Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

Labor are the builders, with the Housing Australia Future Fund that passed this chamber last night and this morning, cheaper child care, cheaper medicine, paid family and domestic violence leave, and this legislation, the National Reconstruction Fund Corporation Bill, as well. Labor government has a great tradition, from the days of Andrew Fisher with the old-age pension and disability pension, new workers rights, the establishment of the Commonwealth Bank, expanding the Australian Navy and formally establishing what we now call the ACT. There was Chifley with postwar migration, establishing Australian citizenship, the beginning of the construction of the Snowy Mountains scheme and implementing improvements in social security. There was Whitlam with legal aid, arts funding, trade practice and family law reform, equal pay for women, universal health care and opening up universities to every Australian, based on merit. There was Hawke and Keating, with Medicare and superannuation, and Rudd and Gillard, with NBN and the NDIS. This government, the Albanese Labor government, is doing so much in that fine Labor tradition.

I want to speak today on the National Reconstruction Fund Corporation Bill. One of the big lessons of the pandemic was that so much of our production and imports were dependent on just one country, which left us massively exposed to supply chain vulnerabilities, compounding the botched vaccine rollout by the previous government. COVID also highlighted that many other manufacturers are struggling to be globally competitive, especially when it comes to innovation and technology. At the time, Labor in opposition said we could do better and that we needed to rebuild jobs and our industrial base.

Australians recognise that we have to be a country that makes things again and we have to do it better. Modern economies need a strong manufacturing capability. That manufacturing matters because it generates full-time, secure, well-paid jobs. Just as former Labor prime ministers John Curtin and Ben Chifley had a vision for postwar reconstruction, the Albanese Labor government has a vision for our post-pandemic recovery and prosperity.

This legislation establishes the $15 billion National Reconstruction Fund, delivering on a key Labor election commitment. It's a major nationbuilding fund and, in the tradition of Labor governments, one of the largest peacetime investments in our country's manufacturing capability in recent times. It will help drive economic development in our regions and outer suburbs, in places like Ipswich and surrounds, boosting our sovereign capability, transforming and diversifying industry and, more importantly, helping to create high-skilled, high-paid jobs.

The NRF will grow advanced manufacturing and revive our ability to make world-class products. It will be governed by a corporation with an independent board modelled on the very highly successful Clean Energy Finance Corporation, which the previous Labor government introduced and which the coalition spent years trying to abolish. It will be empowered to co-invest in projects through a combination of loans, guarantees and equities, institutional investors, private equity and venture capital. It will achieve a return on investment to cover borrowings, costs and an expected positive underlying cash impact. It's not about picking winners; it's about strategically investing in industries of the future, leveraging our natural strengths and competitive advantages, as many other countries are doing. It's designed to create private sector investment and address market failure by derisking propositions that would otherwise be passed over by the private sector at a time of global uncertainty, when there has been a dearth of venture capital.

To that extent, the NRF will help drive innovation in technology and better collaboration between science and industry, ensuring Australian-made discoveries can be commercialised and scaled at home, rather than having to go offshore. The fund will make some pretty strategic investments in a number of priority areas, including value-adding in resources, agriculture, forestry and fisheries, transport, medical science, renewables and low-emissions technologies, defence capabilities and emerging technologies like robotics, artificial intelligence and quantum computing. It is worth noting that world-leading scientific agency CSIRO, which we value deeply in this country, has played a role in identifying these areas as offering the best chances for jobs and growth in their paper COVID-19: recovery and resilience.

I am pleased to say that many of these changes will benefit my electorate of Blair in south-east Queensland. The resource industry is a major industry and employer in Queensland, my home state. It's not all about coal and gas, as some have suggested. The National Reconstruction Fund will have a strong focus on critical minerals, which are becoming increasingly important strategically as a pathway to energy transition. We want to see more minerals processed domestically, like lithium and graphene, providing for batteries and other materials. An example of that is a manufacturing group based in Richlands in the Speaker's electorate of Oxley, just next to mine, that is experimenting with developing graphene batteries that charge 70 times faster and with three times the battery life of lithium batteries.

Agriculture is a big industry in the electorate of Blair, including horticulture, dairy, beef cattle and meat processing. It is a big employer in my electorate and its surrounds. In fact, my first job was as a cleaner at the meatworks for Dinmore, based in Ipswich, now owned by JBS. I have kangaroo meat processing at Wulkuraka. There is beef meat processing in Kilcoy, at Coominya, as well as in Dinmore. I'm pleased the fund will look at opportunities, for example, in high-end food manufacturing and processing. If you go to these plants you will see the creative and innovative methods these meat processing operations use, and there are opportunities for growth in the industry by getting apprentices in to learn more about the industry. It is really good. I have met with so many people who have benefited, from school all the way through. It certainly won't destroy native forests. It's all about making sure that we look at high-end production.

Transport is another area in my state of Queensland with strong manufacturing capabilities. The state government has announced Downer as the preferred supplier to build new trains at Maryborough in regional Queensland, where my mother's family comes from, in the member for Wide Bay's electorate, no less. Nearly half of all manufacturing jobs are in areas such as this.

Additionally, medical science is a really fast-growing industry in my electorate. For example, Springfield Citigroup in Ipswich have been working with a range of partners to develop the Springfield BioPark, an innovation precinct dedicated to advanced manufacturing of high-value medicines like vaccines and blood products. This is an exciting initiative and has enormous potential to boost the local biotech industry and jobs into the future. It will also boost Australia's sovereign capability for medical manufacturing and improve access to life-saving drugs, which will support our future pandemic preparedness. I am working closely with Springfield Citigroup on delivering an election commitment of $12.6 million in that regard.

I can reassure those who may be sceptical of this fund of the remit of the fund, which invests in a range of renewable energies and clean energy technologies like components for wind turbines, batteries and solar panels, which is where we think this fund will go.

Again, Australia has some of the world's largest deposits of critical minerals, which are shipped and used in battery manufacturing and supply chains overseas. But we don't make enough batteries in this country. A great case study in this space is a company called Vast Solar based in Goodna, Ipswich, just outside my electorate, which is developing dispatchable solar thermal battery technology. In fact, ARENA, another organisation that those opposite would have done their best to abolish but Labor opposed, has just backed the firm with a grant to build a commercial solar thermal power plant in Port Augusta, South Australia, which will bolster power supplies nation wide and create regional jobs. The fund could also support more success stories like Vast Solar for domestic battery manufacturing, which will combine Australian-sourced minerals, Australian know-how and skills to power the clean energy transition, here and around the world. Three million dollars will be allocated from the fund to invest in green metals, steel, aluminium, and clean energy component manufacturing like hydrogen, electrolyser and fuel switching, agricultural methane reduction and waste reduction, so many things that will help us in the transition.

Finally, the defence industry is another key employer in Ipswich and surrounds. Its proximity to the RAAF base at Amberley and access to a high-skilled defence workforce are critical. We have great organisations and great companies, like Boeing and TAE and Rheinmetall, in the Ipswich region, just to name a few. These priority areas will drive future economic growth, both nationally and locally in my electorate. Ipswich and Brisbane's western corridor is one of the fastest growing areas in the country, so we need to be investing now in these areas and in the high skilled, well-paid jobs of the future.

The National Reconstruction Fund will not only have a strong focus on helping transition industries to net zero emissions to address climate change emergencies but will also look at a whole range of other areas which I have outlined. It is important the bill be passed as soon as possible so the fund can be up and running from 1 July. It's important this parliament does the right thing and supports the legislation. Those opposite are simply not builders. I listed the achievements of previous Labor governments, and so many of those things were not supported by those opposite. They didn't vote for them or support them, and spent years trying to undo them. There was Medicare—when Bill Hayden brought in Medibank as the forerunner, Malcolm Fraser, the Prime Minister, abolished it and Bob Hawke had to bring it back in. Who can forget that famous ad on TV with Bob Hawke and the Medicare card going to the Lodge?

This legislation is in the great tradition of Labor building this nation—a party of reform and progress. Those opposite are the wreckers, the deniers and the naysayers. They're not the ones who build this nation; it's always left to Labor governments to do that. Those opposite oppose superannuation; there has not been a vote in this parliament in the over 15 years I've been here where those opposite have supported superannuation—not once! They have always voted to deny working Australians a decent retirement. And those opposite will not support this bill here today. They are opposed to it. It's always about denial and opposition, not about support for nation building. If you want to support manufacturing and jobs, you support bills like this and support reform.

It's not just about the fact that those opposite will never support a wage rise for workers in the workplace. They're always wanting a higher percentage of the profit to GDP to go to the rich and powerful in this country. They never support working-class people and people in the regions struggling. They'll never support a minimum wage rise; they can't even do that. They haven't got the grace to support this legislation, which will help jobs in manufacturing. They're happy to put the high-vis on and parade around in campaigns, put a bit of coaldust on their face and do what they like to do, but when it comes to casting a vote, or doing anything about it, they will not do it. We saw that with the Housing Australia Future Fund. The naysayers over there say they're in favour of helping veterans but don't vote for it. They say they're in favour of helping women and children fleeing domestic and family violence but don't vote for it. They say they're in favour of helping Aboriginal people in remote areas but don't vote for it. Question time after question time, there are questions about the cost of living index but when given the opportunity last year, in December, what did they do? They voted against it. Here, today, they've got a chance. Get up on your feet and support it. Support jobs in manufacturing. Support the jobs of the future. You claim you want to transition the economy into a clean energy future. How about you actually vote for it?

Remember the ring-a-ring-a-rosy, with a whole bunch of people there, when those opposite got into power and got rid of the price on carbon? They stood there and hugged each other, teaming up with the Greens. Once again, on bills like this—and we saw it last night. In this country you're either Labor or against Labor. In this country, it's Labor governments that make a difference. All those opposite will not do it. They will not support this legislation. They get up and protest because they're ideologues. They believe in an untrampled Milton Friedman type economy where the rich and powerful can look after themselves and everyone else can get lost. When they were in government, they punted people off the pensions I referred to that Andrew Fisher brought in—373,000 people in this country were punted.

This day they've got a chance. Show us your grace. Show us your integrity. Show us you will build this country for the better. Vote for this legislation.

Aaron Violi (Casey, Liberal Party) Share this | Link to this | Hansard source

I rise to discuss the National Reconstruction Fund Corporation Bill 2022. The reality is: the best way we as lawmakers can support our industries is by creating the right economic conditions for success. Unfortunately for industry, this government is more focused on politics and spin at the cost of good legislation. On our side of the House, we support our manufacturers to bolster Australia's sovereign capabilities and we will support legislation that makes an actual difference. This government argues that this bill establishes the National Reconstruction Fund Corporation to facilitate increased flows of finance into priority areas of the Australian economy by financing businesses, state and territory governments and other entities through concessional loans, equity guarantees and other financial instruments. That does sound very impressive, but unfortunately this bill follows in the tradition of so many of the government's bills; it follows their standard formula.

Mr Deputy Speaker Vasta, I do need to apologise to you in advance. You were in the House when I spoke on the housing bill, so a lot of the things I'm going to talk about right now are things you've already heard, but that's because the Labor Party follow a very consistent formula. I'll go through this formula again, because it's consistent. Step 1 in this formula: start with an impressive-sounding name. 'The National Reconstruction Fund Corporation'—a very impressive name. Tick! We've got that one. Step 2: commit a lot of money but commit it over a long-term horizon. When we say the number it sounds very impressive—like the name. In this case it's $15 billion over 10 years. We had $10 billion over 10 years for housing; we're now at $15 billion over 10 years, so it's a tick for step 2. Step 3 is very important. The Treasurer in particular, the Doctor of Politics, gets this. You need to place the fund in off-budget spending. They need to do that, Mr Deputy Speaker, because they need to continue the facade of responsible economic management. The Treasurer needs to be able to stand at this box in question time and talk about how economically responsible he is, while really he's playing a bit of smoke and mirrors—and I'll talk about that in a bit more detail. Step 4, following this very standard formula of the ALP: ensure that there's a significant lack of detail in the bill so the government are not held to account while they're rushing the bill through but making claims of transparency.

I'll go through these steps in little more detail, first to step 1 and this impressive sounding name, the National Reconstruction Fund Corporation. Did you know, Mr Deputy Speaker, that the word 'reconstruction' does not appear in the explanatory memorandum or the actual bill, apart from in the bill's name? In fact, the bill does not mention any specific sectors, limit eligibility priority areas or refer to reconstruction at all. I'll come back to this point a bit later, because it's an important one.

On to step 2: on the surface, this legislation looks very positive. It allows ministers and backbenchers to talk about how they're backing manufacturing with a huge investment of $15 billion. They claim it will create jobs and industry growth, all the while securing our sovereign capability. As I said, it sounds amazing. But the real problem is that the government can't actually outline how many jobs will be created or how much growth will be created. We haven't heard any numbers attached to this bill from the government. We know that the Prime Minister doesn't like numbers, so it's not that surprising; it fits the formula. The measure of success for a bill really shouldn't be how much money is spent; it should be about the outcomes that have been achieved. I spent 15 years working in business before this role, and we were always focused on the outcomes, not the money spent. That's actually what you should be looking for—efficiency. It's not about how much we spend; it's about what we actually deliver for the Australian people. But, every time we hear the government talk, they talk about how much money they're spending. In a high-inflation environment, we definitely need a focus on efficient spending, because it's crucial to support all Australians in this challenging economic time.

I'll now move to step 3, the Treasurer's favourite part, the off-budget spending. This government has already committed to $45 billion of extra borrowing in off-budget spending, and that's going to have a direct impact on inflation. The Treasurer's pushing the economy one way; he's got the accelerator on inflation. The RBA governor's got the brakes on. The money for all that off-budget spending still needs to be borrowed and repaid, and that impact is going to be felt across the economy. There's no doubt that the RBA governor and the board, when they're sitting around making decisions on interest rates, are very aware of this government's off-budget spending. The funding model proposed, which is going to shift from direct grants and tax incentives to the government acquiring equity and providing loans, is a pivot to interventionism, and it's likely to have unintended consequences. Businesses may not meet the eligibility criteria. They will perhaps have margins that are too small, or they will be too risky in the current uncertain economic landscape. They may not have the capability to create the complex and detailed business plans that they have to write to satisfy government departments rather than private investors. Feedback from stakeholders has raised issues of ownership. This is a big concern, as many of our manufacturers are family owned businesses.

Unfortunately, innovation and the development of manufacturing systems often go through failures before they succeed. Would a complex innovation pathway be tolerated with this funding structure? How many failures are too many? How does this government drive a return on investment to safeguard taxpayers' money, which is required for all off-budget spending, because it has to deliver a return? It raises the question: if these are such great investment opportunities that the government will acquire equity in, why hasn't the private sector already taken advantage of these lucrative opportunities? This is a crucial question because, by designating this fund as off-budget spending, the government are committing to a return on investment on this capital. With rising interest rates resulting in government debt costing even more in repayments, it is vital that taxpayers' money is spent wisely. Fifteen billion dollars in debt, which is what this government will take out for this fund, at the current four per cent rates, will cost taxpayers $600 million a year. I spoke on the Housing Australia Future Fund Bill. That's $400 million on the housing bill. So we're at $1 billion in debt repayments so this government can spin its lines and follow its formula.

I also wonder—because, when these were announced, we were at zero inflation, in a zero-interest-rate environment—what adjustments have been made to the government's modelling 18 months later, with interest rates rising. That's the reality. This is more political smoke and mirrors from this government to hide its irresponsible spending. At least with private investment, if market gains do not stack up, investment is withdrawn, with investors responsible for their own losses and the associated consequences.

As I've said before, this spending risks driving inflation even higher in Australia. It's not just me and the opposition saying that. Just last week, the Australian Financial Review reported that the International Monetary Fund said:

Strong aggregate demand and the tight labour market warrant continued focus on fiscal consolidation in the near term.

The IMF also warned:

Implementation of below-the-line—

off-budget spending—

activity through newly created investment vehicles (National Reconstruction Fund … and Housing Australia Future Fund) should be phased appropriately, and, more broadly, a proliferation of such vehicles should be avoided.

The Treasurer and the Prime Minister like to stand at that dispatch box in question time and quote the IMF, but you'll notice that they don't quote that part of the IMF's advice. I do wonder about the Prime Minister. We know he's not strong with numbers or the economy, so he potentially doesn't know the impacts of off-budget spending. But we'll give the Treasurer the benefit of the doubt and say that he should. It's clear political spin from him to continue his facade of economic management and his essay writing that he needs to focus on, because that's the reality. The Prime Minister and the Treasurer are the ultimate political insiders. They've spent decades in this house as MPs and staffers, and it's all about politics and spin. It's not about delivering real results for Australians.

Finally, we're on to step 4: ensuring significant lack of detail in the bill so the government is not held to account. When I look at this bill, I can't see where the investment priorities are explained or even mentioned. It's interesting that the minister spoke about the priorities in this place but they are not listed or defined in the bill. So why would the government talk about the priorities but not include them in the legislation? It raises the question: what are they hiding? What are they planning to do once the bill passes that they can't include in the legislation? It just doesn't pass the pub test.

While the bill requires that NRFC investments be mainly Australian based, it provides no definition of those priority areas which would be supported. So does this mean that the government can provide funding to state governments to invest in whatever they like? What are the parameters in this bill? The lack of definition in this bill on what exactly will be eligible for investment flies a red flag. It does not codify the priority areas of the Australian economy to be targeted for investment. There's a great saying I like: if everything matters, nothing matters. And this bill is essentially a blank cheque for the government.

