Larissa Waters (Queensland, Australian Greens) Share this | Hansard source

I rise to speak on the National Reconstruction Fund Corporation Bill 2023. I'm really pleased, thanks to Greens amendments, that this fund can now facilitate decarbonisation and an actual focus on rebuilding manufacturing and a renewables industry, rather than propping up fossil fuels. The National Reconstruction Fund will set aside $15 billion to rebuild an industrial base in Australia. The NRF, as it's known, will have seven priority areas. Pleasingly, renewables and low-emissions technologies will receive $3 billion set aside in particular. The other priority areas include medical science; transport; value-add in the agriculture, forestry and fisheries sectors; value-add in resources; defence capability; and enabling capabilities.

I'm very pleased that the Greens have secured amendments that ensure that coal and gas and native forest logging are prohibited investments for this fund. This is the same amendment that was put in place by the Greens for the Clean Energy Finance Corporation and the Australian Renewable Energy Agency, or ARENA. This prevented the CEFC and ARENA from being used as a slush fund for coal and gas by the previous government. The amendment we have secured to the National Reconstruction Fund makes sure that the fund will be focused on the task of rebuilding a manufacturing base, not just propping up coal and gas corporations—who, frankly, are already overly subsidised and don't even pay their fair share of tax, all the while cooking the planet—and that the fund won't prop up native forest logging. But we managed to secure a further amendment to make sure that investments made by the National Reconstruction Fund board must align with Australia's legislated climate targets and any future updated commitment by Australia under the Paris Agreement.

We're very pleased to receive those amendments and secure those changes. In fact, we're pleased also because the National Reconstruction Fund looks remarkably similar to an election policy that the Greens took to the last federal election, where we elected a record number of Greens. We took a policy to create a $15 billion made-in-Australia bank and manufacturing fund. Because of the amendments that we've managed to secure to the National Reconstruction Fund, today that fund reflects much of what we had hoped and aspired for in that Greens made-in-Australia bank. The point of that was to decarbonise our existing manufacturing base and to make stuff again. Let's make stuff again in this country. We've got brilliant scientists. We've got skilled engineers. We've got a world-class workforce. If we back them and invest in our manufacturing industry we can tackle the climate crisis. We can strengthen local communities and we can create well-paid, secure jobs. There's no downside to that.

I'm reminded that Australian technology and Australian nous invented solar panel tech, invented wi-fi and invented the bionic aye. We used to make our own cars, and we could in fact do that again. We took a plan to that last election that, as I said, now looks remarkably like the National Reconstruction Fund. Under our plan we wanted a manufacturing Australia fund to help local manufacturers recover from the pandemic, move off coal and gas, and expand into new sectors. We wanted to use government investment to drive new export industries in green hydrogen and minerals processing and ensure that Australia could become a renewable energy superpower. We wanted to facilitate that rapid transition to 100 per cent renewables—which, of course, would create jobs and encourage new industries and innovation in the course of achieving that. And if we use low-cost green energy to rebuild our manufacturing industry we can support those new green export industries and bring back jobs that have gone overseas.

Manufacturing still has a place in Australia, and I'm so pleased that this $15 billion fund—which, as I said, remarkably resembles what we took to the election—can now support manufacturing, innovation, industrial decarbonisation and a relocalisation of supply chains. When we campaigned on this we referenced the fact that clean, cheap abundant energy from our vast solar and wind resources could be Australia's competitive advantage in net zero global trade, but only if we seize it. We know we've gotten further and further behind as the world decarbonises and moves towards 100 per cent renewables. But with such an abundance of sun and wind energy we could drive energy costs close to zero, which would see the return of manufacturing to our shores. Australia's manufacturing renaissance could occur in those areas where we know we've got an advantage in a zero carbon economy, from manufacturing electrolysers to heat pumps to battery technologies. But it could also extend to medical equipment and pharmaceuticals, to food and packaging projects. There's also great opportunities in supply chains for electric vehicle components, for wind towers and for public transport infrastructure made with emissions-free steel.

The manufacturing bank that we have envisaged, which this fund now closely resembles, would support manufacturing, innovation, industrial decarbonisation and a relocalisation of supply chains. In our minds it would have had a similar structure to the existing Clean Energy Finance Corporation and provide direct grants, equity investment, financing and concessional loan options, depending on the structure of the corporate applicants. And it would target small business, workers co-ops, green not-for-profits and social enterprise that are engaged in innovative production, research and development.

We need this more than ever, because Australia currently ranks 91st for economic complexity, because we've traded our previously self-sufficient manufacturing base for an entirely fossil fuel reliant economy of extraction. We are deeply reliant on a globally integrated open-market economy. Therefore, shocks abroad reverberate through the Australian economy. We saw that and felt that so viscerally during COVID. The mining boom has not translated into a sophisticated economy capable of handling those shocks. Rather, we've failed to build up an industry base or the infrastructure necessary to handle a bust in the resources sector. Previously, the former government accelerated the death of the car industry in Australia, and this really added a devastating blow to our manufacturing base. But we have the capacity to rebuild a strong industrial base with a focus on renewable energy.

