Wednesday, 8 March 2023
National Reconstruction Fund Corporation Bill 2022; Second Reading
Luke Howarth (Petrie, Liberal Party, Shadow Minister for Defence Industry) Share this | Link to this | Hansard source
I rise to speak in continuation on the National Reconstruction Fund Corporation Bill 2022. The modern manufacturing strategy accounted for a quarter of Australia's national research and development investment. We expanded and modernised Australia's sovereign manufacturing capability, secured supply chains and invested in the skills and world-class research our manufacturing businesses needed through the six priorities I listed before. Australian manufacturing helped keep our economy moving and Australians safe during the pandemic, producing medical equipment, securing supplies of fertiliser, keeping supermarket shelves stocked and increasing our defence force capabilities.
Under the coalition's modern manufacturing strategy, an additional 3,300 manufacturing businesses were created in Australia. Manufacturing turnover increased to its highest level since 2010. There was a bit of a fall-off in the last three years of the Gillard and Rudd governments, and then when we left office in 2022 it was right up there again. In fact, there were over a million jobs in manufacturing at the height of COVID. But the new Labor minister stated on this bill just yesterday that there are 900,000. Is that a 10 per cent drop since they came to office? Because there were over a million. More than 220,000 trade apprentices were also in training under the coalition. That's the most since records began back in 1963. We hear those opposite talking about TAFE and what they've done with it. They've been talking about TAFE for 30 years. The issue is—and the member for Barker would know—a lot of the TAFEs are empty. We brought in JobTrainer during COVID, which got a lot of people back into training, including those 220,000 people in trade apprenticeships. That will not only help the government but also the Australian people going forward. For example: as we know, there's a lot more housing stock which needs to be built. That nearly quarter of a million apprentices that the Liberal-National government got into training will go a really long way with that. And manufacturing represented a quarter of all merchandise exports under the Liberal-National government.
I'm proud of the strong manufacturing legacy of the former coalition government. We understand manufacturing in Australia. If Labor really wanted a win for our manufacturing industry, one that's economically sustainable and built upon our sovereign manufacturing industry, then building upon this legacy would have been a better strategy than the establishment of an entirely new National Reconstruction Fund that has its priorities wrong and threatens to weaken our manufacturing—plus they're spending $15 billion initially, $5 billion initially. It's off-budget—not even included in the budget. As I said before, the minister and the Prime Minister should have hit the ground running 10 months ago. They should have picked up the Modern Manufacturing Fund that we already had in place, and which is currently law. They should have picked up on that, rather than saying: 'Let's get rid of that; let's create something new and off-budget, with a whole lot of extra bureaucracy. And we'll reward our union friends.'
This is the thing. When talking about governing, right now I'm hearing, particularly in defence industry, that these people have been ignored. The minister has been missing in action for the last 10 months. He was contacting them all prior to the election; he was putting his hard hat and high-vis on. But now, guess what? When those same businesses that he visited try to call him or get an appointment with him he's nowhere to be seen. They can't see him and can't even get in to see his staff!
Tony Pasin (Barker, Liberal Party, Shadow Assistant Minister for Infrastructure and Transport) Share this | Link to this | Hansard source
He's at the tennis or the cricket!
Luke Howarth (Petrie, Liberal Party, Shadow Minister for Defence Industry) Share this | Link to this | Hansard source
I was actually talking about the minister for manufacturing. The National Reconstruction Fund that this government has put forward, with the accompanying administrative corporation and independent board, is really poorly designed. Labor's manufacturing policy will drive up inflation and interest rates through this reckless off-budget spending, while ignoring the critical economic issues which have been amplified through this government's poor policy decisions and which have left homegrown Australian manufacturers calling out for this government to address.
These are issues like rising energy prices. We know the Prime Minister promised to reduce energy prices 97 times—almost 100; we'll round it up to 100—before the last election. And those have continued to go up, even after the legislation was passed the end of last year. They're still going up! A constituent of mine from Griffith sent me an energy bill today, and it has increased by 50 per cent. Labour market shortages are also a big issue for this government. And what are they doing during this time? The minister for employment is actually getting rid of mutual obligation and making it easier for those who are currently on JobSeeker not to have to look for work and not to have to do training. In fact, the minister opposite is, I believe, abolishing the ParentsNext program that the coalition government put in place. That's a remarkable program, which has done great things, and they're getting rid of it! They're not addressing energy prices and they're not addressing labour market shortages, and disrupted supply chains need to be addressed first. Any investments through this off-budget National Reconstruction Fund will be in vain, when it eventually gets going nearly two years on; if this government does not address these critical economic challenges, any proposed investment will be eaten up by increased input costs and inflation.
You would think that the Albanese government would try to tackle the rising costs in energy prices as they become a rising problem for our manufacturers. From fruit pickers in the agricultural industry, through medical manufacturing and to critical technologies, right across the board, manufacturers are being hit by massively increased costs in electricity and gas bills. The latest report by the Australian Energy Market Operator on the state of Australia's energy grid has a clear warning that the government's energy policies are failing our businesses. They're causing higher costs, and look at what the government is doing in renewables and by refusing to look at other options, like small modular nuclear emissions-free energy: they just rule that out completely, but then say, 'Let's do more off-budget spending through the Rewiring the Nation Fund and let's run high-voltage powerlines right around the country.' That's bad for the environment—it kills birds. It's probably through farmland in your area, member for Barker. And guess where all of this is made? It is all made overseas. If we are talking about manufacturing, every solar panel outside of Tindo, which is 97 per cent of the market, is made in China. All the wind farms are made overseas. None of it is recycled at the moment. I see state and federal governments saying it should be recycled. That's all good but when is that going to happen? Right now, it's all just put into landfill. They talk about manufacturing but it is costly. Imagine the amount of money that is going to be spent in offshore wind farms out in the ocean. With the Rewiring the Nation policy, some businesses, where energy costs are going up, can pass on these costs to the consumer and that will just contribute to more inflation.
Australians can see that their grocery bills and higher costs of living are going up under this government. In fact, today in a question time, the Treasurer went out of his way to point out to the opposition that there was one interest rate rise prior to the election—one—and nine since they came to office, yet I am sure all these newbies on the other side here on their social media put up 'Inflation is high at 5.1 and now it is 7.8 per cent,' or 'Interest rates are high. Mortgages have gone up $400.' Now they have gone up $2,000. I am sure the good people of Robertson and other seats over there, their mortgages have gone up by $2,000 and these guys think they are doing a good job. It is an absolute joke! But, of course, not all businesses can do that.
Businesses in defence industries, for example, deal with fixed-price contracts that run for years. The rising costs will have real, long-lasting damage to manufacturing industries over the coming years. Small and medium operators within defence industry tell me that once again that ministers opposite were all keen to see them before the election but, since the election, nothing—crickets. They can't get an appointment with the Albanese government; they don't want to know about it. They are running away from their pre-election commitments again on manufacturing, particularly for small and medium businesses.
The Prime Minister proposed we would be better off under his government. But the fact is, under Labor, businesses are not only being hit with higher energy prices and more union interference but they are now also being told to brace for blackouts as soon as this summer. You would think that this government would try and fix the labour market shortage for manufacturers to meet their orders and consumer demand but, instead, they are neglecting the labour market and adding further strain on already disrupted supply chains.
What will we on this side do in relation to this bill? We will not be supporting it. It is bad policy. It is just like their super changes—bad policy. So if you want to actually get some support from this side of the House, come up with proposals that will help the Australian people, that are not bad policy and that are just looking after your union mates.
Russell Broadbent (Monash, Liberal Party) Share this | Link to this | Hansard source
I appreciate that you have noticed me in the room. I like to look back on the Abbott, then Turnbull and then Morrison governments in one very fine light, where a light shone brightly and that light that shone brightly was investment in manufacturing, not just across our cities but across our regions. We actually went into the regions, and my region of Gippsland—I cover mostly West Gippsland and Darren has East Gippsland—was able to focus very specifically on what we were good at. This is really important. We are good at timber manufacturing. We are good at technology. We are good at issues around hydrogen, which I will come to in a minute. Especially under the Turnbull government and our manufacturing program, we were able to help people invest in companies. But there were criteria all around those grants that they received. That is why I think the grants program is better than what has been put to me on the government's program this time. The grants program was: 'Yes, you applied for it. Here are the criteria. If you can perform all these things, including the number of increased jobs you will bring to the region, which we're desperate for'—Deputy Speaker, you would know very well, all the way back to the changes in the Kirner and Kennett governments, our region has changed in the coal industry and it has really affected the job opportunities for our young people, our engineers.
