Seven categories of key goods have been identified as being important to Australia's national interest as thoughts turn towards supply chain issues during the pandemic and global conflicts.
The federal government will focus on shoring up the supply of semiconductors, agricultural chemicals, water treatment chemicals, telecommunication equipment, plastics, pharmaceuticals and personal protective equipment to ensure Australia's economic security.
Prime Minister Scott Morrison told the AFR business summit on Tuesday the government was working with industries to identify where supply chains were vulnerable and how shortfalls could be mitigated.
"COVID has demonstrated the importance of domestic manufacturing to national health, security and resilience. It has brought into sharp focus the need to be constantly alert to supply chain vulnerabilities," Mr Morrison said.
"In this new era, we can't just be thinking about 'just in time' supply. We also need to think about a 'just in case' model, which supports greater diversification and larger inventories of key goods."
But Labor industry and innovation spokesman Ed Husic said too often the government made announcements and didn't follow through with delivery.
"(Australians) want Australia to be a country that makes things, but to do that you need to invest in the research, you need to invest in the capability you need to invest in skills, which this government constantly fails to do," he told reporters in Melbourne.
"We rank amongst the worst in the OECD for manufacturing self-sufficiency.
"We still import way too much in terms of critical technology. We have a big job to rebuild Australian manufacturing."
Mr Morrison said Australia would focus on its sovereign manufacturing capability and while not everything could be produced on-shore, the country could "play to our strengths" in six key industries.
They include space, medical products, food and beverages, recycling and clean energy, defence and resource technology, and critical minerals processing.
The prime minister said the private sector continued to be the first line of defence against critical shortages, but there were times the Commonwealth would need to step in to find a solution.
Mr Morrison pointed to the shortage of diesel additive AdBlue, which strained Australia's trucking industry when China suspended the export of urea, from which the additive is made.
"This is not some abstract, binary debate about government intervention versus the market. It highlights the vital enabling role government can and should play in maintaining economic security," he said.
"That is the world we are living in now - and we all know that supply chain disruptions are lower when we plan and prepare for them."