Coming to the National Reconstruction Fund Corporation Bill 2023, this bill would invest in rebidding Australian industry and manufacturing, and it's a public policy outcome that the Australian Greens have long pushed for and very much welcome. We strongly support public investment in rebuilding manufacturing in Australia. Broadly stated, the aims of the fund are supported by the Greens, in particular a reinvigorated role for state led investment in designated priority areas of the economy. During the inquiry into this bill we heard some very persuasive evidence from a number of experts, including the Tech Council, who said, 'Given the long-term and strategic nature of these investments, governments are often the best placed actors in an economy to address this gap by being patient funders of strategic investments and crowding in further private investment.'

Whilst the aims of the National Reconstruction Fund were always consistent with Greens policy, we were very concerned regarding the potential for fossil fuel finance under the original bill as it was pro-proposed, prior to the discussions that my colleague Senator Allman-Payne and our leader, Adam Bandt, were able to successfully have with the minister. The legislation as originally proposed was wide open to abuse by governments that wanted to use the $15 billion for more coal, oil and gas, and that's a risk that the Greens simply would not take. We needed legislative restrictions to stop public money from being used to prop up oil and gas. As I mentioned, $11 billion in subsidies in cheap diesel and accelerated depreciation already get given every year to the big fossil fuel companies. That is too much. They certainly didn't need any more. We know that coal and gas are the main causes of the climate crisis, and to have any chance of getting the climate crisis under control and meeting even the net zero climate targets that this government claims to support—too weak and too late—there can be no new coal or gas projects. This is also the view of the usually conservative International Energy Agency. It's the view of the United Nations Secretary-General, Antonio Guterres, and it's the view of the world's scientists.

But, concerningly, there was nothing in the proposed legislation to prevent investment in coal and gas or in the projects that would lock in and extend the use of coal and gas. Anything that the government of the day chose to support could have been declared a priority area for investment in the future. Under the original proposed legislation the minister would have issued the investment mandate as a non-disallowable legislative instrument and then declared the priority areas of the Australian economy in the form of a disallowable legislative instrument. The minister provided a good deal of detail on the proposed priority areas, and we again thank the minister for his collegiate approach.

But the detail provided was effectively going to be a moot point, where there were so few limitations on what the government of the day could choose to direct NRF funding towards. When we asked in Senate estimates, the government confirmed that they could have used the $15 billion as a slush fund for coal and gas—although I don't believe they used the term 'slush fund', but certainly that was our concern. The Department of Industry, Science and Resources confirmed that the government of the day could have invested in coal and gas by simply changing the priority investment areas and subject to revised priority areas not being disallowed by the Senate. There was a real risk with this legislation that this government, or, indeed, subsequent governments, would have had almost unlimited discretion to declare priority areas for a gas fired recovery or a coalmine renaissance—flying in the face of global trends, climate science and community sentiment. This, in fact, was a view that was shared by some of Labor's own members, who made a submission to the department's consultation. In a submission to the Department of Industry, Science and Resources's consultation on the National Reconstruction Fund, the Labor Environment Action Network, or LEAN, stated:

LEAN strongly recommends that the NRF not invest in any technology which will support further fossil fuel development including discredited carbon capture and storage processes or 'clean gas or coal' technologies. All NRF investment should support the delivery of policy to deliver net zero by 2050, an end to extinctions and delivery of Kunming-Montreal Global Biodiversity Framework obligations. All proposals should be tested for alignment with the government's existing commitments and policy priorities.

Those were the words of the Labor Environment Action Network. They were not alone. Many other submitters highlighted the fact that coal and gas should not play a part in the future of modern manufacturing in Australia, including learned experts such as Ms Lee, who is the CEO of Beyond Zero Emissions. She said:

When we looked at shoring up and giving confidence to the manufacturing sector and the businesses in it—nobody is looking for any fossil fuel input streams for that. What we hear are people looking at the time frame for when they can turn off existing coal and gas use in their facilities, and this is because, for the facilities that we are looking at, everyone is dependent not just on Australian financiers but also on global finance, so the medium- to large-end-of-town businesses. All of that investment money is looking for ways to decarbonise, so we're seeing that in so many commercial, financial and other businesses. There's a whole lot of pressure on these businesses from all sides—from shareholders as well, for those that are public—and all the pressure is on transitioning to renewables. The question is: how fast? There is a need to make sure that energy is reliable today, but there is no increasing demand that we see for future-proofed manufacturing to have any fossil fuels.

It was against that background that we were insistent, and successfully so, in our request that this fund be precluded from investing in coal and gas or in native forest logging. Our amendments create a class of prohibited investments within the legislation that explicitly bans the National Reconstruction Fund from financing the extraction of coal and gas, the construction of gas pipelines and the logging of native forests. As I mentioned before, we also secured an amendment that investments made by the board will have to align with the legislative climate targets and any future updated commitment by Australia under our nationally determined commitments under the Paris Agreement.

We now have an opportunity to actually invest in regional Australia to build stuff again, to make our economy more resilient and self-reliant and to genuinely give regional communities a sense of opportunity. As we transition off coal and gas and towards 100 per cent renewables, let's ensure that we've got a strong manufacturing base for those communities to aspire to work on and to help build the things that our new clean, green economy will need and will be based on. The Greens are really pleased to have secured amendments that ensure this fund can't just be a slush fund for coal or gas or for native forest logging, and we're very pleased that it might kickstart local manufacturing again.