Just this week we have seen the government commit 74 per cent of regional black spot towers spending into ALP seats, despite them representing only 33 per cent of regional seats. This shows that we need to ensure the government is held to account and has transparency in all their spending. The Australian people should not listen to their words but look at their actions when it comes to transparency.

One of the most concerning aspects of this bill and the corporation it creates is the inappropriate ministerial discretion in appointing the corporation's board. Section 19(2)(j) of the bill indicates that those eligible to sit on the board would be people with 'substantial experience in industrial relations'. We all know what that means—union officials. I would note that, in question time on Monday, when asked about the board qualifications required by members, the minister listed the qualifications people needed to be appointed. I was listening very carefully. It included banking and finance, venture capital, economics and industry growth. So what he happened to exclude in his answer was that industrial relations—read 'unions'—is also on that list. It was a very convenient omission from the minister. He also omitted to say that appointments can be from any other field that the minister considers appropriate, so that list is actually irrelevant; the minister can appoint anyone he likes. Again, he forgot to mention that in question time—surprise, surprise.

As I said, the government talk a big game on transparency, but their actions continue to curtail transparency. We have seen just this week that the unions are already lobbying for control of the NRFC, and they're planning to use the NRFC as a vehicle to promote union projects and recruit union members. Always look at what they do, not what they say. This is the reality in the economic environment that we have: taxpayer money is too important and hard earned to waste one dollar, especially at this time of high inflation and high interest rates, and especially as a means to become a vehicle for unions and this government to push their own political agenda.

Unfortunately, there are so many problems with this bill, I truly believe it will cause more harm than good, because this bill follows that time honoured four-step formula of standard ALP policy: an impressive-sounding name; we're committing a lot of money over a long time; we're hiding it in off-budget spending; and we're ensuring there is a lack of detail.

On this side of the House we will always support practical and realistic support for industry, for innovation and for small business. We don't make life harder for Australians by driving up inflation and forcing the RBA to increase rates. We don't just throw around money in the hope that it works, and we won't support a bill that does that. We won't play the political games that the government continue to play, with a prime minister that's all about politics and spin and not about real Australians.

Jerome Laxale (Bennelong, Australian Labor Party) Share this | Link to this | Hansard source

I'd like to thank the member for Casey for his contribution, because he's outlined in a quite succinct way his four-step plan. We heard it was a four-step plan to oppose investment in manufacturing, a four-step plan to oppose the creation of Aussie jobs, a four-step plan to stifle Australian innovation and a four-step plan to attack Aussie workers. I'm so thankful that he's on that side of the House and not in government, because this side of the House was elected on a mandate to drive the transformation of Australian industry and revive our ability to make world-class products right here in Australia.

Manufacturing matters because it creates full-time, meaningful work, and secure jobs. This National Reconstruction Fund matters because this fund, the biggest investment in manufacturing since World War II, means that there will be more jobs here in Australia. It will mean that more Australians across the country will have more secure work. It will mean that workers can reskill and get into emerging industries. In my electorate of Bennelong, where there is significant interest in the advanced medical manufacturing element of this bill, it'll mean that young students and new graduates will be able to get into tech jobs and STEM jobs.

During the pandemic, we learnt the hard way what happens when you abandon manufacturing in this country. When you abandon manufacturing, you abandon Aussie jobs, you abandon Australian innovation and you abandon Australian families.

That's exactly what those opposite did in their decade in office. Remember when they killed our automotive industry? Joe Hockey as Treasurer dared our auto industry to leave, and they did. Then, of course, they said that Australians couldn't build our ships. And then we heard former New South Wales premier Berejiklian say that we could not build trains in New South Wales. It's in their DNA. Those opposite do not care about manufacturing. They love putting on the high-vis, but they're not prepared to back the high-vis. They're the cosplay coalition, as we heard the other day from the minister. They're all show, no go.

That's why we need this investment in manufacturing. We were elected to revitalise the manufacturing sector after years of neglect under those opposite. This $15 billion fund is a key platform to support, diversify and transform Australia's industry and to create sustainable, well-paying jobs—well-paying jobs that will help families pay the bills and help families get ahead.

The way that this fund is proposed to operate is incredibly important. It'll provide finance, including loans, guarantees and equity to drive investments in seven priority areas of the Australian economy. These priorities leverage Australian's natural and competitive strengths, support the development of strategically important industries and shore up our crucial supply chains, the main driver of inflation at the moment.

The seven priority areas include value-adding in resources—expanding our mineral science technology to ensure the greater share of raw materials we extract here in our country are processed domestically. For example, we dig up a lot of lithium; we should be making batteries right here. Other priorities are value-adding in the agriculture, forestry and fishery sectors; and unlocking the potential to value-add in areas like food processing, and textiles, clothing and footwear. There's transport, of course, which is about developing capabilities in shipbuilding and in the manufacturing of cars and trains and, of course, batteries for cars. There's medical science, which is about leveraging our world-leading research to provide essential supplies such as medical devices, personal protective equipment, medicines and vaccines—and didn't we see what trouble we went through for not having a local medical science manufacturing industry only a few years ago.

There's a huge investment in renewables and low-emissions technologies so that we can pursue commercial opportunities to make components for wind turbines, and for the production of battery and solar panels; so that we can have new livestock feed to reduce methane emissions; so that we can modernise the construction of steel and aluminium; so that we can make hydrogen electrolysers; and so that we can have innovative packaging solutions to reduce waste.

This fund will also invest in our defence capability, maximising sourcing requirements from Australian suppliers and employing more workers in this industry, whether they be in technology, infrastructure or skills. It will have key engineering-enabling capabilities in data science and software development, including AI, robotics and quantum.

Each of these target areas will have allocated funding: $3 billion for renewables and low emissions, $1.5 billion for medical manufacturing, $1 billion for value-adding in resources, $1 billion for critical technologies and advanced manufacturing, and $500 million for agriculture, forestry, fisheries and food.

It'll target projects that will help Australia capture new high-value market opportunities to help our businesses grow and succeed both in the economy of today and in the economy of tomorrow. It's an investment in now and an investment in the future.

This includes NRF finance to grow advanced manufacturing and support businesses to innovate and move up the ladder. As a co-investment fund, this looks to draw in investment support with super, venture capital, private equity sources, crowding in investment to help create high-quality, sustainable industries and jobs. There is an opportunity to discuss lessons around timing investment to support manufacturing capability in our regions to make sure that they also benefit from sustainable economic growth. Importantly also, it's modelled on the very successful Clean Energy Finance Corporation.

This bill, if passed, will establish the NRF as a new corporate entity. Importantly, it will be administered at arms-length from the government by an independent, skills-based board appointed jointly by the Minister for Industry and Science and the Minister for Finance. The government of the day will provide guidance on expectations and policy priorities, as is appropriate. The board will make independent decisions on who to invest in and what to invest in and will manage its investment portfolio to achieve objectives and, importantly, to bring a return to the Commonwealth.

Importantly—and I want to stress this—this board will be free from political interference. There will not be a colour-coded spreadsheet in sight. There won't be a member of the National Party there to change the rules without telling anyone. There won't be a Prime Minister who can oversee a program that targets Liberal seats. This is such an important point to stress, particularly after what we've seen from John Barilaro and the New South Wales National Party. We have seen there and over the past decade how those opposite treat these funds and treat taxpayers' money. That will not be able to happen under this bill. We've seen how they reward their mates, rather than the communities and industries that desperately need this investment.

We learnt in New South Wales recently how John Barilaro's office intervened in the $½ billion bushfire economic recovery program, effectively excluding Labor electorates from urgent bushfire recovery funding. Co-funded by the federal government, $250 million of taxpayers' money was used as a slush fund for Liberal and National electorates. The electorate of Macquarie, which includes the Blue Mountains, didn't receive a cent of this crucial economic disaster funding. The report that was released was damning. It states:

The administration process lacked integrity, given it did not have sufficiently detailed guidelines and the assessment process for projects lacked transparency and consistency.

That's not the case for this fund. Inbuilt in the legislation are transparency measures, and the board will be held accountable to this parliament. It will be the National Reconstruction Fund, not the National's reconstruction fund.

They'll be independent. For too long, while those opposite were in government, decisions were made that were in the interests of the coalition, not in the interests of Australia. This bill prevents ministers from directing the NRFC board to make a particular investment and ensures that the board can act independently and make the right investment decisions.

The board will also be required by this bill to take all reasonable steps to ensure the Reconstruction Fund and subsidiaries comply with the directions of the investment mandate. Importantly, the board is required to have a return to government. I'd like to focus on just one part of this investment mandate, and that's the minister's priority in advanced medical manufacturing. Many in this place would know that the member for Bennelong is usually referred to as the member for 'Pill Hill'. There are plenty of advanced medical manufacturers and companies in my electorate. Some of the world's largest and most innovative medical and medical device companies are based not too far from my electorate office.

We have organisations like Sanofi, whose head office is, as I said, located not too far from mine. They provide life-changing treatment options and life-saving vaccine protection to millions of people globally while putting sustainability and social responsibility at the centre of their actions. They have a huge pipeline of new therapies undermined by a commitment to clinical research and development to transform the practice of medicine. Recently they partnered with the Palaszczuk Queensland government, the University of Queensland and Griffith University to establish a global science hub here in Australia. Like many of the businesses based in Bennelong, they have welcomed the announcement and consultation of this fund. They want to see investment in localised manufacturing, particularly in the medical sector. They also note that the NRF has the potential to reshape Australia's healthcare ecosystem by demonstrating that this government is willing to invest in transformative medical science. What will that do for jobs and those studying science at university? It will provide them with a pathway to make things here and design some of these advanced medical products right here in Australia.

I would like to finish by talking about the potential of this fund to unlock low-emissions industries. Australia is rich with valuable critical resources that we could have rightly expected to be used to build our manufacturing base, to add value and to create jobs here in Australia. For decades, we've mined those resources, shipped them overseas for other countries to process them and to add value to them and then imported them back for many, many times the price, sending the manufacturing industry, their profits and the thousands of jobs they create overseas. Our know-how, our scientists and our innovators are amongst the best in the world. Solar cells were invented here. But, today, 87 per cent of the world's cells are made in one country. In the next three years, that number will be 94 per cent.

As the world urgently focuses on decarbonisation and the transition to renewables, our technology and our minerals will play a vital role in meeting not only our target to reduce emissions by 43 per cent but the world's targets. Australia will help the world deliver emissions reduction. As a trusted global strategic partner, it's important that we take advantage of our established free trade agreements so that we can make some of those technologies here. Rather than just digging resources up and shipping them overseas, we should be making solar panels here, we should be making the hydrogen electrolysers here and we should be making batteries here. It's pretty simple: if we invent it here or if we mine it here, we should make it here.

That is what this fund will do. This fund will start up those industries in important medical manufacturing and low-emissions technologies. We have seen what happens when Australia fails to back itself and fails to back its workers. Under the former government, we saw those industries and those jobs go overseas. The NRF is about an investment in Australia. We want it to invest in Australia and Australians—Australian know-how, Australian ideas and Australian ingenuity.

This bill, the investment mandate, the guiding investments and the board's independence to make decisions in the national interest will make sure that this $15 billion fund drives Australia's natural inclination towards innovation. Labor's focus is on renewing, revitalising and rebuilding our manufacturing industry for small-business owners, for the regions, for better pay for families, for a stronger economy and for more secure jobs. I urge those opposite to put their politics aside and to not oppose this once-in-a-generation investment in our crucial manufacturing industry.

Michelle Landry (Capricornia, National Party, Shadow Assistant Minister for Manufacturing) Share this | Link to this | Hansard source

I rise today to speak against the government's proposed National Reconstruction Fund Corporation Bill. First and foremost, I want to personally thank our nation's manufacturers, who helped to keep our country moving during the pandemic. I also want to mention the incredible value that manufacturing adds to our country, especially in my electorate of Capricornia. There are so many great manufacturing organisations around Central Queensland, and every single one of them makes a valued contribution to the local area, whether it's by fabricating aluminium at Barnes & Sons in Rocky or making award-winning liqueurs and condiments from Aussie grown sugar at the Sarina Sugar Shed. The sugar industry alone in 2020-21 generated more than $349 million in my electorate and employed more than 1,917 people. This success is in part due to the coalition's successful manufacturing strategy, creating the right environment for business development. It's growth like this I want to see continuing well into the future for my area.

The growth of our manufacturing industry and sovereign capability isn't something we should be advocating for. It's a necessity for the future of our nation. I find it hard to believe that anyone here would disagree with me on that. That is why it's disappointing to see the Albanese government focus its attention on anything but supporting our valuable manufacturing industry in the way that it deserves. We are almost 10 months into this government and, sadly, there has been no progress for manufacturing. In fact, the government has been more obstructive than helpful, playing politics with manufacturing grants awarded under the coalition and costing businesses valuable time and money. The $15 billion National Reconstruction Fund sounds great in theory, but as usual with this government, it's all style over substance, and I'd be surprised to see that money has gone out the door by the time the next election rolls around.

If you speak to any manufacturer across the nation, they will tell you that the biggest issue right now is electricity prices. Despite the claims from those opposite that the price of electricity would come down under Labor, prices have skyrocketed and are continuing to go up. I know that Labor can't be trusted with the economy or with knowing how to manage money, but the simple fact of the matter is that you can't just throw $15 billion at the manufacturing industry and not address the key issues, the economic issues that the industry relies on to thrive. The government would know that if it took the time to speak to anyone in the manufacturing sector. What's worse, the National Reconstruction Fund's poorly designed funding models shift from competitive grants with robust processes to the government equity and loans. Government equity and loans schemes are far less accessible than grants and provide more barriers for manufacturers, who will ultimately miss out. It's as if the government designed the National Reconstruction Fund with the intention of being purposely restrictive for manufacturers.

First announced in March 2021, the National Reconstruction Fund has been touted as a key priority for the government, but if you read the finer details, it's clear to see the real priority for Prime Minister Albanese is to give jobs to union mates and to create an election slush fund. This bill allows for inappropriate ministerial discretion, giving the minister to appoint the chair and board members at their own discretion, the only prerequisite being substantial experience in industrial relations. The integrity of the Minister for Industry and Science on appointments has already been called into question. As recently shown, he is willing to disregard the recommendations of his own department to appoint a self-declared socialist and union member to the robotics advisory board. This legislation would open the door to allowing this disgraceful behaviour to continue.

If, like me, you ask the manufacturing industry, they also don't have high hopes for this fund, and nor should they. Labor's record on manufacturing is woeful, and it's concerning to think how much damage those opposite can and will do to the industry. I won't sit idly by and watch that happen. I will be pushing to make sure that the voices of Capricornia and national manufacturers are heard and given the support they need.

Josh Wilson (Fremantle, Australian Labor Party) Share this | Link to this | Hansard source

The good news is that the Albanese Labor government is absolutely committed to fostering innovation, productivity, value added enterprise, job creation, self-sufficiency and resilience in Australia. We are absolutely committed to doing that. We went to the election promising to introduce the National Reconstruction Fund as one of the tools by which that would be achieved, and here we are, inside the first 12 months, getting on with that job.

We need to create the means to foster all of those things if we want Australia to become more resilient and more self-sufficient. We learned through the pandemic just how important that is, and it will get only more important in the years ahead. But it's also necessary if we want to take on the challenges that face us, challenges like climate change. We need a shift to renewable energy with greater storage and energy efficiency measures. We need to make a shift when it comes to resource management and the sustainability of the limited resources that the world has and that we all use in manufacturing and in everyday life, and we can only achieve that by moving towards a circular economy. These are things that have to be taken on in Australia and around the world. This government, quite rightly, is grasping that nettle and putting in place the structure by which we can make that shift and benefit from all the good things that come with it—value added businesses with higher export value; more jobs, particularly in regional and rural Australia; and greater innovation, and we know how important innovation is. We're doing it through a proven method. We're doing it through a fund that in many ways is like the Clean Energy Finance Corporation, which, of course, the previous Labor government introduced. It is a structure that has been enormously successful by any measure.

I think that for people listening at home, when those opposite get up and criticise this particular fund and talk about how it's not going to be effective and it's going to have all of these terrible things associated with it—it's going to bring on the night of the living dead, things will be rising up out of the ground and marching through the streets, the sky will fall in, black clouds will roll over, and all the other very reasonable, sensible things we hear from those opposite—it's worth going back to what the Manager of Opposition Business said about the CEFC and the excellent economic judgement that he showed all those years ago. This was the Clean Energy Finance Corporation, a structure that has delivered a clean energy, energy efficiency and storage revolution in this nation, despite the best efforts of those opposite to rip it down and tear strips off it. The Manager of Opposition Business said:

I predict that this investment of $10 billion of taxpayers' money is going to turn out very, very badly. I predict that taxpayers are not going to see a good return on the $10 billion which this government has presumed to invest on their behalf in a range of speculative and unproven technologies—technologies so speculative and unproven that they are ones that the private sector has declined to invest in.

That was the judgement of the current Manager of Opposition Business. This is the CEFC, which now, all these years on, has successfully invested $11.7 billion in projects with a total value of $42 billion. So every dollar that the CEFC was able to contribute leveraged a further $2.60 of private sector investment. It's created thousands and thousands of jobs, and, by fostering the kinds of energy and energy efficiency and storage technology which Australia has to have as part of the climate change action that needs to be taken and the shift towards reliable, cheaper and cleaner energy, it's produced 5.2 gigawatts of renewable energy capacity and reduced emissions by 240 million tonnes. That is how successful the CEFC, the Clean Energy Finance Corporation, has been. It was created by the former Labor government and railed against by all those opposite, who still try to pretend that it wasn't effective.

