Hollie Hughes (NSW, Liberal Party, Shadow Assistant Minister for Climate Change and Energy) Share this | Hansard source

I rise today to address the main reasons why the coalition will not be supporting the National Reconstruction Fund Corporation Bill 2023 in its current format, and I'm actually surprised that some opposite are going to be supporting it, because when they come in to address this bill, their bill, they're not selling the bill to us. They're not talking about how great it's going to be; all they do is keep looking back towards the coalition and talking about what the previous government did, and of course they're rewriting history significantly. But if this were so great, wouldn't you think they'd be in here to sell their bill, to talk about the positive impacts it's going to have, rather than just, hilariously, talking about using cheap political shots? They are the government and they should be in here selling the positive outcomes to the Australian people on the bills they propose, but unfortunately they can't do that, because this bill does not produce those outcomes.

Firstly, the bill ignores key economic issues, and we know that's a consistent message from those opposite. In order for any of these things to be successful, the government must address rising energy prices, labour market shortages and disrupted supply chains if we are to have a manufacturing sector that is able to succeed. Without policies that create strong economic conditions, any and all government spending is simply in vain. It would be money in one pocket and out the other, due to the cost pressures the government is just failing to address. The coalition is opposing this bill because this arrogant government is telling our manufacturers what it thinks they need rather than addressing what manufacturers actually want.

We know Labor have made a desperate dodgy deal with the Greens, their partners in crime, which will prohibit coal or gas from receiving finance from this National Reconstruction Fund. At a time when energy prices are causing businesses to close, those opposite are too busy doing deals with their Greens mates which are going to further restrict manufacturing in this country. Australian manufacturers—and we on this side understand this completely—rely on cheap energy to make things on shore, but Labor's continued demonisation of gas and broken promises to bring power prices down will force more Australian manufacturing overseas. Every expert in the country, every single one, is calling on the Prime Minister to unlock more supply of gas—more supply, meeting the demand, lowering the price. Indeed, some manufacturers have had their gas bills triple—not double, but triple. But these backroom deals they insist on making with the Greens undermine any effort to bring power prices down, and we know Labor will always work with the Greens to push their own agenda rather than support the needs of Australian businesses and families.

Secondly, we'll be opposing this bill because we know it will create even more lost time for manufacturers in this broken model and it will take a significant time for any money to start flowing. The Clean Energy Finance Corporation, on which the NRF is modelled, was established in 2012 and the first investment was only made some 10 months later. Manufacturers in Australian cannot afford to wait that long. The government announced that the NRF should be up and running by next financial year but haven't committed to a launch date. They said it 'should be' up and running. We remember all the broken promises made before the election—$275 off power bills; instead they're going the other way. Ninety-seven times Mr Albanese said that, and now no-one opposite can even mention that number. There were broken promises over superannuation. He said there would be no changes to superannuation, and now we regularly hear from Senator Gallagher that there will be 'modest changes'—modest changes that are scaring farmers, who may have to sell their family's property to pay a tax bill from an unrealised asset. We know there were going to be no changes to franking credits, but now they're back on the agenda. Why should manufacturers have any faith when those opposite say there should be a launch date by next financial year but won't outline when it will be up and running? Is this just going to be added to the litany of broken promises?

Industry feedback suggests that this type of funding mode takes years to get right and that those years will be lost to Australian manufacturers and cause the loss of a significant number of jobs across our country. Let's not forget that, while those manufacturers are waiting, we get closer and closer to a world where hard-to-abate industries will no longer exist in Australia. Think about all the refining resources in this country—iron, coal and oil will all be forced out. I've already spoken in this place about the impact the safeguard mechanism is going to have on the cement industry. We know that the cement industry in Australia cannot abate the creation of clinker, the most important and emissions-intensive part of the cement-making process. Those opposite are going to send if offshore, destroying Australian jobs and Australian companies and ensuring that we have no sovereign supply of cement.

We know that all of this is a recipe for economic disaster. We can't blame the public servants in each of the individual agencies. They only see the work that they're doing; they don't look at the broader implications across the different bills and the different departments. That is the job of the government—to look at what's being proposed across government departments and always consider the cost to our citizens, the impact on industry and what the unintended consequences may be—but this is a government that proves, day on day, that it is not up to the challenge.

The NRF has a poor funding model. The model shifts from a competitive grants program with robust processes, to government acquiring equity and providing loans. When we talk about unintended consequences, we absolutely know what's coming down the track. Government equity and loan schemes are less successful than grants. Manufacturers may struggle to meet the return-on-investment thresholds or put together detailed business cases in house. What will happen to failed or failing loans? It's clear that the last experiment down this path, the Victorian Economic Development Corporation, uprooted manufacturers. Eligibility is another issue—certain industries might have margins which are too small, or it could be too risky with disrupted supply chains. Many will no doubt miss out, and the fund could become equivalent to a white elephant.

