Kylea Tink (North Sydney, Independent) Share this | Hansard source

As Australia's response to the Inflation Reduction Act, introduced in the USA in August 2022, the Future Made in Australia legislation, or the FMIA, presents us with an important opportunity to decarbonise our economy and boost economic growth by reinvigorating our manufacturing sector and fostering innovation. Importantly, by encouraging and facilitating private sector investment to power the net-zero transition, the FMIA could help build a more diversified, resilient and future focused economy.

That ambition could not be more aligned with my community's aspirations, with many across North Sydney already pursuing increased productivity and output via innovation and investment, because my community recognises the world is changing and it wants Australia to be part of that change. Along with many others, my community has been frustrated that the nation has not made the most of its comparative advantages and has failed to leverage its workforce, abundant renewable resources and land. Ultimately, they recognise that the FMIA provides us with an opportunity to increase the sophistication and complexity of our economy whilst working to meet our climate targets as we move away from our history as a nation reliant on trade built on everything we can grow, dig and ship.

Done well, the FMIA opens the door to a future in which Australia is no longer reliant on fossil fuels but is rather a global exporter of renewable energy; a nation where high-energy goods are manufactured using renewable energy and exported as zero-carbon products and where renewable energy components like batteries, innovative new solar panels and wind turbines are made and exported right here; a nation that is recognised for our capacity to export renewable energy electrons to neighbouring countries like Singapore whilst domestically we use our own 100 per cent certified renewable energy sources to make green hydrogen and ammonia; and, finally, a nation where other related exports like engineering expertise and software services thrive and grow—a nation we'd all wish to live in.

To achieve emissions reduction at the pace and scale needed, however, we must make every decision from here on out by looking at it through a whole-of-economy lens, ensuring our actions are clearly directed and coordinated. While the headlines around the Future Made in Australia Bill 2024 were initially encouraging, the devil is shown to be in the detail, and it is crucial that we examine whether the FMIA will be strong enough to overcome the challenges we face whilst enabling us to embrace the opportunities.

Seen by many as a visionary step towards revitalising our domestic industries and fortifying our economy, the legislation does indeed hold promise. However, having discussed it broadly with my community, I have found several areas where we believe it could be strengthened. They include the following. At its core, the FMIA legislation is designed to promote local manufacturing and innovation, aiming to ensure Australian businesses and industries are competitive on a global scale. While the legislation is intended to encourage the transition to renewable energy, support local enterprises, encourage investment in advanced technologies and net-zero industries, and secure jobs for Australians, the reality is that it may fall short if it fails to clearly articulate an overarching and single-minded mission. Having scattergun goals spread across multiple areas is a surefire way to achieve little, and many in my community would like to see this mission oriented economic policy tightened.

One of the most significant criticisms of the FMIA legislation is its lack of emphasis on long-term decarbonisation. While the legislation addresses the immediate needs and supports of short-term goals, it fails to outline a comprehensive long-term vision, and ultimately many are left asking the question: what mission is this legislation seeking to achieve? Throughout history, extraordinary things have been done when the mission has been clear, whether that was mobilising economies during the world wars or the efforts to get a human on the moon. The governments involved at those times were unequivocal about what they were seeking to do. In this context, my community would like to see the mission for the FMIA legislation more clearly articulated, and we would like to see that mission become known as 'to be decarbonising Australia's economy'. As it stands, fossil fuel companies and projects are not explicitly excluded from funding under the FMIA, and there is no clear link to decarbonisation goals or climate considerations. Rather, Australia's emissions reduction targets and obligations under the Paris Agreement are not included in the legislative objects, meaning the overarching goal for the scheme is not in line with our need to urgently decarbonise.

To rectify this, the FMIA Bill should explicitly rule out any assistance for fossil fuel projects or investments, including carbon capture and storage projects, as many of these projects, particularly the carbon capture and storage ones, currently have a poor track record and present material risks for Australia's transition to net-zero emissions. To this end, I'll be supporting crossbench amendments, recommended by many stakeholders, that would enable that exclusion.

Secondly, the FMIA legislation includes provisions for oversight, but these mechanisms are not particularly rigorous. Without stringent enforcement, the potential for misuse or ineffective limitation remains high. In facilitating investment it's paramount that the government avoids a situation, whether it is real or perceived, where taxpayer money is used to fund pet projects. Investment decisions must be transparent and driven by independent expert economic analysis and there must be clear and compelling public value when resources are diverted from one industry to another. Financial support must be tied to clear policy goals, not distributed on the whim of politicians or governments. To ensure the effective use of public money, taxpayer funds should be allocated only where that assistance is needed in a transition phase as ultimately it is imperative that industries supported can stand on their own two feet after receiving an initial leg-up from the government. The government must avoid propping up industries that are not economic or are unlikely to become so. As the Productivity Commission has warned:

If poorly designed, industry policy such as the FMIA can be costly for governments, act as a form of trade protection, and distort the allocation of Australia's scarce resources towards activities that Australia is not best placed to undertake.

