New laws will be introduced to support Australia's manufacturing industry as part of a $1 billion federal government package announced Sunday.

The government's A Plan for Australian Jobs aims to shore up local jobs and tap into a bigger slice of the resources pie while making a concerted play for the growing Asian market.

The plan is the government's long-awaited response to the manufacturing taskforce and is predicted to be worth $1.6 billion a year in extra work to local business.

It has been backed by the manufacturing union and key industry players.

A key plank is an Australian Jobs Act that requires projects worth more than $500 million to include an Australian Industry Participation plan, levelling the playing field for local suppliers.