There was the change to the SCC all those years ago, where we created engineers in La Trobe Valley that were so good that they're now working all around the world. All around the world you will find people who were trained as apprentices in Latrobe Valley, in the mining industry and all of the other associated industries that went with it. It must be a real badge of honour for a lot of people to know they trained those people so well that the world wants their expertise.
That's where I think the government's bill misses the mark. I would rather have had the government wait awhile—not too long—and do more investigation into where the nation is going to be in 30 years and what manufacturing the nation of Australia, this great southern land, should be investing so we're investing in niche markets that are going to provide jobs for our children, their children and their children? Where can we do that expertly so we have strategic industries? At the moment, sadly, because my state government, the Andrews government, is determined to wipe out native forest harvesting that's been supplying our paper industry and our furniture industry and creating about 800,000 jobs relying on that—and now our paper manufacturers in Australia are shedding jobs at Traralgon on a daily basis because they haven't got the timber supply. What you have to know is that we only harvest 0.5 per cent of the available timber. It's a renewable industry, and governments, over a long period of time, have invested in paper manufacturing in Morwell and Traralgon.
Why Morwell and Traralgon? It is because we want to proudly say that we manufacture our own paper. This paper here comes from Traralgon. It is good hands, good people, good men and women who have made that paper, and we can be proud as a nation to say, 'We make our own paper.' We don't import it from a country overseas that has none of the environmental controls that we have. None of them do. But we put so many restrictions on our manufacturers, and then we come along with a new government and say: 'We're a new government. This is a Labor government, and we're going to have new plans. We're going to do it our way and we're going to have a new independent board. They're going to direct how this whole thing's going to go, but half of that board have to be union representatives.'
I don't mind if they're trained in the field. I don't mind if they've got a history of manufacturing. I don't mind if a new government wants to direct who's on what board and how and when. My experience of manufacturing in Gippsland has been positively enhanced by the previous government's programs. Now, I'm not a great fan of everything governments do. Don't get me wrong; I'm really not. I don't think governments are as efficient as they should be. But, if they place funds targeted into specific businesses that can grow in your region and export, manufacture, produce or create in the full knowledge that they have to do what they say they were going to do—I think a lot of the innovation and everything that's happened across my region of Gippsland and that of Darren Chester, the member Gippsland as I am the member for Monash, have worked really well. I have great hopes that in manufacturing the government won't be able to muck this up, that they will actually work out where our future lies. You need to know where your future lies and not be harking back to the past to say, 'This was Australia. It lived on the sheep's back.' We don't live on the sheep's back anymore, but we have some of the finest wool products in the world that we get manufactured overseas and then brought back to us and we buy them. We're buying our own wool back. This suit that I am wearing is Australian wool but it wasn't woven here. It was probably woven in some factory with terrible conditions in the Middle East or in Vietnam. Then it goes to the UK—someone correct me if I'm wrong here—and they put a print on it which says made in the UK. Where was it actually manufactured? I would suggest somewhere else. There are a whole lot of issues that fall around manufacturing as a whole.
I suppose the rest of Australia would call me a Melburnian, because Melbourne has grown so big. I am just on the outskirts of Melbourne so I am a Melburnian. Melbourne was one of the greatest manufacturing hubs in the world. Melbourne is no longer one of the greatest manufacturing hubs in the world, because of the restrictions we've put on ourselves not to free up business, not to give them the opportunity, not to tell them what they should be doing. If the government makes the mistake of telling them what they should be doing, rather than investing where business tells us they need to invest for future prosperity, well, that will be a fail. I don't want government to fail in manufacturing and in grants to manufacturing or in this particular case it's your new National Reconstruction Fund Corporation.
I have a bit of a problem with the word reconstruction. Whilst this nation has faced some pretty tough times over the last 12 months, don't tell me it's a National Reconstruction Fund. We haven't just been through a war. We haven't had our cities decimated—only through flooding where we've had massive damage to infrastructure, but outside of that our cities are going pretty well. I am not saying that will be the same case, but don't call it a National Reconstruction Fund. Why would you call it a reconstruction fund? What are you reconstructing? Are you reconstructing the program or are you reconstructing manufacturing in Australia? It's very unclear.
I have the highest regard for the minister in this portfolio, Minister Husic. Since he arrived in this place I have always had the highest regard for him. I know he's dedicated and I know he's determined. I know he wants this to work, but I wonder what outside pressure is being put on him, because this gives the actual minister of the day an enormous amount of power as to where that money is spent. Is that going to be politicised like I've seen so many other government programs be politicised? That would wreck manufacturing in this country. If you want to win seats in Adelaide you put all this money into Adelaide. If you want to win a few seats in Brisbane you put it into those seats in Brisbane that you need to win. Is that what this is all about? We can direct all the money to our seats. It is likely that we give state governments money for housing then they go and spend it in marginal seats for the long-term disruption of the Liberal and National parties—if they're a Labor government. It's sort of underlying corruption. I am not accusing Ed Husic of this, because he has an enormous amount of power under this legislation to direct what happens.
If you have got a senator John Button of the past—and that senator John Button put together a car plant that kept manufacturing going in Australia for all those years. The world has regard for what John Button put together and directed, what happened in the vehicle manufacturing industry in this country. He probably saved it from immediate decline in the late sixties and early seventies. There's a minister who only acted in the interests of the Australian people. How wonderful it would be if I could believe that every action taken by a political party was only in the interests of the Australian people; that it was fair, just, reasonable and equitable; that it lifted the community up in every action it took; and that it gave opportunities to our newcomers, to people who have come to this country as refugees—who should be given the greatest opportunity, because you often find they are the hardest workers and they want to go out there and they want to do things.
The Japanese came to us a few years and said, 'We'd like to put a hydrogen production plant in Gippsland,' and they have done it. Today, there was a huge spread in the paper detailing how the Japanese government are now putting $2.35 billion into the hydrogen plant in the Latrobe Valley. It will create jobs, opportunities and everything else for people in the Latrobe Valley. It's the best news ever! The Japanese are doing that. The state government put in $50 million to get the pilot plant going and there was $500 million from the Turnbull government. I was there for the announcement. So they approved the plant and approved the operation and they have proved that it works. It is hydrogen from brown coal. We have enough brown coal to make enough hydrogen to keep the world going in a clean way for the next 10,000 years. I've never believed we shouldn't be using it to create electricity and building more efficient power plants. Why wouldn't we? Why do we have to kick ourselves in the foot in this nation every time we go to do something? Every time we make a decision now it seems that we're kicking ourselves in the foot and the rest of the world is laughing at us.
That is why our manufacturing sector is so important. That is why it is so important to have the best innovation, the best technology, the best people and the best opportunities, and to encourage these start-up companies and not put barriers in their way all the way through. You've got to make it easy for government to be able to deliver on behalf of those people that are going to do the best for our country.
This should be seen as an opportunity. I understand governments want to come in and put a new label on a new minister and say, 'We're going to do it a different way.' I hope and pray it works. If it doesn't, we kick ourselves in the foot again. I want this to work. I want it to happen. I want this nation to succeed. Every time we succeed as a nation, we enhance the opportunities for our children and their families. That has to be important to everybody in this House. If we're not putting the Australian people first, whether it comes to manufacturing or any other job, we're doing the wrong thing. So let's have regard to equality, fairness and opportunity.
Terry Young (Longman, Liberal National Party) Share this | Link to this | Hansard source
I rise this evening to speak on the $15 billion National Reconstruction Fund Corporation Bill. Although on the surface it has the appearance of trying to achieve something that we all want—increasing the manufacturing industry in this country—this is a bad bill for so many reasons. The government are the masters of smoke and mirrors and slogans. They are exceptional in stating the problems—which just about anyone in the country can do—but rarely provide solutions, which is the very function that governments are supposed to perform.
As is the practice of this all-show and no-substance government, they introduce bills with little to no detail with underlying motives and they then try to hide those motives from the Australian people: hidden agendas that serve one purpose—to increase the membership of their masters and puppeteers, the unions. Labor have always been and always will be the enemy of small business. No matter how hard they try to spin it in a different way, their underlying obligations and first loyalties will always lie with their union masters, who will always try to steer any government business assistance to the big corporates, who they can negotiate union membership deals with—something much harder to do with the thousands of small businesses across the country.
In reading this proposed legislation and the structure of the corporation, there are red flags everywhere. The fund will be administered by a board. Clause 19, on the appointment of board members, says that the board members are to be appointed by ministers. In other words, it'll be stacked with Labor and union-friendly board members that will ensure funds are distributed to businesses that will have a union membership component to them.