The joke when you hear those opposite talking about the financial rigour or the financial quality of the CEFC and of the National Reconstruction Fund, which follows in its path, has to be seen in the context of the things that they did in government. At one point they actually tried to reduce the return that is required under the CEFC, because they wanted to use the CEFC to fund things that they knew would not deliver an acceptable financial return. They wanted to use it to invest in things that weren't even clean energy. So anyone listening at home should take the comments those opposite about the Clean Energy Finance Corporation and therefore the National Reconstruction Fund with a little bit of reflection on history.

It is bizarre after an election where the Australian people clearly endorsed the program of this government with respect to the National Reconstruction Fund. But why would you be surprised about that? Why would anyone be surprised that the Australian people want to see investment in innovation, new manufacturing and value-added enterprise—all of those things which are clearly good in themselves and are necessary to respond to challenges like climate change, the circular economy and those sorts of things? Those opposite have said no to that in the way that they've said no to housing reform—investment in affordable and public housing—to climate change action and to energy price relief. I can't think of anything notable so far that they have said yes to. You would think that there is a limit, in parliament and in your approach to government and policy, to how often and how consistently you can say no. But apparently not, if the conduct of the opposition to date is anything to go by.

I know that my community want to see the National Reconstruction Fund support innovation and new manufacturing. I know because of the things that are going on in Fremantle, like the production of graphene. We have companies like ChemX, which I visited the other day; they're seeking to commercialise an innovative process for producing high-purity alumina. High-purity alumina is used in the manufacture of synthetic sapphires, which are used to cover the lenses of smartphones. I've got robotics, I've got autonomous aerial and submarine vehicle production, I've got vanadium battery production. I've got high-quality sustainable fisheries like Fremantle Octopus, Australia's first to be certified by the Marine Stewardship Council. I've got gaming and virtual reality tech. All of these things should be part of a bright, vibrant economic future in the 21st century in a country like Australia, but they need appropriate market shaping and investment support from government.

Another of the mistruths you will hear from those opposite is that that kind of innovation, that kind of market-shaping change in direction, will always be produced by the private alone and that the best thing government could do is stay out. Take the smartphone. What technologies does the smartphone depend on? The internet, GPS, touch screen technology—all things that were developed by government, all things that were produced through research that was government supported or undertaken. That is actually true in many areas, like biotechnology, nanotechnology, solar cell development, the internet, wifi—which Australia had a role in—and pharmaceutical breakthroughs. All of these things generally begin with publicly funded research and development. It is absolutely right that we are prepared, through properly structured means like the National Reconstruction Fund, to try to kickstart and lean into all of the changes that should be the basis of a high-tech, sophisticated, resilient manufacturing future in Australia.

I am very glad to support the National Reconstruction Fund along with my colleagues. Its basis is rock solid. It is shaped in the way that the CEFC was established, and that has been enormously successful. It has identified seven pretty clear and, to some degree, I would say, obvious areas of focus: value added resources, value added agriculture, transport, medical science, renewables and low-emissions technologies, defence and enabling capabilities. I don't know anyone over there could argue that those aren't things that we should be leaning into. That's how the National Reconstruction Fund will work. It will catalyse sophisticated manufacturing and innovation in this country, and it will do it through a proper and rigorous investment structure. I am very glad to support it. It's what the Australian community voted for last May. I guess we just keep holding on for the day, at some point in the future, when those opposite, after nine years of saying no and doing nothing in government, and now nine months of saying no to everything in opposition in this parliament, come in here and surprise us and say yes. But I won't be holding my breath.

Zali Steggall (Warringah, Independent) Share this | Link to this | Hansard source

I rise to support the National Reconstruction Fund Corporation Bill 2022. The aim of this bill is to establish a fund to invest in priority areas of the Australian economy. It's clear this is one of the key pillars in delivering the emissions reductions that are necessary for Australia to achieve as quickly as possible. It is very important, and I recognise the importance of this legislation and of this fund.

The minister has said that this corporation has been proposed as a result of the pandemic highlighting the importance of an agile advanced manufacturing capability that can pivot to produce critical products. We also know that we are in a race to zero around the world, and so manufacturing of new technologies and really getting that slice of the pie of new opportunities is incredibly important. I know we have so many leaders in this space in my electorate of Warringah. It is very important that we set up the right framework and the right support from government; it has been missing. As the minister said, during the pandemic we really did see where we have gaps in our manufacturing and our supply chain, and how exposed we are to all the offshore manufacturing. We need to do better around supporting manufacturing in Australia.

The object of the corporation that will be established under this bill will be to facilitate an increased flow of finance into priority areas of the Australian economy. That is to be achieved by financing businesses, state and territory governments and other entities with concessional loans, equity, guarantees and a wide range of other financial instruments. The set-up proposed in the bill for this corporation is very much modelled on the Clean Energy Finance Corporation. As many in this place have stated, that has been an incredibly successful model. There has been a huge amount of really appropriate investment that has brought forward and advanced so many technologies and put Australia into a really good position when it comes to some new technologies. But obviously more can be done, and so to have this corporation working in parallel to the CEFC will be incredibly important. They won't duplicate each other, but they will supplement each other's purpose in really driving investment in Australia.

The minister has said that the seven priority areas are: value-add in resources; value-add in agriculture, forestry and fisheries; transport; medical science; renewables and low-emissions technology; defence capability; and enabling capacities. These are clearly very important areas, but of course the investments and the focus will need to remain quite flexible, because from time to time we identify other areas and sectors that need that focus. When the bill was first introduced, the government introduced a consultation paper to seek input relating to the seven priority areas and that investment mandate, looking at questions such as risk and return; limits and conditions on types of financial instruments utilised by the corporation; governance requirements, including ESG, which is so incredibly important in the private sector; the influence of government policy priorities on investment decisions—I think it's really important that we remember that government should not fall into the trap which the last government did, of picking winners, because you do that at the expense of the market and where demand actually is—and managing national security risk, which obviously underpins defence, with defence capability being one of those key priority areas.

It's clear that we need to invest in our future to meet the challenges ahead. We know there are many, from COVID, which really rocked our systems of government and society, to the impacts of global warming and the urgent need to reduce global carbon emissions, including through rapid industrial transformation. The world is on a race to zero, and there are certain jurisdictions that are really accelerating beyond. Australia is at risk of being left behind if we don't pick up the pace. What we've seen in the US with the Inflation Reduction Act is a huge surge of investment and international capital going to the US as a result of a now very attractive legislative environment. People know that there is so much focus on the transition to clean technologies that that is attractive. We know that the EU are looking at similar legislation to the Inflation Reduction Act so that they also attract international capital for investment. So now it's really important for Australia to hold its own and have a share of that pie and make sure that we are underpinning and supporting manufacturing in so many key industries so that we remain in that race, or we will lose to overseas, to the US, so much of our skills and growth opportunities.

I believe we absolutely need to be striving for a future-focused circular economy where business can thrive and innovation and inclusion are embraced. We still don't have a regulatory regime that really encourages innovation and investment into R&D for our businesses, and we often lose entrepreneurs and new ideas to overseas jurisdictions because of that.

So I support this legislation, and I've met with the minister to discuss improvements and where I think there are risks in the implementation. I urge the government to ensure that the aim is to achieve growth that is both inclusive and sustainable and that the focus is on small to medium enterprise as well as large business, because too often government makes the mistake of focusing on very large business, and SMEs miss out. But we know SMEs are a huge part of growth. They are a massive employer and they are where the technologies of tomorrow start out.

Innovation is critical for a successful economy. A dynamic, productive economy creates jobs, boost wages and ultimately ensures economic prosperity and welfare. From the pacemaker to cochlear implants, Australian innovation has revolutionised industries and people's lives. In Warringah, innovation is everywhere. Lakeba's Future Hub 11 shows how we can excel in digital technology; SEVENmile Venture Lab proves we can create an ecosystem to support the next generation of startups; Loam Bio shows the innovation leading from Warringah and transforming agriculture to enhance crop yields and increase carbon sequestration of soil; v2food is working to bring down our average meat consumption and reduce emissions from the meat based sector; Aviation H2 is working on the development of green hydrogen powered planes. There are ideas and innovations really coming to the fore.

But we're losing momentum, and we risk being outpaced by economic competitors. Australia currently ranks 25th in the world in innovation, according to the global innovation index, down from 17th in 2018—so in the space of five years we've already lost seven places. We must reverse that decline and really increase the focus on innovation.

Our economy should be dynamic and pioneering, based on growth industries like IT, financial professional services, advanced manufacturing, aerospace, healthcare and biotechnology, artificial intelligence, clean energy and quantum technology. It should be driven by empowered people with the skill sets and visions for the future. Our economy bets on startups and other tech companies to be new engines for growth. Warringah's well-educated workforce and forward leaning businesses are well positioned to engage in this positive future.

The proposed National Reconstruction Fund will help achieve these goals, and for that reason I support the principle of the legislation. I also encourage the government to consider the mechanisms to boost innovation in Australia. In particular we need to increase the budget for the Australian Research Council to support cutting-edge research. We need to broaden the research and development tax incentive to increase accessibility for SMEs and tech firms, as well as offer a 20 per cent collaboration premium. We need to broaden angel investor tax incentives to improve access to capital for early-stage companies. We need to facilitate partnership and collaboration between international and domestic research institutions, businesses and all levels of government, and we need to equip new and existing workers for future jobs with STEM skills.

Are these things interventionist in this bill? One of the questions that will be asked is why businesses need government funding to commercialise and develop innovative research and ideas. If the business is good, why does it need private funding? The fact is that Australian research has produced some highly commercially successful businesses. Much of the commercialisation, though—whilst the research has occurred in Australia, the commercialisation has been done overseas because we have not offered the right environment for that to occur. Some of Australia's most profitable inventions, developed by CSIRO research, have been delivered by the likes of Unilever, DuPont, Ciba Vision and Novartis. In 2021 CSIRO prepared a report on unlocking the innovation potential of Australian companies. It tells us the major barriers to commercialisation of science and technology are low levels of cross-sector collaboration, cultural challenges including risk aversion to innovation, and business research incentive misalignment. There is a strong argument, supported by international economists, that private sector investment in new technologies and industry only eventuates after governments make the risky early-stage investment. It's an approach which appears to be working for some of our Asian neighbours, through government support for manufacturing and high-tech industry development.

The recent experience of the COVID pandemic also emphasised Australia's geographic isolation and supply chain challenges. It highlighted how some industries found a way to pivot quickly—hand sanitiser, anyone; how many companies in everyone's electorate started to develop that? But there is a role for government in considering the lessons of COVID and which industries need to be developed and supported in the future, and as soon as possible.

There are some key questions on transparency and board independence. I urge the government to ensure there is transparency in both investment decision-making and reporting of investment performance. It's very important to ensure genuine independence of the board. The minister has said the board will be independent of political influence and that it will be appointed jointly by the Minister for Industry and Science and the Minister for Finance. Madam Deputy Speaker, forgive me for being a little bit cautious when I take that at face value, because this place has shown me political interference is fairly frequent when it comes to these kinds of bodies and this kind of decision-making. I welcome the review into jobs for mates, announced over the weekend by Minister Gallagher, and I urge the minister to consider the framework proposed in the member for Mackellar's private member's bill, to be tabled next sitting, in relation to appointments to boards of this nature. We need to avoid the mistakes of previous governments and ensure there is true independence and accountability of the board of the corporation. It cannot be a case of jobs for the boys and investing in politically aligned projects. We must avoid the corporation becoming a source of funding for projects in marginal seats.

I note that the University of Sydney's submission in support of the bill urges the government to consider the recommendation that there be appropriate academic representation on the NRF reference group, which will guide the fund's development and the preparation of its investment mandate. The involvement of academics with demonstrated significant success in commercialising Australian university R&D will assist both in identifying suitable investments and in risk management. Of course, we also need industry and people with strong networks and expertise in the field of innovation.

We need to align the investment mandate with other policy goals, such as sustainability and inclusivity, and to this end I support proposed amendments identifying that we do need to exclude support for fossil fuel projects. We can't let this fund, which is about supporting our innovation for the future, be about propping up the industries of the past. We need to make sure that its investment mandate includes the criterion that it align with important policy objectives such as net zero targets, sustainability, inclusivity and circularity principles. I note that the University of Sydney's submission, for example, makes this very point.

It's also important that this legislation not duplicate existing institutions, such as, very importantly, our Advanced Manufacturing Growth Centre, the AMGC. Instead, the NRF needs to leverage the experience and knowledge already existing in such bodies. The AMGC has been a highly successful fund. Its goal is to drive innovation, productivity and competitiveness across Australia's manufacturing industries. It's an industry led not-for-profit organisation run by a board and management team of industry experts. To date, the AMGC has distributed some $137.5 million in co-funding investments. Of this, $50 million was federal funds, and it has had a return of 26 to one on federal funds. That is success.

We can do this, but let's make sure we do it well.

Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

I'm proud to have the opportunity to speak on the National Reconstruction Fund Corporation Bill 2022. This bill is one of the most important pieces of legislation this House will deal with. The Albanese government was elected on a mandate to drive the transformation of Australian industry and revive our nation's ability to make world-class products in Australia. This bill delivers on that mandate.

The National Reconstruction Fund will oversee one of the largest investments in our country's history: $15 billion to invest in independently assessed projects that will support, diversify and transform Australia's industry and economy. The NRF will assist Australian industry, including in regional areas, such as in my own electorate of Lyons, to seize new growth opportunities. It will do that by providing finance for projects that add value, improve productivity and support transformation. Investment in these activities will help create secure, high-value jobs for Australians and strengthen our future prosperity.

The bill we have before the House establishes the NRFC as a new corporate Commonwealth entity; establishes the NRFC independent board; outlines the functions and powers of the corporation; sets out the financial, personnel and governance arrangements; and establishes the power of the minister to issue an investment mandate to guide the investment strategy of the NRFC and declare the priority areas of the Australian economy.

The fund will provide finance, including loans, guarantees and equity, to drive investments in seven priority areas of the Australian economy. These leverage Australia's natural and competitive strengths and support the development of strategically important industries and shore up those critical supply lines. The seven priority areas are, first, value-add in resources: expand Australia's mining science technology and ensure a greater share of raw materials extracted are processed domestically—for example, high-purity alumina from red mud in bauxite processing, or lithium processing for batteries. If we mine it here, we should make it here. Second, value-add in the agriculture, forestry and fisheries sectors: unlock potential and value-add to raw materials in sectors like food processing, textiles, and clothing and footwear manufacturing. Third, transport: develop capabilities in transport manufacturing and supply chains, including for cars, trains and shipbuilding. How fantastic would that be, after seeing those industries driven out of this country by those opposite? Fourth, medical science: leverage Australia's world-leading research to provide essential supplies such as medical devices, personal protective equipment, medicines and vaccines. There is no lesson greater than what we've lived through with the COVID pandemic in ensuring that Australia has sovereign capability in that critical area of medical science and supplies. Fifth, renewables and low-emissions technologies: pursue commercial opportunities, including from components for wind turbines; production of batteries and solar panels; new livestock feed to reduce methane emissions—and a shout-out to my electorate, where we're developing seaweed additives, which make a big difference in that regard; modernising steel and aluminium; hydrogen electrolysers; and innovative packaging solutions to reduce waste. Sixth, defence capability: maximise the sourcing of requirements from Australian suppliers employing Australian workers, whether they are technology, infrastructure and skills—and, of course, the Minister for Defence and the Prime Minister have received the DSR, which I'm sure will go into this as well. Seventh, enabling capabilities: supporting key enabling capabilities across engineering; data science; software development, including in areas such as artificial intelligence, robotics and the quantum area.

I'm particularly excited about the opportunities that the National Reconstruction Fund presents for regional Australia and, of course, my own state of Tasmania. My home state of Tasmania has a long history of manufacturing innovation. Indeed, the hydroelectric scheme in Tasmania is just one example. Manufacturing is the sixth-largest industry in Tasmania, generating $1.9 billion and employing 17,000 people. Tasmania's manufacturing sector is globally competitive on food and beverage processing, smart technologies, forestry, maritime and defence. It offers high value across the whole state and, of course, is a critical employer. Tasmanian manufacturing is part of the global production supply chain which attracts and supports globally competitive companies, including large-scale corporations such as Caterpillar, Elphinstone, Cadbury and McCain Foods.

We also have some fantastic manufacturing operations in my own electorate specifically, from small-scale facilities to global operations—for example, Orion Australia, a family owed business in the Meander Valley that manufactures guaranteed water tanks and storage bins; or Kings Outdoor Living, manufacturing custom-made outdoor products for both residential and commercial customers from their facility in Sorell. Another fantastic example is Tasbuilt, also in the Meander Valley, specialising in custom designed commercial modular buildings manufactured in Westbury. On a larger scale, Norske Skog, the only manufacturer of newsprint grades of paper in Australia, operates the Boyer mill in the Derwent Valley, producing around 260,000 tonnes of newsprint, improved newsprint, book grades and lightweight coated grades annually. These are just the kinds of operations that can benefit from the NRF, and there are so many others. I look forward to seeing what we can achieve in Tasmanian manufacturing and, indeed, Australian manufacturing as a whole with the type of investment and support the NRF can provide.

We know we need to revitalise manufacturing after a decade of neglect from those opposite. The Liberals had nine industry ministers in as many years, and they left Australia's manufacturing industry in tatters. They had nine ministers who stood there in this place and baited the Australian car industry into leaving the country, and it did. The opposition has a choice: a choice to help us revitalise manufacturing or to turn their backs once again on Australian manufacturers and Australian workers who work in manufacturing. The Labor government's focus is on renewing, revitalising and rebuilding Australia's manufacturing industry for Australians: for small-business owners, for the regions and for jobs.

