Lisa Darmanin (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Before I speak to the specifics of the Future Made in Australia Bill 2024, I want to share a personal story—one that highlights why I care so deeply about manufacturing in Australia and why this legislation is close to home for me.

My dad, Vince, spent all of his working life in manufacturing. For some of this time, he worked as a maintenance worker at the Kodak factory in Coburg, in my home state of Victoria. He started there in 1997. Like many working Australians, he put in years of hard work and dedication to support our family. The Kodak factory was a landmark of our area, a sprawling site that employed hundreds of workers, and it was central to the local economy. It was part of what made Coburg such an important manufacturing hub in Melbourne for many years. At its peak, Kodak was a household name, and its factory was a symbol of Australia's manufacturing strength. The Coburg site was the largest factory in the city of Moreland, known as Meri-Bek now, spanning 21 buildings. It opened in 1961 and remained a key part of the community until its closure in 2004. For decades, it was one of Melbourne's most well-known factories—a place where generations of workers like my dad earned their livelihood.

I saw firsthand how manufacturing jobs gradually were offshored. The closure of the factory in Coburg was part of a significant wave of change that reshaped not just the local economy but the lives of countless families, including mine. When the factory closed its doors, it wasn't just the end of a job for my dad; it was the end of an era for the entire community. Coburg, once a manufacturing stronghold, saw its landscape transform. Countless jobs were lost, and Australia's manufacturing capacity continued to decline. The northern suburbs of Melbourne, including Coburg, were changed forever by the loss of these jobs. This is why I stand with such passion for this bill here today. I know what it means to lose manufacturing jobs. I've seen it in my own family and I've seen it in my community. I'm determined to make sure that future generations of Australians won't have to experience that same loss. That's why the Future Made in Australia Bill is so important. It's about protecting and revitalising industries, like the one my dad worked in, and it's about ensuring that Australian manufacturing can not only survive but thrive into the future.

This legislation is what good governments do. They invest in their people and their jobs, building skilled and satisfying careers, and they invest in communities and the future. For decades, Labor governments have led the way on nation-building policies, from superannuation to Medicare and more recently paid family violence leave and the creation of the Net Zero Economy Authority. These are the kinds of nation-building reforms that ensure the Australian community has economic security and opportunities not just for now but for generations to come. They're about protecting and advancing working people and creating a fairer society for everyone.

For over 20 years, I've worked to improve the lives of working Australians by fighting for fair wages, better conditions and safer workplaces. The Future Made in Australia Act is all about that. It's about making sure the jobs of the future are good jobs that pay well, are secure and benefit Australian workers and their communities. It's about creating pathways and opportunities for our young people to build satisfying careers in trades, technology and innovation. At the core of this bill are a set of community benefit principles, which ensure that the investments we make as a government benefit workers, local communities and industries that drive our economy, across the country. These principles are essential to ensuring that the economic growth that we generate is shared broadly, not just concentrated in the hands of a few. They are about making sure that every dollar that we invest serves the public good.

The five community benefit principles at the heart of, and enshrined in, this legislation ensure that (1) we promote safe and secure jobs that are well paid and offer good conditions; (2) we develop a skilled and inclusive workforce by investing in training and skills development, and broadening workforce participation; (3) we engage with, and support, local communities, including First Nations communities and those most affected by the transition to net zero; (4) we strengthen Australia's industrial capabilities by enhancing local supply chains and boosting domestic manufacturing; and (5) we ensure transparency and accountability in how public investments are managed, particularly when it comes to the benefits received under the Future Made in Australia framework.

These benefits are critical to ensuring that the principles described are not just aspirational or 'nice to have if those businesses we partner with can fit them in'. It will be mandated that they be delivered. They will not just be words on paper. In terms of requiring these principles to be followed, they will be practical, but they will also be enormously impactful. They will ensure that, when the government invests in industries like clean energy, advanced manufacturing or critical minerals—the modern manufacturing industries—it is the Australian people who will benefit, and not just the companies involved.