To be truly transparent and avoid any pork-barrelling and involvement from outside parties, the process should be via the robust competitive grants process, with politicians removed, to ensure decisions are made without partiality and on merit only. As is the practice of this 'just write a blank cheque, and we'll fill in the details later' government, there are no details on the eligibility of potential applicants and recipients of funding under this program. Does a business have to be of a certain size, as far as staffing numbers, turnover or floor space? Is there a geographical location requirement? What happens if the loan is not able to be repaid, either through poor management and business decisions or through factors that are outside the business's control, like supply chain issues or lower margins to a more competitive market? If the government has an equity in a business, what is the government's tax obligations? What happens if the majority of the business is sold to overseas individuals or shareholders?
Another problem with this bill is that it's modelled on the Clean Energy Finance Corporation initiative, which took way too long for funds to start flowing. Industry feedback suggests this type of funding takes years to get right, and that means lost years for manufacturers. This government needs to leave business investment to businesses and the private sector, and get on with supporting them to get on with whatever their business is by ensuring there are workers with the required training available to employ and that there is reliable and affordable energy to meet the needs of the business. They need to cut red tape and compliance so businesses can spend their days actually focused on manufacturing the products and not in an office filling out government forms to meet, in the main, unnecessary regulations dreamt up by politicians and bureaucrats.
The only other reason I can see for them wanting to go down this path is that they have finally realised that under any Labor government business confidence falls, and falls rapidly; therefore, private investment dries up. My own experience in business for over 20 years is that when a Labor government has been in power, the growth in my businesses has been modest—in the low, single digit range at best, or zero growth. In contrast, when the coalition have been in government, every business I have had ownership of in that period has had double digit growth.
Again, Labor have missed an opportunity to provide practical support to the business community for three reasons: firstly, they simply don't get business or the economy; secondly, they have to consider their union masters in every decision; and, thirdly, they will never be able to inspire the most critical thing of all, which is business confidence. You see, I know that in my own business, when Labor are in, we stop spending because we simply don't trust them or their union masters. This is something that cannot be changed, as a business community knows a leopard never changes its spots. Conversely, when the coalition are in government, business open their chequebooks, as we know they have our backs. And, if you look after business, this flows through to the worker.
Another question that must be answered is: if this is to work—which it won't—where will the workers come from to fill the jobs in these new manufacturing businesses? There is a critical labour shortage, and Labor's ridiculous idea to bring in workers from the Pacific islands via a lottery system is flawed. It will result only in the Pacific losing their youngest and brightest people, therefore causing a detriment to their societies—not to mention the clause that allows them to come over on a visa and leave a job after a week and be qualified for our welfare system, which will only create greater cost to our already overburdened welfare system. That is a joke. The coalition's $2.5 billion Modern Manufacturing Fund, which was underway and which had empowered 200 projects across the country, had been independently assessed by experts in this field and in the department. It was reviewed by the minister purely for political reasons—again, causing another delay in getting manufacturing going in this country.
If anyone knows anything about manufacturing they know that with the highest labour costs and one of the highest energy and compliance costs in the world, we simply cannot compete against countries which have much lower costs and which make low-margin fast-moving products, like the electrical appliance industry that I was in for 20 years. We have to focus on the niche products that have the majority of the focus on quality rather than price. This is why it beggars belief that the coalition's Australian space manufacturing industry has been kicked in the guts by the decision of this Labor government to remove it as a priority area. Again, they simply have no clue.
This government makes out that the opposition never votes with or agrees with them. This is untrue, because in fact we have voted with them on some bills. But it is true that we don't vote with them on bills that are duds, and there have been plenty of those. There's the one that was the first step to what I call the 'communism bill'. Last December we were flown in from around the country and saw the result of the renewable energy 'Kool-Aid' program that the Labor Party has got involved with. It's driving up energy prices. They flew us all in to cap—to cap!—in this country, in this democracy, pricing. The most ridiculous part about it was that it was wholesale pricing; it wasn't even retail! So that allows retail to price gouge. Again, it just reinforces that they have no business sense at all.
I ask: what is next? Are we going to cap the price of milk? Of bread? This is not what a democracy in a free-enterprise country does. Of course we aren't going to agree with or vote for an undemocratic and anti-free-market bill like that. And we won't support this union-membership-drive bill either. Australia, make no mistake: every decision this Labor government makes doesn't have the best interest of Australian business or Australian workers in mind. It will always have the primary function of driving up union membership, whatever the cost. This bill is a classic example of that.
Llew O'Brien (Wide Bay, National Party) Share this | Link to this | Hansard source
I am somewhat pleased to speak on the National Reconstruction Fund Corporation Bill 2022, because I'm doing the right thing. But, at the same time, I'm somewhat disappointed, because a National Reconstruction Fund which is purporting to improve manufacturing in the nation and give people jobs sounds like a great thing. It ticks all the right boxes emotionally, that's for sure. It makes you feel good, like a lot of what Labor announces—it's all about the feel good. But the reality, and the reason why I'm disappointed, is that with this bill the detail just does not pass muster—the detail of how this reconstruction fund will be applied is really quite concerning and limited.
I know that the government went to the last election with this as an election policy plank. But, in saying that, since that election, Prime Minister Albanese has broken so many promises I don't think he can be trusted to implement a $15 billion spend of government money—of taxpayer money, our money—with any degree of competence. Certainly, on the integrity level, and on the trust level, the trust is broken. Let's not forget that this is the Prime Minister who in the lead-up to the last election promised to lower our electricity bills by $275. That was a really important promise that he made to average Australians like my kids. I was at my son's place the other day and he showed me his electricity bill. He's a young guy starting out in life with a little family. This promise to Australians in his position where every cent counts—$275 is something they listen to—turned out to be an absolute broken promise. Cheaper mortgages were, once again, another promise. We'd have cheaper mortgages under this Labor Albanese government and what do we have? We have had nine consecutive interest rate rises. These are the promises that have been broken that make me think I can't support a National Reconstruction Fund. What will it turn into in this government that can't be trusted and this Prime Minister Albanese, who also can't be trusted?
This will no doubt turn into some sort of, as has been said here before, union slush fund. I understand there is a place for unions in this country. Absolutely, they are a important part of the industrial make up of industry and our economy. But when Labor get their hands on the Treasury benches, we know they do the wrong thing and they certainly look after the unions in a way that the average Australian would not think is right.
Another broken promise that makes me think this National Reconstruction Fund is never going to be applied as said is 'no changes to superannuation'. I mean, you could not get it any clearer that the Prime Minister and the now Treasurer stated in the lead up to the last election that they would not tamper with superannuation, but what did we get? We have serious changes to superannuation that have rocked confidence. People like, as I said, my kids who are starting off in life, do not know what is happening to their future now because of this government that can't be trusted.
If this government really wants to do something about manufacturing, if this government wants to turbocharge manufacturing—we all want to turbocharge Australian manufacturing and we want products made in Australia—there are two things they can do straightaway: get out of the way of business with unnecessary regulation and forget all of this ridiculous green tape that ties every business down in this country, that stops them from progressing and give them confidence and lower electricity prices. They can do that instead of capping production, which is always going to increase the price of electricity. Increasing supply will bring the price of electricity down. You would be bringing down a significant input into manufacturing. And guess what? If you stimulate businesses like that, they are going to make more, they are going to innovate more, they are going to employ more, and the economy will start moving again. But no. Of course, the ideology of the left, which is running the Labor Party and which will control the policy is, no, let's bog it down with green tape and really strangle business.
I have sugarcane farmers in Wide Bay who need to irrigate and their power bills have soared from $2,000 a month to $6,000 a month. This is what we need to be targeting—lowering those electricity prices—but that is not what is happening here. That is not what is happening with this piece of legislation. I have a butcher in my area and he runs his business 24 hours a day. His power bills have soared to $4,000 a month. If you want to increase manufacturing, if you want to create jobs, if you want to stimulate the Australian economy and get us going like we should, do something about that. Increase the supply of those products—gas and coal—and those products that our economy is being built on. Increase supply and that will help with inputs for business in Wide Bay.
Power brokers have warned businesses in my area that they should expect an increase of 20 per cent when signing a new contract. Is it not obvious that this is an area we need to target to stimulate growth? This relates to manufacturers who already exist in Wide Bay, which has a proud manufacturing industry. We support the mining industry with heavy manufacturing, particularly in and around the areas of Gympie and Maryborough. We don't need to establish new businesses. New businesses are always nice, but we need to support the businesses that currently exist. Instead, people are being told that, under an Albanese government, they're to expect a 20 per cent increase in their power bill.