Before the election—aside from the 97 claims of a $275 reduction to power bills—Mr Albanese also claimed that he was putting forestry at the heart of his manufacturing policy, naming it as a priority under the National Reconstruction Fund. On 17 May 2022, he wrote to Tasmanian forestry workers, pleading for their vote:

I promise you that, if I become Prime Minister, a government I lead will not shut down the native forestry industry in Tasmania … I will take up the fight against them—

Referring to the Greens—

to protect your job too.

Not even a year on, the Prime Minister has broken this promise as well. He's made a desperate, dodgy deal with the Greens in return for support for the National Reconstruction Fund—a deal which prohibits investment in native forest logging in the so-called reconstruction fund.

The bill also undermines investment certainty in national priorities, with the government changing Australia's national manufacturing priorities on a political whim, undermining investment decisions and eroding investor confidence. This is particularly pertinent to the space industry, complementary medicine and, to a lesser extent, recycling. The government's new priorities are too vague. The government don't know where their focus should be in order to drive investment into specific sectors. This is typical of Labor, choosing to spray money indiscriminately instead of continuing investment certainty for our manufacturers and industry.

The government has displayed a callous lack of understanding for how these delays may have already damaged these projects. But one of the key pillars of this new manufacturing strategy was our strategic decision to bolster Australia's capability in the space sector. We supported funding to locally design, develop, manufacture and deploy specialised space products, equipment, systems and services for export to international markets and to support national and international space missions. The government has chosen to effectively wipe out the coalition's efforts to develop our space industry manufacturing by removing it as a priority area. The space industry and the Australian public are yet to understand the basis on which this shift in focus was made. The government must address the critical issues affecting our manufacturing, not tinker with a proven model. Power prices are forecast to spike—not to go down but to spike—by 56 per cent. I say to those in the gallery that, if you've already seen your power bills go up, they're about to go up a whole heap more, and you can thank those opposite for that. That is also to the businesses that are now going to be pushed to the brink. It's time this government delivered inflationary support for industry and put forward a plan to deal with these spiralling power prices.

Finally, the fifth reason the coalition will not be supporting this National Reconstruction Fund in its current form is the complete fiscal irresponsibility that it shows. Delivering funding well in excess of the coalition's Modern Manufacturing Strategy, an additional $5 billion appropriation is provided upon passage of the bill. But the timing of the remaining $10 billion will not be subject to further parliamentary approval. So $10 billion of your money—$10 billion from those sitting in the gallery and every Australian taxpayer—won't be subject to any scrutiny in this place. Those opposite, the Labor government, will be able to put that money wherever they like. We know how those slush funds work and benefit their mates in the unions in this country—not small businesses, not Australian manufacturers and certainly not Australian families. We know that financial structures similar to the one underpinning this bill have drawn criticism from the IMF, who stated:

Implementation of below-the-line activity through newly created investment vehicles (National Reconstruction Fund, Rewiring the Nation, and Housing Australia Future Fund) should be phased appropriately, and, more broadly, a proliferation of such vehicles should be avoided.

The IMF is saying that it should be avoided. Other than that, this is the important part:

Cost-of-living support in light of high energy prices should be targeted, aimed at protecting vulnerable households and small viable firms.

Let's not forget that Labor is carelessly rushing through a total of $45 billion of off-budget spending. How's that transparency going, guys? Do you remember that new kind of place? Well, we know that hasn't worked; we saw a disgraceful performance by one of your frontbench cabinet ministers last week in this place. You promised more transparency, but instead you've moved $45 billion of off-budget spending, with no accountability, no oversight and no transparency.

The bill hasn't passed, and already unions are licking their lips at the prospect of the NRF and have listed their demands. A third of the board positions are hand-picked by the Australian Council of Trade unions, the ACTU, that bastion of morality—not! Their positions will determine who gets access to funding and an enterprise agreement with unions as a precondition to make an application. Applicants must not have engaged in conduct that treats workers 'unfairly'. That's a very vague term and a vague way of saying, 'If you're not with the unions, you're against them,' and demanding that applicants commit to direct employment. So, if contractors or an indirect workforce are used, they must be employed on the same conditions as the direct workforce. This essentially enshrines compulsory unionism if you want to be a successful applicant. It's for these reasons—amongst others, but for these five reasons primarily—that the coalition will not be supporting this bill in its current form.