My home state of Victoria still remains the biggest manufacturing state in the country, with a $33.5 billion industry. It remains a cornerstone of our economy. It's home to more than 23,000 manufacturing firms and over 279,000 workers. In fact, Victoria accounts for 31 per cent of Australian manufacturing output. That's a huge number, and it speaks to the importance of this sector, not just in Victoria but also across the entire country. But Victorian workers know there are different approaches to manufacturing. They remember how the coalition chased out car manufacturing and killed more than 100,000 manufacturing jobs. They and I remember the devastating impact that that had on families and communities, particularly around the regions of Geelong and Campbellfield, and the downstream manufacturing shops further afield that lost their major contracts supplying the vehicle industry. I remember the ripple effect across the economy as workers' years of loyal service were taken away as their jobs were offshored.

The car industry is but one example of this devastation, as we've seen the decline in Australian manufacturing industries. But Labor is seeking, with this legislation, to repair that damage, and our industry policy has already seen us create 70,000 new manufacturing jobs. The opposition only talk about manufacturing to talk it down. On this side of the chamber, we back our manufacturers, and we always have. This legislation is about securing that legacy and building on it. It's about ensuring that Australia can be a manufacturing powerhouse into the future. It's about making things here. It's about aligning economic incentives with the national interest. It's about investing in skills and training. And It's about investing in clean energy, green metals and critical minerals processing.

We know that climate change is the most pressing challenge of our time, and this bill allows us not only to meet this challenge but to grasp the opportunities in front of us. It ensures that the industries of the future, the industries that will power our net zero economy, are built and sustained right here in Australia. It does this through the National Interest Framework, which identifies sectors where Australia has a comparative advantage or where investment is crucial to our economic security. This framework focuses on sectors that support global decarbonisation and where Australia has a reasonable prospect of sustained advantage.

The government has already identified five key industries that will be the focus of this investment: (1) renewable hydrogen; (2) critical minerals processing; (3) green metals; (4) low-carbon liquid fuels; and (5) clean energy manufacturing, including battery and solar panel supply chains. These are sectors that have the potential to create thousands of jobs and drive significant economic growth. They are the sectors that will revitalise and renew our manufacturing industry and secure Australia's place in the global clean energy economy.

We're also investing in making sure that the things Australians rely on are right here, through the economic resilience stream of the Future Made in Australia plan. This is about learning the lessons of the pandemic and preparing Australia to deal with future challenges, building domestic supply chains to make sure we aren't relying on things overseas in a crisis. Labor want us to make things here and ship them everywhere. The opposition want us to make nothing here and import everything.

Yes, the coalition have opposed this bill and resisted the necessary investments in clean energy and domestic manufacturing. Under their watch, factories have closed, jobs have been lost and opportunities to build sustainable futures have been squandered. They failed to invest in renewables, with 22 failed energy policies in 10 years, leaving Australia vulnerable to the shifting dynamics of global energy markets. Even now, three years into the parliamentary term, they haven't got a single serious or costed economic policy. All they have to offer is an expensive nuclear fantasy.

Their opposition to this bill reflects a lack of ambition for our country and a short-sightedness we simply cannot afford. They've failed to recognise that clean energy investment and manufacturing are not mutually exclusive. They are intertwined, and this bill makes that clear. They've made it clear to every worker installing solar, every worker making batteries and every worker in critical minerals that they won't have a job under a coalition government.

By contrast, the Albanese government understands that the future of manufacturing lies in clean energy. That's why we are making significant investments through the $22.7 billion Future Made in Australia budget package. This package includes production tax incentives for hydrogen and critical minerals, the Future Made in Australia Innovation Fund, the Solar Sunshot program, the Battery Breakthrough Initiative and the National Interest Account. These initiatives will make Australia an indispensable part of the global supply chain and cement our place as a renewable energy superpower. Now, that's the kind of vision we should all get behind.

A future made in Australia requires a skilled workforce that is ready to meet the needs of a transitioning economy. Recently, I attended the launch of the Electrical Trades Union's Charged up report, which highlighted the urgent need for an additional 32,000 electricians by 2030 and a staggering 85,000 by 2050. This is a wake-up call for us.

The coalition spent years running down skills in our economy, leaving us without the workforce we need for the future, but this government is about fixing that. We've invested in TAFE, with 500,000 fee-free places, and we're expanding our programs to train workers in clean energy industries. The government is also investing $91 million to accelerate the development of the clean energy workforce through expanded access to the New Energy Apprenticeships Program and VET courses.