LNG costs have risen 30 per cent. Liquid carbon dioxide, for the rapid chilling of fresh trimmings, rose 366 per cent for one of my meat processors. That's approximately $450,000 a year, heading towards half a million dollars a year. That's money that doesn't go into building that business and doesn't go into expanding the market. Meat processing plants need diesel, mainly for mobile plant and equipment. Prices of diesel for them have increased in the order of 160 per cent. What is the government doing about this? Absolutely nothing. Cooling the products in line with the refrigeration index and other standards is essential to maintain eating quality and food safety. If we have an unreliable electricity network, resulting in outages for a business that needs to refrigerate products, the net loss per incident for the product alone could be more than $900,000 for some of my producers for a medium-term part-day outage and up to $7 million for a long-term several-day outage.
These are problems we have with our power supply as we go down the path of implementing these policies from Labor that will undoubtably add unreliability into the network. These are the things we should be addressing. We should be putting confidence into manufacturing, not destroying it. Abattoirs are only efficient when running at total capacity with limited interruption. Due to the processing being quite labour-intensive, they have a large workforce. My local one has about 550 people.
I would really like to support a bill that is genuine and can be trusted, and a government that can be trusted to implement a big economic responsibility like this. Within the very short time this government has been in power, it has shown that it can't be trusted. Today, when the Minister for Financial Services gave an explanation of self-managed superannuation funds, it could only be described as either not telling the truth or incompetent; it was one of the two. So how can we trust this government to implement a program that is going to spend $15 billion of hard-earned taxpayers' money? I would like to do it, but I simply can't.
Phillip Thompson (Herbert, Liberal National Party, Shadow Assistant Minister for Defence) Share this | Link to this | Hansard source
PSON () (): I would like to join my colleagues and make my contribution for the people of Herbert in this place today. The opposition opposes the National Reconstruction Fund Corporation Bill on a number of grounds. The member for Longman said it quite clearly. He hasn't seen a lot of detail; it's been lacking. He hasn't seen anything of substance that would make him want to stand up and vote for this bill. I don't think anyone around the country, at any level of government, should say to their constituents: 'Trust us. We're the government.' That's not a good thing to say. People want to see the detail. People want to see all the little parts of the bill to ensure that what that their members are voting for and what they could be getting is actually going to benefit them. I believe we should be doing absolutely everything we can to support the manufacturing industries, and I think that they drive this country. They absolutely have kept the lights on and they are an integral part of our growth and our development of the nation. There is no question of that.
There are, in fact, a lot of manufacturers in the electorate of Herbert, in Townsville, who do a fantastic job contributing to the economy, creating jobs, providing goods for the rest of the nation and exporting through our awesome Townsville port. They are incredible businesses. Often they've started as small local businesses. They've seen a gap and have decided to manufacture products or to corner a market share that's been lacking, and they are always the most enjoyable to go visit. It's always incredibly amazing to see what our local industry can achieve and the output that they produce.
We don't have a problem with government providing manufacturing businesses with assistance to grow their business and invest in local jobs. Townsville is the largest city far away from a capital city, so, if you're talking about creating jobs, if you're talking about ensuring that people have well-paid professions that they enjoy going to and that drive our nation, we get behind that. The former coalition government supported many businesses like this in the electorate of Herbert, not just through the Modern Manufacturing Initiative but through the Northern Australia Development Program too.
For example, the former government invested in a fantastic local manufacturer by the name of Gough Plastics. This is a family owned business that provides plastics for domestic environmental engineering and rural applications. Through a nearly $5 million grant, the business is going to be able to build a new facility to expand their operations and build more products. This is a really good local, homegrown manufacturing organisation. When I go out and visit the brothers out there, I see these fancy, different-coloured hi-vis shirts that they would wear. I asked, 'Why are you wearing different hi-vis? What's this for?" and they said it's to promote positive mental wellbeing and suicide prevention. It took me back a bit because, when I talk about it, I talk about it from a personal experience within the military, but they have had a personal experience for them within their workplace, and now Gough Plastics wear these shirts to promote positive mental health, to promote suicide prevention. It really resonated with me. It was one of those moments where everything else is going on and I just wanted to know more about their business. At the end of it one of the directors actually gave me a hug. They could see that it affected me. I think that it's appropriate to say thank you to them and to everyone else who does their bit around the nation to promote positive mental health and suicide prevention in manufacturing, construction and all other industries as well.
I will get back to what they are doing now. Through a nearly $5 million grant, the business is going to build this new facility, and it will increase the output of Aussie-made products. That gives an injection of confidence, and they will immediately go on the hunt for 10 new apprentices. We know that building the apprentice workforce and growing it is something that's needed. I did a traineeship. I didn't do an apprenticeship. I did it in construction when I was concreting, and I think apprenticeships are a fantastic way to build the workforce and give another option for our young people, whether they're in school, leaving at a certain age, post year 12 graduation or even some that have graduated or gone through university and gone back to do trades. It should never be viewed as university or a trade—that one is better than the other. They are both equally important to drive this nation, and I know that we need more trades to continue to grow these sorts of industries. That means more jobs for our region; but it also means more training jobs. Another investment of $11 million is helping Wulguru Steel grow and expand its manufacturing operations.
So, make no mistake, we're not against manufacturing and we don't think it's a bad thing to support small business and industry to grow and expand. That's why, on this side of House, we took a very conservative approach, in the context of an economy that was performing well because of good economic management. But we do think this new $15 billion fund is a bad way of going about it, and I want to run through some of the reasons.
Firstly, the government is failing to provide the right economic environment for this initiative to have any chance of succeeding. It's like starting a fire: you might have the match and the kindling, but, if you starve it of oxygen, you're not going to be able to keep the flame going. It's the same with this initiative. The economy needs to be in a position of strength for us to get a strong outcome, but, in only nine months of this government, we've seen higher interest rates, soaring inflation, labour market shortages and disrupted supply chains.
Without policies that create strong economic conditions, any government spending is in vain. I can't tell you the number of manufacturers who come to me asking and begging for help to get workers. What's the use of stopping the importation of products so that we can make them here when we're constantly having to import more workers from overseas to get them made? Even those industry stakeholders who supported the NRF model shared these concerns.
Meanwhile, the bill will discourage investors from backing key national priorities because it undermines their investment certainty. That's because the government of the day can change Australia's national priorities whenever they want and on a political whim. The bill doesn't put into legislation what the priority areas are for investment. The minister has come in here and listed off some important areas in his speech, but the fact that that can be changed at any time doesn't fill me with much confidence and it isn't going to fill investors with much confidence. It's particularly concerning given it could be influenced by the political situation of the day to suit the government of the day. The word 'reconstruction' isn't even defined or mentioned in the bill, except in its title or when referring to the name of the corporation.
This is a big-government approach. As the dissenting report of the Senate Economics References Committee inquiry into the Australian manufacturing industry said:
The majority report proposes a number of recommendations which would underpin a government driven interventionist approach in the manufacturing sector. Such policies have not worked in the past and there is no evidence to suggest that they will work in the future. The danger is that they will distort the market and cause more harm than good.
It's something the Productivity Commission commented on extensively in its submission to the manufacturing inquiry. Instead of broad enabling reforms and investments, it advocated a small number of limited expectations. Along the same lines are worries that industry could be required to comply with a mountain of paperwork to be able to gain investment through the corporation. Australian Industry Group chief executive Innes Willox had this to say:
It is critical that no special regulatory requirements should be placed on the businesses engaged with the NRF that would not apply if the NRF was not involved in their financing. For example, there should not be particular conditions imposed on the governance of recipients of NRF financing; the workplace relations requirements of these businesses should not be required to satisfy additional conditions; and there should not be additional requirements on the share of local content in the production undertaken by these businesses.
On the workplace relations point, that's essentially enshrining compulsory unionism in legislation for businesses that want to participate. That is never a good thing.
It's also incredibly concerning that the minister can appoint the chair and the board members who will oversee the corporation and its funds. We know that the minister has already appointed a union mate to a board and has rejected recommendations that his department has made on appointments. And we've already seen the unions calling on their Labor mates to give them a seat at the table. The ACTU said:
The Bill puts forward a model of independent directors that are appointed by the Minister (s.19). The ACTU does not support this model. The Board of the NRFC should have equal representation from trade unions, industry and other expertise.
If the unions are saying that, that's something that we should be worried about.
This government, I believe, has stooped to a new low, relegating Australia's allies and our defence pact, AUKUS, to being a bargaining chip for their rushed National Reconstruction Fund Corporation Bill. AUKUS should be above politics, but for the Prime Minister it is not. The Prime Minister promised bipartisanship on AUKUS. It should sit above the day-to-day politics of any specific legislation, but the Minister for Industry and Science has broken that promise today. The government should be embarrassed because of this shameful and desperate attempt to pass this flawed bill. This act of desperation from Labor makes it clear that the National Reconstruction Fund isn't about national security; it's all about politics. When the minister for industry introduced the National Reconstruction Fund bill, he didn't mention the words 'AUKUS' or 'national security'—not once; not at all. This is desperate politics from a desperate government.