For too long, while those opposite were in government, decisions were made in the narrow political interests of them and their mates and not in the broader national interest. Maybe that's why they oppose it: it's just too hard to rorts. The NRF and its funding decisions will be independent. It will be administered at arm's length from government by an independent board, appointed jointly by the Minister for Industry and Science and the Minister for Finance, that will make independent decisions about investments in Australia's best interests. The National Reconstruction Fund will be modelled on the successful Clean Energy Finance Corporation, which the Liberals also opposed, claiming it would be a financial disaster, but which has in fact invested around $11 billion in Australia's transition to net zero, leveraging $2.61 of private sector investment for every dollar of government funding. This government will provide guidance on expectations and policy priorities through a legislative instrument and an investment mandate. The NRF board will independently make investment decisions and manage its investment portfolio to achieve both the NRF's objectives and a positive portfolio rate of return, free from political influence. There won't be a colour coded spreadsheet in sight. No wonder those opposite oppose it. There's no gaming to be had.

The Albanese Labor government want Australia to be a place that makes things again, and we know Australians want that too—a place with our own industrial and manufacturing capabilities, and a place where men and women can build things to be proud of. We all remember the footage and photos of Ben Chifley with the first Holdens coming off the assembly line. That is etched in our history and our national psyche, with pride. Those opposite drove that industry out of the country. We want to bring manufacturing back. Manufacturing matters because it creates full-time work and secure jobs, it helps the security of families and it serves our national interest.

Labor understands we need both sovereign borders and sovereign capability. If we mine it here, we should make it here. If our brightest minds are able to think, create and develop ideas, they shouldn't have to go offshore. If we invent it here, we should make it here. We saw through the pandemic how supply chains stretched. Supply chains were taken for granted for so long. They stretched and then they snapped, and products that we'd come to rely on as a matter of course simply disappeared. Labor heeds this lesson, while the Liberals foolishly ignore it.

This Labor government will revitalise manufacturing after a decade of Liberal neglect. We will rebuild our nation's sovereign capability. The assembly lines will be switched on again. The $15 billion National Reconstruction Fund is a key platform to support, diversify and transform Australia's industries and provide a pathway to more sustainable, well-paying jobs. This bill and the investment mandate guiding investments will make sure the $15 billion fund drives Australia's natural inclination towards innovation.

There's no greater example of this than what I spoke about yesterday in the Federation Chamber with the Australian Space Agency and their investment in the Greenhill Observatory in my electorate, where we have upgraded the communications capabilities of the observatory. It can now not only track satellites but communicate with them. There are many thousands of satellites up there—it's getting pretty crowded up there!—that need to be recalibrated and have their trajectories changed. Tasmania is part of this global effort. I saw in the press just yesterday the deputy administrator of NASA in the US calling for space technology to be treated as a sustained investment and as a strategic priority. This government's NRF will fund, subject to the board, of course, technology innovation in space development because we know it is a growing area and a strategic priority.

My electorate, Lyons, is a big agricultural seat in Tasmania, and here we are playing our part in the development of 21st century space innovation and tech. It's this sort of innovation that will lead us into the future and provide a future for the students and graduates of the University of Tasmania in space technology. So I commend this bill to the House. It's one of the most important pieces of legislation this House is dealing with. It delivers on a key election commitment this government made coming into government. It's fantastic for the country, it's fantastic for manufacturing jobs and it's fantastic for the regions.

James Stevens (Sturt, Liberal Party) Share this | Link to this | Hansard source

I rise to speak against the second reading of the National Reconstruction Fund Corporation Bill 2022. I feel compelled to briefly clarify something very important regarding the car industry. Ford made the decision to close during the Gillard government in about May of 2013. There were three major manufacturers in the country then—Ford, Toyota and General Motors Holden in my home city of Adelaide. The impact of the Gillard government letting Ford close was that effectively for the economies of scale throughout the supply chain for vehicles it was all over red rover from that point onwards. I remember being in briefings with Holden during the Gillard government's era, and it was very clear that letting Ford close implicitly meant that there wasn't a future for car making in this country. That was the simple reality. Ford left. Then prime minister Gillard said it was because of the high Australian dollar. She said, 'The high Australian dollar has led Ford to make the decision to close.' That was really the domino that saw the other two, very regrettably, also make that decision. Those are the facts of the history. It was in May 2013 that that decision was made by Ford. It's completely delusional to suggest that that wasn't the catalyst for the industry regrettably leaving.

But going to this bill and our commitment on manufacturing versus what this bill actually achieves I would like to first start by saying that, as a South Australian, I think it's appalling that this government has stepped away from the priorities the previous government had around the space industry. Space is the future. There is no question that the greatest opportunity for economic growth and employment creation, particularly in my home state of South Australia, is through the space industry. We were very proud to have the Morrison government make the decision for the Australian Space Agency to be headquartered in Adelaide. We are very proud of a number of our capabilities, particularly the great asset of the Woomera proving range, which gives enormous civilian as well as defence opportunities for proving and testing and so on and so forth. We have a lot of great launch opportunities in South Australia, particularly with Southern Launch over near Port Lincoln on the Eyre Peninsula being already a going concern, and with the Space Agency based in South Australia, with our heritage in aerospace, particularly centred around Woomera, and future launch opportunities.

We on this side of the House are really excited about the opportunities that space provides. We are really proud of the record we have in making the decision to establish the Space Agency, which was announced at the international astronautical conference in South Australia in 2017. It was a decision of the previous coalition government. Then there was the decision of the Morrison government to locate the headquarters there, knowing full well that space is a national opportunity. I don't mean to pretend for a moment that South Australia is expecting all the benefits of it. It is much like defence capability. We want to see all Australians benefit.

There are huge opportunities in this sector nationwide. That is why it is absolutely remarkable that the new government are moving away from the most exciting future industry at the first opportunity they've got. Imagine saying, 'We've got a policy for manufacturing and industry that involves stepping away from the biggest future industry opportunity on the planet'—in fact, beyond the planet. That is exactly what they've done. It's completely nonsensical.

No-one has mentioned it in their speeches. You'd assume that there was a reason for this change and they would come in here and justify it in all the speeches in this second reading debate. The previous speaker, the member for Lyons, even talked about the opportunities in the space industry—on the bill that sees the government remove support from the space industry! What spectacular gymnastics we saw from the member for Lyons in his contribution.

As a South Australian I have to really call out the disgrace of dumping space as an industry that is focused on by this government. Apart from the lost opportunities in the future, it is really debilitating for those who made decisions thinking that there was bipartisanship in the future opportunities that the space sector can offer in this country. A lot of people have made decisions, particularly in my home state of South Australia, to invest in South Australia. The previous government sent a clear signal that we were embracing space—the industry and its opportunities.

We know that space has unbelievable applications for all industries—even for some of the most traditional industries we have relied on, like agriculture. Earth observation technology can have enormous applications in agriculture, one of our greatest traditional industries. Of course agriculture is a huge component of our economy in South Australia. It's so short-sighted to not recognise, apart from the direct jobs and investment in space itself, space has applications for so many industries and the kinds of productivity gains we can achieve from the space sector across all industries. The short-sightedness of that is appalling. It is a really dark day for the space industry in this nation to see this government make that decision.

This bill, very much like the housing bill, is effectively a form of magic pudding accounting. The government could properly put in the budget investments in industry and manufacturing capability. They could make a decision that growing manufacturing and supporting businesses in the manufacturing sector are priorities for them and they could undertake an appropriation in the budget and make decisions that involve prioritising expenditure in that area. They would have to cut expenditure somewhere else to accommodate expenditure in manufacturing or, Labor being Labor, maybe they would increase taxes or run a higher deficit.

They could properly invest in industry capability. Instead, what they're doing is accounting trickery where they say, 'At no cost to the actual budget, we can have all this expenditure in industry growth and manufacturing reconstruction'—whatever the spin is on it. There's no budgetary impact whatsoever. They are not going to make any difficult decisions. They're not going to say, 'This area is so important that we're going to allocate proper legitimate budgetary expenditure to it and through our ERC process and budget processes we will have to accommodate other decisions to allow for that expenditure.'

Instead, we have the mythical proposition that happened with the housing bill as well where now they just do things outside of the budget and spend hundreds of millions, if not billions, of dollars by acquiring funds and getting a higher return on the cost of that capital and that will have no risk and be a certainty and guaranteed into the future. As I said on the previous bill, why aren't we just doing that on every element of how we operate the government if it's that reliable and that simple? You could borrow tens of trillions of dollars and, apparently, under this methodology that you are using, much like under the housing bill, you have no risk whatsoever at earning a higher return through these sorts of activities, or any investing activity, frankly. You could give the Future Fund trillions and trillions of dollars and say, 'Hey, could you go and invest this money, earn more than it cost us to borrow that money so we can use the difference between the earnings and the cost of the capital to fund the entirety of government?' That would be fantastic. We could then have no tax, whatsoever. We could spend whatever we wanted because we could just keep borrowing the extra amount of money and just bank that.

This is the Bernie Madoff government. It is very straightforward, because there is just no question whatsoever that, in perpetuity, we will always earn more money than the cost of that money—always. So you could then just get some kind of formula that says: How much do you want to spend this year? How much is that in the differentiated rate of return between what we absolutely will earn on anything we do ever versus the cost of the money that we used to invest it? Then we will just figure out how much to borrow, we will absolutely earn that return and it will be absolutely perfect. So this is perhaps an exciting day for all Australians because we are on the cusp of something that involves no taxation ever again. I don't know if CNN are running this live and whether the world is about to stop, but we now have a government that effectively says, 'We can spend all sorts of money at absolutely no budgetary cost whatsoever with no reliance on taxpayers.' Obviously that is completely farcical and ridiculous.

Now that we have this happening in a pattern—we have had it on the housing bill and now we have it on this bill before the House—these bills have nothing to do with what all the speeches claim they will spend the money on, because will the money ever eventuate? In particular, what kind of financial risk, when things go bad, are we putting the finances of this nation into? It is very much akin to the Jim Cairns-Rex Connor approach to public finances, and we all know how that ended. In fact, thankfully, it stopped before it could even get going. Even people back then—this might be an oxymoron—the responsible members of the Whitlam government—that's a relative term—could not stomach that kind of recklessness. But now apparently we are incurring tens of billions of dollars of debt, saying that beyond any question there will be a return higher than the cost of that money that we can just spend for free off the budget.

We on this side of the House are standing up to the fraud of that proposition. We always hope that the Future Fund is going to have strong returns. The Future Find is a very important capability for us to meet future liabilities and we commend the excellent work and performance of it over the years. But the chair of the Future Fund himself has said, and it is a very reasonable comment, that he is uncertain about the economic future, and people have to prepare themselves for the fact that the Future Fund cannot be expected to buck the trend of markets and be able to keep returning heroic rates of return through any form of economic cycle.

We have a government proposing these sorts of measures where we are on the cusp of some of the greatest risk in the economic market cycle that we have seen for decades. For all of this to go wrong, all that has to happen is the returns we are meant to get on these billions of dollars of borrowings fall below the cost of those borrowings. The cost of borrowing is going up; that's an indisputable fact. We absolutely know that. So the rate at which the government is borrowing money right now is much higher than when the then Labor opposition conceived these hocus-pocus schemes.

Equally, the return of investment for Future Fund and its outlook is dramatically down. We have no idea how the markets and how these sorts of returns are going to shift into the future but, regrettably, there is a very high risk that they will go the wrong way. So what this parliament is being asked to do on this bill and on another bill that has regrettably been through earlier today is to pretend fictitiously that there is no risk whatsoever, that it is completely guaranteed and completely reliable and that we can apparently play the markets better than anyone else in the global markets and always achieve a regular guaranteed permanent return. There's just no way that that is achievable.

So we've got to decide what sort of fiscal responsibility and, in particular, what sort of balance sheet responsibility we want to have as the Commonwealth of Australia, and how important our AAA credit rating is—in particular, the credibility that we've got in global bond markets. If we are reckless with that and the worst-case scenario occurs, imagine where we will be as a nation if, because of these sorts of policies, we see our reputation in global debt markets deteriorate. That is what has been put on the line here with this kind of recklessness: 'What's a good press release in an election campaign? Where can we achieve free money and say we're spending on all these great, colourful, shiny things and we don't have to find any budget savings and we don't have to do anything difficult or unpopular in order to pay for it?' In exchange for that press release and that press conference in an election campaign, saying we've got billions of dollars that we don't have, to spend on manufacturing and industry, the government is recklessly putting at risk our ability to sustainably finance the Commonwealth of Australia. It's not an insignificant thing.

So I'm very proud of the important, strong, principled position that we've taken on this bill and on a similar bill, and I hope that it might persuade some of the reasonable members of the Albanese government who can channel some of the more reasonable members of the Whitlam government to stand up against this kind of fraudulent accounting trickery and put the interests of this nation first, put the finances of the people of Australia first, and vote down this bill.

Louise Miller-Frost (Boothby, Australian Labor Party) Share this | Link to this | Hansard source

After that highly entertaining exercise in fantasy land—a no-tax world! Good on you, Member for Sturt! That's from the people who left us almost a trillion dollars worth of debt. But let's return to talking about the bill.

Boothby was once home to a thriving Mitsubishi motor plant at Tonsley. For many who grew up in Boothby, the automotive industry was a defining feature of economic life—from 1964, when it opened as Chrysler, to 2008, when it closed as Mitsubishi. It was an industrial focus and a major employer for the southern suburbs. While Mitsubishi may have gone from Boothby, manufacturing, innovation, research and industry continue to thrive. That's why I'm thrilled to speak today about this bill to establish the National Reconstruction Fund.

The Albanese government was elected on a mandate to drive the transformation of Australian industry and revive our ability to make world-class products here in Australia. In fact, the Prime Minister, then in his capacity as Leader of the Opposition, announced our policy for a national reconstruction fund back in 2021, because he and those of us who now sit on this side of the House could see that opportunities had been wasted for too long. And, as we dealt with COVID-19 and all the restrictions, challenges and hardships that came with it, it became blindingly obvious that, as a country, we were not where we needed to be. As global supply chains ground to a halt and demand for health supplies, electronics and many other items soared, the relative decline in our sovereign capability became obvious. It was clear to anyone paying attention that there was a need to revitalise and rebuild Australian manufacturing as a powerhouse for jobs, as a powerhouse for the economy and to protect our own supply chains. Seems like a no-brainer.

And so we come to the government's $15 billion National Reconstruction Fund. The bill establishes the fund as a new Commonwealth entity. The NRF will provide finance, including loans, guarantees and equity, to drive investments in seven priority areas of the economy. These leverage Australia's natural and competitive strengths, support the development of strategically important industries and shore up supply chains.

The bill establishes the fund's independent board and outlines the fund's functions and powers, including those relating to investment. Importantly, the bill establishes the power for the responsible ministers, the ministers for industry and finance, to issue an investment mandate to guide the investment strategy of the fund and declare the priority areas of the Australian economy.

These priority areas have been identified by the minister as the following. Value-add in resources: the fund will aim to expand Australia's mining science technology and ensure a greater share of raw materials extracted are processed domestically—for example, high-purity alumina from red mud in bauxite processing or lithium processing for batteries, which we know will be a key economic resource and growth driver for the decades to come. As a country we are blessed to have these in-demand minerals, but instead of shipping them offshore to be processed and then buying them back as products at much higher prices, we should be processing them here so the financial benefit accrues to us, Australians, and the jobs are here for us, Australians. Value-add in the agriculture, forestry and fisheries sectors: the fund will work to unlock potential and value-add to raw materials in sectors like food processing and textiles, clothing and footwear manufacturing. Transport: it will develop capabilities in transport manufacturing and supply chains, including for cars, trains and shipbuilding, to ensure we have efficient, effective transport to power industry. Medical science, which is the key for Boothby, which is home to both a major hospital and a leading research university, as well as to a number of high-tech medical innovators: the fund will work to leverage Australia's world-leading research to provide essential supplies, such as medical devices, personal protective equipment, medicines and vaccines. Renewables and low-emission technologies: this is a fantastic opportunity for us to sell to the world. It will pursue commercial opportunities, including for components for wind turbines; the production of batteries and solar panels; new livestock feed to reduce methane emissions; modernised steel and aluminium; hydrogen electrolysers, and we have the largest hydrogen electrolyser in the country in Tonsley, in Boothby; and innovative packaging solutions to reduce waste. We need these things for our future here in Australia, but they are going to be in high demand around the world. This is key to our becoming a renewable energy superpower. Defence capability: as a representative from South Australia, I have seen how many good, well-paying jobs are being driven in improving our defence capability, not just directly in defence and in the submarine and frigate builds, but as we see in the Tonsley innovation precinct, many companies are seeing the opportunity to join the supply chain, even if they've never been part of defence previously.

The fund will work to maximise sourcing of requirements from Australian suppliers employing Australian workers, whether they be in technology, infrastructure or skills, and the government has already announced target investment levels for specific priority areas. There is up to $3 billion for renewables and low-emissions technologies, $1.5 billion for medical manufacturing, $1 billion for value-adding in resources, $1 billion for critical technologies, $1 billion for advanced manufacturing and $500 million for value-adding in agriculture, forestry, fisheries, food and fibre.

The National Reconstruction Fund will target projects and investments that help Australia capture new high­value-market opportunities to help our businesses grow and succeed. This is about not just the economy of today, which is itself so vitally important, but the economy of the future. It's about setting Australia up to lead the world in these fields so that we can benefit from the growth that will come from these areas. The fund also includes finance to grow advanced manufacturing and to support businesses to innovate and move up the technological ladder. As a co-investment fund, the NRF looks to draw in investment support from superannuation, venture capital and private equity sources, bringing in investment to help create high-quality, sustainable industries and jobs. We know that locking in the 43 per cent emissions reduction target by 2030 has brought certainty to business and investment and has made Australia a much more attractive investment opportunity.