The Albanese government is also building a hydrogen centre of excellence in Queensland and a clean energy centre of excellence in Western Australia. We're committed to increasing women's participation in these industries, with initiatives like the Building Women's Careers Program and support for STEM diversity. With this bill we are building a strong, skilled and inclusive workforce. We are making sure that our regions, those that have traditionally powered Australia, are at the forefront of the net zero transition. This is about realising the opportunities for workers, communities and businesses right across the country. We are planning for the long term and we are doing it with the Australian people in mind. I am proud to stand in support of this bill today.

Paul Scarr (Queensland, Liberal Party, Shadow Assistant Minister for Multicultural Engagement) Share this | Link to this | Hansard source

I think this legislation, the Future Made in Australia Bill 2024 and the Future Made in Australia (Omnibus Amendments No. 1) Bill 2024, is an absolute train wreck. I ask those listening to this debate this question: do you believe that, if there's a business in this country that can't find private shareholders and investors who are prepared to put their money into it, or that cannot find a lender—a bank or someone who provides debt finance—who's prepared to lend it money, the government should invest your taxpayer dollars, which you work hard for, in that business? Do you think that's a good idea? Do you think that's sustainable? If these businesses can't find equity capital contributed by the private sector or if they can't find banks prepared to lend to them, why should your taxpayer dollars go into financing those businesses? Why?

This is what I believe—

Claire Chandler (Tasmania, Liberal Party, Shadow Assistant Minister for Foreign Affairs) Share this | Link to this | Hansard source

Order, Senator Scarr. Senator Chisholm.

Anthony Chisholm (Queensland, Australian Labor Party, Assistant Minister for Education) Share this | Link to this | Hansard source

A point of order: I'd just ask that the senator direct his comments through the chair.

Claire Chandler (Tasmania, Liberal Party, Shadow Assistant Minister for Foreign Affairs) Share this | Link to this | Hansard source

Thank you, Senator Chisholm. Senator Scarr, please remember to direct your comments through the chair.

Paul Scarr (Queensland, Liberal Party, Shadow Assistant Minister for Multicultural Engagement) Share this | Link to this | Hansard source

Thank you, Acting Deputy President. I always get excited when there are people in the gallery. When I'm here I do like to make sure that we include them in the proceedings, but I'll do my best to adhere to Senator Chisholm's rebuke.

In this respect, and this is an extraordinarily important point, I believe that the government should focus on its core responsibilities—that is, creating firstly an investment environment in which capital in the private sector comes to this country from overseas and is generated within the borders of our country, and the private sector makes investments in the businesses of the type we're talking about. The government should then use taxpayer dollars to provide the roads, the hospitals, the schools and all the other government services needed, which provide an environment whereby businesses can be established and provide wealth and prosperity across the whole country. That's my belief.

I do not believe that taxpayer dollars should be used as some sort of government process to pick winners, and I'll tell you why. History tells us that government—and this may come as a great surprise to those listening to this debate—doesn't have a really good track record of picking investors and winners amongst commercial enterprises. The government finds it hard enough to keep its own infrastructure projects within budget and on time. Why would you possibly trust the government to decide whether or not it should invest in a private enterprise? Why would you possibly trust the government to do that?

I had 25 years in the private sector before coming to this place. One of my jobs as a senior executive in a mining company was to travel the world and look for investment opportunities, and I can tell you that the best way to destroy shareholder value is to make an investment that is the wrong investment, to make an acquisition of an asset that is the wrong acquisition. I've seen billions of dollars of private sector money lost through those sorts of investment mistakes. So, given that environment, why would you possibly support a policy whereby the government is going to use taxpayer dollars—and all government money is taxpayer dollars—and go out and try to pick investment winners, effectively playing the share market? Why would you possibly support such a policy?

And let me tell you what the other issue with this policy is. What happens once the government puts its foot on the sticky paper? What happens when the government makes that initial $100 million investment into an enterprise, becomes a shareholder in an enterprise? It's put its foot on the sticky paper. What happens if the economy turns, the market turns against that individual enterprise, and that enterprise says, 'Well, we're going into liquidation unless we have another $100 million.' What does the government do then? Does it write off the investment and walk away? Ah! That's hard. That's political because the government has got its foot on the sticky paper and so if the government withdraws any future investment, then it's going to be heavily criticised. It'll be criticised first for making the wrong investment. It'll be criticised because the employees and unions—rightly—will beseech the government to provide additional support. It'll be criticised because it is not supporting the manufacturing industry. And all the arguments we've heard used in the context of the automotive argument will once again be used. It'll be deja vu.

