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Productivity Commission review into supply chain stability

Treasurer Frydenberg has asked the Productivity Commission to examine supply chain challenges and opportunities post-pandemic

THE federal government has requested the Productivity Commission do an independent review into supply chain vulnerabilities and risks to ensuring the Australian economy is prepared for future disruptions.

According to a statement from treasurer Josh Frydenberg, the experience with COVID-19 highlighted Australia’s potential vulnerability to global supply chain disruption.

The Productivity Commission is to examine Australia’s supply chains, as well as longer term trends in relation to Australia’s linkages and dependencies with respect to international trade and assess whether vulnerabilities or opportunities exist.

The PC is to also examine the nature of the risks to the Australian economy as a result of global supply chain disruptions, identifying any significant vulnerabilities and possible approaches to managing them.

“The Australian economy greatly benefits from the international trade facilitated by global supply chains, through the provision of critical goods and our specialisation in export markets and it is timely to assess our role in and exposure to global supply chains,” the treasurer said.

The Productivity Commission’s is to undertake consultation and provide a report on Australia’s role as an importer in March 2021 and a second and final report on Australia’s role as an exporter in May 2021.

“The Productivity Commission study builds on a series of measures implemented by the Morrison government to ensure Australia’s supply chains remain functioning and resilient including the announcement of a $107.2 million Supply Chain Resilience Initiative that businesses can access to support or establish a capability that addresses a supply chain vulnerability,” the treasurer said.

The review is expected to be another important step by the government to further secure the Australian economy, ensuring it is ready for the challenges and opportunities presented by the COVID-19 pandemic.