Pat Conaghan (Cowper, National Party, Shadow Assistant Minister for Social Services) Share this | Hansard source

I rise to speak in opposition to the National Reconstruction Fund Corporation Bill 2022. In doing so, I say that Australia is a country that is blessed with so much. Aside from making things—and apart from a series of fantastic tourism ads—we also have significant natural resources, a motivated workforce and, most importantly, that good old Aussie ingenuity and pride in our products that we stamp as 'Australian made'.

In my electorate of Cowper, we have a number of manufacturing businesses that employ a significant number of people. In the small town of Smithtown, just outside Kempsey, is the Nestle factory. Some say 'Nestles' and some say 'Nestlay', but I'm told reliably that it is pronounced 'Nestlay'. It has been operating since 1921 and has just recently unveiled a new hot 'choccy' production line. Previously, only part of that hot chocolate product could be made at the factory, but a recent investment has meant that the complete product can be manufactured locally. The innovative new recycled cup that is produced on site will also help to reduce up to 95 tonnes of waste from entering landfill each year.

Or we can look at Planet Lighting in Bellingen, which manufactures and supplies some of the country's most advanced medical and surgical lights, as well as LED and custom lighting solutions. It's just another small but brilliant manufacturing company in regional and rural Australia. And of course everybody knows Akubra! Akubra are in Kempsey, and I'll give a shout out to Steve Kier, who is the fourth generation manufacturing there. Akubra employs dozens and dozens of people in the Kempsey and Macleay Valley areas. It is known all around the world and highly respected.

I do, however, appreciate that it would be disingenuous not to recognise that in recent decades the number of products proudly adorned with the 'Made in Australia' stamp, such as the products I have described, have been declining. A number of economic factors have fed into this. But it should be noted that this does not sit with one single government or one government term, but has been occurring gradually under several successive governments.

For all its disadvantages, the one thing that COVID-19 brought to the fore of the national consciousness was the need to protect and enhance our sovereignty when it comes to supply chains and manufacturing. Rather than being an issue almost solely discussed in this place and in corporate boardrooms, it was a topic discussed over the dinner table at home with families right across the country, not just in our traditional manufacturing towns. The sight of bare shelves and restricted pantries was more than a metaphor—it was a reality and a wake-up call for the nation.

I'll circle back to the number of economic factors that have influenced Australian manufacturing in recent decades. I don't pretend to be an economist by any stretch of the imagination, but before this place I was a small-business owner and, believe it or not, I am the one who does the weekly shop on a Sunday. I understand that higher input costs ultimately mean higher price points are required for the customer. That means reduced competitiveness both locally and internationally. For all its complexities, the success of manufacturing in this country does boil down to just that. As members of parliament, we need to ask: does this bill, combined with the current policies, assist manufacturers with input costs? I think it would be naive at best and at worst wilfully negligent to reply 'yes' when this bill arrogantly ignores one of the most prominent current input costs—that is, the cost of energy.

This is not an issue that we can sidestep with ideology. It's one cost that has already skyrocketed and has future increases of over 50 per cent on the horizon. That's not a figure I'm throwing out; this is a figure that this government acknowledged in the October forecast. This is a cost that will continue to go up without meaningful policies in play, and this bill provides the perfect opportunity to address this for our local manufacturers, yet it is stunningly omitted. Why?

I'm sure that for every member travelling around their electorate—it's particularly true in mine—electricity costs are on the top of the list of topics of conversation each day not just with manufacturers and business but also everyday constituents. I was at Expressway Spares, which borders my electorate and Dr David Gillespie's electorate of Lyne. They employ over 300 people, and in the past six months their electricity bill has doubled. That is obviously causing them great concern about being able to cover their costs. I hate to mention payroll tax because it's a tax on employing too many people, but the increase in cost is just not sustainable. I think everyone understands that if it costs more to keep the lights on at home, it's also costing businesses more to supply products, and means higher prices on the shelves. It's economics 101. Any reasonable person would acknowledge this, so I question why the government is sticking their head in the sand. Some people may agree with the proposed financial supports contained in this bill, but if not combined with a reduction to the cost of energy, any funding provided at one end will ultimately be used to combat the other end, rendering them effectively impotent and being an exercise in grandstanding and headline-grabbing rather than meaningful change. I fear this practice is becoming all too common with this government.

The second key economic factor affecting growth of Australian business that is completely ignored in this bill is the current labour market shortages. I mentioned before that electricity costs were on the top of the list of issues. Well, labour shortages would have to be number two, particularly when speaking to small businesses. It can't only be coalition MPs hearing this, so I ask again: why is the government sticking their head in the sand? If we're not willing to address these basic principles, throwing obligatory cash at would-be manufacturers is an exercise in futility.

Let's put those two issues aside, pretend that these basic principles can be ignored, take a step back and look at the funding streams and mechanics that are on offer in this bill. I think it's necessary to point out that there was an existing coalition policy in place providing funding to Australian manufacturers that was already in play and working, and that was the Modern Manufacturing Initiative. The initiative had already started to bolster our sovereign manufacturing capability, and over 200 projects had been successfully funded. This government swiftly changed that and dismantled the important initiative that already had momentum before the National Reconstruction Fund was even at a point that it could be used to replace it.

What this has meant, in very real terms, is that there has been a significant time loss in providing support. It would be one thing if that delay had been in place to sort out the aforementioned energy costs and the labour market implications, but it simply wasn't. Additionally, the method by which the funds are to be awarded is comparatively volatile when seen next to the Modern Manufacturing Initiative's model. Removing the competitive grants process is a mistake, in my view, and I should add that private economists also share the same view. The model in its current form proposes that government should acquire equity and provide loans, behaving more like a financial institution by imposing return on investment thresholds and repayment plans.

As a business owner of 18 years before coming into this place, the last thing I would ever want is to be in business with government. Whether it's federal, state or local government, keep your nose out of my business. That fact has significant implications when it comes to businesses' agility and the pursuit of innovation—two of the key driving factors in long-term success. Couple this with the psychological importance of retaining ownership of your own business, particularly when you're looking at the plethora of family owned and run manufacturers in this country, and the National Reconstruction Fund is looking more like a hurdle than a leg-up.

The ambiguities contained within this bill are also of concern, and the lack of definition and detail, again, seems endemic in Labor policies. Why are the national manufacturing priorities not defined within this bill? It leaves the door open for a continual change in the eligibility criteria based on political whims of the minister, particularly when they are able to personally appoint the chair and board members charged with overseeing the corporation and its funds.

The dismantling of the Modern Manufacturing Initiative and introduction of the proposed National Reconstruction Fund can be seen as blatantly partisan decision-making and ultimately reveals, once again, a government unwilling or unable to provide reasonable detail and definitions in their policies. The Australian manufacturing industry deserve certainty, and they deserve a clear path to grow, not ambiguity and not an unwillingness to address basic economic principles. In short, they deserve better than this.

Before I finish, I'd like to make an observation. If the National Reconstruction Fund Corporation Bill is so important, where are all the government speakers? I have watched people speak for the better part of today—and I note the member for Jagajaga is sitting on her own—

Yes, next to the member for Riverina—but where are the speakers from the government if this is so important? The only inference I can draw from the lack of speakers is that this is just another ill-considered and ill-conceived bill that the government is trying to ram through this place. I think it's demonstrative of the way this government is adopting policy and adopting the bills. To be perfectly honest, I think it's disgraceful.

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