There is opportunity to discuss lessons around targeting investment to support manufacturing capability in our regions to make sure they benefit from sustainable economic growth. Modelling the NRF on the successful Clean Energy Finance Corporation, this bill establishes the NRF as a corporate Commonwealth entity.

Importantly, the National Reconstruction Fund will be administered at arm's length from government by an independent board appointed jointly by the Minister for Industry and Science and the Minister for Finance. The government will provide guidance on expectations and policy priorities through a legislative instrument and an investment mandate, as I outlined earlier. To ensure integrity, accountability and value for money, the board will independently make investment decisions and manage its investment portfolio to achieve both the NRF's objectives and a positive portfolio rate of return. Free from political influence, there won't be a colour-coded spreadsheet in sight.

There's long been an argument made that government has no role to play picking winners, no role to play guiding industry, no role to play other than establishing guardrails and letting business do its thing, only stepping in when there's been market failure. But this is not a do-nothing government, as the previous one was—happy to let things float along, see where they end up, taking credit for the wins and disavowing the losses. As the minister has said, government does have a role to play making real contributions to our most vital sectors. That's what we're elected for.

Australia is rich with valuable critical resources—resources we could have rightly expected to be used to build our manufacturing base, add value and create jobs here in Australia. But for decades we've mined these resources and shipped them off overseas, only for other countries to process and add value to them, and then we import them back at many times the price—sending the manufacturing industry, their profits and the thousands of jobs they create overseas. If we mine it here, we should make it here.

Australia's know-how, with our scientists and our innovators, is among the best in the world. Photovoltaic technology, solar cells, was invented here. But today 87 per cent of the world's cells are made in another country. You can imagine what that means in dollar value. In the next three years, that number will be 94 per cent. If only it was still here in Australia!

As the world urgently focuses on decarbonisation, the transition to renewables and low-emission technologies will play a vital role in delivering Australia's emissions reduction target of 43 per cent by 2030 and net zero emissions by 2050. We're well placed to make the most of our technology and our skills. If we invent it here, we should make it here. We've seen what happens when Australia fails to back itself and fails to back its people. They go overseas and take their experience, their know-how and their passion with them. We want Australians living overseas to come home. We recognise many of them left Australia seeking support and funding for their ideas—support and funding they just couldn't find at home. We want to empower the NRF to invest in Australia and Australians—Australian know-how, Australian ideas, Australian ingenuity.

Both this bill and the mandate guiding investments will make sure the $15 billion fund drives Australia's natural inclination towards innovation. Our focus is on renewing, revitalising and rebuilding Australia's manufacturing industry for Australians, for small-business owners, for the regions, for jobs. I turn back to the old Mitsubishi Motors factory at Tonsley, in Boothby. In 2012 the Weatherill state Labor government bought the property. The old factory site was turned into an innovation precinct, and 13 years later there are more people employed on site there than there were during the Mitsubishi car factory days. It is a world-recognised invasion hub. Tonsley is home to the sort of modern manufacturing the National Reconstruction Fund could encourage in the future; home to companies that work in clean tech and renewable energy, health, medical devices, assertive technologies, mining and energy services, automation software and simulation; and home to the Global Centre for Modern Ageing, SAGE Automation, Hydro Consulting, Tesla, Micro-X and so many more. It's a really exciting place to go and a constant buzz of innovation and growth.

This is the way of the future. Australia has so many opportunities to build manufacturing, build jobs for Australians and build industries. The National Reconstruction Fund helps companies and industries prepare for a bright new future. I commend the bill.

Keith Wolahan (Menzies, Liberal Party) Share this | Link to this | Hansard source

It's always worthwhile listening to speakers that come before you, from both sides. It gives you a sense of perspective about what matters to each side. I am really glad to see that the Minister for Defence Industry is here and that the member for Boothby, in her contribution, mentioned defence. We saw earlier this week the true heart of the Labor Party. On the one hand, we had the Labor Party come in here and show their statesman credentials, and we heard them speaking in hushed tones about veterans, national security and how we're on a unity ticket for the national interest. Then, as they turn on a dime, we see the other side of the Labor Party come in, the brawler side. I didn't come up with the words 'brawler statesman'. Someone who sits over there, the Treasurer, came up with those words. A lot of commentary has been given about the Treasurer's 6,000-word essay over summer. No-one on this side has criticised the Treasurer for putting pen to paper.

Pat Conroy (Shortland, Australian Labor Party, Minister for Defence Industry) Share this | Link to this | Hansard source

I think a few have.

Keith Wolahan (Menzies, Liberal Party) Share this | Link to this | Hansard source

Oh no. We commend him for doing it.

Angus Taylor (Hume, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

It's what he put on the paper that's the problem.

Keith Wolahan (Menzies, Liberal Party) Share this | Link to this | Hansard source

That's right. It's what he said. I encourage the defence industry minister to write some long-form papers. We'll definitely read them.

There were a lot of instructive statements within that paper, including purlers like this:

Our mission is to redefine and reform our economy and institutions …

It's a mission. So it's not just about this bill; it's about what this bill is supporting. He then goes on to say:

If we could redesign markets …

The Treasurer doesn't say what he means by 'redesign markets', but it does pose a question: maybe he could extend this essay out beyond 6,000 words to something that maybe looks like a thesis. Then he talks about renovating the RBA. Some commentators have said that that obviously doesn't mean a new set of curtains and a lick of paint but it means more something more substantial. We wait to see what those proposals will be. He goes on to say:

And we will renew and revitalise the Productivity Commission …

It begs the question: what is it about the Productivity Commission that the Treasurer doesn't like? Is it its mission statement of actually reforming and boosting productivity in this nation? He continues:

… it's not just our economic institutions that need renewing and restructuring, but the way our markets allocate and arrange capital as well.

'Allocate and arrange capital'—that sounds very much like a Treasurer who is focused on injecting himself and the government into how capital is allocated in our markets. And that has never ended well, anywhere in the world. But for some reason that's a great idea for this government to have at this time.

When you look to the Treasurer's thesis, which is a lot longer than his 6,000-word essay—

Angus Taylor (Hume, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

Not a lot of economics.

Keith Wolahan (Menzies, Liberal Party) Share this | Link to this | Hansard source

No, there's not a lot of economics. I was looking for economics. I looked in chapter 1. It's titled 'Brawler Statesman'—no economics there. There is a subchapter called 'Revisiting Prime Ministerial Power'—again, no economics. In chapter 2, 'Prime Ministerial Leadership'—no economics there. There is a subchapter, again, on prime ministerial power. The word 'power' comes up a lot in this thesis. It seems to be quite an interest and obsession of this Treasurer—the word 'power' and how power is obtained and wielded.

Angus Taylor (Hume, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

He means political power not electrical power.

Keith Wolahan (Menzies, Liberal Party) Share this | Link to this | Hansard source

Exactly. That's right. It's certainly not power that powers our manufacturing sector, powers our homes. That is not the focus of the Treasurer. Chapter 3 is 'Leading Labor'—that's a keen interest of the Treasurer, and I'm sure that was a keen interest of the Treasurer in his 6,000-word essay. There is a subchapter titled 'Factions'. When the Treasurer is thinking about factions in the Labor Party and he pens a 6,000-word essay, what buzzwords is he including that he knows will go down well within certain sections of the people sitting behind him? We know what they are. No-one loves neoliberalism, so of course he sticks the boot into neoliberalism. He doesn't define it, but he sticks the boot in, because he knows that goes down well with the people sitting behind him. He talks about the Washington consensus and how that's been a terrible, terrible thing for this nation. When you go through all of this thesis, there is nothing in there about economics.

That brings us to this bill, the National Reconstruction Fund Corporation Bill 2022. I again refer to the defence industry minister. When you came in here and linked this bill to our national security objectives, to AUKUS, that wasn't a statesman move; that was a brawler move. You came in here with your brawler hat on. That's a choice you made. You can choose to be a statesman and you can choose to be a brawler—I've seen you do both. We commend you when you're a statesman, but you came in as a brawler. It's a new low, because AUKUS should be above politics. Those who sit on the other side are of that view. There was bipartisan combined trip to Washington to reinforce AUKUS because it's an important thing for our nation, and we commend you for that. But then you come in here, take your statesman hat off and put your brawler hard hat on.

When you promise bipartisanship on AUKUS—

Angus Taylor (Hume, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

They're remaking capitalism!

Keith Wolahan (Menzies, Liberal Party) Share this | Link to this | Hansard source

exactly—it should sit above day-to-day politics, but we haven't seen that.

Matt Burnell (Spence, Australian Labor Party) Share this | Link to this | Hansard source

Mate, you're a brawler!

Keith Wolahan (Menzies, Liberal Party) Share this | Link to this | Hansard source

A brawler!

Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

Order! Can I remind members that this is not a several-way conversation. Can we have some quiet please.

Keith Wolahan (Menzies, Liberal Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker. So this isn't about national security; this isn't about our domestic manufacturing. It's about politics; it's about power. When this bill was introduced, there was no mention of AUKUS, no mention of national security—no, that was wheeled out this week when it looked like the bill might be in a bit of trouble, when it looked like we were onto you. The heading of the bill looks great, but when you look at the detail it is bad policy that would create bad law, so of course we are not going to support it. This is desperate politics from a desperate government.

If this were really about national security, why would you cut funding for the space industry? Why would you do that? The member for Sturt was quite right to point out that that is of particular interest in his seat and it should not have been cut; it should be supported. If Labor are so concerned about defence manufacturing, why have they held up millions of dollars for critical defence manufacturing projects that were funded through the Modern Manufacturing Strategy of the previous government? Why did you hold those up?

So this politicises the landmark AUKUS partnership—it undermines our cornerstone national security agreement—and that shouldn't happen, in this place or any other place. We should not link the National Reconstruction Fund to a critical security pact, and particularly when the Labor government will be relying on the support of the Greens to pass this bill through the Senate. What demands linked to national security will be put on you? Australians are entitled to know what you will trade to get this through the Senate. We ask the Labor Party to immediately rule out things like mandating union board membership and mandating union agreements as a condition of entry to the fund, because we know several unions have joined many anti-AUKUS protests in recent months.

We need to look at the bigger picture. The Treasurer let us think he was looking at the bigger picture, but he wasn't. We are in a cost-of-living crisis in this country. Australians are hurting and they're asking, 'What is this government going to do to help?' Not much. We know from the IMF that the off-budget funding of $45 billion will directly contribute to higher inflation and higher interest rates, and that is going to be paid for by working families in this country—families at their wits' end because their mortgage repayments are going up. There are 800,000 families who will come off fixed interest rates this year alone.

We have a by-election coming up in the seat of Aston. That seat is full of working families. Those of them who are on the average mortgage for that area, $750,000, are going to have to find an extra $19,000, and that's after tax. Those families are going to have to see about $24,000 extra in their wages just to fund the increases from this year alone. When we listen to the RBA—and we should listen to the RBA—that's not the end of it; there is more coming. What is this government doing to help? Well, off-budget bills like this one are not helping. They not helping, because each $6 billion can lead to a quarter of a per cent increase in the cash rate. So $45 billion of off-budget funding is not helping them when they need that help.

But there's more to the seat of Aston. It has some of the highest rates of car ownership in the country. Many families have two cars and they travel long distances to get to work.

An honourable member interjecting—

I hear the interjection about the car industry, and it's about the bowser; it's about the cost of fuel. They're noticing that, as they put fuel into their car, it is double numbers for the cost compared to the litres. I've heard families tell me that they don't think they can work at the same job anymore, because it's costing too much to get from home to work and back again. So where are they finding those savings? They're not finding those savings from the government; they're finding those savings themselves. So they're going to have to cut things like school excursions, they're going to have to adjust what sort of food they buy, they're going to have to cancel holidays and they're maybe going to have to take kids out of a private school. They're going to have to cut so many other things, because there's very little room to move when you have to find that much extra money.

I listened to the member for Casey's contribution on the National Reconstruction Fund Corporation Bill, and he gave a very constructive checklist about what really guides these sorts of bills. The first thing he said was, 'It has a wonderful name.' It would be like the 'national reconstruction fund for puppies', and, if we're not supporting that, why do we hate puppies? It's the oldest trick in the book: you create a great name, then you don't worry about the detail; you don't worry about how it actually affects people on the ground. Just say, 'Because you oppose it, you oppose the name that we have put into it.' Australians deserve better than that. It's cheap politics and it's inserting cheap politics into the name of a bill. We will never support bad policy, which will become bad law.

If you think about what this government is actually doing for manufacturing in this country, then you only have to turn to the radical industrial relations legislation that has been imposed on them—a regime that was not brought to the Australian people at the election. There was no legitimacy for that. It will not help manufacturing respond to a modern economy, and many manufacturing companies may end up closing because of that. Many manufacturing companies—and these are small family companies, medium enterprises—tell me that the biggest pressures on them are the cost of power, the cost of fuel and the cost of capital. Again, we come back to the Treasurer's essay, where he's looking to see how capital is reformed, how capital is allocated. Whenever a government does that, it always ends terribly, and it's not a Treasurer who pays the price, and it's not the government; it is people, it is small business and it is families. They are hurting, and they are asking for so much more.

So can we cease the practice of coming in here with a fancy-sounding bill and saying, 'It's a binary choice; you're either for it or against it.' Can we say: 'What are you doing to help families who are struggling with the cost of living? What are you doing to help reduce inflation?' That's the only question that matters to the economy right now; that's the only question that matters to families and small businesses that are struggling. If you're not contributing to reducing inflation—and this place is a huge role to play in that—then you're part of the problem, and if you're part of the problem, then there should be consequences at the ballot box. I think the first test of that will be the upcoming by-election in the seat of Aston. Families are struggling to put fuel into the car, struggling to pay the mortgage and making really serious compromises to the things that should make people happy, the things that keep families together, the things that make a good life—school fees, school sport, excursions, holidays and good food. We hear so many stories of people eating less meat; they're eating things that are not bought on the edge of the aisle but in the aisle, because they need to be able to store it so they can keep it for next week or the week after. So many people are living pay cheque to pay cheque.

So we plead with the Labor Party: please, stop the cheap politics and join with us in helping use fiscal policy to reduce inflation, to help families and to give them a break, because they need it.

Libby Coker (Corangamite, Australian Labor Party) Share this | Link to this | Hansard source

This bill, the National Reconstruction Fund Bill 2022, is all about making things in Australia again, growing jobs, reducing the cost-of-living pressures facing many Australians and giving all Australians a sense of pride in our nation. People across Greater Geelong and in my electorate of Corangamite understand all too well the importance of revitalising manufacturing and the jobs that accompany it after years of neglect under the coalition government. The Geelong Ford factory produced its last Australian-made straight-six and V8 engines in September 2016. Assembly at Broadmeadows, in Melbourne, ended a month later. About 600 workers lost their jobs at Ford, but many more lost their jobs in the smaller manufacturing businesses which supplied components and services to Ford.

The exit of three carmakers—Ford, Holden and Toyota—from 2013 to 2017, under the coalition government, wiped out jobs on a scale rarely seen before. Those opposite in the coalition had an astounding nine industry ministers over those nine years. Their dysfunction in government left Australia's manufacturing industry in tatters. Coalition ministers stood right here in this place and baited the Australian car industry into leaving the country. Not surprisingly, that's exactly what the car companies did. Australia has suffered nearly a decade of policy drift under the coalition. Australia ranks dead last in the OECD when it comes to manufacturing self-sufficiency. It's a sorry record of manufacturing and job loss from the former coalition government.

In stark contrast, the Albanese government has a plan to drive the transformation of the Australian industry and the jobs that go with it. In a plan to revive the nation's ability and capability to make world-class products right here in Australia, manufacturing matters because it creates full-time, meaningful work and secure jobs, both directly and indirectly. This bill to establish the National Reconstruction Fund is the first step in that plan to rebuild Australia's industrial base.

The $15 billion National Reconstruction Fund will provide a crucial financing vehicle to drive investment in projects that will build prosperity across our country. It will provide loans, guarantees and equity to support projects that create secure, well-paid jobs, drive regional development and innovation, invest in our national sovereign capability and diversify Australia's economy. Through the National Reconstruction Fund we will partner with businesses to unlock further private investment of more than $30 billion. This investment will play to our strengths, supporting new and emerging industries, transitioning existing industries to net zero emissions and making it easier to commercialise innovation and technology—something that we have struggled to do in the past. The fund will not support grants; they would erode the fund's capital over time and undermine its ability to deliver returns. It's intended to be a commercial entity, generating a positive rate of return over time. Returns on investments will be available for future investments, ensuring the fund can continue to provide targeted finance.

This bill establishes the National Reconstruction Fund Corporation as a new Commonwealth entity. This fund is modelled on Labor's successful Clean Energy Finance Corporation. The corporation will be governed by an independent board making independent investment decisions. It will have a chief executive and staff and it will publish investment reports quarterly. It will also provide detailed financial and operational information in its annual reports to parliament. As a co-investment fund, it will seek to draw in investment support with superannuation, venture capital and private equity sources to help create high-quality, sustainable industries and, importantly, jobs.

