Zoe Daniel (Goldstein, Independent) Share this | Hansard source

'Our land abounds in nature's gifts, of beauty rich and rare.' Dorothy Mackellar got it right: we are indeed endowed with great and unique riches. Over the decades, Australia has ridden on the sheep's back and accelerated our prosperity courtesy of gold and, more recently, the export of mineral resources, including the energy locked into thermal and metallurgical coal. It's been a case of 'dig and ship', but those days are coming to an end. At some point, sooner or later, the nations with which we trade will no long be prepared to allow us to export our carbon pollution.

Europe is already introducing a carbon border adjustment mechanism to apply in full from 2026. The mechanism, as the EU says, is designed to ensure that the carbon price of imports is equivalent to the carbon price of domestic production and that the EU's climate objectives are not undermined. At some point, carbon border tariffs will spread beyond the EU and will threaten the value and quantity of the coal and gas exports which have underpinned our prosperity since the mining boom accelerated in the early 2000s.

Fortunately, we do have a choice. We have a choice and an opportunity. As a continent, we are uniquely endowed with sun and wind. Make the right policy decisions and we can be a clean energy superpower. Indeed, it's probably the only way that we can endow our children with the prosperity we have been so fortunate to enjoy, with secure, well-paying jobs in clean, green technology and energy. Ignore the opportunity and we run the risk of condemning our children to being the first generation in recent Australian memory to have a lower standard of living than their parents. That's not the legacy I want to leave behind from my time here in parliament.

That is why we are here right now debating and discussing the Future Made in Australia Bill, declared by the government to maximise the economic benefits of a net zero workforce and economy. But, as is so often the case, the devil is in the detail.

Considering the existential climate crisis in which we find ourselves, and the decade of delay and denial of the previous government, market forces alone will not get our economy to net zero. Add to that the Biden Administration's Inflation Reduction Act and the billions of dollars of climate-related investment it's underpinning in the United States. Already, it's sucking investment out of Australia. Companies which had plans to innovate in Australia cannot resist the financial benefits and opportunities offered by the IRA. As well, China is throwing everything at carbon reduction technologies, with recent record investment in renewable energy. These international developments mean a new approach is needed, an overarching strategic partnership between government and industry here in Australia—one which coordinates efforts across government and forms a genuine partnership with industry, one that is underpinned by a strategy which invests in the renewable opportunities of greatest potential as long as they're driven by the evidence and the data, and with minimum risk to taxpayers.

We've been down the path of picking winners before, and it took decades of effort by governments led by Bob Hawke, Paul Keating and John Howard to get us out of the blind alley of complacent underperformance. The Future Made in Australia legislation represents a step forward in this direction, but I would argue it's lacking in both ambition and rigour. Let's pause for a moment and check what we're up against. China is spending $650 billion a year on clean technology—much more than either Europe or the United States. China is way ahead of everyone else in taking up renewables. It has more than 50 per cent of battery installations worldwide, 70 per cent of wind turbines and 75 per cent of offshore wind.

This legislation identifies two streams for investment. The net zero transformation stream appears sufficiently rigorous to meet its objective of triggering and facilitating net zero industrial activity. On the other hand, the defined scope—or lack of it—of the economic resilience and security stream risks misapplication. It's appropriate for Future Made in Australia to address gaps in Australia's economic security. However, narrowing its eligibility boundaries or clarifying the sectors it may target would enhance genuine public confidence. It's a welcome step forward that, for a change, the government intends to establish an evidence base before committing public finance. I have confidence that sector assessments will provide ministers with sound findings and policy recommendations, but my confidence ends there.

Ultimately, as proposed, the sector assessment model lacks the rigorous safeguards necessary to inspire genuine public confidence in financing decisions made by ministers. I understand the intent of the provisions restricting ministerial influence or interference over the outcomes of a sector assessment are promising, but in practice ministers exercise influence over their departments—both direct and indirect. Sector assessments would be more appropriately conducted by an independent body, one free from the potential political preferences of any government now or in the future. As it stands, the Future Made in Australia legislation risks politicisation. Sector assessments are initiated exclusively by the Treasurer, which allows government to target Future Made in Australia supports towards sectors it determines are of most value. What's to stop the net zero transformation stream being used for financing of carbon capture and storage, or small modular nuclear reactors—despite the evidence that the first has yet to prove to be of value, while the latter have yet to advance far beyond the drawing board? There should be an independent body to scrutinise industry policy and the deployment of taxpayers' money at such scale. There are examples of this already across government—indeed, in the Treasurer's own portfolio. The Productivity Commission conducts assessments at the discretion of its minister but also holds the ability to initiate assessments of its own. This creates an appropriate degree of policy-making independence, and I urge the government to mirror this arrangement in the Future Made in Australia legislation. I'll be moving amendments to this effect.

