Sussan Ley (Farrer, Liberal Party, Shadow Minister for Women) Share this | Hansard source

I meant no imputation of the minister in negative terms. If it will assist the rather difficult member for Lyons, I'm very happy to withdraw it so I can get on with the important issue of the debate.

The government was disingenuous at its jobs summit and it's disingenuous about its consultation for this bill as it cuts corners to get this flawed bill through the House. The minister may be impatient when he is trying to ram through his flawed bill, but he has been on a real go-slow in his ministerial duties. Since the election, the government has dithered and delayed, failing to support our manufacturers in any substantive way. The government has delayed the provision of independently assessed grants funded by the coalition, conducted excessive politically motivated reviews and chopped and changed the national manufacturing priority areas. Entire industries have been put in a holding pattern whilst international competition continues to rise. The time it will take to establish the NRF will cumulatively cost our manufacturers some two years before they start seeing any government support for their work.

Establishing something like the NRF takes time—time to legislate, time to attract a board, time to hire staff, time to establish process, time to prepare funding streams, time to market, time to select applicants and time to settle contracts. The government has modelled the National Reconstruction Fund on the Clean Energy Finance Corporation, the CEFC. However, the National Reconstruction Fund is more complicated, as it invests in multiple industries. History shows us that the CEFC took three years to design, legislate and start making investments, with the Gillard government saying this was necessary due to the complexities involved. Indeed, so great was the task that a full Treasury review was commissioned to design the scheme, and let's not forget that this was for a fund into just one industry.

Following all that work for what was a complex initiative, by the Gillard government's own admission, the CEFC was established in August 2012. The first investment was made in June 2013, some 10 months later. The government has signalled its intent to get money out the door as quickly as possible, but at best, it will be over a year from the election that the corporation will even effectively be formed and quite possibly another year before funding is issued to manufacturers. This is lost time for our manufacturers, prospective workers and economy, and it dampens prospects for investment. Our manufacturers can't afford to wait as their competitors forge ahead. Those on the frontiers in tech or on the cusp of medical breakthroughs and any manufacturer with a cutting-edge offering cannot sit idly.

The government announced that the National Reconstruction Fund should be up and running by next financial year, but they haven't committed to a launch date. They know it will take time. That's why they are rushing it through the parliament. They were quick to stop, stall and stifle any industry program from the coalition government but failed to replace it with any program. Worse, they are now rushing through a lengthy and lacking bill to compensate.

The coalition government's Modern Manufacturing Strategy was delivering for our manufacturers, and dismantling many of these measures was a mistake—a spiteful and partisan mistake by a bad Labor government—undermining what could have been a bridging gap between our programs in government and a properly designed and thoroughly consulted national reconstruction fund. Industry has told us that this type of funding model takes years to get right. Those will be lost years for manufacturers. Consultation has been rushed. Parliamentary oversight has been sidestepped.

This bill poses more questions than answers. The government's own departmental consultation only closed last Friday, and the government will have you believe that this feedback was thoroughly reviewed and workshopped with experts—and changes were made to the bill in only two working days. What a joke! The minister was clearly committed to reviewing the consultation—socialising with celebrities at black-tie events in Los Angeles and having birthday burgers with his caucus colleagues in the Hunter. We know ambition when we see it. I wish the minister for industry were as ambitious for our manufacturers as he is for himself.

The government is wilfully avoiding scrutiny and obfuscating consultation. That's because its flawed bill seeks to introduce significant ministerial discretion, which every taxpayer should be concerned about. The government really does give meaning to that word 'shortlist', because only a special handful have had a chance to contribute to the design of the bill. Unsurprisingly, this list included some frequent flyers to offices of those opposite—the Australian Council of Trade Unions, former Labor cabinet minister Anna Bligh who heads up the ABA, and Industry Super Australia. Who would have thought. The Albanese accord strikes again: donations go in and policy comes out.