Pleasingly for those of us from regional Australia, there will be targeted investment to support manufacturing capability in our regions. In Corangamite, in my region, there is much capability to build on. It will make sure regions benefit from sustainable economic growth. As I've said, in my electorate, there have been excellent past examples of targeted joint investment supporting research and manufacturing. There are institutions like Deakin University's Waurn Ponds campus, within my electorate, working in research and pilot manufacturing. ManuFutures is one such example. It is an advanced manufacturing hub in the heart of Deakin's future economy precinct. The university has chalked up impressive innovation successes leading to commercialisation and many hundreds of jobs in a number of areas, including advanced fibres and textiles, carbon fibre and composites, advanced alloys and electro and energy materials. Another example is Carbon Revolution. It began as a small start-up with a great idea creating lightweight, ultra strong carbon fibre and using it to build high-performance wheels in the premium or top end of the market with companies such as Ferrari, Renault, General Motors and Ford. They also supply components for the aeronautical industry. Elsewhere around the Geelong region, I'm seeing excellent examples of manufacturing innovation in the private sector. I give a shout-out to the Geelong Manufacturing Council for its work in supporting local manufacturers and start-ups. There are countless opportunities in many fields of endeavour waiting to be tapped into and supported to flourish across this nation.

Importantly, the Geelong council is already encouraging its members to look at the possibilities that the National Reconstruction Fund will provide. The council understands the opportunities for innovation and commercialisation in manufacturing. The fund will open these opportunities to it. The fund also has potential to undertake innovative work like that in Deakin, in the Geelong manufacturing community and elsewhere across the nation to a whole new level.

As with other Commonwealth special investment vehicles, the responsible ministers will issue investment mandates to the fund's council. While the government will set its mandate to drive investment in key sectors to make the most of Australia's natural and competitive strengths, the fund's board will always operate independently. The investment mandate will guide the board on a range of matters, including the government's performance expectations about rate of return, governance and risk management. The government will consult extensively with industry, state and territory governments, and community stakeholders to design the investment mandate. The board will then make investment decisions and manage its investment portfolio to achieve both the fund's objectives and a positive rate of return to ensure the fund's sustainability.

The bill specifically prevents ministers from directing the board to make a particular investment. This model will ensure there will be no politically charged whiteboards or coloured spreadsheets highlighting marginal electorates when funding is being allocated by the board. The legislation requires that, to be eligible for appointment to the board, members must have substantial experience and professional credibility in at least one of the fields listed in the bill. The bill also provides for the board to establish committees made up of both board members and external experts to provide expertise to support the board's decision-making. This will help ensure sound investment decisions are made across priority areas.

Crucially, co-investment plans will be developed collaboratively with industry. These will outline investment opportunities in priority areas and actions for government and industry to build Australia's industrial capabilities, and this is so important. The plans are expected to be released by the end of the year. It will invest across seven priority areas of our economy. Value adding in resources will help expand Australia's mining, science and technology sectors, ensuring that a greater share of raw materials extracted are processed domestically. For example, high-purity alumina from red mud in bauxite processing, or lithium processing for batteries. Value adding in agriculture, forestry and the fisheries sectors will unlock potential in areas like food processing, textiles, clothing and footwear manufacturing. In transport, it will help develop capabilities in transport manufacturing and supply chains, including for cars, trains and shipbuilding. In medical science, it will leverage Australia's world-leading research to provide essential supplies such as medical devices, personal protective equipment, medicines and vaccines, so important, as we know, after the COVID pandemic we have faced.

In renewables and low-emission technologies, it will pursue commercial opportunities, including components for wind turbines, the production of batteries and solar panels, new livestock feed to reduce methane emissions, modernising steel and aluminium, hydrogen electrolysers and innovative packaging solutions to reduce waste. In defence capability, the plan will help maximise sourcing from Australian suppliers, employing Australian workers, whether it be in technology, infrastructure or skills. In enabling capabilities, the plan will support capabilities across engineering, data science and software development, including in areas such as artificial intelligence, robotics and quantum.

Some people believe that government has no role to play other than establishing guard rails and letting business do its thing, only stepping in when there has been market failure. But the Albanese government does have a role to play in making real contributions to our most vital sectors.

Australia is rich in valuable, critical resources—resources we can rightly expect to use to build our manufacturing base, add value and, importantly, create jobs here in Australia. But for decades we've mined those resources and shipped them overseas to other countries to process and add value, and then we've imported them back at many, many times the price. We've been effectively sending overseas what should be our manufacturing industries, their profits and the thousands of jobs they create. If we mine it here, we should make it here too.

Australia's know-how, our science and our innovators are among the best in the world. Technology into solar cells was invented here. Yet today 87 per cent of the world's cells are made in another country, and in the next three years that number will be 94 per cent. It's not good enough, not when we're so well placed to make the most of our technology and our skills. Renewables and low-emission technologies will play a vital role in delivering Australia's emissions reduction target of 43 per cent by 2030 and net zero emissions by 2050. If we invent it here, we should make it here.

We have seen what happens when Australia fails to back itself and fails to back our innovative people. They go overseas and they take their experience, know-how and passion with them. We want Australians who are living overseas to come home. We recognise that many of them left Australia seeking support and funding for their ideas—support and funding that they just couldn't find at home. The Albanese government wants to empower the National Reconstruction Fund to invest in Australia and Australians. This bill and the investment mandate guiding investments will ensure that the $15 billion fund drives Australia's natural inclination towards innovation.

If we didn't already know it, the pandemic made it clear, through supply chain stresses, that Australia must be a country that supports local businesses and industries to make more things here. There is a great opportunity to support innovation in Australian industry after years of uncertainty and the lack of a plan. The Albanese government's focus is on renewing, revitalising and rebuilding Australia's manufacturing industry for small business owners and for regions like mine, including towns like Waurn Ponds, where Deakin University is. It is all about jobs as well.

The National Reconstruction Fund is about building a better future for all Australians. It deserves support from all in this parliament, and I commend the bill to the House.

Dai Le (Fowler, Independent) Share this | Link to this | Hansard source

I rise to speak on the National Reconstruction Fund Corporation Bill 2022. I want to thank Minister Ed Husic for giving me the opportunity to discuss the NRF bill with him. It is my understanding that the purpose of the bill is to resurrect Australia's industrial and manufacturing capacity. I'd like to believe that the bill will set the foundation for the start of a new tomorrow for local manufacturing, even if it's small, such as small packaging-manufacturing companies like Pakko, set up by Nina Nguyen, a former constituent of mine who migrated to the Sunshine State to start this business so that local businesses can order packaging boxes in small quantities rather than having to order in bulk and wait for shipping containers. She's also creating employment opportunities in Geebung in Queensland. If we had a manufacturing hub in South-West Sydney, in Fowler, and the government support that this bill is proposing, I'm confident that Pakko would have been growing in South-West Sydney instead.

I believe in local manufacturing, and on that principle I support the bill. But I also understand the challenges that many big manufacturing companies have in setting up in Australia, due to the costs involved and the fact that Australia, although big in land mass, is small in population compared to other developing nations. Nevertheless, I believe that the government can step in to provide support for small local manufacturing companies like Pakko to thrive and be competitive, at least locally.

If the government is genuinely committed to supporting the growth of an industrial and manufacturing sector in technology and medical research then I call on the minister to really explore the possibility of creating such a hub for New South Wales in my electorate of Fowler. My electorate proudly boasts one of the largest family-run manufacturing businesses, based in Villawood. It is leading the way in the production of essential medical supplies. I visited Multigate's facility soon after my election in May last year to see the work that this company is doing, manufacturing critical medical supplies that service nearly every hospital in Australia. Their products include PPE, IV tubes and medical and surgical procedure packs that are vital to the day-to-day running of medical practices and hospitals. Peter Chang and Sam Chaisumdet founded Multigate with Ben Chen, and during the COVID pandemic they prioritised our local Australian hospitals over other profit channels to benefit Australians and Australian frontline workers. Two years on from the pandemic, Multigate continues to heavily invest in R&D to provide innovative excellence. Their Cadence suction irrigator, which assists surgeons in keyhole surgeries, is a product that has won awards for its design and innovation. Can I say, as someone of refugee background, that to know that Multigate, also from a refugee background, is contributing back massively to Australian society just shows that we, as a refugee community, play a huge role in our new home country once we've overcome the challenges of resettlement.

Multigate is just one established company in south-west Sydney who could benefit from the NRF bill funding, and I'm looking forward to seeing the investment mandate and how it will benefit this sort of company, although I would rethink my position if the unions were to start making IR stipulations within the bill. I just want to emphasise to the government that they should consider the challenges faced by many small businesses in the current economic climate. I would hope the bill protects small and medium enterprises so that they don't require union involvement to apply for funding, because it would mean that many businesses in my electorate of Fowler would be at a serious disadvantage. Most businesses in my electorate do not have the capacity for enterprise bargaining obligations, and in the end it would mean that we as Australians would lose the opportunity to grow our local manufacturing industry.

Companies like Multigate are a success story, but I also hope that the bill doesn't just provide for established businesses. It's important to acknowledge that innovation also comes from young startup entrepreneurs who just need the right backing at the right time. Business success isn't always about the idea itself; it is about who is willing to believe in the vision. Even if you have the most innovative of ideas, you still need the financial support. I would hope that the NRF provides equal opportunity for companies of all sizes and from across the community and the country. I will be championing those entrepreneurs and innovators in my division. It's disappointing, though, that the fund has not legislated for money to be put aside specifically for small and medium-sized enterprises. I want reassurances that this isn't going to help the big end of town and will go to truly worthy startups and manufacturers.

One Australian startup company that would benefit from this is Opuz, who recently reached out to my office with their aspirations to set up in my electorate. With their patented smart ring technology, diabetics will no longer need to prick their finger to monitor their glucose levels, which is a painful process, as we all know. Nearly 1.2 million people across Australia have either type 1 or type 2 diabetes, with south-western Sydney having the highest rate of diabetes across the country. Technology like this could change thousands of lives and improve the general wellbeing of many diabetic patients. The Opuz founders, directors and staff also reflect the rich multiculturalism in south-western Sydney. This cultural diversity allows us to draw on the experience of international communities for collaboration, like both the United States and Israel, who lead the world in technology research and development because of the wealth of diversity represented in their R&D sectors. We can look to their examples to become truly globally competitive.

Manufacturing is one of the biggest employment sectors in Fowler, ranging from food processing to medical supplies, building materials, woodwork and recycling. I for one disagree with those people who believe that manufacturing in Australia is a dying sector and there isn't any reason for intervention in an industry that is becoming irrelevant. Those people want us to rely on cheap imports instead of locally made products. Now is the time to reinvigorate our manufacturing sector. Without local manufacturing, we become reliant on external forces, which was painfully evident during the COVID pandemic, when our country all but came to a complete halt. People in New South Wales relied on our local drivers to deliver food and our warehouses to continue making goods; however, that was not enough to sustain our economy.

Even as we recover from the impacts of the pandemic, we are still feeling the hurt from the devastation it left behind. The aftermath of the pandemic showed a glaring flaw within the Australian economy. We were not sustainable without our import market. But we have the power to change that. Two years on, we are still seeing unprecedented material supply shortages as a result of the pandemic. It is up to us to ensure this never happens again. As I have said, in principle I support the NRF funding that encourages local manufacturing; however, any such bill must address the skills and labour shortages we are currently experiencing, especially within the manufacturing sector.

I recently met with Simon, a local mechanic who owns a tyre shop. He told me that it is increasingly difficult to import tyres from overseas due to logistics and cost and, at the local level, he is struggling to find skilled workers. He said: 'I have been in business for over 27 years and it's been a family business for 45 years. We have seen it all, from a number of recessions, high fuel costs, interest rates well over 18 per cent, import shortages and COVID—but this is the worst we have seen. The government seems to be throwing money at it by giving us incentives, but we don't need money; we need people to come to work to make money.' Therefore, in order for our manufacturing industry to get back to work, we need workers, not just money.

A 2021 report by David Gonski and Professor Peter Shergold into the VET sector points out the societal shift from the VET sector to higher education due to negative perceptions. VET graduates are no less valuable than university graduates. After all, university isn't everyone's cup of tea. Some people are more entrepreneurial and may prefer to start their own business after high school or TAFE so they can work their own hours while earning a decent salary. We need to shift the public discourse around VET courses to let future generations know that they do not need to go to university to be considered successful.

I understand the Institute of Applied Technology has been set up in New South Wales to tackle this issue. This gives VET participants the opportunity to upskill via microcredentials so they can start shifting into the innovative technology sector. The microcredentials pathway is very important. I ask that the government bring together VET, universities and businesses to ensure we do not have workforce shortages once our advanced manufacturing industries get set up. I hope they do get to start the process of setting up. There's no point in having innovative products if there's no-one around to build or run them.

The pandemic also demonstrated the need for the government to establish a centre for disease control so that we can better prepare for health crises across the country. In a submission to the minister, Research Australia suggested:

The Ministers should obtain the advice of a future Centre for Disease Control about medical products for which there is a critical unmet need for domestic manufacturing.

I do not want to see my community go through what we did in 2021 ever again. I call on the government to implement a centre for disease control as a matter of urgency, utilising the NRF bill funding. I think we can all agree that the health of the nation should be our No. 1 priority. As for the return on investment, I agree with Research Australia, who said that it shouldn't be considered in this particular instance. After all, the 'return on investment' from medical research is, first and foremost, the health and wellbeing of our citizens and, second, softening the financial impact on our economy should another health crisis happen.

I understand another priority area the government is exploring is the clean energy and renewables sector. I commend Minister Husic's plans to boost research and development and encourage local development of such technology. As we are to move towards a more renewable future, we must find the means to manufacture it here in Australia. There is no reason why we shouldn't right here in Australia be manufacturing electric cars, buses and other modes of transport. It would reduce the manufacturing and supply chain costs and environmental costs, which would ultimately benefit middle Australia.

I'm sure many of you in this House know that lithium plays a critical role in the clean energy sector. Australia is one of the world's biggest lithium exporters, exporting about 60 per cent of its reserves. At the moment we export lithium for extracting and refining. Then that gets exported again to another country to make batteries to be installed in EVs. Then those cars get exported to Australia. It just doesn't make sense. If we take measured approaches to ensuring that we have a sustainable long-term manufacturing economy then we have the potential to be leaders in the renewable manufacturing sector.

I can see the potential of the NRF bill to boost the economy in Fowler and the whole country. Although to truly benefit all of us, we must think outside of the box, support new ideas, embrace innovation and be willing to take risks. After all, the same industries overseas have shown that diversity of backgrounds leads to the best outcomes. With that in mind, I was glad to get reassurance from the minister—it's only reassurance—that the board will have people from culturally and linguistically diverse backgrounds and with personal experience in this sector. It is an assurance. Whether or not that's going to be implemented is another question, but I take comfort in being reassured.

As we look to develop innovation and manufacturing in Australia, let's go west. Go to south-west Sydney, where we have the people, the energy, the cultural diversity, the talent and the potential to reignite the manufacturing sector in Australia. Our ability to innovate and to develop infrastructure will enable us to be first-class manufacturers locally, even if it's small; nationally, if we can grow big; and across the globe.

Luke Gosling (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

The Albanese government was elected on a mandate to drive the transformation of Australian industry and to revive our ability to make world-class products here in Australia—A Future Made in Australia. Manufacturing matters because it creates full-time, meaningful work and secure, well-paid jobs. We saw through the pandemic our supply chains under huge pressure. Products we expected to have on hand were hard to obtain.

We need to revitalise manufacturing after years of neglect under those opposite. There are a couple of reasons for that. One of them is that they had nine industry ministers in nine years, which has left Australia's manufacturing industry in tatters. I remind people that it was Ian Macfarlane; Christopher Pyne; Greg Hunt; Arthur Sinodinos; Senator Cash; Karen Andrews; Christian Porter, a former member of this place; Angus Taylor, the current shadow Treasurer; and, of course, the member for Cook, the former Prime Minister—and I'm not sure if that was a double-up ministry or he just held it on his own.

Those opposite stood right here, in this place, and baited the Australian car industry into leaving our nation. I remember how frustrated, amazed, disappointed and angry I was, because I knew what it meant. They baited the car industry into leaving Australia. Many may recall our former treasurer Joe Hockey telling Holden from this House, 'Either you are here or you are not,' and refusing to consider $500 million in assistance. In hindsight, that was a paltry amount—

Keith Pitt (Hinkler, National Party) Share this | Link to this | Hansard source

It's half a billion.

Luke Gosling (Solomon, Australian Labor Party) Share this | Link to this | Hansard source

and we all know the outcome of that story. An astounding 40,000 car-manufacturing workers lost their jobs. I'll take the interjection from the honourable member that it was half a billion. Well, losing 40,000 car-manufacturing workers is pretty significant. Having all those high-tech jobs is pretty important. When we have a pandemic and we face an uncertain future, it's important to have sovereign manufacturing so that we can make things like electric vehicles and other high-tech pieces of kit—maybe even guided missiles, which we may need to protect the homeland in the future. So much was lost. So, as I said, in hindsight it was a paltry amount. Most countries around the world subsidise car manufacturing because they're smart and understand how important 40,000 car-manufacturing jobs are.

This government believes in the future of the Australian manufacturing industry. That's why we're delivering the $15 billion National Reconstruction Fund. It's a key platform to support, diversify and transform Australia's industry and to create sustainable, well-paid jobs. The fund will provide finance, including loans, guarantees and equity, to drive investments in seven priority areas of the Australian economy. These will leverage Australia's natural and competitive strengths to support the development of strategically important industries, to shore up our supply chains and, as I said, to make more things here.

The first of the seven priority areas is to value-add in resources. We need to do that. For so long we've just shipped our resources offshore. This fund will expand Australia's mining, science and technology and ensure a greater share of the raw materials that are extracted are processed domestically. This could include high-purity alumina from red mud in bauxite processing or lithium processing for batteries.

