Don Farrell (SA, Australian Labor Party, Minister for Trade and Tourism) Share this | Hansard source

I table two supplementary explanatory memoranda relating to the government's amendments to be moved to the National Reconstruction Fund Corporation Bill 2023, and, by leave, I move amendments (1) to (8) on sheet UC140 together:

(1) Clause 5, page 4 (after line 16), after the definition of Australia, insert:

Australia's greenhouse gas emissions reduction targets means:

(a) if:

(i) Australia's current nationally determined contribution was communicated in accordance with Article 4 of the Paris Agreement in June 2022; and

(ii) that nationally determined contribution has not been adjusted in accordance with paragraph 11 of Article 4 of the Paris Agreement;

the greenhouse gas emissions reduction targets set out in paragraphs 10(1)(a) and (b) of the Climate Change Act 2022; or

(b) in any other case—the greenhouse gas emissions reduction targets included in:

(i) Australia's current nationally determined contribution communicated in accordance with Article 4 of the Paris Agreement; or

(ii) if that nationally determined contribution has been adjusted in accordance with paragraph 11 of Article 4 of the Paris Agreement—that nationally determined contribution, as adjusted and in force from time to time.

(2) Clause 17, page 15 (after line 16), after subclause (3), insert:

(3A) In performing its functions, the Board must have regard to:

(a) the desirability of transforming Australia's industry and economy by:

(i) growing or improving Australia's industrial capability; or

(ii) improving Australian industry's ability to pursue value-adding opportunities; or

(iii) supporting a long-term improvement in Australia's economic diversity; and

(b) the desirability of attracting private sector finance or investments into the priority areas of the Australian economy; and

(c) Australia's greenhouse gas emissions reduction targets and the desirability of supporting decarbonisation; and

(d) the desirability of creating secure jobs and a skilled and adaptable workforce; and

(e) the desirability of enhancing Australia's resilience against supply chain vulnerabilities; and

(f) the desirability of encouraging the commercialisation of Australian innovation and technology.

(3) Clause 17, page 15 (line 24), omit "Subsection (4) does not", substitute "Subsections (3A) and (4) do not".

(4) Clause 75, page 46 (after line 25), after paragraph (1)(c), insert:

(ca) in the case of the Corporation—environmental, labour, social and governance matters to be considered by the Corporation in relation to:

(i) the Corporation's investment functions; and

(ii) the Corporation's investment powers;

(5) Clause 75, page 47 (after line 5), after paragraph (1)(f), insert:

(fa) in the case of a designated subsidiary of the Corporation—environmental, labour, social and governance matters to be considered by the designated subsidiary in relation to:

(i) the Corporation's investment functions being performed through the designated subsidiary; and

(ii) the designated subsidiary's investment powers;

(6) Clause 82, page 51 (line 8), omit "and".

(7) Clause 90, page 56 (line 5), after "delegate to a", insert "senior".

(8) Clause 90, page 56 (line 10), after "function to a", insert "senior".

We thank the Senate Economics Legislation Committee, the Senate Scrutiny of Bills Committee, the Parliamentary Joint Committee on Human Rights and the many other stakeholders, including members of this place, who have provided their valuable feedback on this bill. In response to this feedback, the government is moving these amendments to the bill.

Firstly, in respect of functions of the board, while investing to diversify and transform Australian industry is the core objective of the NRF, we also recognise that there are several important considerations that the board should have regard to in performing its functions. That is why we are proposing further amendments to clause 17 of the bill to make it clear that the board must have regard to a number of other important matters that have informed our design of the NRF from the outset, transforming Australia's industry and economy, attracting private sector investment and not crowding it out, meeting Australia's greenhouse gas emissions reductions target and decarbonisation, creating secure jobs and a skilled and adaptable workforce, enhancing resilience in Australia's supply chains, and encouraging the commercialisation of Australian innovation and technology.

Our proposed amendments to clause 75 require the corporation to develop policies on how environmental, labour, social and governance matters need to be considered in relation to its investment functions and powers and also its subsidiaries. This represents modern investment best practice, and we thank those stakeholders who raised these issues. By introducing these amendments, the government reaffirms that one of the most important outcomes of the National Reconstruction Fund will be the creation of secure, well-paid jobs in these key industries that build upon our national strengths. The fund will revitalise and strengthen our local supply chains to ensure that we have our own industrial and manufacturing capabilities.

By legislating the core functions of the board to include the creation of secure jobs, we are emphasising one of the biggest benefits that our domestic manufacturing industry provides and will continue to provide: opportunities for Australians to make a meaningful, high-skilled contribution to our nation's future. Nearly 85 per cent of the jobs in manufacturing are full-time.

When we proposed the National Reconstruction fund in March 2021, Labor said we were doing this to rebuild secure work. When he announced the Inflation Reduction Act in August 2022, itself a huge investment in manufacturing capability in the US, President Joe Biden said that it would 'lift up American workers and create good paying union jobs across the country'. 'Union jobs' is universally recognised language for secure, safe, high-skilled, well-paid jobs. That is exactly what this government is doing with our National Reconstruction Fund, creating jobs that communities can build around, especially in regional, remote and outer-suburban Australia. We're investing in businesses so that they can invest in their workers, developing the skills that we need to meet any challenges that the future may have in store. But we're only going to get there by working together—government with business and their people. We all have a common goal: an Australian industry that will lead the world. This can only be achieved if everyone has a voice, which can be heard, and a stake in the success of our collective effort.

Finally, in response to comments by the scrutiny committee, we also propose a minor amendment to clause 90, to make clear that the CEO may only delegate their powers and functions to senior staff. This amendment brings the clause into line with the CEFC Act and will not significantly change the operations or the functions of the NRF. I therefore commend the bill to the Senate.