Buses are the most used mode of public transport in Australia, and building replacements for the huge fleets around the country could be worth around $16bn over the next 20 years.
With this comes an incredible opportunity that goes well beyond just replacing diesel buses with electric ones.
Australia has an opportunity to build a modern, competitive and sustainable local bus manufacturing industry that creates skilled jobs, develops technology, strengthens supply chains and gives governments greater security over a critical part of our public transport infrastructure.
But to do that, governments need to work with industry on the way they buy buses.
That’s because you cannot build a sustainable sovereign bus manufacturing capability through ad-hoc or short-term purchasing decisions.
Manufacturing requires investment into factories, tooling, engineering capability, apprenticeships, supply chains, technology and product development.
All of these require businesses to commit substantial capital today to prepare for demand that may not arrive for several years.
We need a credible and reliable view of what governments intend to buy over the next five, ten and even fifteen years.
Australia’s governments are already some of the country’s largest purchasers of buses, and their purchasing power can either support the development of domestic capability or simply become a mechanism for buying the lowest-cost product available at a particular point in time.
The Commonwealth’s Buy Australian Plan recognises government procurement can be used to build domestic industry capability.
The NSW Treasurer has also recognised the importance of certainty, with the recently announced $6.5 billion New Electric Bus Program which is intended to provide a 10-year investment pipeline and a 50 per cent local-content target.
This is the right intention and the same principle needs to be embedded consistently around the country.
A manufacturer needs to know how many buses will be purchased, when they will be purchased, what specifications will apply, and what proportion of the build is expected to be local content.
This information allows a company to recruit and train local apprentices because there is confidence those skills will be needed in the years to follow, and it enables local component suppliers to invest alongside manufacturers.
This approach shouldn’t be done to protect an inefficient industry, rather it should be to create an industry capable of competing successfully.
The Australian bus industry has experienced the consequences of uncertain procurement for too long.
When orders surge, manufacturers scramble to recruit people, secure components and increase capacity, but as government purchasing falls away, that investment is difficult to sustain.
The result is a boom-and-bust cycle that is particularly damaging to manufacturing because skilled people and productive capability can't be quickly rebuilt once they have been lost.
The NSW Bus Industry Taskforce has previously identified the lack of certainty around forward orders as a factor in the closure of local manufacturing facilities.
Every time manufacturing capability disappears, Australia loses engineering knowledge, skilled workers, apprenticeships, supplier relationships and the ability to respond quickly when demand increases.
We should not have to be rebuilding those capabilities from scratch every decade because of an inefficient procurement cycle that could easily be changed.
It would help if governments would look at buses not as vehicles, but as long-held public assets that consume energy, require maintenance, parts, and technical support all while carrying Australians every day for many years.
The procurement decision therefore has consequences well beyond the initial purchase price.
A bus that is marginally cheaper to purchase but creates no locally skilled jobs, and no local supply-chain exposure may not represent better value over its operating life.
Australia has a fragmented bus market divided across multiple states and territories, each with different procurement processes, specifications and interpretations of local content.
The federal government has already recognised the value of greater coordination through the national Zero Emission Bus Procurement Pipeline, designed to make future procurement more visible and improve coordination across governments and industry.
This is a great first step, but what is really needed is a nationally aligned approach to procurement.
That does not mean every purchaser has to buy the same bus.
It means governments should work towards greater consistency in specifications, safety requirements, local-content definitions, contracting arrangements and technical standards.
As governments provide the certainty and policy framework, all manufacturers must deliver. We must become more productive and invest in training, automation and technology.
We must develop products that compete on quality, reliability and whole-of-life cost, that allow us to build export opportunities.
Australian manufacturing cannot ask taxpayers to pay a premium indefinitely. The ambition should be to use the purchasing power of governments to help Australian manufacturers reach sufficient scale to become internationally competitive.
The most valuable thing governments can give manufacturers is not a grant, but certainty.
They should publish the pipeline and then stick to the timetable, while providing indicative volumes and giving sufficient notice of major tenders.
They could also coordinate purchasing between jurisdictions where practical, use longer-term contracts where they provide better value, and reward investment in local capability.
Most importantly, they should be evaluating tenders on whole-of-life value rather than purchase price alone.
If governments do those things, manufacturers can make long-term investment decisions.
The bus industry is a useful case study for a broader question facing Australia.
Do we want to remain primarily a consumer of advanced manufactured products, or do we want to retain the capability to design, engineer and manufacture strategically important products ourselves?
Buses sit at the intersection of transport, energy, manufacturing, technology and infrastructure, and the transition to zero-emission buses makes the question even more important.
Australia does not have to choose between value for taxpayers and Australian manufacturing.
With intelligent procurement, we can achieve both.
The question is whether we treat government purchasing as a series of individual transactions—or as an opportunity to build a national industry capability that delivers value for decades.
As an Australian bus manufacturer, I want there to be local and international competition.
But we need to compete in a market where the rules recognise the value of resilience, skills, technology, innovation and long-term economic contribution.
Government has enormous purchasing power, and when used strategically it won’t just build buses, it will build an industry.