Bert Van Manen (Forde, Liberal Party) Share this | Hansard source

It's always a pleasure to rise in this place and speak about business in this country and the wonderful job they do for us as a nation. We all know that we have the capabilities and expertise in this country to manufacture a wide range of high-quality products. It was the previous coalition government that understood this best and understood how we could harness the potential of our manufacturing base, particularly in advanced manufacturing, to drive our economy and ensure sovereign capability. That's why the coalition, when we were in government, implemented the $2.5 billion Modern Manufacturing Strategy, which was designed to position Australia as a globally recognised, high-quality and sustainable manufacturing nation. This support sought to bolster our sovereign manufacturing capability and empowered over 200 projects across Australia. It was all about government backing enterprise led growth, strategically investing in harnessing our world-class science and research to secure our manufacturing future.

Sadly, the proposed National Reconstruction Fund is the Modern Manufacturing Strategy's polar opposite. This policy proposed by the government sets the tone for the overarching policy direction of this Labor government, an agenda guided by sheer arrogance. It sets out to tell business what Labor thinks they need, instead of addressing what they want. The coalition government's manufacturing funding model centred on a competitive grants program with extremely robust processes, awarding funding to businesses that were investment ready. Labor's preference, however, is for a poorly designed funding model built on the government having to provide equity and loan schemes, which has raised far too many unanswered questions. As I've said many times in this place since the election outcome, Mr Deputy Speaker: have a look at what the government does, not what it says, because nine times out of 10 they are two very different things.

In increasing Australia's manufacturing output, the role of government should be not to dictate but to ensure that business are able to operate in an environment where they are best placed to compete on a global scale. Government equity and loan schemes are less accessible than grants, and manufacturers may struggle to meet return-on-investment thresholds or put together the detailed business cases in-house. Furthermore, an unanswered question is what will happen to failed or failing loans or business ventures. That is a key part of the business development process. As unwelcome as it is at times, it is the way the market cleans out the system. How will eligibility be met on these loans when certain industries have margins that are too small or the approval is seen as too risky? What about private equity? The Australian Bankers Association have stated that banks are already involved in providing loans in the priority areas identified in the consultation paper, meaning that the government will be discouraging further private investment instead of addressing current issues, such as input costs, noted by industry stakeholders. That is certainly the feedback I get from my manufacturers, Mr Deputy Speaker, as I go around my electorate of Forde. Compounding their poor policy direction is the failure of this Labor government to deal with the economic issues facing businesses more generally, let alone manufacturing. Without policies that create strong economic conditions, any government spending is in vain. We see before us that this government fails to deal with these issues. Rising energy prices, labour market shortages and disrupted supply chains are issues that must be addressed if we want to see our manufacturers succeed. Power prices have been forecast to spike by over 56 per cent over the next two years, with many businesses across the country already feeling the pinch—sadly, some may be pushed to the brink. Inflation remains far too high, with every increase in interest rates not only impacting consumer spending but also curtailing business confidence.

This government loves to congratulate itself on its extensive budget repair that it has undertaken from its midyear budget last year. However, when pressed, the government struggles to be specific, not only noting that it has sought some vague plan—which is not unusual for Labor governments—while spending continues, as with this proposal, off the balance sheet and hidden away from the budget. While manufacturers across the country struggle with rising power prices, inflation and rising interest rates, the government is failing to enact any productive policy that will address these issues. It likes to say it has a plan, but in reality it has no plan to address these economic conditions that are impacting our economy, hurting everyday Australians and impacting our local businesses.

