coordination now, or watch a vital growth engine lose momentum in the coming decade.