Australia’s packaging and manufacturing sectors are facing mounting pressure as growing reliance on imports exposes structural vulnerabilities across the supply chain. In a recent industry commentary, concerns were raised that without decisive action, the country risks further erosion of its sovereign manufacturing capability, particularly in critical areas such as plastics and packaging.

The issue is not new. Australia has experienced similar industrial decline before, most notably in the wool and textile sectors. Once a dominant economic force, wool production has diminished significantly, largely due to the rise of synthetic alternatives and global cost competition. The failure to develop downstream industries to support domestic production led to a gradual shift toward imports—a pattern that is now repeating across multiple sectors, including packaging.

Over the past three decades, Australia has increasingly prioritised lower-cost imports over local manufacturing resilience. This shift has been compounded by regulatory complexity, rising operational costs and limited long-term policy support. As a result, industries such as automotive, refining, steel and packaging have weakened, leaving the country heavily dependent on global supply chains.

The COVID-19 pandemic briefly highlighted these vulnerabilities, as supply disruptions forced local manufacturers to step in and fill critical gaps. However, despite renewed political attention at the time, the momentum to rebuild domestic capacity has slowed. Today, the situation has intensified, with more companies closing operations or relocating offshore, and fewer investing in new local facilities.

A clear example of this structural fragility is the closure of Qenos in 2024, Australia’s last polyethylene producer. The shutdown, driven by high feedstock and energy costs, created ripple effects across the plastics and packaging value chain. Despite being rich in natural resources such as oil and gas, Australia has struggled to sustain the downstream industries required to convert these resources into high-value materials.

This contradiction underscores a broader issue: resource abundance does not automatically translate into industrial strength. Without investment in processing and manufacturing infrastructure, countries risk becoming exporters of raw materials and importers of finished goods—an imbalance that weakens long-term economic resilience.

Current global disruptions are further amplifying these concerns. Supply chains remain volatile, costs are rising, and delivery timelines are increasingly uncertain. For many packaging businesses, this environment resembles a “second wave” of disruption, where uncertainty has become the norm rather than the exception.

The packaging sector, often underestimated, is in fact a critical pillar of modern economies—supporting food systems, healthcare and everyday consumer goods.

While government initiatives such as the Future Made in Australia plan signal intent to strengthen domestic industry, stakeholders argue that short-term measures are insufficient. What is needed is a coherent, long-term industrial strategy that supports investment, innovation and competitiveness across the packaging value chain.

Equally important is a shift in public perception. Plastics and packaging are frequently viewed through an environmental lens alone, often overshadowing their essential role in preserving products, reducing waste and enabling modern logistics. Locally produced packaging also tends to meet stricter environmental standards than many imported alternatives, yet cost-sensitive markets continue to favour cheaper imports.

As Australia confronts ongoing supply chain challenges, the question is no longer whether reform is necessary, but how quickly it can be implemented. Without a strategic pivot, the country risks deepening its dependence on imports and losing critical industrial capabilities that underpin economic resilience and sustainability.