The future of manufacturing in the country has been secured by the passing of the government’s reconstruction fund, Prime Minister Anthony Albanese says.
The $15 billion fund passed the Senate overnight, after the government’s signature investment vehicle secured the support of key crossbenchers.
It will head back to the government-controlled lower house to be rubber-stamped before becoming law.
Industry Minister Ed Husic said the fund would provide more secure work across multiple sectors.
“The national reconstruction fund is about Australians backing Australians in terms of pursuing those ideas,” he said in Canberra on Wednesday.
“It’s from the factory floor to the lab bench to the boardrooms of this country, making sure that we’ve got that huge growth capital available, to unlock what is really important for the economy and jobs.”
The fund aims to drive investment in seven priority areas: resources, agriculture, transport, medical sciences, renewables and low-emissions technology and defence.
Mr Albanese said it would revitalise industries that had been allowed to lag.
“During the pandemic, our vulnerabilities at the end of supply chains were exposed for all to see,” he said.
“We’ve been very good at exporting our resources and should continue to do so, but where possible, we should be value adding, creating jobs here.”
Industry leaders have heralded the passing of the fund, which was a Labor election commitment.
Australian Chamber of Commerce and Industry chief executive Andrew McKellar said the investment would help businesses diversify and boost the domestic economy.
“With Australia now having the lowest manufacturing self-sufficiency in the OECD, it’s critical we redouble our efforts to encourage and stimulate new manufacturing and industrial investment in this country,” he said.
Tech Council of Australia chief executive Kate Pounder said the fund would unlock further capabilities for the country.
“This is a long-term landmark investment that will help build Australia’s tech industries in strategically important areas like quantum, AI robotics and cyber security,” she said.
“There’s nothing revolutionary about this sort of role for government. Emerging industries and technologies have always been funded by a mix of private and public capital.”
The coalition opposed the legislation.
Opposition finance spokeswoman Jane Hume said the borrowing of the fund, combined with the government’s proposed $10 billion housing fund, would have an inflationary impact.
“The housing fund alone, that’s $10 billion of off-balance sheet funding. That means it’s immediately borrowed,” she told AAP.
“You can see how this is pushing up inflation.”
Senator Hume said the use of equity instead of grants would also stall productivity.
“A lot of these organisations need to be very nimble. If your co-owner is the government, that slows down your decision making dramatically,” she said.
“It essentially nationalises so many of those organisations that the private sector would be keen to invest in. It crowds out the private sector.”
But the Greens backed the legislation after securing amendments to ensure the money wouldn’t be invested in coal and gas projects.
Crossbench senators secured changes to how the fund’s board would operate and commitments to boost the ability for start-ups to access investment.
– AAP