The bill hasn't passed but unions are already licking their lips at the prospect of the NRF, and they've listed their demands: a third of the board positions handpicked by the Council of Trade Unions, positions which will determine who gets access funding—an enterprise agreement with the unions a precondition to even making an application. Applicants must not have engaged in conduct that treats workers unfairly. That's a very vague way of saying if you're not with them you're against them. And they're demanding that applicants commit to direct employment, and if contractors or an indirect workforce is used they must be employed on the same conditions as the direct workforce. This essentially enshrines compulsory unionism, to be a successful applicant.

The minister must, today, rule this out and immediately distance the government from such egregious outcomes. Of course, Labor will consult their faction bosses, the union movement and their donors from Industry Super. But given the significant ministerial discretion in this bill, it became clear something was not quite right. It says a lot about this bill that Ethical Clothing Australia, a CFMEU front, believes they stand to gain from the NRF as recipients of a $6 million commitment before the election. The minister must explain how, during the election, support was promised from a fund that (1) hasn't been established, and (2) makes investment decisions via an independent board that is yet to be formed. It defies logic and certainly does not reflect the transparency and accountability the government led the Australian people to believe they would exemplify in office. It's the quid pro quo of the Albanese accord: money comes in; policy goes out. What a joke.

This is symbolic of a deeper structural problem with this legislation. It's the typical 'cloak and dagger' politics those opposite engage in to benefit trade unions. In opposition, the Labor Party jumped up and down in fits of hysteria about what they perceived to be unfair allocations of funding by way of competitive grant processes. They claimed these were terrible, which their own review cleared as being completely appropriate. According to those opposite, grant funding is so terrible that this bill will outlaw grants which our industries have come to rely on, so terrible that the minister has instituted grant programs to work alongside the NRF. Can you believe anything that comes out of this government?

The government promised the Australian people transparency, but what this bill seeks to enshrine by way of ministerial discretion is opaque beyond belief. This is incredible. Out of everyone in the hardworking textile industry, a union front gets the first funds from the NRF slush fund. Only the Labor Party would endorse an organisation with a rampant history of criminal conduct. Corrupt unions are doing well under Labor. No surprises there.

This decision will not provide any certainty to the taxpayer that this fund will be administered in the transparent and independent manner that the government promised. The Australian public aren't stupid. They know the fix is in. We know the Prime Minister and the minister for industry have provided assurances that the fund will be overseen by an independent board, but it's becoming clear that this board is likely to be stacked with union mates. It's difficult to foresee any other outcome when their first decision was to hand money to the CFMEU. And this is a minister with form.

Since the election, it's been revealed that Minister Husic rejected recommended ministerial appointments made by his department and instead installed others. More alarmingly, Minister Husic has made questionable appointments to committees demanding subject-matter expertise. Take his recent appointment to the Robotics Strategy Advisory Committee. Did he appoint a scientist? No. Did he appoint an engineer? No. Perhaps he appointed the head of an industry body? No. Minister Husic appointed the president of the Australian Manufacturing Workers Union, Andrew Dettmer. Mr Dettmer is not your run-of-the-mill union boss. He's a self-labelled socialist, who on social media publicly called the Leader of the Opposition a pig and called the Productivity Commission a front for neoliberal ideology. Sounds like he might also be moonlighting as the Treasurer's ghostwriter. A union boss, not a scientist, not an engineer—but, on Mr Dettmer's watch, the AMWU has donated millions of dollars to the ALP.

This dangerous bill allows the minister to appoint members of the board, the chair and indeed the committee. The minister will have direct discretion to appoint board members overseeing the rollout of a $15 billion taxpayer fund, leaving the door open to a situation where significant funding could be ticked off or denied at the whim of union officials. The coalition will be engaging with good faith in the Senate processes underway, unlike this bad Labor government. If the Senate processes ask for significant amendments, we will work constructively to that end. We will try to make a bad bill less bad.

But there are also issues with the funding model, which will enrich vested interests and leave small and family manufacturers behind. By ditching competitive grants with robust processes, the government cuts out a stream of funding which may be more accessible to many smaller manufacturers that just don't have the capabilities to apply for complicated equity or loan programs.