The second priority is to value-add in the agriculture, forestry and fisheries sector. This, too, will unlock potential and value-add to raw materials in sectors like food processing—and we're doing a deep dive on food processing, in the aquaculture area, in our fisheries in the Northern Territory at the moment—textiles, clothing and footwear, and manufacturing. My mum's first job was with a bootmaker in Melbourne, but it's been a long time since we manufactured footwear. We could be doing a lot more of it again with smart technology and a bit of support.

Priority area No. 3 is transport. The fund will develop capabilities in transport manufacturing and supply chains, including for cars and trains and in shipbuilding. I would add aircraft building to that. Certainly in Darwin, in my electorate of Solomon, we are going to be manufacturing amphibious aircraft into the future. We've got the first one in the hangar right now and we've got orders coming in from overseas. The ability to take off and land on water is very handy when the Indo-Pacific includes the two large bodies of water, those being the Indian Ocean and the Pacific Ocean, not to mention all the seas that surround our island nation.

Medical science is the fourth priority. We've got some world-leading researchers, and we want to back them so they can provide, here in our own nation, essential supplies such as medical devices, personal protective equipment, medicines and vaccines. We saw during the pandemic that we couldn't get hand sanitiser or masks when we needed them in those early days. I congratulate the Australian companies that quickly got their own ability to produce face masks, for example, up and running. We need to be able to produce our own medical instruments, our own PPE, our own medicines and our own vaccines.

No. 5 is renewables and low-emissions technologies. Again, we've got some of the best and brightest people. Everyone knows the shame, the missed opportunity that was seeing some of our best solar technicians go overseas when they couldn't get the funding to commercialise their brilliance. That's what it was—Australian ingenuity and brilliance in those researchers and scientists. They felt compelled to pursue this, but the funding wasn't available here, so they went overseas. We won't let that happen again. We'll address the brain drain we've had by providing opportunities here so that those brilliant Australia minds will stay and so that we can attract brilliant minds from overseas who want to come to Australia, where there are skills shortages.

This fund will facilitate more funding into these high-end manufacturing renewable industries, like components for wind turbines, as we see wind farming accelerate around our nation. The production of batteries and solar panels—I've been talking to companies that want to do that in Middle Arm, just outside my electorate, in the member for Lingiari's electorate. That Middle Arm precinct is going to be part of this big move towards us having renewable technologies produced right here in Australia, aided and assisted by this fund. We're also an agricultural country, and new livestock feed will reduce methane emissions, which is incredibly important. We also make steel, though not as much as we used to, and we're modernising steel and aluminium. Hydrogen electrolysers are so important for green hydrogen of the future. Again, some of that will be happening in the north. Innovative packaging solutions will reduce waste, and we do have a sincere and genuine commitment to the circular economy—less waste, smarter tech and recycling more and more.

No. 6 is defence capability. The fund will maximise sourcing of requirements from Australian suppliers, employing Australian workers, whether they be in technology, infrastructure or skills. Making more of our capability here is incredibly important, not only from a sovereignty point of view but for us to be assured of our supply chains in times of strategic competition—hopefully not war; we'll be doing everything we can to avoid that, but if it does come to that, we want to make sure that our supply chains operate within our nation and that as much as possible of what our Defence Force uses to defend our nation can come from within. That's just smart.

No. 7 is enabling capabilities. This fund will support key enabling capabilities across engineering, data science and software development, including areas such as AI, robotics and quantum mechanics.

Our government has previously announced target investment levels for specific priority areas within the fund. For the information of honourable members and members of the public listening, we're talking about $3 billion for renewables and low-emission technologies; $1½ billion for medical manufacturing; $1 billion for value adding in resources, which is absolutely essential; $1 billion for critical technologies; $1 billion for advanced manufacturing; and half a billion for value adding in agriculture, forestry, fisheries, food and fibre, which is as important for emissions reduction as it is for food security and growing our ag sector and aquaculture sector.

The National Reconstruction Fund will target projects and investments that help Australia capture new, high-value market opportunities to help our Aussie businesses and the international businesses that work in Australia employ Australians to grow and succeed now in our economy of today but also in the high-technology economy we're building for tomorrow. This includes fund financing, advance manufacturing and supporting of businesses to innovate as they move up the technological ladder. Moving up that ladder is so absolutely vital. There's no way for us to compete in the world if we don't climb that technological ladder. It doesn't matter whether we're talking about traditional primary industries or the high-tech part of our economy; it all has to move up the innovation ladder. It all has to move and advance up that technological ladder if we're going to compete and be successful. That's why this fund's so important.

As a co-investment fund, the National Reconstruction Fund looks to draw in investment support from super, from venture capital and from private equity sources, getting that investment to help create high-quality sustainable industries and jobs for Australians. That's why it's so important. As for its structure and governance, investment powers will be restricted to set priority areas. These will be determined jointly by the Minister for Industry and Science and the Minister for Finance in a legislative instrument.

There's so much more I could say about this fund but time is against me. I want to make clear to those listening that our government is committed to making renewables and low-emission technologies one of the key areas, but we also recognise that traditional primary industries will benefit as well and absolutely need to innovate, to develop for themselves, for the future, so they can stay competitive. That's what we're committed to doing and that's what this fund will facilitate.

I sincerely hope that those opposite support this. I hope that the crossbench supports this. It's essential for our nation's future. It's essential for our nation's security. On that basis, I very much support it.

Keith Pitt (Hinkler, National Party) Share this | Link to this | Hansard source

I rise to speak on the National Reconstruction Fund Corporation Bill 2022. If you're feeling kind, you could potentially call this a smokescreen. If you're feeling less kind, you'd call it a political stunt. But the reality is that this proposal is a political showbag. Deputy Speaker Goodenough, I'm sure you'll recall when you go to the show and you buy a showbag; it's up in bright lights and it's got a lovely pamphlet and it all looks wonderful, and you lay out your hard-earned money and it costs a fortune. But then you get it home, open it up, get to the bottom and find it's full of you-know-what. That is this proposal, and I will outline over the next few minutes exactly why that is the case.

The political showbag has hit the media. David Marin-Guzman, from the Fin, I believe, wrote: 'ACTU wants unions first in $15b fund'. The first problem: a $15 billion fund is actually not true. In fact, the legislation specifically says that on commencement there will be $5 billion. I know there's some confidence in those on the other side, but in 2029 the contribution will have been up to a total of $10 billion. We just had the previous speaker outline the commitment, and I got to $8 billion. There's no 15 in eight and there's no 15 in 10, unless my math has changed since I went to school—and I know it was a while ago. So this is the first problem with the political showbag. What's being sold is not what's in it. It is not a $15 billion fund. It will be $5 billion of the hard earned money of the taxpayer that the government has to borrow.

Secondly, it's about the ACTU. According to this story, it is calling on Minister Husic to install union officials on the fund's board, because otherwise it might be biased towards the finance sector and private business—that is, to those people who make decisions that actually make a return, who make good financial decisions. What else do they want? Let's have a look: 'You must guarantee secure jobs with decent working conditions.' In this country we have laws. They already exist. You can't just wander around and hire people outside agreements and outside Australian law. It is unlawful. That is why it's in place. They also believe that enterprise agreements with unions must be a precondition of any tender. There may be those listening who think this is unlikely and it might not happen, so let's look at what else they want. They also want there to be no independent directors. They oppose independent directors. They are a bad idea. We see from Senator Michaelia Cash in the other place the quote: 'Union demands on Labor know no bounds after they made $16.7 million in donations.'

You can ignore that, if you like, but if you go to the actual statements on this bill, you will find that the federal Labor government consulted with a range of government stakeholders followed by the following non-government stakeholders: the Australian Banking Association, the Australian Council of Superannuation Investors, the Australian Council of Trade Unions, the Australian Investment Council, Industry Super Australia and the Law Council of Australia. We've heard honourable members come to this place and outline what it is the fund will be investing in, but there's none of them in the consultative process, absolutely none.

The fund also includes the capacity to lend money, to provide equity to invest in state and territory governments. Is federal Labor serious? Do state governments need more money from the Commonwealth through a loan fund? Do they not get enough through GST or through the existing national agreements or for hospitals? Actually, on hospitals, they don't get enough. In the last budget, according to the AMA, federal Labor cut $2.4 billion from the forwards for hospital funding, so we know where this is coming from. We know exactly where it's coming from.

The fund will also be used to meet international agreements. This is a magic fund. It is not just a political showbag; it's magic. It will cover everything from critical minerals to defence, energy and, right across the road, international agreements. But it is not $15 billion, because their own legislation says that that's not the case. It says exactly how much money is going in.

This appears to be a wonderful intervention from those opposite, but it is actually a cut in what has been provided for support. If we come back to just one segment, critical minerals, which I've had a bit to do with over recent years, we find that the previous coalition government established a $2 billion loan facility. It's already there for critical minerals. It was established through former prime minister Scott Morrison, former minister Mr Tehan and me. Guess what! It is managed by Export Finance Australia, which already exists. It has already made investments and loans. It has already provided money for critical minerals.

The challenge in this space is that critical minerals is not an economic decision. It is a national security decision. The reason for that is that there is a provider in the world who basically has a monopoly across everything to do with critical minerals. If you even look like you are not going to be providing to that monopoly provider, they will knock out your business, so you have to be able to provide different methods to ensure success. You cannot simply rely on the basics of the economy when it comes to critical minerals. It is incredibly important to get this right. The idea that you would put forward the political showbag as a solution for something that is absolutely necessary for not only this country but other countries around the world—it's the reason there are signed agreements with places like Japan, the United States, South Korea and India. The critical mineral supply chain is critical to this country and many others.

There was $2 billion in loans, and we had announcements that were delivered for $239 million provided EcoGraf Limited and Renascor Resources. We also had some $50 million over three years to establish the Virtual National Critical Minerals Research and Development Centre, along with $200 million, if I recall correctly, for grants. And guess what? They got cut in the last budget—not entirely, but they were reduced by those opposite because clearly they didn't think they were important. So the political show bag cannot be the solution for all things, and it is certainly not $15 billion. That can be checked because it is in the legislation—$5 billion at commencement up to $10 billion by 2029. So they're confident that they're still going to be there in 2029. It is quite extraordinary, absolutely extraordinary!

I will return to the appointment of board members. We've heard a lot from those opposite and others around transparency in selection, so I thought I should go and read and see exactly what skills you might need to become a member of the board. There's a pretty good list. It says:

(b) professional credibility and significant standing;

in at least one of the following fields:

(c) banking and finance—

Good—

(d) venture capital, private equity or investment by way of lending or provision of credit—

Sounds okay—

(e) economics;

(f) government funding programs or bodies;

(g) accounting;

(h) law;

(i) a priority area of the Australian economy;

(j) industrial relations—

Would you believe—

(k) industry growth—

And, finally—

(l) any other field that the Ministers consider appropriate.

So it is anybody. It doesn't really matter as long as the minister thinks that that'll be okay. They can be appointed. In terms of all of those opposite who bang on about transparency and bang on about decisions, this has very clearly been set up to select whoever they want, because that is exactly what the legislation says.

So it will be borrowed money and it will be pushed by the ACTU, according to reports in the media and according to the fact that that was who was consulted. But let's come back and look at the fundamental problem: if you want manufacturers in this country—and we all do—then they have to be internationally competitive. It's pretty straightforward how you get there. You must have affordable electricity, affordable gas, affordable energy. You must have an available workforce. You must have people who are actually manufacturing something that the world wants. So you need a market. And, quite simply, you just need to get out of the way of business. Businesses are quite capable of making their own investments and their own decisions if they don't continually have government interventions—and there have been no worse interventions in recent times than the interventions of those opposite in the gas market and the electricity market, in particular. We have seen that exactly what we warned would happen is happening, and that is that there will not be sufficient investment to bring on more gas. If anyone wants to see what the results are when there is no investment in the resources sector, go to Victoria. It is very straightforward. There has been a moratorium on onshore gas exploration in Victoria for some 10 years. And guess what? They've run out of gas. And guess what? When there's no gas in the markets, and you shortfall the supply, the price goes up and you become uncompetitive. All of those poor manufacturers in Victoria that rely on gas for their energy and for their sourcing for other products are now absolutely getting it in the neck because of decisions of state governments not to develop their own resources.

I don't see anything in this political show bag that will fix that. I just don't. The intervention that those opposite are putting forward—the idea that you can shift gas from Gladstone to Melbourne and be competitive on price—is just wrong. It's not factual. You cannot do it, because you've got to transport it. You've got to build infrastructure. You have to have pipelines and all the things that go with them. It is not that simple.

We've also seen very recently in the press—and I genuinely hope this is not true—that those opposite are considering changing the ADGSM to allow for quarterly decisions, including the ability to block all exports of the gas industry. Mr Deputy Speaker, can you imagine if you had purchased a new car two years ago, and you had borrowed however much money you might have needed—$50,000 or $100,000 or $25,000 or even $10,000 if that's what you could afford—and the government came to you and said: 'It doesn't matter how much equity you have; it doesn't matter what your loan conditions are; it doesn't matter what your contract is; we've decided that potentially we want you to change that car and get a different car, or not use your car at all, but you will still have those bills.' That is what's being proposed, and I hope it's incorrect, because investment in this country is critical to its success. Investment in the resources sector means jobs, particularly in the regions. Investment in the gas sector means you'll have lower energy prices and more availability. The idea that you'll go back to investors and countries who have committed tens of billions of dollars to this nation and tell them, 'That's just too bad; we're going to take your product whether you like it or not,' is the wrong decision. It sends the wrong message and it is bad for our national reputation.

Over the last few years, COVID has been terrible for all of us, for all Australians. But I'll tell you what one of the highlights was: the Australian resources sector maintained their operations, maintained their contracts and met those contracts. They enhanced the reputation of this country because of the decisions that they made and the work that they did, and, as a result, they are breaking all records. I've seen the most recent forecasts. It could be as much as $460 billion worth of economic activity added to this country from the resources and gas sectors. That is off the back of the fact that they supplied when it was incredibly tough. They supplied when the rest of the world was stopped. They made sure that the countries with which we have agreements—Japan, South Korea and others—had their energy supply and could keep their lights on and keep their people safe, because they had a deal with this country and companies in this country. The idea that those opposite would destroy that reputation is an absolutely false economy. They should absolutely not do it. Do not do it. There will be billions of dollars worth of investment decisions made over the future which simply won't be positive. They will not take a final decision to invest in Australia knowing that the playing field will change constantly under this federal Labor government. It does not make any sense. It is dangerous for the nation, its reputation and the 1.2 million people who are employed, directly and indirectly, through the resources and energy sector.

I come back to the political showbag. What we see once again from Labor is all politics. It is all noise. What they put forward is not factual. There is not $15 billion in this fund. There is a maximum of $10 billion by 2029. There is $5 billion to start with. So the idea that those opposite purport to hold—that they can cover all of those fields through this simple proposition—is wrong. There are any number of existing policies and programs which have been enormously successful; which are out there, established and budgeted for; and for which processes are in place. You do not need to set up another whole political showbag simply to put the ACTU on the board. We know that that is the proposal the ACTU want, given that they are among the few that were actually consulted. We can put two and two together—well, some of us can. For those opposite, it adds up to 15, but it hasn't got quite the right numbers.

Once again I come back to where I started. Those opposite will potentially be providing money to state and territory governments who already have any number of other sources. They will be putting forward all sorts of proposals for which there is already existing availability. So we will not be supporting this bill. It is the wrong decision for Australia, and it is a political showbag. (Time expired)

Peter Khalil (Wills, Australian Labor Party) Share this | Link to this | Hansard source

I might commence my remarks on the National Reconstruction Fund Corporation Bill 2022 by gently reminding the member for Hinkler. He almost got there. He said '$5 billion' and then '$10 billion'. He just didn't get to the 'equals' part. I remember from doing maths in grade 6 that five plus 10 equals 15. I could provide the member for Hinkler with an abacus if it assists him, but five plus 10 in our universe is 15, and the Albanese Labor government's $15 billion National Reconstruction Fund will transform Australian industry. It will create secure local jobs, and it's going to bring manufacturing back home. This is going to leverage Australia's natural strengths, support the development of strategically important industries and protect Australia's supply chains.

The member for Hinkler was talking about all the different critical areas that this would invest in.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

I call the member for Hinkler.

Keith Pitt (Hinkler, National Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, if it assists the member, the section number is 52(4):

The Ministers must ensure that the total of the amounts credited to the Account under subsection (2) before 2 July 2029 is equal to $10 billion.

Peter Khalil (Wills, Australian Labor Party) Share this | Link to this | Hansard source

The member for Hinkler may have found his abacus there in his drawer. But I will say this, and I'm just quoting him: $5 billion and then $10 billion. That's $15 billion in anyone's mathematics.

Anyway, let's leave that, because he did touch on the critical areas of investment, and they are important. They're actually critical to Australia's future: resources; the agriculture, forestry and fisheries sectors; transport; medical science; renewables and low-emission technologies; defence capability; and enabling capabilities, which are best described as including support for key enabling capabilities across engineering, data science, software development and areas such as artificial intelligence, robotics and quantum, which are so important now as advanced technologies. These are key areas that you would think that every member in this place would get around and support, given their critical nature to Australia's future.

But I'll come to that later, because this National Reconstruction Fund is also about jobs—secure, local, well-paid jobs for Australians, something that people in my electorate of Wills know all too well. Many people in the north of my electorate worked at the Ford factory in Broadmeadows, and they lost their jobs when it shut down in 2016. This fund is about rebuilding manufacturing in our country. It's about bringing manufacturing back home, unlike those opposite, who tore through manufacturing, particularly car manufacturing. A previous speaker had the audacity to try and claim it was a Labor government's fault when they themselves ripped out the guts of car manufacturing in this country. It was absolutely disgraceful, and I think the Treasurer at the time went on to smoke a cigar celebrating that effort, if I could call it that.