The government will then be trapped to continue to use your taxpayer dollars—the taxpayer dollars of the people in the gallery, the people listening to this debate, the people who don't even know we're having this debate about their money, their taxpayer dollars. The government would be trapped to continue to provide additional support to those businesses. That is the fundamental risk of government sponsoring businesses. Businesses that can't attract equity and debt themselves, because private investors don't want to invest in them, will need to go, cap in hand, to the government. That's the fundamental risk—that is, those businesses that are unable to raise that equity and debt in the private markets are coming to government because they cannot otherwise raise it. They become dependent on the public support, and then the government gets trapped because it has its foot on the sticky paper. It knows, if it cuts them loose, then it's going to be heavily criticised. So then the government starts to make irrational economic decisions, with taxpayer money. We've seen it before.

What the government needs to focus on is productivity, energy costs, our regulatory system and providing the environment for businesses to prosper. If all of these businesses that the government is talking about have this great net comparative advantage, why can't they raise money from the private sector? Why do they need to go to the government? They can't answer that question. And the answer to that question is: because they don't have robust enough projects. If you have a project that's going to be profitable and the risks can be mitigated, you'll be able to raise the money. But if you don't, you go to government. And the Labor government is proposing to use billions—not millions but billions—of your taxpayer dollars to invest in these projects. Billions of dollars. What could go wrong? What could go right—that's probably a less elaborate question.

And then consider the opportunity cost. The basic rule of economics: scarcity of resources. The government only has so much in taxpayer dollars. There's only a particular pool of taxpayer dollars. Would you rather your taxpayer dollars go to investing, go to picking winners in the private sector and investing in those companies? Or would you rather your taxpayer dollars go to addressing the recommendations which were brought down in the report of the royal commission into veterans suicide? I know what my preference is. Would you rather your government go out there and invest in businesses that can't raise money from the private sector? Or would you rather your taxpayer dollars go into the NDIS system, helping some of the most vulnerable people in our community? Or putting additional funds in the aged-care system. Or providing for the defence of the country? Or doing any of the other things that we talk about in this place? This is the choice for every taxpayer dollar, because it can only go so many different ways.

And bear in mind that these are taxpayer dollars, because, as a country, we've got net debt. We owe hundreds of billions of dollars in debt. Even worse, the government is going out and borrowing these billions of dollars and then investing. It's like going down to your local bank, borrowing from the bank and then putting the money on the share market. What could possibly go wrong? Time and time again through Australian economic history we've seen these issues arise, and policies such as this one end up as public policy debacles, where billions and billions of dollars in taxpayer moneys are spent and there's an inevitable conclusion: the business fails and taxpayer dollars, which could have been allocated elsewhere, are wasted.

These aren't just observations that I've made. This country has had the benefit of a productivity commission, which has been an outstanding institution providing detailed, objective advice with respect to economic matters. This is what Danielle Wood, the Chair of the Productivity Commission, appointed by the Labor Party, said in relation to these sorts of schemes:

If we are supporting industries that don't have a long-term competitive advantage, that can be an ongoing cost. It diverts resources—that's workers and capital—away from other parts of the economy where they might generate high-value uses.

That was the productivity commissioner, appointed by those opposite, speaking. She also said:

We risk creating a class of businesses that is reliant on government subsidies, and that can be very effective in coming back for more.

That's the sticky paper phenomenon: once the government makes an investment into these businesses, the government's foot is on the sticky paper, trapped.

Former productivity commissioner Mr Gary Banks described Future Made in Australia as a 'fool's errand' that risks repeating mistakes of the past by propping up 'political favourites'. So it's not just picking winners; it's picking political favourites. That's not a politician in this place speaking; it's the former productivity commissioner, Gary Banks, one of this country's most well-credentialled economists. He likened the scheme proposed by the government to 'Hotel California'—you know the song by the Eagles, Madam Acting Deputy President?—saying that many will enter into the program 'but few ever leave'. Again, it's the sticky paper phenomenon.

