Australia needs strategic reindustrialisation. The days of secure supply chains and geopolitical stability have begun to erode, and Australia is without a plan. 

Australia is at a crossroads, where the convergence of global power shifts and domestic vulnerabilities demand urgent action. As the Indo-Pacific emerges as the epicentre of global geopolitics, Australia must confront critical weaknesses that threaten its national security and social cohesion. Chief among these is the legacy of deindustrialisation, which has left the nation overly reliant on global supply chains for essential goods, diminished its economic resilience, and undermined its ability to respond to strategic threats. When combined with an over-reliance on imported fuel, misaligned naval capabilities, and the absence of a cohesive grand strategy, these vulnerabilities risk consigning Australia to strategic irrelevance in an increasingly contested region.

The implications of Australia’s post-industrial shift are profound. As globalisation recedes and geopolitical instability rises, Australia’s dependency on global supply chains exposes it to significant risks. Once-thriving domestic industries—shipbuilding, steelmaking, and refining—have largely been dismantled, leaving the nation reliant on imports for essentials such as fuel, fertilisers, and industrial materials. In a de-globalised world, where supply chains are increasingly weaponised or disrupted, this reliance represents a profound strategic vulnerability.

Australia’s embrace of free-market principles in the late 20th century brought short-term economic gains but at the cost of long-term resilience. Policymakers prioritised economic efficiency and global integration over domestic capacity, outsourcing key industries and hollowing out manufacturing. The closure of BHP’s Newcastle steelworks in 1999 marked a turning point, symbolising the decline of Australian industry. Once the economic and social heart of Newcastle, the steelworks provided thousands of jobs and anchored a proud industrial community.

This erosion of industrial capacity extends beyond economic concerns; it strikes at the core of Australia’s identity and cohesion. Regions once defined by their industrial prowess now grapple with unemployment, social instability, and a loss of purpose. At its peak, the Newcastle steelworks employed approximately 11,000 workers, making it one of Australia’s largest industrial employers and a cornerstone of the local economy. The steelworks not only provided direct employment but also supported countless businesses and services in the region, delivering widespread economic benefits to Newcastle’s community. Its closure left thousands unemployed, severing the economic lifeline for many families and triggering long-term hardship across the region.

Similarly, the decline of Geelong’s manufacturing sector, punctuated by the closure of Ford’s plant in 2016, dismantled a foundation of the local economy, straining the community’s resilience. In South Australia, the shuttering of Holden’s automotive plant in Elizabeth further exemplifies the widespread impact of industrial decline. These once-thriving industrial hubs now face significant challenges in redefining their identities. The decline of these centres has exacerbated inequality, leaving many communities disillusioned and disconnected from broader national narratives of progress. While efforts to transition to new industries are underway, the legacies of industrial decline continue to weigh heavily on these regions.

In Australia’s case, current policies assume global systems and domestic stability will persist without interruption. However, de-globalisation, geopolitical fragmentation, and economic stagnation reveal a stark reality. Real wage growth has stagnated over the past two decades, highlighting the disconnect between perceived progress and lived experience. This stagnation is not just a matter of individual earning power; it is intricately linked to the broader economic structures, including the disruption of traditional industries and supply chains.

The decline of manufacturing in regions like Newcastle and Geelong has created significant economic challenges, as supply chains that once supported local industries and provided stable jobs have broken down. As a result, the economy has shifted toward service-based and globalised supply models, which have not translated into wage growth for many workers. The disconnect between the perceived progress of a globalised, technology-driven economy and the reality of stagnant wages underscores the deeper, systemic issues impacting these communities.

The deeper implications of Australia’s industrial decline resonate with geopolitical analyst Samo Burja’s hypothesis that post-industrial societies are not a mark of progress but of regression. This perspective challenges conventional narratives that equate deindustrialisation with economic evolution, suggesting instead that it represents a loss of the systems of knowledge, coordination, and institutional capacity critical to sustaining a resilient and self-reliant society.

