Prime Minister Julia Gillard has made a pitch to blue-collar workers, unveiling details of the Government's new $1 billion jobs package.

The legislation is designed to improve the benefits Australian companies see from large-scale projects undertaken in the country.

Ms Gillard says concerns have been raised that major projects undertaken by multi-nationals tend to lean towards using international suppliers and importing material and equipment.

Under the plan, large companies will be required by law to give local firms the opportunity to bid for contracts before they are sent offshore.

"When there are projects worth more than $500 million, they will need to have an Australian industry participation plan," Ms Gillard told a press conference in Melbourne.

"They will need to look to how they can involve Australian businesses and create Australian jobs in what they do."

Ms Gillard says the plan is designed to keep the local manufacturing industry competitive despite the high Australian dollar and other economic pressures.

"I believe that modern Australia can have a great blue-collar future," she said.

"We can continue to be a manufacturing nation, we can be a nation in which people make their living through blue-collar jobs that aren't intermittent or insecure or low paid, blue-collar jobs that are highly skilled and highly paid.

"But we aren't going to get there by accident. We have to make sure that we shape that future."

'Big tick'

Sorry, this video has expired AMWU welcomes Govt job plan ( ABC News )

A series of new manufacturing precincts will also be established to develop new products and skills to break into new markets.

Industry and Innovation Minister Greg Combet says the precincts are a key part of the plan.

"A lot of our research effort in Australia is pure research and a lot of great research has been done," he said.

"But we don't perform well by international comparisons in commercialising the research effort that we make in this country.

"And I think one solution to that is to get industry far more active in directing the research effort we have."

The Government predicts the plan will inject $1.6 billion into the economy.

Ms Gillard says the plan will be funded by removing a tax concession for big businesses.

"Bigger businesses currently benefiting for a special research and development tax advantage will be forgoing that advantage," she said.

The national secretary of the Australian Manufacturing Workers Union, Paul Bastian, says the jobs package largely reflects what it has been campaigning for.

"We're now going to have in legislation that any project worth more than $500 million in this country will be required to have an Australian industry participation plan to show how those projects are giving our manufacturers the opportunity to bid on a fair and reasonable basis for work," he said.

"That is a big tick for us."

Peter Anderson from the Australian Chamber of Commerce and Industry (ACCI) says the jobs plan deserves support.

"It is a plan from the Gillard Government that should have a strong measure of industry support," he said.

"Not in every detail, but the government is trying to support competiveness in the economy, and even though there's plenty of other criticisms the business community has of government policy, this one's going down the right path."

'More red tape'

Sorry, this video has expired Job package a broken promise rebadged: Mirabella ( ABC News )

But Opposition industry spokeswoman Sophie Mirabella has labelled the announcement a "bitter disappointment".

"The keystone of the announcement are these industry hubs. What we see is that they are a re-badging of a promise from 2011 to have industry research innovation hubs and that hasn't happened," she said.

"If Labor couldn't deliver those, they can't deliver on their new promises."

She also warned against "more red tape and more bureaucracy".

"We don't need the over 20,000 new regulations that this Government has introduced to make doing business and making things in Australia more expensive.

"The Government needs to look at the things that are slugging manufacturing, and on top of the list is the carbon tax."

Ms Mirabella repeated the Opposition's pledge to repeal the carbon tax if it wins the election.

Greens MP Adam Bandt says the Government's plan lacks teeth and wants it to go further and mandate local content in large projects.

"The Greens are worried that this will create jobs in the same way the mining tax creates revenue for the country.

"It's not enough to simply make these big miners place an ad in the paper and talk to local firms - they need to use them."