The analysis and recommendations made in sector assessments should be a pre-condition, not an option, for the government to commit funding to projects. It is proposed that sector assessments will be made publicly transparent after 30 sitting days, which is welcome, but the absence of a built-in link between findings and finance erodes the integrity of Future Made in Australia supports. The government has gone as far as to explicitly state in this legislation that all expenditure under the legislation will occur via separate existing law. So much for oversight; so much for accountability. Redacted transparency reports will do only so much.

The composition of sector assessments similarly lacks definite boundaries. Consultation is not a requirement; nor are there any set criteria. A rigorous assessment process would be one directed to provide explicit final recommendations, detailed reasoning as to why supports are required and strict parameters of exactly what a support intends to achieve. Unamended, the Future Made in Australia legislation risks descending into a vaguely scoped slush fund. Support must be targeted to ensure it reaches the facilities and the workers with the most potential.

A glaring omission in this legislation is any restriction on a minister's ability to direct finance to technologies or infrastructure associated with legacy non-renewable energy. For the public to have confidence in the government's vision of turning Australia into a renewable energy superpower, safeguards to this effect must be included in the very industry policy it claims will achieve it. A standalone clause expressly prohibiting the allocation of Future Made in Australia supports for fossil fuel projects and other technologies of dubious value is essential. I note the intention of fellow members of the crossbench, including the member for Clark, to move amendments to this effect.

It is promising that this legislation incorporates what are termed 'community development principles', because one thing is certain: we will not make the necessary progress to achieve net zero by 2050 without the support of affected communities. That means paying special attention to their wellbeing and their welfare. Communities which have depended on the extraction of resources cannot be allowed to wither. There are opportunities for well-paid, secure jobs as clean, green technology is rolled out across the country, and special attention needs to be paid to ensuring that these communities not only survive but also thrive.

The government insists that the community development principles will guide the implementation of Future Made in Australia supports, but here too the rigour is lacking. 'Principles' sounds good, but the government has, to put it charitably, provided next to no detail as to how these principles would be implemented or what precisely 'support' entails. Future Made in Australia support, it is stated, means, any support, 'including a grant, loan, indemnity guarantee, warranty, investment of money or equity investment'. Talk about vague. Funding recipients do not have to demonstrate adherence to the principles, either, nor a long-term commitment to them, nor any alignment with Australia's net zero climate targets. A rigorous implementation would see them apply over the life of the project, an approach I encourage the government to adopt in regulation.

Glaringly absent in the community development principles as they stand is a substantial recognition of the role that women and underrepresented communities will play in our net zero workforces. We know that women and girls tend to be drawn to careers that hold a strong sense of social purpose. As Future Made in Australia supports are implemented, women must be included in trades, academia, engineering and all the industries adjacent to our electrification transition. Upskilling, internships and job placements are all ways Australia can reach net zero quicker, and I will be tabling a second amendment to this end during consideration in detail.

There's an urgent need to invest in our net zero economy, but I remain concerned over the ability of the Australian Renewable Energy Agency and the Export Finance and Insurance Corporation to rapidly scale and meet their requirements under this legislation. Neither of these organisations were originally designed for the purpose of delivering grants or significant industrial investment. I note the government's decision to lift restrictions on use of consultants for these two organisations, which is at odds with its policy for the broader Public Service. Time will tell whether this measure is temporary and whether further scrutiny should have been given now to their ability to deliver this expenditure without developing a new reliance on private consultants. The Future Made in Australia legislation therefore is a mixed bag, with positive signals that are marred by some flawed governance arrangements.

Australia has a long history of experimenting with industry policy, of bottomless grant funding and of federal programs used as slush funds. If Australia is to genuinely reach its potential to become a renewable energy superpower, our strategy must be fit for purpose. This legislation is enveloped in good intentions, but, as the saying goes, the road to hell is paved with those. I urge the government to consider the range of crossbench amendments that seek to make this legislation fit for purpose, effective and a pathway to the future prosperity of our nation.

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