Simon Kennedy (Cook, Liberal Party) Share this | Hansard source

The member for Holt was saying that those thinking about voting against this bill should consider the US Inflation Reduction Act. Well, there's one key difference between the US Inflation Reduction Act and the Future Made in Australia Bill 2024. That key difference is that the Inflation Reduction Act is technology agnostic. As the member for Holt exits, I'd just like her to note that the Inflation Reduction Act is investing in nuclear energy. In the US it's bipartisan, unlike the Future Made in Australia Bill, which is picking winners and certain energy technologies to invest in. This act would be unable to invest in nuclear energy, unable to invest in gas or carbon capture and storage and unable to invest in other net zero technologies that the US and many other countries around the world have.

Therein lies the coalition's opposition to this act: it's not technology agnostic and, unfortunately, it's not like the Inflation Reduction Act. It's a partisan and ideological attempt to actually railroad industry into certain ideological priorities that the Labor government is pushing. Unfortunately, Australia is at a crossroads in energy and technology, and they are reshaping our economy. Given these trends, the Future Made in Australia Bill seems to be well timed—it's got a very good tagline—but it is falling short of what it might promise. I think all members in the coalition and on this side of the House would support measures that, as this bill quotes, 'capitalise on the economic and industrial opportunities of the global move to net zero' and 'align its national security and economic interests'. If this were what this bill was truly doing, I have no doubt members on this side of the House would be supporting it.

Unfortunately, this bill is more about marketing than it is about delivery. Economist after economist is lining up to criticise it, and I'm glad the member before me was talking about the Inflation Reduction Act, because that is an act that is not ideologically pushing certain technologies. It's actually focused on outcomes, it's focused on increasing manufacturing, it's focused on jobs and it's focused on doing this with whatever the technology may be—nuclear, renewables and wind—but this is not what we have here.

In this bill we have an attempt to expand the EFA and ARENA and to establish a national interest framework. This expanded remit would fund domestic industries nominated by the Minister for Finance, and, finally, ARENA's functions would expand from pure R&D to deployment. This move to deployment and manufacturing would double up responsibilities for the Clean Energy Finance Corporation. In a cost-of-living crisis, we cannot be wasting taxpayers' money. As we talked about yesterday in the MPI, when we're spending more and more in the government sector, what we're doing is fuelling inflation. We're fuelling inflation and increasing the cost of living for millions of vulnerable Australians. This is not what we need at this time.

Furthermore, the bill gives the minister for climate change the ability to unilaterally boost ARENA's funding with the stroke of a pen. The minister for climate change can roll out up to $4 billion in an election year. This does not sound like a bona fide and genuine attempt to address Australia's manufacturing capability. This sounds like a partisan attempt to pick technologies that suit an ideological agenda, unlike the IRA—this is nothing like that act. The member for Holt could not be more wrong. They are doing this in an election year with an unfettered $4 billion—we don't know where it's going to go—with no parliamentary oversight and with no proper scrutiny. With just some delegated legislation, $4 billion can walk out the door.

This is not acceptable in a modern democracy. Australia's taxpayers are already on the hook from Labor's inflation. We've said this figure many times: $315 billion in the last two years since the election, with $30,000 per Australian household. I can tell you that the households in Cook do not feel $30,000 better off in the last two years. They feel much, much poorer. They don't even feel better off. Putting $4 billion out the door into a slush fund is just going to fuel inflation and make them even worse off again.

Australian families are already paying this price. There have been 12 interest rate hikes since the election, and we have the most stubborn core inflation in the developed world and higher taxes that come with it.

More broadly, why focus on ARENA to support manufacturing? We really should be focusing on things that are technology agnostic. Judgements made on this National Interest Framework will be made on a very narrow and flawed set of criteria. The government has provided evidence to Senate estimates that shows that these criteria will prevent key investments in sovereign capability in net zero technologies—technologies that will reduce the effects of climate change, that will take carbon out of the air and that will lower the cost of energy.

We can't invest in carbon capture and storage. I'd love the next speaker to explain why we are getting rid of carbon capture and storage. Why can't that be invested in? We can't invest in blue hydrogen. We can't invest in uranium and we can't invest in nuclear. The IRA allows these investments. Why is this government deciding not to do that? The IRA was pointed to as inspiration for this bill, but I wonder why that has been left out. The whole point of this bill, I would hope, would be to actually increase the supply of clean energy and lower its cost, but we're specifically excluding technologies.

The Business Council of Australia also do not like this. They have warned this process risks subsidising businesses that will never have a comparative advantage. Bran Black, the head of the BCA, has said all investments must be in areas in which we have a comparative advantage and where the investment helps those projects get to market faster or there is a clear national interest in making that investment.

It's not just Bran Black who's been criticising this. Danielle Wood, the Productivity Commissioner, has said:

We risk creating a class of businesses that is reliant on government subsidies, and that can be very effective in coming back for more.