Do you know what our Prime Minister said in response to Gary Banks—a prime minister who, with all due respect, has spent nearly the whole of his working life in this place, not out in the private sector or building businesses but as a politician? He said that Mr Gary Banks was a flat-earther. That's how he described Gary Banks. That's like calling Galileo a flat-earther—absolute nonsense. Gary Banks is a very, very well-respected former productivity commissioner of this country trying to bring light to the mistakes of the past because he considers this bill a fool's errand which will actually lead to us committing exactly the same mistakes, and he gets called a flat-earther by the Prime Minister. Why couldn't the Prime Minister of this country actually engage in a sensible debate and explain to the Australian people why we shouldn't be concerned at the risk? If a company is going cap in hand to the government for funds, why should the taxpayer invest in that company, if it can't raise money from the private sector or from banks? He doesn't answer the substance of the argument. He doesn't engage in a civil debate with respect to the substance of the argument. He gives the good one-liner: 'Mr Gary Banks—a flat earther.'

Another eminent economist, Professor Richard Holden, defended Mr Banks, saying the Prime Minister's insult was 'wrong and uncalled-for'. Again, they're not my words. It was another economist who'd leapt to the defence of Mr Gary Banks. Professor Holden said:

The PM says all the wrong things … And his main argument for subsidies is that other countries are doing it. Like a primary school kid telling a teacher: "but he started it!".

These are not politicians; they are people who study this area and know the history.

Steven Hamilton, an independent economist, has said:

There are many problems with industry policy, and this is a big one. It's why I tend to favour more neutral investment incentives like a lower corporate tax rate or accelerated depreciation.

…   …   …

I thought we'd learned these lessons, but apparently not. The bad old days are back.

To those listening to this debate—through you, Acting Deputy President Chandler: billions of taxpayers' dollars are going to be spent on investments as the government goes out there trying to pick winners, playing the stock market and playing political favourites. Good luck!

Jess Walsh (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I, too, rise to speak on our government's Future Made in Australia Bill 2024 and Future Made in Australia (Omnibus Amendments No. 1) Bill 2024. I'm very proud do so because these bills are about our plans to deliver a future made right here in Australia. It's our actions now and it's this government's leadership that will guide us through the net zero transformation that will bring forward significant new investments, harness our strategic advantages and entrench our national resilience—all the while ensuring the benefits of the investments we make are returned to the economy and to communities.

These bills are part of our plan to deliver the next generation of Australian prosperity. As the Prime Minister has said, we are in the middle of the biggest change in the global economy since the Industrial Revolution. At the same time of these economic changes, we are in a period of geopolitical and strategic uncertainty. But we can chart a path to prosperity and opportunity through all this. We can utilise this opportunity to secure Australia's place in the international transition to net zero, to make the most of our natural advantages and to transform ourselves into a clean energy superpower.

Here in Australia, we are so fortunate to have many natural and human made advantages, from our natural resources, our abundant critical minerals, to our sun and our strong wind, to our proud history of manufacturing, research, innovation and technological change. It is all these advantages, it is this expertise, that make it absolutely critical for us to capitalise on and make the most of the opportunities before us to modernise and strengthen our economy.

These bills are about setting us up to prosper from change, not to protect ourselves from it. They will provide an appropriate framework to modernise our economy and deliver industrial policies backed by the evidence and the rigour that is needed to grow investment in priority industries. We are not looking to replace private capital; we are looking and working to attract private capital, and we'll use the power of government and the private sector to maximise economic benefits. And the investors are already lining up.

We're creating the framework for an ambitious industrial policy that will move Australia beyond 'dig and ship', because we can do better than that. This is just the start of our plans. These bills establish our national interest framework—a framework to guide the decision-making of government, that highlights what our national priorities are and that sends a clear signal to investors on where public support will be available to bring forward investments, to grow our critical industries and to deliver a future made in Australia.

The national interest framework will have two streams—net zero, and economic resilience and security. The net zero stream acknowledges the industries of the future—industries like green metals, hydrogen and low carbon fuels that will be critical to decarbonising our industries here and abroad. The economic resilience and security stream acknowledges our place in the world. It sets us up to play an important role and to back ourselves in. These bills also set up the processes for the Treasury to undertake sector assessments. These will be commissioned by the Treasurer in consultation with relevant ministers, and they'll be based on our National Interest Framework. They assess the case for providing public investment, and they'll provide much-needed rigour and justification based on evidence for public support and public investment. Critically, they'll be done—

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

It being 1.30 pm, the debate is interrupted. Senator Walsh will have leave to continue speaking when the debate is resumed.