If the National Reconstruction Fund is about national security, then why did Labor cut space industry out of its priorities? If Labor are so concerned about defence manufacturing, why have they held up millions in funding to critical defence manufacturing projects funded through the Modern Manufacturing Strategy? And if Labor are so concerned about defence and national security, then why have they held up the LAND 400 deal? Now the price that it was set to has been halved, or thereabouts. We have the 3rd Battalion, Royal Australian Regiment, in Townsville using the APC, which is an armoured tracked personnel carrier that is literally in museums as a relic. LAND 400 would support them. It would give them the vehicles that they need to do their job, which is to fight and win wars, and they would have the kit to be able to do it correctly.
I think that everyone wants to support manufacturing in this country, but trying to tie this light-on, changing with the wind bill to AUKUS to emotionally blackmail the coalition, because they know that AUKUS is something that we negotiated, that we took to the table and that we put in this position, is nothing more than bad, bad government from a lazy, tricky government. And that's all we've been seeing from this Prime Minister.
( Quorum formed)
Jenny Ware (Hughes, Liberal Party) Share this | Link to this | Hansard source
I rise to speak on the National Reconstruction Fund Corporation Bill of 2022. The National Reconstruction Fund Corporation Bill purports to deliver on the ALP's $15 billion signature manufacturing policy. It establishes a fund that will be administered by a corporation with an independent board that would deliver funds against an investment mandate set by the government. However, the design and execution of this bill are both fraught with issues.
The first thing is the bill ignores key economic issues which drive our manufacturing industries. The government must first address issues such as rising energy prices, labour market shortages and disrupted supply chains if our manufacturers are to succeed. Without policies that create strong economic conditions, any government spending is in vain. The coalition is opposing this bill because this represents the Labor government telling our manufacturers what they think they need rather than addressing what they actually want.
The second main problem with this bill is it will create even more lost time for manufacturers. In this broken model, it will take a significant time for money to start flowing through to the manufacturing industry. The Clean Energy Finance Corporation, upon which the NRF was modelled, was established in 2012, and the first investment was only made some ten months later. Our manufacturers, with the current economic conditions, cannot afford to wait that long. The government has announced that the NRF should be up and running by next financial year but hasn't yet committed to a launch date.
The third issue with this bill is the poor funding model upon which the National Reconstruction Fund has been built. In this instance, the model shifts from competitive grant programs with robust processes to government acquiring equity and providing loans. Unintended consequences of the way that this has been modelled include government equity and loan schemes being less accessible than grants, and manufacturers may struggle to meet return on investment thresholds or put together detailed business cases in-house. What will happen to failed or failing loans? It is clear that the last experiment down this path—the Victorian Economic Development Corporation—totally uprooted manufacturers.
Eligibility is another issue. Certain industries might have margins which are too small, or it could be too risky with disrupted supply chains. Many will no doubt miss out, and the fund could become equivalent to a white elephant. Risks to crowding out private investment are also concerning with this legislation. This begs the question: if there are such great investment opportunities for the government to acquire equity, why hasn't the private sector already taken advantage of these lucrative opportunities? We must also not overlook the importance of retaining ownership, especially given that many of our manufacturers are family owned businesses.
A fourth problem with this legislation is that there is inappropriate ministerial discretion to allow the minister to appoint the chair and board members who will oversee the corporation and its funds. This flies in the face of specific recommendations given by the minister's own a department on such appointments.
There's a fifth issue with the NRF, and that is that this bill undermines investment certainty in national priorities, with the government changing Australia's national manufacturing priorities on a political whim, undermining investment decisions and eroding investment confidence. This is particularly pertinent to the space industry, for example, complementary medicine and, to a lesser extent, the recycling industry. The government's new priorities are far too vague and strip industry policy of the focus needed to drive investment into specific sectors. This is demonstrative of Labor choosing to spray money indiscriminately instead of continuing investment certainty for our manufacturers and our industries.
Finally—and this is the sixth problem with this bill—it is fiscally irresponsible. It's delivers funding well in excess of the coalition's former Modern Manufacturing strategy. An initial $5 billion appropriation is provided upon passage of this bill, but the timing of the remaining $10 billion will not be subject to further parliamentary approval. In fact, similar financial structures to the one underpinning this bill have drawn criticism from the IMF, which stated:
Implementation of below-the-line activity through newly created investment vehicles—
such as this NRF—
should be phased appropriately, and, more broadly, a proliferation of such vehicles should be avoided.
And this is the important part. The IMF said:
Cost-of-living support in light of high energy prices should be targeted, aimed at protecting vulnerable households and small viable firms.
Overall, again, the budget in October last year was a missed opportunity for the Labor government to support industry and businesses to tackle spiralling costs, workforce shortages and the supply chain crisis. Instead, the government has chosen to forge ahead with radical industrial relations legislation, facilitating a spike in industrial disputes and paving a path to thousands of job losses. All of this will have a devastating impact on industry. The industrial relations bill will cause mayhem for industry and businesses when combined with the ideological scrapping of the Australian Building and Construction Commission and the funding cut Labor handed to the Australian Small Business and Family Enterprise Ombudsman. Labor's union paymasters will be left to run rampant without the proven oversight and dispute resolution required.
While manufacturers across our country struggle with rising power prices, Labor's focus is making it more difficult for industry to employ and keep workers and to grow their businesses. But, rather than embracing it as an opportunity, the budget took active steps to spitefully wipe out key features of the coalition's industry policy.
The coalition had provided $2.5 billion to create the modern manufacturing strategy. This sought to bolster our sovereign manufacturing capability and empowered over 200 projects across Australia. Despite promising over and over again that their NRF would reinvigorate manufacturing in Australia, we saw next to nothing in the budget to roll out this program. Let's make that clear: Labor has chosen to redirect the modern manufacturing initiative without ever having rolled out their own National Reconstruction Fund.
One of the key pillars of the coalition's manufacturing strategy was our strategic decision to bolster Australia's capabilities in the space sector. The coalition supported funding to locally design, develop, manufacture and deploy specialised space products, equipment systems and services for export to international markets, and to support national and international space missions. This Labor government chose to wipe out the coalition's efforts to develop our space industry manufacturing by removing it as a priority area. The space industry and the Australian public are yet to understand the basis upon which this shift in focus was made. The government must address the critical issues affecting our manufacturers, not simply tinker with a proven model.
The Labor government is rushing this bill through, just like it rushed through its radical industrial relations agenda, sidestepping parliamentary scrutiny and avoiding appropriate consultation with industry, and the Australian taxpayer will end up wearing the bill for this recklessness. That is because the NRF delivers on what the Labor Party and the unions want, and not what our struggling Australian manufacturers need. Labor is rushing this bill through, because this bill is what put Labor in power—a chosen board to oversee $15 billion of taxpayer funds on Labor chosen priorities.
The bill hasn't passed but unions are already salivating at the prospect of the NRF and have listed their demands as thus: a third of the board positions handpicked by the Council of Trade Unions—positions which will determine who gets access to the funding; and enterprise agreements with unions—a precondition to make an application for any money under the fund; applicants must not have engaged in conduct that treated workers unfairly—a very vague way of saying that, if you're not with them, you're against them. Finally, the unions have demanded that applicants must commit to direct employment and, if contractors or indirect workforces are used, they must be employed on the same conditions as the direct workforce. This essentially enshrines compulsory unionism to a successful applicant. Again, Labor rewards its union mates.
Let us turn then to what some of the stakeholders have said about this. The ACTU said:
The bill puts forward a model of independent directors that are appointed by the minister. The ACTU does not support this model. The board of the National Reconstruction Fund should have equal representation from trade unions, industry and other expertise.
The Australian Industry Group said:
Cuts to the Modern Manufacturing Initiative and Entrepreneurs Programme in 2022 deprive the NRF of two main pipelines for preparing innovative SMEs to be investment-ready.
The Australian Chamber of Commerce and Industry said:
There is no clear definition of what a 'priority area of the Australian economy' is. The Bill leaves it open to the minister to declare that each or any area of the Australian economy can be identified as a priority area.
The Australian Banking Association said:
It is noted that banks already invest in many of the priority areas proposed to be targeted by the Fund, such as renewables, transport and defence. Investments in these priority areas would be better suited towards the beginning of their lifecycle, such as during the research and development or commercialisation phases of a project or business, where it is more difficult for banks to manage the risk profile.