To ensure the judicious use of taxpayer dollars, then, there must be a sustainable and future focused policy agenda that allows businesses to plan confidently. Those I have spoken to have clearly stated they would like to see the FMIA investment linked to the National Interest Framework, with the basic requirement being for all funded projects and entities to be within the scope of a sector assessment. As it currently stands, however, this is not the case. The Productivity Commission has recommended limiting FMIA support to sectors that pass the National Interest Framework sector assessments. Again, I will support amendments moved by my crossbench colleagues that would implement that recommendation. Overall, the National Interest Framework is absolutely welcomed, as it is seen as an appropriate way to assess sectorial intervention, but, by tying investors to it, the FMIA funding will be targeted towards our national policies, which in turn will ensure an effective of use of public money and that resources are only diverted from industries where there is a clear and strong public upside.

The Productivity Commission has also noted the importance of using clear and robust policy frameworks to inform interventions and to ensure compelling value for money and the delivery of industry assistance. Whether public funding is put to its best use will rest on the strengths of the sector assessment process. However, it is currently unclear to what extent initiatives already announced as part of the FMIA plan, such as the Solar Sunshot program and the Battery Breakthrough Initiative, were subjected to this sort of sector assessment prior to announcement. To boost public confidence in these projects and the overall operation of the bill, the government should provide clarity as to whether these projects will be subjected to the same rigorous and transparent sector assessments as future projects will.

Thirdly, the community benefit principles contained in this legislation are an important and welcome inclusion as they ensure the public-private investment the FMIA attracts will flow to communities in ways that benefit local workers and businesses. The bill requires decision-makers of the FMIA's support to have regard to these community benefit principles to ensure the benefits of these programs are widely shared. However, stakeholders have raised numerous questions about the principles and there is clearly a lack of clarity, leaving it open to the interpretation of what constitutes a benefit to a community and how it can be measured. It also leaves the door open to future regulations redefining and repurposing the community benefit provisions of the bill.

The Climate Capital Forum have raised questions regarding theses benefits, including how the benefits will be measured and what their success would look like, how equity is measured and even whether the environmental benefits are more valuable than a program that enhances skilled employment. To address these questions, the government should clarify how the community benefit principles will apply in practice, how companies will be held responsible for following them and how communities will be able to hold companies and projects to account. This may be achieved by including a requirement that, where the secretary undertakes public consultation, members of the public are afforded a reasonable opportunity to provide comment directly to the secretary, who must then include an explanation of how public comments were considered in the final report.

Finally, on top of everything previously outlined, the current legislation does not adequately address the need for collaboration with Indigenous communities. Indigenous Australians have a unique role in the nation's cultural and economic landscape. Their involvement in future manufacturing and innovation initiatives is not just a matter of social justice; it's also a strategic advantage. Given this, I believe this legislation should include specific programs to support Indigenous businesses and entrepreneurs, ensuring First Nations perspectives are integrated into decision-making processes related to manufacturing and innovation. Including a standalone First Nations benefit-sharing principle that recognises the need for First Nations communities and traditional owners to participate in and benefit from the FMIA initiatives would strengthen this bill. Furthermore, by providing funding for initiatives that promote Indigenous participation in technology and advanced industries, this initiative could truly help shape the way in which First Nations communities currently participate in the wider economy.

In closing, while the FMIA legislation presents a positive step forward for our manufacturing and innovation sectors on the pathway to decarbonisation, it is not without its flaws. To truly secure a prosperous future for Australia, we need to address the gaps and the weaknesses that have been identified through collaboration and consultation. By strengthening the focus of this legislation, by creating a clear link between the National Interest Framework and the FMIA funding, by requiring projects and entities to be within the scope of a sector assessment to be eligible for support, by explicitly ruling out the use of FMIA on fossil fuel and carbon capture and storage projects, by tightening up the community benefit principles to safeguard them against future governments, and by including a standalone community benefit principle for First Nations participation and engagement, this bill would be greatly strengthened.

It is our collective responsibility to advocate for legislation that meets the needs of today while preparing for the challenges and opportunities of tomorrow. I look forward to further debate around this bill.

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