Linda Reynolds (WA, Liberal Party) Share this | Hansard source

Sorry, Acting Deputy President Cox. I thought I was seeing Senator Pratt take another photo in the chamber. My apologies. It is very, very clear that, despite all of their rhetoric before the election, Labor will always work with the Greens against the interests of families, businesses and our manufacturers. That is very clear. No matter what they say before the election, they always do that after the election.

Benchmark power prices for hundreds of thousands of Australians are set to rise by more than 20 per cent over coming months. Sadly, for all Australians who are already struggling with the increased cost of living, including increased power costs, this desperate and very dodgy deal will make it worse for Australian manufacturers and for everyday Australians through further increases to power prices. The Minister for Industry and Science speaks out of one side of his mouth, saying that he supports gas, but his actions in caving in to these radical Green amendments speak the loudest. This is a very bad bill, which has become even worse with this dodgy deal. We on this side of the chamber will fight it because it is such a flawed bill.

There are five main reasons why this bill is flawed. Let me share them with you now. The fund will be administered by a corporation with an independent board, who will deliver against an investment mandate set by the government, but that framework is fundamentally flawed for five reasons. As I've said, it will make the circumstances for Australian manufacturers and for Australian energy consumers—that is, Australian families—all the worse. What's worse is that Labor and the Greens understand these flaws, yet they are still going ahead with this legislation. To me, it reeks of them pushing through the repeal of the cashless debit card, knowing, and having had warning of, the consequences this would have for thousands of Indigenous Australians and remote communities, but they were ideologically hell-bent on introducing it—the safety and security of those communities and women and children be damned! That is exactly what we're seeing here. They are going to introduce this legislation, come hell or high water, and they don't really care about the implications for Australian workers, Australian manufacturing and, of course, our energy producers.

Let's have a look at the five reasons why this is such bad legislation. Firstly, the bill is almost devoid of any economic considerations. The government promised before the election to address rising energy prices, but, as we've heard time and time again in question time inside this place, it's another broken promise. They don't really care at all. The government must address rising energy prices, and they must address labour market shortages and disrupted supply chains, if our manufacturers are to succeed. Without the policies—and they have no policies in any of these areas yet to create stronger economic conditions—any government spending like this, apart from being inflationary, will have no positive impact on our economy. It would be money in one pocket and money out of the other, due to the cost pressures that the government in its first nine months has completely failed to deliver, as every Australian will tell you about the pressures on their hip pockets.

The coalition is opposing this bill because this arrogant government is telling our manufacturers what they think they need and what they ideologically are now bound to deliver because of this deal, rather than addressing what our manufacturers actually need to be competitive, to produce and to employ Australians. The simple fact is that, without these other policies, they are holding industry back, and this is not just useless but counterproductive. It seems that every time Labor are in government, they have such terrible luck. Every time they come to government, there is such an unprecedented crisis, but that is government and that is always the case. That's the first thing, that they don't have the economic policies to make this policy work.

The second flaw—fundamental flaw—in this policy is that this bill will create even more lost time for manufacturers. In this terribly broken model, it will take far too long for money to start flowing to manufacturers. The Clean Energy Finance Corporation, on which the NRF is modelled, was established in 2012, and the first investment took nearly 12 months to make. Our manufacturers cannot afford to wait that long. The government announced that the NRF should be up and running by next financial year, but, of course, they have not yet given any indication of a start date. Why? Because they know it is going to be a long time away. That's the second reason this is such flawed legislation.

The third reason is that the NRF is based on a highly flawed and very poor funding model. The model shifts from competitive grant programs, which have built within them robust processes for government to acquire equity and for how government provides loans. This, in their model, will lead inevitably to unfavourable and unintended consequences. Government equity and loan schemes are less accessible than grants, and manufacturers are almost certainly going to struggle to meet their return-on-investment thresholds or put together detailed business cases in-house. These are the sorts of things that the Labor Party and the Greens do not think about. What is the reality of business development and equity financing and capital-raising for manufacturing companies in Australia? What will happen to failed or failing loans? It is clear that the last experiment down a very similar path was the Victorian Economic Development Corporation, which uprooted manufacturers. Eligibility is another issue. Certain industries may have margins which are too small or could be too risky with disrupted supply chains that many companies are still facing.

The fourth flaw—the fourth very fundamental flaw—in this legislation is that this bill undermines investment certainty in our nation's priorities. With the government changing Australia's national manufacturing priorities on a highly partisan political whim not based on sound economic principles, it will undermine investment decisions and erode investors' confidence. This is particularly pertinent to the space industry, to complementary medicine and, to a lesser extent but still validly, to the recycling industry. The Labor government's new priorities are too vague and they strip industry policy of the focus needed to drive investment in highly tailored and specific sectors. This is so typical of Labor, choosing to spray money indiscriminately instead of continuing investment certainty for our manufacturers and our industry.

If that wasn't enough, there is a fifth reason why this is such a flawed fraud on the Australian people: the bill, ultimately, is fiscally irresponsible. In delivering funding well in excess of the coalition's Modern Manufacturing Strategy—which was highly targeted, specific and aimed at value-adding for manufacturing in this nation—an initial $5 billion appropriation is provided upon passage of this bill. But this is the kicker: the timing of the remaining $10 billion will not be subject to further parliamentary approval. Think about that. This is the next Labor Party slush fund, one of $10 billion. This is why it is so flawed.

In fact, similar financial structures to the one underpinning this bill have drawn criticism from the IMF itself:

Implementation of below-the-line activity through newly created investment vehicles—

such as the NRF, which is what we're talking about today—

should be phased appropriately, and, more broadly, a proliferation of such vehicles should be avoided.

They are bad policy and they are fiscally irresponsible. The IMF also said:

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: Labor are carelessly rushing through a total of $45 billion of off-budget spending. This has to be stopped by this place. It is inflationary. It will further drive up the cost of living, particularly power prices, for all Australian families. Worse, it will not achieve the desired or the stated effect by those opposite of increasing targeted manufacturing in this nation.

I'll finish on this, which is something that absolutely floored me—but, then again, I'm not surprised. When the Assistant Minister for Manufacturing, Senator Ayres, and the department were pressed in Senate estimates recently about whether any modelling had been done on the inflationary pressures of the NRF, and what inflationary pressures they would cause, what do you think the answer was? Had the Labor Party and the government modelled this in any way to determine the inflationary impact on Australians, particularly now with the high cost of living for all Australians under this government? The department official said, 'No.' No inflationary modelling on this at all, despite the fact it is very clear this could well have an inflationary impact on Australians and on companies, particularly for their energy prices. When pressed further—as if that wasn't bad enough—the response from the official was this: they didn't do it because they didn't think it was necessary. This government did not think it was necessary to even model the inflationary impact of this clearly inflationary policy. The only reason you can possibly imagine they did that is they can say, when it inevitably drives up inflation and energy costs, 'Well, no-one told us.' That's because you didn't ask and because you ignored the economic facts.

The coalition acknowledges the importance of having strong supports for Australian manufacturing, which is why we achieved this and delivered the Modern Manufacturing Strategy. But it was transparent and it was sound economically. Labor's National Reconstruction Fund is many times the cost, has great risks for Australian taxpayers and will demonstrably not result in any benefit for Australian manufacturers. It will just result in more pain for Australian taxpayers.