The Future Made in Australia Act
The Australian government’s vision for a Future Made in Australia, which is to be enacted later this year, is set to become the core of the government’s industrial policy, and will encompass existing and new initiatives. The vision is aligned to reshoring and onshoring, which is one of the 2023 trends in Australian manufacturing. Announcing the Future Made in Australia Act in Queensland last Thursday, Prime Minister Anthony Albanese said the US is pursuing what they call a ‘small yard, high fence’ approach to critical industries. He listed the policies of the European Union, Japan, Korea and Canada, and proclaimed, “This is not old-fashioned protectionism or isolationism — it is the new competition”. “We must recognise there is a new and widespread willingness to make economic interventions on the basis of national interest and national sovereignty. And – critically – none of this is being left solely to market forces,” he said, while promising to champion global markets and free trade, and to build bilateral and multilateral co-operation.
The new Act will include existing government initiatives such as the $15 billion National Reconstruction Fund, the skills agenda, and initiatives to encourage Australian-made batteries and solar panels, the Hydrogen Headstart program and the Net Zero Economy Authority. New incentives for local and offshore companies to invest in Australia’s renewables and advanced manufacturing capacity are to be fleshed out in the May Budget. “Part of the objective here is about Australia presenting potential investors with ‘a single front door’. A clear path to investing in Australia, in Queensland, in hydrogen, green metals and advanced processes with an aim to decarbonise the manufacturing industry,” he told his largely Queensland audience. “In this time of transformative opportunity, our government will not be an observer or a spectator – we will be a participant, a partner, an investor, and enabler. This new wave demands a new approach – and since the last election, our government has been laying the foundations to deliver it …. In next month’s Budget – and beyond – we’ll be building on that foundation.”
Responses to the announcement have been mixed, ranging from acclaim from clean energy advocates, scientific groups and workers’ representatives to qualified, lukewarm reception from business groups to specific caveats from the Productivity Commission and Weld Australia. Weld Australia welcomed the Act as a critical opportunity to bolster local economic participation in heat induction bending services. Yet it warned that government must ensure that enforceable, local content thresholds are formally incorporated to achieve the desired results. The Productivity Commission’s new chair Danielle Wood told media that Australia can’t pretend the Act will be without cost, and that subsidies demand well-defined exit strategies. “We risk creating a class of businesses that is reliant on government subsidies,” she told the Australian Financial Review. If we are supporting industries – such as pipe fabrication – 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.” Since then, Treasurer Jim Chalmers has said Wood’s points had already been addressed by government.