This is about people's livelihoods, their jobs. It's about making things here again and setting up Australia as a leader in advanced manufacturing. It's about our self-reliance and our sovereign capability. We saw during the difficult period that we all went through when COVID was at its peak in the last couple of years that it exposed issues such as supply chains and resilience in those supply chains. It showed that we were possibly too reliant on some supply chains that were exposed. COVID impacted those supply chains, and Australia was not prepared as we should have been. We as a government are doing something about that. It's a big part of the National Reconstruction Fund.

We took the $15 billion National Reconstruction Fund to the election in May last year. We have a mandate, and now we are delivering on our commitment to the Australian people. The Albanese Labor government is focused on renewing, revitalising and rebuilding Australia's manufacturing industry for Australians, for small-business owners, for the regions and for jobs. We're setting Australians up for the future, investing in jobs and in making things here again.

Those opposite have done nothing in government to invest in Aussie manufacturing over nine long years. As I referred to, they baited the Australian car industry into leaving the country, and they had nine industry ministers in nine years. How could any one of those ministers even get on top of the portfolio? By the time they finished reading their briefs, they were out the door and the next person came in. If that wasn't bad enough, now, in opposition, they're playing the role of wreckers. They're opposing this fund.

What really gets to me—what really grates—is that they are putting our national security at risk in doing this. The Minister for Industry and Science pointed out that very fact this week. The opposition don't seem to care that a big part of this fund is dedicated to advancing defence capability that's critical to Australia's preparedness for AUKUS and for working with our partners, such as those in the Quad. They don't care. They just want the politics of this. They just want to oppose. They're not interested in our national security. They're not interested in our national interests. It's all short-term politics. The leopard hasn't changed its spots. That's what they were like in government. It was all about the short-term political message, not about the long-term national interest.

I remind those opposite that among our partners—our regional partners, our allies, our friends—there is an expectation that Australia come to the table with our efforts on technology and technological developments and advancements—with our technological strength. These developments are paramount to our national security and our national interests. The minister for industry noted that this National Reconstruction Fund is crucial to strengthening both our economic and national security long term. That's right; it's about the long term. It's not about the newspaper report the next day, which the opposition is so fond of trying to win.

Yet despite the facts, the important facts, that $2 billion of this National Reconstruction Fund is going to be pointed towards critical technology—AI, quantum technology, critical minerals, all of which are very important for, as I said, the work we're doing with our international partners and our allies both in the Quad and in our AUKUS efforts on advanced capability—the coalition are still happy to stand in the way of this bill, to oppose it. They talk a big game on national security. It's a big talk but, when they have the opportunity to walk the walk, they go and oppose. They go for the short-term political message. That's not in Australia's national interest. That's not standing up for our national security.

The fact those opposite are actively opposing this National Reconstruction Fund is quite extraordinary. It's extraordinary, given their rhetoric, and that needs to be called out. Because on one side of the mouth they talk about our national security and getting our defence capability and they make a big song and dance about that and then, on the other, they oppose the funding that will go towards those advanced capabilities. It's extraordinary. I'm interested to know, from the opposition, what part of this National Reconstruction Fund do they actually oppose? Is it investment in renewable technology? Because they've been pretty much opposed to that right from the beginning. That could be it. Is it an opposition to investment in advanced manufacturing capabilities? Is that what it is? Don't they think we can be that advanced? Don't they think we have the technology or the technical ability, the workforce? Is that what it is—they're opposed to advanced manufacturing in this country? Because that is what this fund is largely about—getting that up and running, and really turbo charging it. Are they opposed to that? Maybe not. Maybe they're opposed to good secure local jobs for Australians. Maybe, given the way they killed the car manufacturing industry in this country and saw thousands of jobs walk out the door and thousands of Australians lose their jobs in manufacturing, and then smoked a cigar about it in celebration, they're opposed to the job creation that comes out of this fund. Maybe that's what it is. I'm trying to guess here because I haven't really heard any good reason. Are they opposed to creating jobs? Because this fund is also going to create new jobs in new and advanced manufacturing, in technology, in exciting new sectors. Maybe they're opposed to creating jobs; they don't like that. Maybe not. Maybe they're opposed to growing the economy. Maybe they don't want Australia to succeed. That would be a poor position to take as an opposition—let's prevent the growth of the Australian economy by killing this fund. That's pretty cynical if that's what they're doing it for. Let me ask this: Are they opposed to making our supply chains more resilient, which is a big part of this fund and the investment that goes to it? Is that what it is? Because we all saw how exposed our supply chains were over the last couple of years, so it really shocks me that those opposite would be opposed to making those supply chains that we are so reliant on more resilient. It could be all of the above. It could be one or two of them. Whatever their reasoning is, it is really making it harder for Australians to get those jobs and do the things we need to do in the coming decade. They are all opposition and no policy.

I know it might be useless, it may be futile, there might be no point in it, but I ask the opposition to rethink their position. Act in good faith. Negotiate on some amendments, if that's what it is. But outright opposition to the National Reconstruction Fund is outright opposition to advancing Australia and its national interests—that's what it is. And they will be called out for it; the opposition will be called out for the wrecking ball they're putting to this bill, the wrecking ball they're putting to Australian jobs and the wrecking ball they're putting to our advanced capability and our manufacturing in this country. I ask them to rethink.

There are good members on the other side. They care about Australia's future. They care about Australia's national interest. They would know that $15 billion invested in manufacturing, in advanced manufacturing, in technology, in capability and in supply chain resilience is good for Australia. Maybe they'll have the courage in their party room to stand up to their leader and say: 'No, we should negotiate. Let's try and put up an amendment or something but we should back this bill in because it's good for Australia, because it's good for our constituents.' To them: I'm asking you to back Australian made. I'm asking you to back Australian jobs. I'm asking you to back the Australian economy. I'm asking you to do the right thing and not oppose the National Reconstruction Fund.

Melissa Price (Durack, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the National Reconstruction Fund Corporation Bill 2022. The Liberal Party has always believed a government's role is to minimise interference but maximise initiative. We as a nation are at our best when we as policymakers give private industry and individuals the opportunity to be the best they can be, whilst providing a helping hand but only when necessary. It is not our job to get in the way of Australian businesses' day-to-day goings-on, to impose unnecessary bureaucratic red tape or to own part of the personal property they earned through their own hard work. That is what the Liberal Party believes, Deputy Speaker Goodenough; I can guarantee you that. But I can also guarantee that that is not what those opposite believe. They are too arrogant to believe that individuals have the capacity to create opportunity without government holding their hand during the process. In fact, they are so arrogant they tell people what they need instead of listening to what they want. This typical top-down approach that the Australian people are unfortunately becoming all too familiar with, with the Albanese government since they've come to power, is riddled throughout this bill we are debating. Typical Labor—all focus on the politics but useless with policy.

In Australia, we build things. We build them well. Our manufacturers are some of the best in the world, and I am incredibly proud of that. Our exports are lauded for their quality and reliability, making Australian-made products a sought-after commodity right across the globe. Our manufacturers create jobs, providing financial security for hundreds of thousands of Australian families right across the country. Manufacturing at home is a key part of our nation's ability to ensure we protect our sovereign interests from threats abroad.

During the last term of parliament, as the Minister for Defence Industry, I led with the passionate belief that if you can't build at home you cannot defend your home. Never has this mantra been more important than in the geopolitical environment we currently find ourselves. Right now our manufacturers are being threatened with rising cost of living, rising electricity prices and rising inflation. I am genuinely concerned about the direction in which our economy is going and the impact it'll have on our ability to build on Australian soil.

Now is not the time to play politics with our manufacturing sector. Sadly, this is what we are seeing with the inexperienced industry minister. With power prices forecast to spike by 56 per cent over the next two years, many businesses across the country may be pushed to the brink. I am particularly concerned about the impact this is going to have on our fabulous Australian defence industry.

The coalition understands how important manufacturers are to this country. That is why, when we were in government, we introduced valuable programs that created opportunities for hundreds of businesses right across the country such as the Modern Manufacturing Initiative, known as the MMI, and many initiatives to support our incredibly important critical minerals projects. Labor, on the other hand, have used their first eight months in power to prioritise their union mates and have decided to forge ahead with radical industrial relations legislation that will leave our industries in a devastated position. Never has there been a more inappropriate time for that focus.

The October budget was the perfect opportunity for our Prime Minister to assure Australian manufacturers that the government still had their back, but instead he used it as an opportunity to spitefully wipe out key features of the coalition's industry policy. We saw next to nothing in the budget to begin the rollout of the National Reconstruction Fund. The Labor Party are happy to redirect the MMI funds, but they have failed to roll out their own program, creating a void that is no doubt being felt by industry right around the country right now. You only need to review the large number of successful MMI applications to see the geographical spread and the very important mix of industries that we have been supporting.

The coalition provided $2.5 billion to create the MMI program to support our sovereign manufacturing capability, to empower over 200 projects right across Australia, with money going to, for example, the Forager Food Co. in Tasmania, for a freeze-drying and processing facility; Sealite in Victoria, for automating electronic circuit board capability; Sun Cable in the Northern Territory, to improve solar array manufacturing; Techno Plas in South Australia, to improve food packaging; and First Graphene Ltd in Western Australia, to support an optimisation and automation project. Industry invested significant funds to prepare for the application process of the MMI. Some went as far as building up their own infrastructure or capacity in key areas to make their submissions more competitive. Other businesses had begun to roll out their programs because they had received a commitment from our government that they would receive financial assistance with their project. They were told their application was successful, and they had begun operating accordingly—quite reasonably, I would say. Then there is a change of government, and the first thing the minister does is put a halt to funds that were assessed by independent experts and the department. It shows a complete lack of understanding of how delays such as these can significantly delay or damage critical manufacturing projects.

Never has a lack of industry experience by the Labor frontbench been so clearly on display as in this pathetic approach to support our nation's manufacturing capability. The National Reconstruction Fund is a very, very poor funding model. The National Reconstruction Fund is another attempt by the Labor Party to realise their ideological obsession of government ownership over what rightfully belongs to private industry. Instead of a competitive grants program, as offered under the coalition's Modern Manufacturing Initiative, Labor has opted for loans and acquiring equity. We know, from similar schemes rolled out by previous Labor governments, that equity and loans schemes are less accessible than grants, and manufacturers may struggle to meet return-on-investment thresholds or, indeed, be able to put together the detailed business cases in-house.

Our approach was funding projects to help to build scale and capture income in high-value areas of manufacturing where Australia either has established competitive strength or emerging priorities. Labor's approach is to roll out a process that excludes certain industries with small margins or disrupted supply chains, risks crowding out private investment opportunities and will uproot manufacturers who are unable to meet their loan agreements with the government. There is a better way to manage this process, and Labor have utterly failed to grasp this point.

Perhaps the biggest shame this bill highlights is that our fabulous space industry is not a priority for this Labor government. As a former minister for science and technology, I know how devastating this news will be for many new and existing businesses that operate within the space sector. Under our leadership, the government proudly supported funding to locally design, develop, manufacture and deploy specialised space products, equipment, systems and services for export to international markets to support national and international space stations. Our Prime Minister and the inexperienced industry minister, however, have sent a very clear message to the space sector that while they are in charge the industry will suffer—space does not matter to this mob. We are yet to understand the basis upon which this shift in focus was made.

Times are difficult and they are not going to improve anytime soon; we all know that. Interest rates are up; inflation is up. Right now our manufacturers need our help to ensure that they can navigate the strong headwinds currently caused by our faltering economy. It is time the government put forward a sensible plan to deliver support for our manufacturers that will assist them now, not in 12 months time when Labor finally decide to roll out their own fund. Our manufacturing sector is growing. There is no denying that. But, as COVID demonstrated and as we've talked about in this place many times, we need to ensure that our manufacturing sector diversifies so that we don't get caught out with many products that are not made here in Australia. We must support our existing and new manufacturers before it's too late. Let me tell you, Mr Deputy Speaker, this bill is not the answer.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

Apologies, everyone, for my croaky voice. It's awesome having my children here from Bendigo and it's wonderful to have a childcare centre here at parliament, but it is a Petri dish, as all parents with children in child care know. As I'm keen to speak on manufacturing and the National Reconstruction Fund, please persevere with me. This bill, the National Reconstruction Fund Bill 2022, is critical not just to my electorate but to economies in regional electorates all over our country.

I have to begin by saying that I'm not surprised but I am disappointed that the opposition is opposing this bill. The National Reconstruction Fund is modelled on ARENA and the Clean Energy Finance Corporation. We know those opposite really struggled to understand the importance and success of those two bodies. Multiple times when those opposite were in government they tried to abolish them—unsuccessfully, because the Clean Energy Finance Corporation proved to be a successful model. It proved to work, proved to make money for the Commonwealth and proved to support and grow investment where it was needed. So successful was the Clean Energy Finance Corporation that it has given us guidance on how to create the National Reconstruction Fund.

I have to say I disagree with those opposite about what manufacturers are saying. When I've met with the proud manufacturers of my electorate during the 10 years or so that I've been either the federal member for Bendigo or a candidate, many of them have said they found the grant system run by the former federal government to be clunky, to play favourites and to not actually support innovation.

Innovation is a big word to manufacturers in my electorate. Paul Chapman, who is the founder of Australian Turntables, which his family still own, runs a regular festival on innovation to encourage people to think differently. He quite often says that what manufacturers lack is a partner in government, someone with capital. It's not that easy for manufacturers to access capital, particularly at the moment. The National Reconstruction Fund will give them an option.

Manufacturing has existed for a long time in my electorate. From the simple innovations that occurred in the early days of the gold rushes to what we have today, we are home to world-class manufacturing. We are home to food manufacturing, engineering and heavy metal manufacturing. We manufacture the Bushmaster, which has featured in discussions a few times this week. We have a strong presence in defence manufacturing and we are actively involved in many innovative products in the building products space. These are all critical to where we are in manufacturing today. We are also home to goldmining and have one of the richest goldmines in Australia, which has helped seed a lot of mining manufacturing and equipment that will be required for our mining industry.

Today, manufacturing's economic output in Greater Bendigo alone is about 18 per cent yet the sector employs eight per cent, so, for who it employs, it generates a huge economic output in our region. Salaries are worth over $300 million and local sales over $800,000. Regional exports are also massive in the area. Value adding is a big part of what we do.

I have spoken to a number of local manufacturers about how this fund could help, whether they would consider accessing it and what they could do. Vossloh Cogifer Australia are based in Castlemaine. They have outgrown their facility. They are a leading global company in rail infrastructure. They have been successful in acquiring a contract with the federal government to help build the Inland Rail, but their home in Castlemaine is too small; it doesn't have a proper flow. For those reasons, because the company are looking to expand, they are looking to relocate to Bendigo. But, again, having access to capital, finding the right investment partners is challenging. Despite what those opposite would suggest, they did have people lined up but they didn't quite work out. This kind of fund could be an option for them.

We want to be a country that makes things, we want to be a country of Inland Rail and we want that Inland Rail equipment to be manufactured here. We have great companies like Vossloh that could be part of that but that need a purpose-built home. They are not asking for a grant to build the facility, but through the National Reconstruction Fund, they could actually have a partner.

Hoffman Engineering are known for their manufacturing facility in WA but their leading manufacturing facility on the east coast is in my electorate of Bendigo. They produce heavy fabrication, heavy machinery. When you are there quite often you will see some of the largest gears from around the world being refurbed in Bendigo. They have the largest lathe in the southern hemisphere in Bendigo. They still do work on the Collins class because they do have some of the large equipment able to do that refurb work. They also do a lot of work for the renewable energy industry. From wind turbines to our defence vehicles, they are a critical manufacturer. They are also innovators and have some of the best equipment in electrical welding. Speaking to the young apprentices who are going on to be engineers, they have a brilliant pathway. They too look at the National Reconstruction Fund as an opportunity.

Another fantastic manufacturer in my electorate, JL King, is a large local food manufacturer. They did actually apply to the previous government's grants that they're so proud of only to miss out over and over again. Maybe it's because they were in the wrong electorate. Maybe that was part of their challenge: they are in Bendigo. They're not in Nicholls; they are in Bendigo. Maybe it is because they are in a red electorate, not a Green electorate, not a blue electorate. That is what is so disappointing about those opposite. Have they not learned from their previous mistakes?

JL King are looking to expand. They are a small family business that has grown. They have a site, have built a facility and now they're looking for equity partners to help them fit out that facility so they can grow their manufacturing business. They could double the jobs that they offer if they could just find the equity partners. They are expanding into providing good quality food into aged-care facilities yet they can't expand quickly enough. A National Reconstruction Fund could help them meet their needs.

These are just a few of the many examples in my electorate. I'm know I am about to be wound up soon and I will seek to continue my speech on why the National Reconstruction Fund will make such a difference to local manufacturing. We are in desperate need for a federal government partner to help grow manufacturing jobs. If we want to be a country that makes things, we need to be doing more than just handing out clunky grants, more than just leaving it up to the market. This is an opportunity to actually be a partner. It is innovative. I know those opposite struggle with innovation, but if they actually took the time to work with and listen to manufacturing groups, particularly those in regional areas, they would learn that this fund being put forward by the government is the answer to a lot of challenges that we have in growing manufacturing in the regions.

I will leave my remarks there and hope to be able to return to them when the debate continues.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour, and the member, if interrupted, will be granted leave to continue speaking when the debate is resumed.