In addition, the AWU's submission said:
In responding to the consultation paper, the AWU supports the ACTU's submission and recommendations for the purpose, governance and structure of the NRF.
Again, unions being thanked by Labor. The Australian Forest Products Association said: 'Our timber processing facilities are limited in the investment they can justify due to a shortage in fibre supply. This shortage is being exacerbated by state government ongoing moves to shut down native forestry, while the plantation forestry estate is shrinking, with land being moved to other more lucrative areas and uses. This in turn impacts on the potential returns for investment in Australian manufacturing of timber products.' The Association of Mining and Exploration Companies said:
The fastest way to attract investment to the sector, is to approve and open more mines in a timely manner. The longer the approvals process, the greater the perceived risk.
Therefore, the ALP is again shooting the program in the foot, as mines can take up to a decade to approve. For all of the reasons I have outlined, I oppose this bill. It is not supported by industry groups. It is not supported by business. It is supported by unions. It will do nothing to improve our manufacturing industry.
Melissa McIntosh (Lindsay, Liberal Party, Shadow Assistant Minister for Mental Health and Suicide Prevention) Share this | Link to this | Hansard source
I rise to speak on the National Reconstruction Fund Corporation Bill 2022. The Albanese government is breaking promises but it's also breaking the hearts of kids all across Australia who had the dream of being in the space industry. When I attend schools and when schools come to Canberra, I ask kids what they would like to do when they leave school. One of the most popular choices, when almost every child puts up their hand, is when I ask: 'Who wants to work in the space industry?' The kids get so excited, because in Western Sydney under the coalition government they had that opportunity within their grasp. We supported funding to locally design, develop, manufacturer and deploy space products, equipment, systems and services for export to international markets and to support national and international space missions.
But the government has decided to remove space manufacturing from its plans for manufacturing in this country, therefore breaking the hearts of those kids who wanted those future careers. For me in Western Sydney, that was about creating new and exciting jobs so those kids didn't have to leave our local area for a job and do those long commutes. They could have dreams. They could have reached for the stars under the coalition's modern manufacturing plan. But that is to be no longer. When I was elected as the federal representative to my community of Lindsay, I committed to working hard to ensure that we have more local jobs so people could live, work and stay in our community. It is something I am extremely passionate about, which is why I'm extremely sad for all those kids who wanted to work in space manufacturing in Western Sydney.
As someone who commuted out of the area for many years for work, one industry that I completely back and will always back is Australian manufacturing. To back Australian manufacturing we must leverage the strengths that give our industry a competitive advantage. We cannot compete with mass-producing nations on low-value products, and nor should we. The new era of manufacturing will focus on our strength, where we can compete on quality and value and not just price. I've always believed Western Sydney can be at the forefront of this new era of Australian manufacturing. We have the existing network of established manufacturers and the coalition government was making significant investment to support emerging capabilities in advanced manufacturing.
As we look to our country's strengths, backing Australian made things is what would help us create more local jobs and grow our economy. That's why I established the advancing manufacturing taskforce to bring together our local manufacturers with leading scientists, entrepreneurs, and representatives from schools and TAFE and universities to address the challenges facing local manufacturers and to grab hold of the opportunities. I was and still am particularly focused on ensuring that our local kids are educated and trained in the jobs of the future that are coming to Western Sydney. From Baker and Provan in St Mary's to Grant Engineered in Penrith and Plustec in Emu Plains, we already have a strong local manufacturing industry. Western Sydney is home to Australia's largest industry concentration of manufacturing, generating in excess of $41.5 billion per annum. The manufacturing sector employs more than 114,000 people in Western Sydney across transport, warehousing and logistic supports—an additional 71,000 jobs.
When the coalition was in government, I was really excited about the future of Australian manufacturing in Western Sydney, and I knew that we were delivering what people and manufacturers in Western Sydney needed because we asked them. We didn't just expect that they would go along with our policies. We sat down, we had taskforces and we were delivering what they said they needed. Our record as a trusted and dependable trade and defence partner presented further chances for us to grow in the field of advanced manufacturing. That's why I have risen today to speak on the National Reconstruction Fund Corporation Bill 2023. I strongly object to the bill on a number of areas, particularly as it does not include something as important as space manufacturing. That's completely extraordinary.
I would like to acknowledge some of the companies and manufacturers in my community that I've met with on a number of occasions through my taskforce, through visiting them and through listening to them to support them throughout their journey to create more jobs for local people. Like I've said, there's SpanSet at Emu Plains, which specialises in work safety equipment. There's Baker and Provan in St Marys, which is a heavy machinery and heavy fabrication company that has been in the community for over 70 years, now. That's 70 years of manufacturing in St Marys. Of course, there's a new manufacturing hub on Castlereagh Road in Penrith. When we were in government, there was a lot of confidence in investing in manufacturing in our local area in Western Sydney. Of course, Western Sydney international airport is creating opportunities for advanced manufacturing jobs. But, without investment from the Albanese government, those jobs certainly will not be in the space industry.
Under the previous government we saw positive steps forward, and that's why I'm standing today to talk about why I oppose this bill. This bill misses some key points and ignores the economic issues that the government must address, such as rising energy prices. One manufacturer in my community talked about their prices going up 600 per cent and how they would not be sustainable into the future. That is hundreds of local jobs in manufacturing on the brink because they can't afford the skyrocketing energy prices, not to mention labour market shortages and disrupted supply chains. Without policies that create strong economic conditions, any government spending is absolutely in vain.
The coalition is opposing this bill, because, as I said, when we were in government we would sit down and listen to manufacturers. I had a taskforce where they would consult with me, and we would take their needs to government, rather than what the government thought they needed. Rather than coming to the table and addressing what manufacturers want, particularly in Western Sydney, the government is just telling them what they need. The simple fact is that, without addressing these key economic challenges which face our country right now, government spending is absolutely wasteful. Under the economic mismanagement of this government, any proposed financial support could be whittled away by increased input costs.
The bill will create even more lost time for manufacturers, taking significant time for money to start flowing to them, if it works at all. The Clean Energy Finance Corporation, on which the NRF is modelled, was established in 2012. The first investment was only made some 10 months later. It took 10 months for any money to start flowing to manufacturers. Our manufacturers, who are already struggling, as we know, just cannot afford to wait that long. Like I stated earlier, some manufacturing businesses in Lindsay and others close by in Western Sydney could absolutely fold under the cost of energy prices.
The government announced that the NRF should be up and running by the next financial, but, like many things with this government, they have not committed to a launch date. It's eerily similar to the commitment to have Medicare urgent care clinics up and running by May this year. One of those was promised to my community in the electorate of Lindsay, but I'm yet to have any information on it. I believe it has been pushed back to the end of this year. Is that what's going to happen with manufacturing as well? Will they be pushing back those much-needed funds for manufacturers to push through the struggles of this time of high energy prices?
Industry feedback that the coalition has had suggests the funding model the government is proposing takes years to get right. Those will be lost years that manufacturers just can't afford. The NRF has a poor funding model. The model has shifted from competitive grants programs with robust processes to the government acquiring equity and providing loans. Manufacturers have to come to the government to get a loan. The unintended consequences include that government equity and loan schemes are less accessible than grants, and that manufacturers may struggle to meet return-on-investment thresholds or put together detailed business cases in-house. And what will happen to failed or failing loans? It's clear that the last experiment down this path, the Victorian Economic Development Corporation, uprooted manufacturers. We do not want that to happen. I certainly don't want to see any Western Sydney manufacturers impacted by this, causing job disruptions or job losses.
Eligibility is another issue. For example, certain industries might have margins which are too small, or it will be too risky, with disrupted supply chains. Many will no doubt miss out. The fund could become equivalent to a big white elephant. Risks to crowding out private investment are also concerning. It also begs the question: if they're such great investment opportunities for the government to acquire equity, why hasn't the private sector already taken advantage of them? We must not overlook the importance of retaining ownership, especially given that many of our manufacturers are small and medium-sized family businesses.
The bill will also stifle innovation, as beneficiaries of the fund will be unlikely to invest in innovation without a guaranteed return, and this funding model does not entertain failure, which is an unfortunate reality for some firms developing capacities and engaging in innovation.
In this bill there is an inappropriate ministerial discretion, which allows the minister to appoint the chair and board members who will oversee the corporation and its funds. The government has already demonstrated in its early appointments that it cannot be trusted to make sensible, non-partisan decisions.
The bill also undermines investment certainty in national priorities, with the government changing Australia's national manufacturing priority on a whim, undermining investment decisions and eroding investment confidence. Think of all those investors in the space manufacturing industry, Mr Deputy Speaker. What are they thinking and doing now?