Another question about the funding model is what will happen to failing or failed loans, should an NRF recipient encounter economic uncertainty. At what point would the corporation withdraw its loan? How will the government manage these situations? Examples from similar ALP programs, such as the Victorian Economic Development Corporation, have resulted in manufacturers being uprooted, with the taxpayer footing an expensive bill.

There is no clarity on thresholds for applicants. Presuming that loans and equities will generate a higher threshold for applicants, how many manufacturers will be ineligible to apply? Will some industries be too risky to invest in? And what will happen to industries with diminishing margins, threatened by international competition? The NRF, by design, risks excluding certain industries and could become an idle fund if the thresholds are excessive. There are also concerns about crowding out investment. Government intervention will artificially distort capital markets. Each sector has different challenges, and a cookie-cutter approach won't satisfy each of these. This is just an old-fashioned Labor policy of spraying money around indiscriminately. If these investments were so promising and rates of return were viable, then why hasn't private capital funded them already?

The equity funding model is flawed because it also disregards the importance of ownership, which the minister would have registered if he'd actually taken the time to listen to manufacturers instead of prescribing what he thinks works. Many manufacturers that are family owned businesses would be reluctant to give up control of their business through an equity model.

This funding model will stifle innovation. It's a funding model that does not entertain failure, and, in some industries, innovation comes with an inherent amount of risk. The pressure of providing positive returns will disincentivise innovation, something which has put so many Australian success stories on the map.

This funding model is seriously flawed—even more so because, on a political whim, you could cut a whole industry out of the national conversation.

The government have shown they play politics with funding, and this bill does nothing but undermine investment certainty. What this bill shows us is that this Labor government is more interested in pursuing its agenda than keeping the course for our manufacturers. Prior to the election, this fund promised to be everything to everyone. These new priorities are vague, and they don't provide the focus needed to drive investment into specific sectors where we can achieve critical mass.

That's why the coalition established six critical focus areas with specific priorities to maximise the impact of our resources. In their desire to establish their own NRF, Labor have spitefully redirected funds away from the National Manufacturing Priorities. Indeed, the AI Group note in their submission:

Cuts to the Modern Manufacturing Initiative and Entrepreneurs Programme in 2022 deprive the NRF of two main pipelines for preparing innovative SMEs to be investment-ready.

This was all done to lay the ground for the National Reconstruction Fund, a fund which, from the government's own legislation, will see zero dollars this financial year. With a tenth of the investment, the coalition government made real strides to support industry through some of their toughest years. Instead of supporting manufacturing in a bipartisan manner, the government has embarked on a brazen attempt to undermine the coalition's previous policy priorities, deprioritising our investments in the space industry, food and beverage, and complementary medicines. Complementary Medicines Australia noted in their submission that: 'Unlike the previous government's Modern Manufacturing Strategy, the NRF does not specifically identify complementary medicines as a high-value priority growth area. Furthermore, the funding mechanism provided by the NRF will not be as appealing to industry and it will therefore not deliver the same benefits as a model which provides grant funding.' The government must explain what, other than an election, precipitated this change.

The government's decision to abandon Australia's space industry as a policy priority has left a previously revitalised sector in a state of confusion and uncertainty. The minister has provided no reasoning as to why this massive policy shift has occurred. The industry was simply left to find out from department officials at Senate estimates that it was no longer a priority for this government. This important industry was set to create opportunities to grow, whether it be in rocket engines, component parts or satellites. Our dedication signalled our commitment to the industry and helped enable the first of three launches by NASA in the Northern Territory. I would note that there are Australians of whom we should be very proud who are heavily involved in further planned NASA launches to the moon.

The Labor government were gutless in explaining their reasoning why this was no longer a priority. We have already heard from industry that their decision to wipe space as a priority will see manufacturers leave our shores. I call on a minister or other government member to come to this place and explain why they have taken this ill-informed step. This bill does nothing to provide a rethink or reconsideration of support to this crucial industry. Scrapping the space industry as a policy priority is short-sighted and it strips the manufacturing industry of a key pillar for forward-looking policy.

