Colin Boyce (Flynn, Liberal National Party) Share this | Hansard source

This legislation is called the Future Made in Australia Bill, but what it should be called is the 'Future is Poor in Australia under Labor' Bill. Supposedly, the Future Made in Australia agenda is targeted to address major structural and strategic challenges that the Australian economy faces. The Labor government says support is needed to crowd in necessary private investment to scale up priority industries that will help the Australian economy navigate and prosper through these challenges.

The Australian government's Future Made in Australia plan identifies renewable hydrogen—or green hydrogen—as a priority industry. This will cost taxpayers an estimated $6.7 billion over a decade in production tax incentives alone. In other words, this is just welfare for billionaires. One of the companies and people set to benefit from this welfare of billions is Fortescue, founded by Mr Andrew Forrest, who had promised 15 million tonnes of green hydrogen by 2030. Fortescue opened Australia's largest hydrogen electrolyser manufacturing facility in Gladstone in my electorate of Flynn in April this year, promising thousands of green hydrogen jobs. However, on opening it will employ just 26 people.

Back in July, Fortescue were forced to dramatically scale back their ambitions, unveiling a plan to sack up to 700 workers and postpone their ambitious 15-million-tonne target they had set for hydrogen fuel production by the end of the decade. I recently applied for a right to information access request through the Gladstone Ports Corporation. This RTI found the Gladstone Ports Corporation—the government-owned corporation—has plans for a proposed hydrogen industry and Gladstone which will need 110 gigawatts of renewable energy to produce four million tonnes of hydrogen a year. To be clear, that is approximately double the entire electrical generating capacity of the Australian grid, just for this one proposal. This is economic insanity. The proposal will require 10,000 wind turbines and 2,500 square kilometres of solar panels to be built, and 45,000 megalitres of water each year to reach this target. To produce industrial hydrogen, you need three things: cheap, reliable energy; a huge reliable water source; and a competitive market. At the moment, we have none of these.

I previously asked the following questions that have not been answered—and I will ask again: how much money will be directed to Gladstone? Where will these wind turbines go? Over the Great Barrier Reef? Where will all the solar panels go? On prime agricultural land? Is this funding for hydrogen more money and subsidies for billionaires like Twiggy Forrest? Where will the water come from for Gladstone's hydrogen industry? As the Fitzroy-to-Gladstone pipeline will provide 19,000 megalitres of water for industry at Gladstone, even with the unlikely possibility of the hydrogen industry receiving the full allocation of 19,000 megalitres, where is the remaining 26,000 megalitres of water going to come from?

There has been speculation that large-scale desalination plants could fill the void, and, according to the Water Corporation of Western Australia, seawater desalination is four times more energy-intensive than groundwater collection and more than 40 times more energy-intensive than water sources from dams. This maths just does not stand up. Of the plan to use energy to convert seawater into water and then use more energy to convert the water into hydrogen, my good friend and colleague Senator Matthew Canavan recently said: 'Dig coal, extract natural gas and build nuclear—that is a future made in Australia,' and I couldn't agree more.

Here are some facts about these three industries that those opposite might not be aware of. Coal is used to produce electricity, iron and steel, cement, aluminium, paper, and chemicals, and it is also used as a component in thousands of everyday products, including soaps, aspen, solvents, dyes, plastics and carbon fibres. More than 220 tonnes of coal is required to build a wind turbine. Australia exported $127 billion worth of coal in the 2022-23 financial year. The coal industry employed 48,000 people in 2023. The Australian gas industry is a mainstay of the national economy and is an irreplaceable ingredient for our manufacturing base, driving billions in economic activity through its myriad through-chain applications. Gas in Australia generates $121 billion in economic activity, underpinning 5.25 per cent of GDP, up 42 per cent on the previous year. Australia's gas sector and its network support 258,000 full-time local jobs, up 17,000 on the previous year. Gas is vital and irreplaceable feedstock in the making of many things we need for everyday life, including plastics, fertilisers, pharmaceuticals, rubber, propellants, refrigeration, adhesives and cosmetics.

The Productivity Commission says a $1 billion commitment to make more solar panels in Australia under Anthony Albanese's Future Made in Australia program should be retrospectively subject to a tougher Natural Interest Framework test. Allowing sectors to bypass the National Interest Framework process would undermine its role in disciplining the spending, yet Labor is already breaking their own rules when it suits them. Key elements of Labor's Future Made in Australia agenda, including the $22.7 billion PsiQuantum contract, bypassed the National Interest Framework and sector assessments. There are serious questions to answer about the decision to make this investment, with it becoming increasingly clear that Minister Husic decided to invest in this business independent of any department appraisal, analysis or recommendation. Treasury were not consulted prior to the decision to invest in solar manufacturing, and their subsequent analysis has said that this is not a sound investment. The Productivity Commission were not consulted on details of other proposed investments prior to their announcement, and we are already seeing that this policy is not effective. The Solar Sunshot program has been refused backing by the Treasurer's own secretary, with the main proponent of the policy, who stood alongside the Prime Minister as he announced the initiative, cutting back its staff and replacing its CEO.