She goes on to say that alternative policies, including lowering the corporate tax rate, would 'make us internationally more competitive'. Danielle Wood is not alone, with former productivity commissioner Gary Banks describing the Future Made in Australia Bill as a 'fool's errand' and saying it risks repeating mistakes of the past by propping up 'political favourites'. He said:

Seeking to obtain benefits to society through subsidies for particular firms or industries, including in the form of tax concessions, has proven a fool's errand, particularly where the competitive fundamentals are lacking.

Mr Banks somewhat comically likened this scheme to Hotel California, saying many businesses will enter the program 'but few will ever leave'.

One of those that may never leave has been pointed out by the Productivity Commission, which has talked about the $1 billion commitment to make more solar panels in Australia. I've spoken to solar panel manufacturers in the US, who struggle. They tell me it will never be competitive to make solar panels at scale in Australia. I think the Albanese government knows this as well. These programs should be subjected to this National Interest Framework, but they're not going to be. That led the Productivity Commission to say, 'Allowing sectors to bypass the NIF process would undermine its role in disciplining spending.' Yet Labor are already breaking their own rules when it suits them to push an ideological agenda and not focus on outcomes.

I would instead encourage the government to refocus its approach by looking to two key factors that underpin all industry and doing it in a technology-agnostic way. Clean energy: how can we get more clean energy at a lower cost? I would applaud an act that did that. And how can we infuse Australian industry with better technology? Rather than limiting our view to a sector-by-sector focus, we could actually increase capability across all industries—all manufacturing, be that mining, defence manufacturing, agrimanufacturing or food—and really focus on reducing the costs of clean energy.

We need affordable, reliable and clean energy. We need flexible workplaces. We need less regulation. We need to have an incentive based tax system rather than throw $4 billion of slush fund money at a problem, which Labor is prone to do. Without appropriately considered and effective programs that provide long-term solutions to these issues, all we will do is fuel inflation and fuel a cost-of-living crisis. We need a bill that truly addresses the major trends facing Australia.

Consumption of electricity is set to double globally by 2050. Seventy per cent of that growth is expected to come from APAC. Australia's per capita energy consumption is about 25 per cent above the OECD average. We need to push all technologies, not just pick a few winners. We need something that will make Australia more competitive. Governments across the globe are now focusing on strengthening national resilience. The COVID pandemic, the war in Ukraine and geopolitical conflicts have taught us this. The disruption from these events has shown us the impacts on our supply chains. We've also seen tech truly disrupting markets and old manufacturing industries, such as manufacturing, defence and mining. We need something that pushes tech and low-cost energy in all of these sectors.

The coalition in government would do three things: we would steer our nation out of our current domestic cost-of-living crisis and energy crisis; we would not simply talk about changes but meet them head-on with robust action; and, most importantly, we would make decisions that would set our country and nation up for success. We would offer the industry meaningful support before 2027. That won't look like handing out cheques and subsidies to our favourite technologies. Instead, it will be based on improving the operating environment in which businesses work. It will aim to reduce the cost of energy for all businesses. It will be aimed at helping all businesses to reduce the cost of clean energy, not picking our favourites and not picking winners.

This bill ignores some of the biggest enablers of manufacturing. We have a plan to address this. First, in terms of inflation, we would rein in inflationary spending and take the pressure off inflation. As a start, we would not spend billions on corporate welfare for green hydrogen or critical minerals. Even those companies getting production credits are winding up as much as they're investing in it. Second, we would focus on red tape and overregulation. We would prioritise winding back Labor's intervention and regulation, which is suffering our economy, particularly manufacturing.

Third, one of the biggest interventions would be in industrial relations. We would provide the Australian business community with much more certainty and ensure respectful and sector-specific bargains with unions and employers occur. When Labor abolished the Australian Building and Construction Commission, it was telling what their true priorities in this space were. Then, they were shamed into belatedly dealing with the CFMEU while rolling back regulations that added more cost. Fourth, we would reduce the tax burdens on businesses, particularly small and medium businesses. We would reduce the tax burden on smaller and medium businesses by ensuring Australians keep more of what they earn. This is in stark contrast to Labor's party policy of breaking promises on tax and increasing the tax burden on Australians to fund billions of wasteful spending like that contained in this act. We would also ensure an equal tax playing field exists with multinationals paying their fair share of tax, just like small and medium businesses do in my electorate of Cook.

When asked whether Future Made in Australia contained tax reform, Danielle Wood, the Productivity Commission chair, explicitly said this is 'not tax reform'. On alternative policies, Danielle Wood said that she would look at lowering taxes to make us more internationally competitive. Independent economist Steve Hamilton said, 'It's why I tend to favour more neutral investment incentives like lower corporate tax or accelerated depreciation.'

Fifth, on competition policy, we would give consumers and small businesses competition policy that delivers an equal footing. Sixth, on affordable and reliable clean energy, we would ensure manufacturers have reliable and cheap energy that is technology agnostic. Lastly, on technology, we would help industry through initiatives such as the patent box and the additional $2 billion on the R&D tax incentive.

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