For Australia, the erosion of its industrial base is not merely an economic issue but a profound strategic and societal vulnerability, exposing the nation to external shocks and diminishing its ability to respond to emerging threats in an increasingly uncertain world. This vulnerability was starkly highlighted during the COVID-19 pandemic, when the country faced significant shortages of personal protective equipment (PPE) due to its reliance on international supply chains. Similarly, Australia’s dependency on imported fuel poses a critical risk, as disruptions in global supply can severely impact national security and economic stability. These examples underscore the urgent need to rebuild and diversify Australia’s industrial capabilities to enhance resilience against future crises.

Burja’s hypothesis on “social technology”–defined as the systems of knowledge, coordination, and institutional practices enabling societies to organise complex tasks—underscores the deeper implications of Australia’s industrial decline. In Australia, the erosion of these systems is evident in the outsourcing of critical industries. For instance, the decline of local shipbuilding represents more than just lost jobs—it signifies a loss of specialised expertise and institutional memory essential for sustaining advanced technical capabilities.

Critics of reindustrialisation often raise concerns about costs and efficiency. They argue that restoring domestic industries could lead to higher prices for consumers and reduced competitiveness in global markets. Additionally, some caution that protectionist policies risk fostering inefficiency and may stifle innovation. These concerns merit careful consideration but do not outweigh the strategic imperative of rebuilding industrial capacity. First, the cost of inaction far exceeds the investment required for reindustrialisation. Recent crises have demonstrated that resilience, not efficiency, is the cornerstone of sustainable prosperity.

Second, targeted reindustrialisation need not abandon market principles. Strategic investments in critical industries can be designed to complement, rather than undermine, global competitiveness. For instance, South Korea has successfully combined government support for shipbuilding and high-tech industries with global trade participation. Australia can adopt similar strategies by focusing on sectors that deliver both economic value and national resilience.

Finally, concerns about inefficiency can be mitigated through robust accountability mechanisms and a focus on innovation. Policymakers must prioritise industries with strong growth potential and establish public-private partnerships to drive efficiency and technological advancement. This approach ensures that reindustrialisation strengthens, rather than burdens, the economy.

To address its vulnerabilities, Australia must embrace a strategy of reindustrialisation, restoring its capacity to produce critical goods while fostering innovation and resilience. This requires targeted investments in industries essential to national security, such as refining, advanced manufacturing, and shipbuilding. Rebuilding refining capacity, developing alternative fuel sources, and expanding the strategic petroleum reserve are urgent steps to mitigate supply disruptions.

Equally important is revitalising industrial hubs in regional areas. Newcastle’s industrial decline highlights the social and economic consequences of industrial closures. Rebuilding these centres would not only create jobs but also restore a sense of purpose and pride to communities left behind by deindustrialisation. Incentives for local manufacturing, coupled with education and training programs tailored to regional needs, can bridge the urban-regional divide and foster social cohesion.

Reindustrialisation must form part of a broader grand strategy aligning economic policy with national security imperatives. Policymakers must adopt a balanced approach, integrating elements of strategic protectionism while maintaining global engagement. This shift is essential in a world marked by rising protectionism and strategic competition.

Conclusion

Australia’s transition to a post-industrial society has left it vulnerable to economic, social, and strategic shocks. To secure its future in an increasingly contested region, Australia must prioritise strategic reindustrialisation. This effort will rebuild resilience, foster social cohesion, and safeguard national sovereignty. By investing in critical industries and regional hubs, Australia can ensure its relevance and stability in the Indo-Pacific order.

Joseph Zeller is a Senior Manager at the Australian Maritime Safety Authority and a serving naval officer with extensive experience in defence and national security. He is a graduate of the Australian War College (Australian Command and Staff Course) and holds a Master of Business Administration (ANU), a Master of Policing, Intelligence, and Counter Terrorism (Macquarie University), and a Bachelor of Policing (Charles Sturt University). Joseph Zeller | LinkedIn

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