Andrew Hastie (Canning, Liberal Party, Shadow Minister for Defence) Share this | Hansard source

The world is currently undergoing a period, at least in the Western industrialised world, of rapid reindustrialisation. After 40 years of globalisation underwritten by US security and the institutions that rose up out of the rubble of World War II, countries are now reindustrialising. They're looking to recover lost manufacturing and lost jobs. Gone are the days of labour and wage arbitrage, where a lot of manufacturing was offshored to cheaper countries and jurisdictions for the production of goods that we need. We've seen real wages decline over the last 30 or 40 years for workers in the industrial sector, and strategic circumstances are forcing many countries to look at their own industrial base and ask the question: are we sovereign, are we resilient and are we self-reliant?

I think the war that started in Ukraine in early 2022—Russia's illegal, unjustified and immoral invasion of Ukraine—has brought this into stark relief, and what we've seen over the last two years is that war transforming into a war of attrition—industrial attrition, where we've seen the United States, which supports Ukraine, and its allies, like the UK and European allies like Germany and France in particular, pitted against the industrial base of Russia, which is also supported by China, North Korea and Iran. So we're seeing, in a war where thousands and thousands of people have already died, that it's now grinding into a war of industrial attrition. It's a reminder to people around the world that, if you want to have sovereignty, be secure as a nation and have resilience, you've got to have industrial capacity. It's a key component of national power.

So that's why we're seeing investment in industrial bases across the world. The US is leading this, and I refer to a report that came out last month called Commission on the National Defense Strategy. It's a document that is well worth reading for all parliamentarians. In it, the authors, who are quite eminent national security people in the United States, make some fairly stark judgements about the state of the US and its industrial production. The report says:

U.S. industrial production is grossly inadequate to provide the equipment, technology, and munitions needed today, let alone given the demands of great power conflict.

There are reasons for that in the US: there have been insufficient defence budgets, there's been a decline of research and development, there's been insufficient access to strategic and critical minerals and there's been an erosion of the broader US manufacturing ecosystem.

We can trace that back to 1989, with the fall of the Berlin Wall. The US stood supreme as the global power with the collapse of the Soviet Union, and a lot of the investment that occurred during the Cold War ceased, and we've seen the US military decrease, as well as the industrial base that supported it. Now we're seeing a challenge to the US led rules based global order, if that is what you want to call it. That's what a lot of policy people refer to it as. Because that is being challenged, countries are now having to look to their own security needs, which includes a strong industrial base.

The challenge now, for allies of the US who buy a lot of defence capabilities from the US, is that there is a long queue. The US can't even meet its own needs with its shrunken industrial base, so we need to start thinking about how we recover our industrial capacity as well. That's why AUKUS is such a huge opportunity for Australia. I think if we're going to use any mechanism to recover Australian industrial strength, AUKUS is the best mechanism to do so. I was proud of the coalition government that, back in 2021, struck the original arrangement with President Joe Biden and Prime Minister Boris Johnson. We have since seen two changes of government, one here and one in the UK, and still AUKUS continues strongly. But there is a lot of work to be done, and the decline of the US industrial base is a real challenge for AUKUS. We need the US to uplift, we need the UK to uplift and we, ourselves, need to uplift.

The bill before the House, the Future Made in Australia Bill 2024, really engages on this question: how do we recover a lot of our lost industrial capacity in this country? Our view, my view, is that this bill does not achieve what the Albanese government is setting out to achieve with this bill. To give some background on the bills, these bills expand the role of Export Finance Australia and the Australian Renewable Energy Agency and establish a National Interest Framework that retrospectively underpins the government's Future Made in Australia policy. The accompanying 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 purely research, development and demonstration to support manufacturing, deployment and commercialisation.

The more we hear about this plan, the more we realise that Labor is misguided in this, and it just doesn't stack up. This is a plan for more government, not business investment partnering with government, and that makes it a weak plan. In fact, we believe that this is a plan for more inflation at a time when Labor has already made homegrown inflation a lot worse. We know they've added $315 billion of spending to the budget over the last two years, and we're still leading the world in inflation. Inflation hasn't come back under control to the two to three per cent target range, which is where we want to get it to, and, again, the Australian people are suffering high interest rates with no relief in sight. I know markets are pricing in a cut somewhere around February or so, but there is no guarantee, because we're seeing what the Queensland government is doing to save its skin prior to the election in October. They're spending a lot of money. The Victorian government and the WA government are spending a lot of money. There is no guarantee that inflation is going to abate anytime soon.

The coalition has always supported industry and manufacturing. I think back to Robert Menzies and the economy he inherited when he won government back in 1949. A great economy had been built up during World War II, and it was the basis of our prosperity for the next couple of decades until we opened ourselves up to the world under Prime Minister Bob Hawke.