What I find very interesting about this proposed National Reconstruction Fund is that on one hand the government is talking about wanting to build and grow manufacturing in this country while another piece of legislation that is before this House will do exactly the opposite—that is, the proposal by this government in the TLAB 1 bill to change how franking credits can be paid in the event of capital rising. I am sure that's just the thin end of the wedge of what the government wants to do with franking credits, but let's leave it where it is as this point in time—we all remember the 2019 election, when Labor wanted to change the way franking credits worked, very substantially. Let's just focus on the impact on manufacturing businesses—particularly large listed manufacturing businesses—of this franking credit proposal. One of the best ways and one of the cheapest ways for business to obtain or retain capital to grow and develop is by re-investing the profits of that business. The beauty of our franking credit system is that those companies will pay tax on their profits and then they will make a decision at board level of how much of that profit they wish to distribute to shareholders via a franked dividend and how much they wish to retain for capital to grow and develop their business. If you do that, the consequence is that you build up a pool of franking credits in the franking credit account on your balance sheet. If they say, 'We're going to raise some more capital in addition to that to grow our business,' and then at some undetermined future point say, 'We want to pay out some more franked dividends,'—whatever that amount may be, because the company makes that decision in its best interests and the best interests of its shareholders—the company may well be prevented from paying out that dividend in a franked form. That is complete and other nonsense.

This is the hypocrisy of this government: on one hand you're talking about building and developing our manufacturing base and giving growing businesses the ability to grow, yet at the very same time you have another piece of economic policy over here which mitigates against exactly that. Where's the economic sense in that? There is none. The government should have a good hard look at itself and, if it's genuine about something like the National Reconstruction Fund, then maybe it should have a look at some of the other policies it has in place to see if they're actually mitigating against what it says it wants business to do. Why it's the case that the government can't work that out for itself is beyond comprehension.

In contrast to that is the coalition's record from when we were in government. As I mentioned earlier, as part of our economic recovery from the pandemic, and earlier, the coalition had the Modern Manufacturing Strategy. This was a $2.5 billion policy to provide pathways for manufacturers to expand across six key priority areas: medical products; resource technology and critical minerals processing; food and beverages; defence; recycling and clean energy; and, importantly, space. The Modern Manufacturing Strategy's aim was to secure our sovereign manufacturing capability and to unlock a new generation of high-wage, high-skill and high-tech jobs. By listing our local space industry as a national manufacturing priority, the coalition understood and appreciated the extensive opportunities that could be taken advantage of by developing that.

But I can also add that prior to the Modern Manufacturing Strategy we had the Modern Manufacturing Fund. A number of businesses in my electorate, and across Logan and the northern Gold Coast, were successful in obtaining funding through the Modern Manufacturing Fund. Anybody in this place who wants to say that manufacturing in this country is dead or dying should maybe come and have a tour through some of the industrial estates around this country. I never cease to be amazed by the quality of small-, medium- and large-manufacturing businesses across my electorate—or even a little outside my electorate, in the Treasurer's electorate of Rankin. These are businesses that are using innovative ideas, or re-using the technology they have already developed for a particular product segment in the marketplace. They're taking the lessons from those and developing new products for a new market, whether in defence or in other areas

I just want to touch on a few of those businesses in the remaining time I have. Take a company like Merino Country Australia at Shailer Park. They received $400,000 through our Modern Manufacturing Fund to adopt new technologies for sewing machines and garment production in order to support the international expansion of their wool and clothing business. Or there is ATP Science, which is at the forefront of the fitness industry and which experienced tremendous growth. To support that demand, ATP received $1 million in funding to expand production of their unique high-protein products.

Under our Sovereign Industrial Capability Priority Grants, Holmwood Highgate at Loganholme received $1 million to enhance the manufacture of bulk liquid transport equipment, not just for the commercial sector, which they have done a fantastic job in for nearly 70 years, but for where they have branched off into defence industry. That isn't just for the support of our Australian Defence Force; they're exporting that technology to the world. Frontline Manufacturing at Meadowbrook received $710,000 to purchase equipment that would allow them to manufacture metal plate for armoured fighting vehicles in their big factory at Redbank, in conjunction with Rheinmetall.

These competitive grant processes have provided businesses with the freedom to follow the most appropriate road to prosperity and growth, and these successful local grant recipients developed a vision for their future and, in turn, reaped the benefits. This successful process of delivery is in direct contrast to the government's plan for a loan-and-equity scheme rolled out against an investment mandate which crudely dictates how a business must implement its strategies for growth. Government doesn't know what business is good at or capable of doing, and government should stay out of businesses' lives.

But what we are seeing now are proposals by this government not only to have an equity stake in your business but they want an equity stake in your house and they want an equity stake in your super. What else does this government want an equity stake in in your life? We should oppose this bill, because it's bad policy and it's bad for the country.

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