Phillip Thompson (Herbert, Liberal National Party, Shadow Assistant Minister for Defence) Share this | Hansard source

The coalition will be opposing this bill. Labor's Future Made in Australia policy is about building bureaucracies not businesses. The only thing Labor is making in Australia is more inflation. With inflation rising in Australia and around the world it is time to restore the budget to a more sustainable footing. Australia's economy has gone from leading the world under the coalition to trailing the world under Labor. We are at the back of the pack on interest rates, on inflation, on productivity and on growth.

The coalition will not support this bill, which subsidises businesses for the costs of Labor's bad policies on workplace relations, on environmental approvals, on the safeguard mechanism and on company tax. The best cost-of-doing-business relief Australians could hope for is a change in government.

With regard to production tax credits, this policy does not deliver widespread tax relief. Indeed, it will not provide a cent of tax relief to businesses for years and it costs billions of dollars into the 2040s. Labor's own impact analysis shows that just to apply for these tax credits will cost $100,000 in the first year and hundreds of thousands of dollars in annual costs over the duration of their operation. Just to receive these tax credits, a business has to jump through significant red tape with government, with the Clean Energy Regulator, with the department of industry and with ARENA, and that's before you even get to the tax office.

In addition, businesses seeking to access these credits will be hostage to the same community benefits principles that are embedded in Labor's entire Future Made in Australia plan. What are these? We don't know. The Treasurer will make them up via regulation, but we have heard warnings loud and clear about what these mean. We've seen it in state Labor governments: it's a back door for the CFMEU. Under this policy, if there is no union agreement, there is no tax credit. This is not good policy. This legislation doubles down on the first Future Made in Australia Act by putting the Treasurer and his department in the position to decide whether a sector of the Australian economy deserves investment.

The Treasurer, who has never run a business and has described his private sector career as 'six long, long months', will now be setting the conditions for businesses to operate and will be seeking funding under this plan. Departments will consider the investment against a very narrow set of criteria and have provided evidence to Senate estimates that key investments for Australia's energy future and sovereign capability—be they carbon capture and storage, gas, blue hydrogen, uranium or nuclear—will not be eligible and have not been considered as part of the Future Made in Australia policy. This is not the way to build a healthy and productive economy. The Business Council of Australia has warned that these procurement rules are at risk of enabling this behaviour, while they risk subsidising businesses Australia would never have comparative advantage in. The BCA has also been clear that this is not the best path ahead. The best path is to get back to basics and get the fundamentals right.

Labor's second-term economic plan is unravelling. This is Labor's second-term economic agenda and it is going about as well as it's first-term economic plan. 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 subjected to a tougher national interest framework test. Allowing sectors to bypass the National Interest Framework process would undermine its role in disciplining spending, yet 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. 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 independently of any departmental appraisal, analysis or recommendation.

The coalition is not the only one raising concerns with Labor's economic plan. Danielle Wood, productivity commissioner and the government's key economic advisor appointed by the Treasurer, Jim Chalmers, has said:

If we are supporting industries that don't have 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.

…   …   …

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 that it is not tax reform. On alternative policies, including lowering of the corporate tax rate, Ms Wood offered that it would make us more internationally competitive.

Danielle Wood is not alone, with former Productivity Commission chairman Mr Gary Banks describing 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 program but few will 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 that the Prime Minister's insult was wrong and uncalled for. 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. I thought we'd learned these lessons, but apparently not. The bad old days are back.

Australians want and deserve something better. The coalition, in government, will do three things. We will steer our nation out of our current domestic crisis. We will not simply talk about the challenges of our time; we will meet them head-on with action to carve out a more secure future. Most importantly, we will make the decisions that set up our nation for success for generations to come. The coalition is working to ensure Australia can play to its strengths.

We are looking to build a nation which is a mining, manufacturing and agricultural powerhouse and a leader in technology—and of innovation. We are seeking to help build a nation where the tax contributions from surging industries help us to build the infrastructure of the future and sustain our safety net, our health system and our aged-care system.

We want Australia to be a place where homeownership is possible for every Australian. We want Australia to be a place where the ability to buy a house is not something within the reach of a few who can rely on the bank of mum and dad, but something assured for the hardworking many. This requires strong economic management. That's why a Dutton led coalition will get Australia back on track by delivering a back-to-basics economic agenda. That is how we will restore our standard of living and ensure future prosperity.

We will get our economy back to basics by fighting high prices and interest rates first. We will then wind back regulatory roadblocks, boost productivity and deliver lower, simpler and fairer taxes. We will also stand up for consumers, small businesses and farmers by delivering stronger penalties for anticompetitive behaviour in the supermarket and hardware sectors. We will support Australians to build businesses, not bureaucracies. We will ensure that Australians have more affordable and reliable energy by rejecting the government's reckless renewables-only approach.

We will restore the dream of homeownership and unlock up to 500,000 homes by investing in shovel-ready infrastructure that will enable homes to be delivered faster. We will reduce migration and place a two-year ban on foreign investors buying existing homes. We will tackle union corruption that is continuing to drive up building costs, and we will take action to make our communities safer, including online. A Dutton led coalition will get Australia back on track.

See this speech in context