We are also concerned about the decision to scrap food and beverage manufacturing as a standalone priority for Australian industry. We laid out an ambitious plan to double the value of this industry by 2030. This boost could not be more crucial at a time when Australians are struggling with cost-of-living pressures.

We know that in the government's haste to put this legislation before the House they have ruthlessly ripped funding away from the successful Modern Manufacturing Initiative, which was delivering for families across the country who are feeling the pinch at the check-out. Every time they push the trolley through the check-out the cost of groceries is going up. The government could prevent future price shocks by encouraging sovereign capability in this sector, but instead they have chosen to sideline these crucial industries by lumping them in with an array of other sectors. The minister for agriculture even went so far as to state that:

Unlike many other countries, Australia does not face food shortages.

He must be forgetting some of those shortages we had earlier this year.

The Prime Minister said at the last election he would leave no-one behind. He is leaving whole industries behind. Every incoming government has the right to develop policies based on their priorities. We get that. However, it must be done based on expert advice, especially for our sovereign manufacturing base. Changing these priorities leaves investment decisions in limbo.

We had six national priority sectors under our Modern Manufacturing Strategy. We have significant concerns with this bill, its financial implications and the investment uncertainty it will create. In fact, similar financial structures to the one underpinning this bill have drawn criticism from the IMF, which states that:

Implementation of below-the-line activity through newly created investment vehicles (National Reconstruction Fund … should be phased appropriately, and, more broadly, a proliferation of such vehicles should be avoided.

This is the important part. The IMF said:

Cost-of-living support in light of high energy prices should be targeted, aimed at protecting vulnerable households and small viable firms.

An initial $5 billion appropriation is provided upon passage of the bill, but the entirety of the remaining $10 billion will not be subject to further parliamentary approval, with the bill's explanatory memorandum stating:

… it is not necessary to provide for further parliamentary scrutiny of the timing of particular transfers to the Special Account.

With the Labor Party in this Albanese government, there is always a need for further scrutiny. This bill's explanatory memorandum states the remaining $10 billion appropriation can occur any time in the six years before July 2029. Ultimately the government's design choices in this bill add significant fiscal uncertainty around $15 billion that taxpayers have had to borrow by scrapping the established Modern Manufacturing Strategy and failing to address the numerous concerns our manufacturers face. So we don't support this legislation and we don't support the government's vain attempts to extricate itself from coalition policy that was delivering for Australian industry.

At his recent address to the National Press Club, the minister for industry said:

Australia can be a place that makes things. But it won't just happen because we declare it so.

Well, Minister, we do make things here in Australia, but that is at risk because of this government's go-slow. This government does nothing but pay lip service to our manufacturers, declaring it so without actually acting on the things our manufacturers are crying out for. Our industry deserves better than a minister who claims to represent them—an 'Aussie made' in public—but does something very different behind closed doors.

The opposition will always stand with our industries, who are facing significant and growing challenges. We're out there in those industries, on those shop floors and at those manufacturing sites talking to the workforce, talking to the manufacturers, talking to the small businesses and talking to the medium businesses, and we're listening to what they tell us. They're telling us that their key three priorities of energy prices coming down, workforce shortages being desperate and disrupted supply chains are the three priorities they want this government to address in terms of its manufacturing policy, right here, right now, in this parliament. This bill does nothing to address those priorities. It addresses instead the priority of the Labor Party, which is the priority of the unions. That has been made very clear by the heavy involvement of unions that are anticipated to be on the board of this National Reconstruction Fund.

The opposition stands with our industries, who are facing significant and growing challenges. We understand those challenges. We're there for our industries. We're backing them in—unlike this Prime Minister, who said he would leave no-one behind. He is leaving our manufacturing industries far behind. We will fight every day to ensure that their interests are front and centre. The coalition will be opposing this bill.

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