Labor's production credits are failing to deliver for the struggling nickel industry, with the promise of future subsidies not holding back the tide of international price pressures and rising domestic prices through energy, tax and workplace laws. This nation is already feeling the effects of their attack on the manufacturing industry. We're seeing a tripling of manufacturing insolvencies under the Labor government. Labor's record on essentials for Australian manufacturing is a disgrace. The cost of energy continues to rise thanks to Labor's renewables-only policy and is only going to keep going up under this Labor government.

Labor's renewables-only plan will impose 58 million solar panels, 3½ thousand new industrial wind turbines and up to 28,000 kilometres of new transmission lines across the country. Energy experts have warned that the cost of Labor's rollout will be between $1.2 trillion and $1.5 trillion. Labor will also require 34 times the current amount of utility-scale variable renewable energy in the national electricity market to meet its hydrogen export ambitions. A recent analysis shows that there are some 17,000 wind turbines proposed to be built across the Australian landscape. Under this plan we're going to see blackouts and brownouts. We don't want a California type situation in our country where there are scheduled blackouts and brownouts, because businesses simply will not stay here. High-energy-use businesses won't compete; they can't manufacture in an environment like that. You can't run a full-time economy on part-time power.

Like the other 19 of the G20 countries, the biggest economies in the world, Australia needs to take the decision that is right for our country, and that is nuclear energy. There are around 439 operational nuclear plants in the world. Australia hosts 33 per cent of the world's proven uranium deposits and is currently the third-largest producer of uranium after Kazakhstan and Canada. In 1958, Australia opened its first nuclear reactor, Lucas Heights, in the southern suburbs of Sydney. We've seen this government introduce overbearing industrial relations laws, which are making life tougher for Australian businesses by increasing costs, complexity and red tape and will likely lead to job losses. We've seen a Labor-Greens government introduce safeguard mechanisms, which represent one of the world's most disgraceful carbon taxes and will only see prices soar even further for struggling businesses. Every time they are in government, Labor make sneaky deals with the Greens against the interests of families, businesses and our manufacturers. It is as simple as this: no industry and no manufacturing means no jobs and no future for making things in Australia.

The coalition is not the only one raising serious concerns with Labor's plan. Danielle Wood, who is the Chair of the Productivity Commission and the government's key economic adviser appointed by Jim Chalmers, has said:

If we are supporting industries that don't have a long-term competitive advantage, that can be an ongoing cost. It diverts resources, that's workers and capital, away from other parts of the economy where they might generate high value uses.

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 said:

… your infants grow up, they turn into very hungry teenagers and it's kind of hard to turn off the tap.

When asked whether Future Made in Australia contained tax reform, Ms Wood explicitly said, 'This is not tax reform.' On alternative policies, including lowering the corporate tax, Ms Wood offered, 'It would make us more internationally competitive.'

Danielle Wood is not alone, with former chair of the Productivity Commission Mr Gary Banks describing the FMIA as a 'fool's errand' that risks repeating mistakes of the past by propping up 'political favourites'. Indeed, 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 likened the scheme to 'Hotel California', saying many will enter the program but few ever leave. In response to this, the Prime Minister called Mr Banks a flat-earther.

Another eminent economist, Professor Richard Holden, defended Mr Banks, saying the Prime Minister's insult was wrong and uncalled for. Professor Holden said:

The PM says all the wrong things. … And his main argument for subsidies is that other countries are doing it. Like a primary school kid telling a teacher: "but he started it!"

Steven Hamilton, an independent economist, has said:

There are many problems with industry policy, and this is a big one. It's why I tend to favour more neutral investment incentives like a lower corporate tax rate or accelerated depreciation.

He also said:

I thought we'd learned these lessons, but apparently not. The bad old days are back.

When comparisons with the US IRA were drawn, Hamilton said:

With this scale, it can produce at reasonable cost. [That] is a totally different proposition to doing so in Australia.

Without a large domestic market, exports are the only way for Australia to achieve scale. But we are so far away from the kinds of markets we could sell into that shipping costs put as at a distinct disadvantage. No amount of government subsidy is going to get around that.

It's not just economists questioning Labor; it's their union backers as well. The Australian Manufacturing Workers Union, reported by the ABC as 'the dominant left faction union and a source of talent for Labor in parliament', don't want Treasury to have a central role in Future Made in Australia. They believe Treasury has limited expertise. Australians want and deserve something better. The coalition government will do three things: we will steer our nation out of the current domestic crisis; we will not simply talk about the challenges of our time but meet them head-on with action to carve out a more secure future; and, more importantly, we will make decisions that set up our nation for success for generations to come.

The Flynn electorate is a largely blue-collar electorate, consisting of diverse industries such as mining and resources, agriculture, and heavy industry, with many small and medium-sized businesses. However, every single one of these industries is under attack from the Labor government. I will continue to fight for these hardworking men and women who pay Australia's bills and fund Australia's schools, hospitals, roads and so on. That is why I oppose this Future Made in Australia Bill. In other words, the future is poorer for Australia under this bill.

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