Henry Pike (Bowman, Liberal National Party) Share this | Hansard source

The Future Made in Australia bills have lovely-sounding names, and I think all members of this chamber would be interested in a future made in Australia. But the more you read the actual detail of these bills, the more you realise that what's being proposed doesn't stack up. The coalition fears that this is a plan for pork-barrelling, not for a strong economy, and members on this side will be opposing these bills.

These bills expand the role of Export Finance Australia and ARENA and establish a National Interest Framework that retrospectively underpins the government's Future Made in Australia policy. The accompanying omnibus bill expands Export Finance Australia's remit to fund domestic industries and nominates the Minister for Finance as an additional responsible minister. The omnibus bill also expands ARENA's functions from a pure R&D demonstration to support manufacturing deployment and commercialisation. In essence, this is very much a plan for more government, not more business investment. It's a plan that, unfortunately, will drive forward further inflation, at a time when Australian households can least afford it.

Australian families are already paying the price, having endured 12 interest rate hikes under this government, and unfortunately we're facing some of the most stubborn core inflation in the developed world, and of course we are going to see the economic impacts of that for quite a while to come. Australian families shouldn't be paying for Labor's re-election strategy, which they would be doing if this bill were to pass. Governments can't solve the cost-of-living crisis by throwing hard-earned taxpayers money around in such a manner. The Prime Minister might want to pick winners, but Australian families will certainly be the losers if this process continues as envisaged.

When I speak to the manufacturers who are operating within my electorate, they say they don't want governments to be picking winners within the industry. They simply want government to get the basics right. I think that's the fundamental difference between the approaches on either side of the chamber. The government is keen to intervene in the market to pick the winners, to spend the money, whereas the coalition members, the members on this side, want to ensure that the basics are right, that the market is able to pick its own winners for the people who are delivering the manufacturing outcomes that we want, the manufacturing jobs of the future—that they come up naturally, organically, through the right settings that are in place by the government.

The manufacturers in my electorate simply want affordable and reliable energy. They want flexible workplaces. They want less regulation. And of course they'd love an incentive based tax system. I think that's the fundamental difference. Do we want to be interventionist and trying to pick winners? Or do we want to just be focusing on getting those basics right? Certainly the manufacturers in my electorate are telling me that's the role that they see for government. They see government as there to facilitate their growth, not to take a heavy hand in investing within the market. The sad reality is that Labor's policies on energy, industrial relations and tax are making Australia a less attractive place to do business. That's certainly the feedback that I've been getting from the manufacturers within my electorate who are looking to grow.

The facts are clear: insolvencies are up, productivity is down and businesses are struggling just to keep their doors open. Labor's plan with the Future Made in Australia Bill 2024 is unfortunately more about spin than about actual delivery. We see economist after economist criticise this policy. I'll touch on some of the comments that they've made shortly. Every day we hear more stories about processes that aren't being followed properly, the lack of economic scrutiny and the double standards that will apply to this program.

Let's start by having a look at the ARENA changes that are being proposed through these bills. The legislation fundamentally changes the purpose, duties and roles of ARENA. ARENA has always been a research and development agency. This is clear in its remit, in the explanatory memorandum and in the second reading speech that was given back when these bills were introduced. Labor, in opposition, even opposed expanding the remit to cover sensible net zero related R&D expenditure, including into carbon capture and storage, and blue hydrogen. They are expanding that remit even further into development and manufacturing because it suits the interests of those they wish to please. If ARENA is doing deployment, why is the CEFC even needed in that instance? We're seeing a muddying of the waters between those entities. If these industries aren't commercially viable, why are they receiving government funding in the first place?

Labor's changes are, unfortunately, more insidious than just a muddying of waters between the roles of different agencies. At the stroke of a pen this bill gives the Minister for Climate Change the ability to boost funding. It provides no opportunity for this parliament, for the other chamber or for any of our committees to provide the scrutiny that we would expect. We're talking about pretty significant funding and figures that will not face the same level of parliamentary oversight and scrutiny that we would expect. It's just some delegated legislation, and the government can roll up to $3.98 billion out the door in the course of this year, which would be, of course, an election year. Unfortunately, some have described this as a slush fund, and it's hard to argue with that.

Let's also have a look at the National Interest Framework. This legislation puts the Treasurer and his department in a position to decide whether a sector of the Australian economy deserves investment. Under this plan, the Treasurer will now be setting the conditions for business to operate and seek funding. His department will consider the investment against a very narrow set of criteria, and they have provided evidence to Senate estimates that key investments for Australia's energy future and sovereign capability—whether they be carbon capture and storage, gas, blue hydrogen, uranium or nuclear—will not be eligible and have not been considered as part of the framework. Meanwhile the so-called community benefit principles will entrench union involvement in the workplace and replicate much of the same social procurement policies that have enabled the CFMEU's conduct to go unchecked and that have left us in the mess that we've been trying to deal with over the last few days in this parliament.

