The developers have lodged paperwork with the City of Greater Bendigo for the new McKern Steel at 5620 Calder Highway in Big Hill.

The new steel fabrication factory would allow McKern Steel to bring multiple operations currently spread over multiple sites into one location, documents lodged with the council say.

The factory would be one of the first buildings to rise in the Big Hill Enterprise Park, an area of land where 10 large blocks have been set aside for industrial businesses.

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The Bendigo council is considering the application as federal politicians spruik solutions to widespread building material shortages a few suburbs away in Golden Square.

Deputy Labor leader Richard Marles joined member for Bendigo Lisa Chesters at Ortech Industries on Friday to talk up a $15 billion "national reconstruction fund" to support Australian businesses through the post-pandemic recovery.

Both politicians said the company had the potential to scale up its new building product Durra Panel "under the right federal government".

"Australia is facing a building material shortage, making these products in our own backyard just makes sense," they said in a joint media release prior to Friday's site visit.

Durra panels are fully certified wall and ceiling panels containing an engineered biomass panel core made entirely out of reclaimed wheat straw.

Liberal senator for Victoria Sarah Henderson called Labor's plan a "magic pudding".

"[It] now has 32 top priorities. Yet, the only confirmed funding from this fund to date is a $6 million grant to their mates in the CFMMEU [Construction, Forestry, Maritime, Mining and Energy Union]," she said.

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The Coalition is talking up its own plans for manufacturing as the election looms, including $1.3 billion through its "modern manufacturing initiative", which is designed to grow and create jobs during the economic recovery.

Greater Bendigo's economy relies heavily on manufacturing, which pumps out $1.416 billion worth of exports to the rest of Australia and the world, according to economic consultants at REMPLAN.

The sector is also responsible for nearly 4000 jobs, the fifth highest of any industry behind education, construction, retail and health care, REMPLAN figures suggest.

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