Manufacturing became an instrument of development policy, and government assistance was provided in several forms, including imposing protective tariffs designed to increase employment through import substitution and seeding selected population centers with government-aided industries in Australia. Japanese and American corporations are prominent in the motor vehicle industry, which includes assembly and full-production plants. Iron and steel is a virtual monopoly held by the Australian-based multinational BHP Billiton. Other major manufacturing industries include food, beverage, and tobacco manufacturing; printing and publishing; oil refining; and the manufacture of textiles, domestic appliances, and wood and paper products.

Since the 1960s, manufacturing has declined steadily due to independent decisions of multinational corporations to move production offshore to countries with lower wages, reductions in protective tariffs and other controls on imports, and increasing domestic labor costs. The continuing need for goods in these categories left Australia with punishing import bills. Manufacturing has depended heavily on foreign capital; it expanded rapidly in the 1960s and early ’70s but grew slowly or even contracted during the ’80s. As mining gradually declines, manufacturing and its need for foreign capital become more important for national development. About one-fourth of manufacturing output is exported.