This is not the way to build a healthy and productive economy—far from it. The Business Council has warned that these procurement rules are at risk of enabling this sort of behaviour, while it risks subsidising businesses Australia would never have a comparative advantage in. The BCA rightfully points out that this is important because taxpayers' dollars are at stake, and that should, of course, be the primary concern of parliamentarians here. The BCA have also made it clear that this is not the best path forward. The BCA president, Bran Black, has said that 'our competitors—think China, the US and across Asia—are more investment-friendly environments based on old-fashioned fundamentals, like tax and regulation' and that 'to reinvent our economy we must, as a point of national urgency, become a more competitive place to do business'. I think that's pretty fundamental. It should be a fairly uncontroversial thing for the president of the Business Council of Australia to say.

Let's have a look at what some of the others are saying about this. Danielle Wood, the chair of the Productivity Commission, who was appointed and hand-selected by this Treasurer, 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.

I like this quote that Danielle Wood provided:

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

As someone who's got two rapidly growing small children, I can certainly appreciate that. When asked whether Future Made in Australia contained tax reform, Ms Wood explicitly said it is 'not tax reform'. On alternative policies, including lowering the corporate tax rate, Ms Wood offered it would 'make us more internationally competitive'.

Former chair of the Productivity Commission Mr Gary Banks described Future Made in Australia as 'a fool's errand' that risks repeating mistakes of the past by propping up 'political favourites'. He went even further and 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 will ever leave. This morning, my Spotify account informed me that I have a boomer's taste in music, so I particularly enjoyed that reference to the Eagles. If I can build off Mr Banks's reference to the Eagles lyrics, I think the Treasurer's enjoying 'Life in the Fast Lane' and, through his legislation, is clearly trying to 'Take it to the Limit'. I implore him to reconsider this approach with those iconic lyrics of Glenn Frey and Don Henley: 'Desperado, why don't you come to your senses?' I'm hoping I might trigger a response from those opposite in due course.

Another eminent economist, Professor Richard 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!"

We've got a litany of economists and economic commentators who are pointing us in the right direction. They are pointing us back to the fundamentals of economics. It's not just the economists, these people who've spent their lives studying the fundamentals, but also the manufacturers within the communities who we should be talking to. Certainly the manufacturers in my neck of the woods are all echoing these sentiments.

Steven Hamilton, an independent economist, 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, Mr 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.

I think that's a critical point. It does reach a point where no amount of government subsidy can keep some of these sectors going in Australia.

Let's have a look at how Labor's own investments line up against the standards that they've set for themselves. The Productivity Commission says that a billion-dollar commitment to make more solar panels in Australia under the Prime Minister's Future Made in Australia program should be retrospectively subjected to a tougher National Interest Framework test. It says, 'Allowing sectors to bypass the National Interest Framework process would undermine its role in disciplining spending.' Yet we know that Labor are already breaking their own rules when it suits them.

Key elements of Labor's Future Made in Australia agenda, including the PsiQuantum contract, bypass the National Interest Framework and sector assessments. I think the word PsiQuantum is going to be used in this chamber a lot over the coming year. There are serious questions to answer about the decision of the PsiQuantum contract, about the decision to make this investment, and about the processes that were followed. It's increasingly clear that the minister decided to invest in this business independent of any departmental appraisal, analysis or recommendation. Treasury was not consulted prior to the decision to invest in solar manufacturing, and subsequent analysis has said that it is not a sound investment. On the topic of PsiQuantum. I'm looking forward to the opportunity in October—I'm sure the member for Groom will agree—where, hopefully, a change of state government in Queensland may provide opportunity for greater scrutiny about the Queensland government's decision to invest in that program as well. It may lead to a few more questions being asked in this chamber about the appropriateness of that investment and whether it has met the standards that we expect.

Australians deserve something better than what is being proposed here, and the coalition wants to deliver that. That's why we are promising to do three things: we will steer our nation out of the current domestic crises; we will not simply talk about the challenges of our time but we will meet them head-on with action to carve out a more secure future; and, most importantly, we will make the decisions that set up our nation for success for generations to come. We need to make sure Australia can play to its strengths, and we're looking to build a nation that is a mining, manufacturing and agricultural powerhouse and a leader in technology and in innovation. We need to rein in inflationary spending, take the pressure off and provide the opportunity for these manufacturers to truly have success over the long term.

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