But now Labor's policy on energy, industrial relations and tax is a whole suite of policies and a whole range of things that have occurred under Prime Minister Anthony Albanese over the last two years. It has actually made Australia less competitive and less attractive for international investment. They've also introduced an industrial relations reform package which has made it a lot more difficult for businesses to employ people, to make a profit and to add to Australia's prosperity. That's why we are actually going backwards as a country in terms of productivity, in terms of GDP growth, and people are feeling it. Real wages are going backwards with inflation, and, of course, we're seeing households less well off now than they were two years ago under the Labor government.

The facts are clear: insolvencies are up, productivity is down and businesses are struggling just to keep the doors open. And so Labor's plan for a future made in Australia—it's a great little line, and I always remember the Made in Australia tags with that kangaroo on Australian goods growing up. We still see them. I get quite nostalgic about it. I'm proud of an Australia that can make things and sell them to the world. They're tapping into nostalgia with a title, but, when you actually examine the bills, the policy and the detail, it falls far short of the nostalgia that it seeks to evoke.

There are some challenges here. The ARENA changes are a slush fund for the Minister for Climate Change and Energy. This legislation changes the purpose, duties and roles of ARENA, which has always been a research and development agency. They're now expanding the remit of ARENA into deployment and manufacturing. These changes give the minister for climate change the ability to boost the funding of ARENA without parliamentary oversight and scrutiny, which has been a habit of the Labor government over the last two years. They like to get things through, they like to guillotine debate and they like to empower the ministers to make decisions that avoid parliamentary oversight or scrutiny. Just look at the sitting calendar this year; it's been reduced significantly. All that does is allow for less accountability, and that's not in the best interests of the Australian people or our country over the long term.

Australian families are paying the price. We have already seen the 12 interest rate hikes, and we've got some of the most stubborn core inflation in the developed world, and the high taxes that come with it. Bracket creep is hurting a lot of families out there, particularly in my seat of Canning, and this has all happened under the Albanese government.

There's also a new national interest framework, and this legislation puts the Treasurer and his department in a position to decide whether a sector of the Australian economy deserves investment. This is less a market-leading solution. Instead, it's a command-economy-style solution. When you run a command-style economy, you assume that those running it have all the knowledge required to make good investment decisions. As we know—you just look at the last 100 years—command economies aren't great at making investment decisions. There are a lot of inefficiencies. There's a lot of waste, preferment, nepotism and all those sorts of problems that come with people making decisions without all the information and without the accountability that a market led solution brings. So that is deeply problematic, and I expect bad decisions, not good decisions, with this framework.

In this place we try to create incentives that will build the security and prosperity of our country—incentives that provide for human flourishing. The incentives that this bill brings in, I think, fall far short of those aspirations. But don't take my word for it. The Business Council of Australia have warned that these procurement rules risk subsidising businesses Australia would never have a comparative advantage in. We are a nation that is blessed with an abundance of resources. That's why we lead the world in exports in coal and liquefied natural gas. I represent a seat which used to be Kim Beazley's seat 25 to 30 years ago, which tells you everything you need to know about the realignment happening in Australia and elsewhere. We produce 10 to 11 per cent of the world's bauxite. We have two bauxite mines and two alumina refineries. I represent a lot of FIFO workers, who leave their families and go to our mine sites, and they're the backbone of this country's prosperity. I am very proud to represent them. I am proud that we have a good number of them who are keen to see us become more productive. I acknowledge that many are unionised members with the AWU. One of the things I've really worked on is having a good relationship with those people, because they are the backbone of this country and they do the heavy lifting that provides for a lot of revenue that is used to fund essential services in this country.

I'm really excited, though, about the investment that the former coalition government took in AUKUS. I acknowledge the work that this government has done in building on that work, with the announcement of the optimal pathway for the Virginia class submarine and the SSN-AUKUS. When we're talking about re-industrialising Australia, I want to focus very briefly on Western Australia. We know that $8 billion of investment is going to flow through Perth especially, just to the north of Canning in Rockingham. There's $8 billion to expand HMAS Stirling over the next decade. There will be 3,000 direct jobs created. There will be an additional $83 million for infrastructure works which will create more than 150 jobs.

This is not just a one-off. We're going to see a huge naval base at Stirling which will run our nuclear submarines. We'll also have US and UK submarines. We'll have the supply chains and the maintenance facilities to keep those running. We're going to see a big footprint. I think one of the toughest things any country can do is own, operate and build their own submarines. We are undertaking the biggest nation-building project I think we've ever done. This is going to be very complex. It's good that we're doing it with the US and the UK, who already have capability and are experienced. I'm actually excited for industry. But this government is not selling that. Instead they're following the climate change minister on his frolics, talking about green energy and all these great solar panels and the wind farms that will be made in China, when we could be talking about AUKUS and the economic dividend, the job creation and the industrial rebuild that will bring to this country. This government's failing and it needs to do better. (Time expired)

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