The government's new priorities are too vague. They strip industry policy of the focus needed to drive investment in specific sectors. This is absolutely typical of the Labor government—choosing to spray money indiscriminately instead of continuing investment certainty for our manufacturers and industry.
Finally, the bill is fiscally irresponsible, delivering funding well in excess of the coalition's Modern Manufacturing Strategy. An initial $5 billion appropriation is provided upon passage of the bill, but the timing of the remaining $10 billion will not be subject to further parliamentary approval. In fact, financial structures similar to the one underpinning this bill have drawn criticism internationally from the IMF, who stated that below the line activity through newly created investment vehicles, such as the NRF, should also be phased appropriately, and that, more broadly, a proliferation of such vehicles should be avoided.
I started a petition in my community to bring back manufacturing to this country. I think a petition to ensure that investment in our manufacturing industry continues is more important now than ever. We should certainly add 'bring back space manufacturing' because this is where the jobs of the future are for kids and communities like mine. There was an international airport being built down the road and all this investment already lined up for an industry that has just now been stripped away. So I think having a petition is important, getting people behind it in Western Sydney and continuing the fight because Australia deserves a strong manufacturing industry. I couldn't speak more strongly in opposing this bill.
Zoe McKenzie (Flinders, Liberal Party) Share this | Link to this | Hansard source
I rise to speak on the National Reconstruction Fund Corporation Bill 2022 which establishes the National Reconstruction Fund Corporation with approximately $15 billion to invest in so-called priority areas of the Australian economy. However, at this juncture we have no precise idea what those priority areas will be. The government has full discretion to define them by disallowable legislative instrument.
We do have some idea about seven priority areas that have mentioned so far: renewables and low emission technologies; medical science; transport; value-adding agriculture, forestry and fisheries; value-adding resources; defence capabilities—and we've heard AUKUS thrown around us, as though Labor had come up with it; and enabling capabilities such as robotics, artificial intelligence and quantum. It's fair to say that in Labor's land anything could be a priority area really, and nothing is ruled out. It's one of those speciality policy areas where the Labor Party is so good, and where everyone thinks they're going to win a prize, until they realise it's just the usual suspects who are going to take home the loot.
In terms of spend by priority area, we aren't much clearer there either. There's been some suggestion there will be $2 billion for renewables and low emission technologies, $1.5 billion for medical manufacturing, $1 billion for value adding and resources, $1 billion for critical technologies, $1 billion for advanced manufacturing and only $500 million for value-adding in agriculture, forestry, fisheries, food and fibre. It makes you wonder what they did wrong.
Make no mistake, I do support these industries wholeheartedly that the National Reconstruction Fund Corporation will target, but I think we need to do that by creating the right circumstances in the Australian economy, by creating a context which supports investment, rewards effort and hard work, underpins commercialisation and invests in scientific endeavour. Governments should go down the path of picking winners only with caution, care and hesitation.
As we have seen before, playing to and backing our natural advantages usually makes good sense in policy settings, as the former coalition government did from time to time—for example, when it established the senior investment specialists in the trade and investment portfolio back in 2013-14. Their responsibility was to focus on national investment areas of food and agribusiness, resources and energy, economic infrastructure, tourism and education, and advanced manufacturing, services and technology. Unsurprisingly, perhaps, these were also the industries in which we pursued enhanced market access through our free trade agreements at the time, many of which were completed by the former government. But the coalition's policies put business, not government, in the driving seat of Australia's economic and industrial success.
Let me talk to you of just a few in my electorate of Flinders which have thrived under the coalition's policy settings over the last few years. In Flinders alone, on the Mornington Peninsula—a place that people often think of as hills, beaches, golf and great wine—we also have global leading manufacturers such as BlueScope Steel, which provides COLOURBOND to the world; farm and agricultural businesses like Gazzola Farms, whose broccoli and cos lettuce you'll find in all good supermarkets throughout the country, and Peninsula Fresh organics for the best organic veggies; and resource companies like Esso, from whose endeavours your summer barbecue bottle will be filled.
Let me talk to you about just one local manufacturer in some detail, Sealite, which the Leader of the Opposition recently visited with me when he came down to Flinders in late January. Sealite is a specialist in maritime transportation, headquartered in Somerville. That's in the northern part of my electorate. It was founded back in 1982 by, among a few others, the remarkable Chris Proctor, a local inventor and industrialist, in his garage no less. Today, Sealite is a technology leader on a global scale in both the design and manufacture of marine aids to navigation equipment, including marine lighting, navigation buoys, marine floats, port entry lighting systems, lighthouse lighting equipment, and monitoring and control system software. Sealite designs and manufactures marine aids and navigation equipment with manufacturing and office locations not just in Australia now but also in Singapore, the United Kingdom, Columbia and the United States. Sealite and its distributors service over 100 countries across the globe. When I visited their manufacturing base in Somerville in mid-2022 I could see they were about to send products and goods all over the world—to the Gulf state, all through the Indo-Pacific and, of course, to my personal favourite, the Maldives.
The amazing, dedicated Sealite team services the global marine industry through the efficient design of solutions that withstand the toughest ocean environments. The company employs many locals in the Somerville and Hastings area in my electorate, some of whom have been with the company for decades. You'll be lucky to see their navigation buoys all over the world. When you look out port side or starboard in any kind of vessel, you'll often see a large, round buoy with a big light on top, guiding you safely to shore. There's a good chance it's from Sealite and from my local town of Somerville.
Avlite Systems is a subsidiary of Sealite, an award-winning manufacturer of aids to aviation navigation. You will see their white triangle markers along most runways and runway lights sparkle all around aviation and airports all across the world. In fact, I saw some last week at the Tyabb airfield with the member for Canning, Andrew Hastie, who kindly agreed to come to Flinders from Avalon, where he was meeting with defence industry representatives at the International Airshow. He came across last week to visit HMVS Cerberus but also the home of the other biannual airshow, the famous Tyabb airshow, the next one of which will be held in March 2024. It has one of the most important collections of historical aircraft and is home to about a hundred peninsular aero club enthusiasts in all things aviation, but, importantly, it has Avlite's triangle markers down the side of the runway and also its lights guiding everyone safely home.
Avlite operates purpose-built facilities and employs a highly trained team of engineers and production specialists in its operations. Through organic growth and strategic acquisitions, Sealite and Avlite have broad capabilities to meet the demands of new product design, manufacture and program delivery for aviation clients globally. When you go to visit them, as the Leader of the Opposition and I did back in January, you will see their amazing purpose-built manufacturing plant in Somerville, which is now bursting at the seams, having acquired buildings down the street and across the road. You will see the amazing world-leading research and development they undertake. They are an amazing group of inventors. Indeed, they had to become amazing inventors when their supply chains collapsed during the COVID-19 pandemic.
They are experts in in-house surface-mount technology electronics and robotic assembly lines. They have an in-house rotational moulding and injection moulding capability, which is a marvel to be seen. And they have in-house high precision injection mould toolmaking as well.
Sealite has recently become part of the global SPX Corporation, a manufacturer of products that guide vessels safely into ports and harbours all around the globe. That parent company, SPX, is based in Charlotte, North Carolina, and had approximately $1.5 billion in annual revenue in 2019 and over 4½ thousand employees in 17 countries.
I'm so very grateful to Managing Director Michael Walker and his team for taking Peter Dutton and I on this amazing tour of their Somerville plant. I also recognise and shout out to Chris Procter and his fellow founders for creating such a magnificent local business, taking its wares to the world.
Mike and Chris are indicative of the good folk of Flinders, who cry out for one thing, who tell us what they need but are told by this government that they really need something different. In this case, they need the National Reconstruction Fund, which seems to deliver on what the Labor Party wants and potentially what the union movement wants, not what our struggling and striving Australian manufacturers need. The model that Labor wishes to implement in a no doubt well-intentioned policy is not what is currently needed. This bill, much like everything else the Albanese government has presented to the constituents of my electorate, completely misses the mark.
They pick winners from Labor-friendly National Reconstruction Fund recipients, but at the same time my constituents lose some of the things that they had been planning for and looking forward to for years. I cite the National Centre for Coasts and Climate, which was going to put a globally recognised research institute in climate change and the study of the flora and fauna of our waters and seas in the Point Nepean National Park. I cite the loss of the electrification of the Stony Point rail line to Baxter. We have the only metropolitan Melbourne train line that's still run on diesel. I cite the other thing they've lost, which is funding for the Jetty Road overpass, which has recently been deferred till 2026-27, even though the good folk of Rosebud have been expecting that since at least 2019, if not earlier.
