The Modern Manufacturing Strategy hopes to make Australian manufacturers more competitive, resilient and able to upscale.

Kangaroo Flat manufacturer Australian Turntables' general manager Marc Smith said now is the perfect time to rebuild manufacturing in Australia.

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"For Bendigo, it's a really good opportunity to get people to start businesses, invest in different opportunities and employ locals," Mr Smith said.

The centrepiece of the strategy is a $1.3 billion Modern Manufacturing Initiative, which will see the government strategically invest in projects that help manufacturers scale up and create jobs.

The industries of resources technology and minerals processing, food and beverage, medical products, recycling and clean energy, defence and space have been identified as six priorities.

Defence manufacturer Thales' chief executive Chris Jenkins said Thales welcomes the strategy announced by the Prime Minister.

"The recognition of defence as one of the six national manufacturing priorities will continue to strengthen Australia's industrial capability and advanced manufacturing sector," Mr Jenkins said.

Bendigo MP Lisa Chesters has criticised the government's announcement and said it is a reannounced election commitment.

"Our local manufacturers know what support they need and they need it now," Ms Chesters said.

"Only weeks ago, a local food manufacturer, Moira Macs, announced its decision to close their Bendigo site and move operations to Western Australia.

"We can't afford to lose any more businesses to other states and territories."

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Bendigo's manufacturing sector currently supported 5810 employees, or 9.2 per cent of Bendigo's total industry workforce, across 418 businesses.

Senator for Victoria Sarah Henderson said manufacturers are central to our economic recovery from the COVID-19 pandemic.

"Manufacturers have capabilities that underpin so many other industries and support businesses in regional Victoria right along the supply chain," Senator Henderson said.

"The government is determined to play to our strengths and ensure we are strategically invested in Bendigo."