They are losing funding for mobile black spots, they are getting no help with the cost of living, and all they are seeing is skyrocketing energy prices and land tax from the Andrews Labor government. The people of Flinders and its manufacturers and its agricultural businesses are not being given the support they need by this government, and nothing in this bill proves that statement wrong.
Ed Husic (Chifley, Australian Labor Party, Minister for Industry and Science) Share this | Link to this | Hansard source
I do want to thank members for their contribution on the National Reconstruction Fund Corporation Bill 2022. I am grateful to the member for Flinders for giving a considered contribution to this debate. I know there are a number of people on that side of the House who think deeply about what we need to do with respect to manufacturing, and some of them I see in this chamber right now. It's unfortunate that we haven't had the ability to engage in a meaningful way through the course of this debate, but I remain optimistic that at some point we may productively re-engage, because this bill is about ensuring that we have the growth capital available for manufacturers in those key areas in which we need to see longer term economic growth propelled.
It is a $15 billion financing vehicle, and it will be one of the largest investments in manufacturing capability in living memory. It is important for the country long term. It will make investments in projects that will support, diversify and transform Australian manufacturing. It will also support economic reform by boosting participation and productivity. Now, it's very important to emphasise the $15 billion in growth capital that will be available for manufacturers across the seven priority areas. These investment decisions will be determined by an independent board made up of people with a variety of skills. First, they will be guided by an investment mandate. Second, they will not have, despite the suggestions of those opposite, ministerial intervention in any shape or form. They will be making decisions in the national economic interest and not in partisan political interest. That is important to point out as well.
So there will be clear direction through that mandate in respect of risk, return, investment, governance and core government policy priorities. We aim to crowd in investment. We have one of the largest investment savings pools on the planet with our superannuation system. We have challenges at this point in time with venture capital, but they will not last forever, and we imagine we'll work with them as well. We will also work with private equity. We want to make sure that the capital is there at a time when the cost of capital has increased, both locally and globally. We need to ensure that, for firms that have an idea about how they want to grow, that money will be there to allow them to grow.
Now, I've listened to some of the comments, particularly those of the shadow minister for industry and the deputy leader of the coalition a few weeks back, and I've listened to some of the contributions here. They've clearly got the rote responses, and a lot of them are just plain wrong, frankly. They demonstrate that there has not been a willingness to actually look at what the bill does, nor a willingness to take the time to read the explanatory memorandum and all the material that we've had out there. Those facts are an inconvenient hurdle in the way of making a point. Quite frankly, I think what we can sum this up as, in terms of coalition opposition, is that they're saying no to this bill for one of two reasons: that they didn't introduce it, or that they don't like any program where they don't get to decide where the money is going. I suspect it's a bit of both.
I want to pick up on the points made by the member for Flinders. You indicated through your contribution, Member for Flinders, that we weren't delivering what manufacturers want. In actual fact, the big focus of the incoming government has been to address long-running issues that we have inherited. Manufacturers want access to skilled labour. They have not been able to get it. We have had massive skills shortages, and some of that stems back to decisions made by the coalition government. We are investing in TAFE fee-free places. We are investing in universities. We are reforming the visa system, particularly in relation to skilled visas, so that we can get the skills that are needed. Manufacturers want skills and we are delivering after years of neglect.
Manufacturers also wanted lower energy bills and lower energy prices. We had to make some pretty big calls in relation to, for example, gas, where industrial users make up half of the domestic gas demand. We needed to step in and do that. We also need to ensure that there is access to lower cost capital, and that is what the NRF does for a lot of manufacturers who struggle to get the support that they need to grow at that point in time, and who will often tell us how difficult it is to get a bank or other lender to support their ambitions. We do not want firms to feel like the only way they will get access to capital is to leave Australian shores. So we need to make sure that we have all those things in place.
The NRF is not the be-all and end-all of what is required to grow manufacturing in this country, but it is a massive platform to ensure that that occurs. Again, it will be decisions that are made independent of government and, if I may say, guided by a model that has existed and has operated under previous coalition governments and us, based on the Clean Energy Financing Corporation, which, again, existed under the coalition and, in some cases, in spite of the coalition. It has demonstrated through lived experience what can be done.
We built the NRF concept from the ground up based on some expert advice and informed by, for example, the CSIRO's Recovery and resilience report of 2020, which highlighted the areas we needed to invest in longer term to be able to see longer-term economic growth. We were informed largely by that but we were also informed by some other things—for example, priority areas in the realm of transport, where we believe that there is a need to be able to provide investment in, for example, building public transport infrastructure or what we do with electric vehicles be they light commercial or heavy. Being able to ensure that that capital is there for that growth is really important.
Let me run through other points made during the debate. There have been a lot of worthy contributions. I'm grateful for the contributions from members of the government and from the crossbench. I stress my gratitude to the crossbench, who I have engaged with over a period time. A number of them have made terrific contributions that I am grateful for. We can't agree on everything, but that's not the nature of Australian democracy. Where we can work together, we should—and I have been grateful for their constructive engagement. I would also make the point that questions around processes, thresholds and the like can be easily answered in the legislation.
Despite some coalition claims—chiefly directed through the shadow minister for industry—we haven't abandoned the food and beverage manufacturing industry. In fact, that claim will be a surprise to the industry, which is mentioned by name in our $500 million investment target in agriculture, forestry, fisheries, food and fibre. The coalition also claimed that the NRF will be ineffective because of rising energy prices, despite the fact that they voted against our moves to bring those prices down. The coalition also suggested that we weren't doing anything about supply chains. This bill is trying to deal with that issue. The challenges in relation to concentrated or broken supply chains had been ignored by those opposite. Supply side issues had driven inflation and had set us on a trajectory of higher interest rates while the coalition was in government. We are trying to ensure that we correct that, that we can moderate inflation—take that fight to inflation—and also ensure that we put downward pressure on interest rates.
The NRF has a crucial role to play, and those opposite are voting against it. Many of those opposite speaking against the bill have, time and again, shown a complete misunderstanding of the way in which the bill would work, claiming it would stifle innovation. Hardly—given that this is actually extending capital, particularly in terms of enabling capabilities and critical technologies, where the support is required here on Australian shores, instead of forcing innovators offshore because we don't have the capital available for people right here.
We have designed it, as I've said, to crowd in investment and help local firms attract support, showing other investors that the government supports their work. Of course, the NRF will make decisions that appreciate risk and reward. They will take bigger risks on some projects than others, but it won't be a government minister making a decision on the basis of political interest; it will be on economic and national interests that those decision will be made—again, at arm's length from government and supported by advice from experts to support innovation, investment and opportunity in key growth sectors for the country.
This is our first step in revitalising Australia's industrial capabilities, so that we can be a country that makes things again. The NRF is designed to help secure our future prosperity, drive sustainable economic growth and leverage Australia's natural and competitive strengths by providing finance to projects in priority areas. A strong, diverse economy underpins our government's commitment to creating a more sustainable, high-value job proposition for the rest of the country.
I thank the House for their consideration of this absolutely vital bill, and make the point that, when the vote eventually comes on this bill, people will be asked to make a choice. They will be asked whether or not they support Australian manufacturing and they support good blue-collar jobs. Manufacturing generates, on the whole, full-time, secure work. There are 90,000 manufacturing firms in this country; a third of them exist outside the capital cities. We can do better. We can certainly—and we certainly want to—ensure regional manufacturing grows. And it's not just in the regions but in remote Australia as well. I note the presence of the member for Kennedy, and I note his interest in ensuring that manufacturing occurs in all parts of the country, not just in some. We want to make sure that that is there.
I understand that some Liberals may not necessarily get the value of manufacturing and capability to modern economies and how important this is for economies to grow. The National Party certainly does. The National Party understand this in their part of the world—not just in terms of agriculture but also in terms of the manufacturing activity that occurs across other sectors in their communities. It staggers me that the National Party, knowing how hard it is to get access to capital for some of their businesses, would not back in the NRF. It is simply astounding that they will go back to their communities and say that they will not back in growth capital for manufacturers who have struggled with banks, who occasionally will not provide that support. It will be interesting to see how they reconcile that in their communities. You never know, they could have a change of heart. We'll see.
Stuart Robert (Fadden, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source
Wrap it up!
Ed Husic (Chifley, Australian Labor Party, Minister for Industry and Science) Share this | Link to this | Hansard source
I commend the bill to the House. I note the lack of interest of the shadow minister at the table, who is keen to move onto something else, but we will definitely make sure that we do what we can to see Australia become a country that makes things, because a country that makes things generates good, long-term, full-time, secure work. I commend the bill to the House.
Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source
The question is that this bill be now read a second time. There being more than one voice calling for a division, in accordance with standing order 133 the division is deferred until the first opportunity the next sitting day.