Senate debates

Monday, 27 March 2023


National Reconstruction Fund Corporation Bill 2023; Second Reading

10:02 am

Photo of Tony SheldonTony Sheldon (NSW, Australian Labor Party) Share this | | Hansard source

I rise to speak on the National Reconstruction Fund Corporation Bill 2023, and here we go about making a difference. I start by commending the Minister for Industry and Science for his hard work on bringing this critical and ambitious policy to life. The National Reconstruction Fund is a $15 billion financing vehicle which will be one of the largest investments in domestic manufacturing in our history. The NRF will make targeted investments through a mix of loans, equity and guarantees in seven priority areas: renewable low-emission technologies, medical science, transport—given the former coalition government's debacle in New South Wales, with foreign-made trams, trains and ferries, we certainly welcome that—agriculture, forestry and fisheries; value-add in resources and defence capability; and enable capabilities across engineering, data science and software development, including in AI, robotics and quantum.

You know, we used to make things in this country, and thanks to the NRF and thanks to the massive overhaul of our skills and training system through the Jobs and Skills Australia Amendment Bill introduced in the House last week, we can and will make things right here in Australia again. When we invest in making things in Australia, we make every dollar back 10 times over. We make it back by creating highly skilled, secure and well-paid jobs for working Australians. We make it back by creating economic and job opportunities in our regions. We make it back by securing our national sovereignty. If the pandemic weren't a wake-up call that we need to make essential goods here in Australia and not depend on the benevolence of China based manufacturers, then I'm not sure we'll ever get through to those opposite.

The NRF has the support of the Australian Council of Trade Unions, Australian Chamber of Commerce and Industry and Australian Industry Group. In fact, to quote the Senate Economics Committee report on the bill:

All submissions to the inquiry and witnesses at the public hearing were supportive of the bill and the objectives of increasing manufacturing in Australia.

So why, when there was unanimous support from every single organisation that participated in the Senate review process, are the Liberals and Nationals opposing it? Why are the Liberals opposed to a $15 billion investment in reviving Australian manufacturing? Why are the Nationals opposed to this bill when agriculture is one of the priority areas for investment? Perhaps it's because they are the very same people who decimated manufacturing in this country. Perhaps it's because they are ideologically opposed to making things in Australia. Perhaps it's because they prefer that we offshore our blue-collar jobs to China.

Why don't the Liberals and Nationals ask their colleagues in New South Wales how offshoring manufacturing has gone? If you haven't been paying attention, I'll tell you. In New South Wales they said, 'We're not good at building trains.' So, instead, they bought trains made in Spain, which, it turns out, had major cracks in the wheel arches that caused the Inner West Line to shut down for 18 months. They bought inter-city trains made in South Korea, which were delivered four years ago with a raft of safety issues and are only now starting to enter service. They bought river-class ferries made in Indonesia, which can't fit under bridges on the Paramatta River if passengers are sitting on the top deck. If you're sitting on the top deck of one of these boats you'll be decapitated when it goes under the Gasworks Bridge.

The safety issues, repairs and delays on these projects have cost Australia billions of dollars. So why do they insist on offshoring manufacturing? Well, when the Liberals and the Nationals hear the phrase 'made in Australia', they start panicking about organised labour. They start worrying about workers in a factory or a warehouse organising together to have a united voice on wages and conditions. There is nothing that those opposite hate more than workers with a voice. That's why the Abbott government told our car manufacturing industry to leave. That's why the Abbott government said they wouldn't trust Australia to build a canoe. That's why the Liberals and Nationals are opposing this bill today.

I'm sure there are members and senators in the coalition who are embarrassed but are forced to show up in this place and vote against this bill. They don't want to be on the wrong side of history on this vote, just as they don't want to go along with opposition leader Dutton's ideological opposition to the safeguard mechanisms and just as they don't want to go along with Dutton's opposition to our energy price relief bill. But unfortunately that is how history will record your vote on this issue. Your record will forever be stained by a vote against bringing manufacturing back to this country.

So, to every Australian in the Hunter and Illawarra, in Central Queensland, in Geelong and in South Australia: pay attention to this vote, because the distinction couldn't be clearer. The Albanese government is voting for legislation to revive Australian manufacturing, and the Liberals and Nationals are voting against it.

10:08 am

Photo of Slade BrockmanSlade Brockman (WA, Liberal Party) Share this | | Hansard source

Today, following that contribution from Senator Sheldon, I rise to start clearing up a few misconceptions—and I'll call them misconceptions, not straight-out untruths. There are some misconceptions among the Australian public, largely fuelled by the rhetoric of those opposite about manufacturing in Australia. Would it surprise those who are listening to this debate to hear that manufacturing output in Australia has actually risen since the 1950s? Would that surprise you? Manufacturing output has actually risen since the 1950s. Yes, there's been a change in the mix. Some industries have gone, and others have come in to take their place. But manufacturing output as a whole has risen. In fact, from the 1950s to the early part of this century, manufacturing output in Australia quadrupled. So, when we're talking about the decline of manufacturing in Australia, when we're talking ourselves down as a nation, we're actually talking about the relative decline of manufacturing. As a senator—and I'm sure the same applies to Senator Cash and Senator Scarr, who are in this place with me—one of the absolute privileges I get is going out to so many small manufacturers across Australia. The industrial areas of Western Australia are replete with small manufacturers out there having a go. That is why manufacturing output in this country has actually grown over the last two or three generations, contrary to the rhetoric of those who want to talk down the manufacturing sector, talk down the Australian economy and make some cheap political points about unionisation that do not reflect the reality out there.

What has happened is a relative decline in manufacturing, and that is because we've had another massive success story in this country. The services sector has grown since the 1950s. We all see it in the way we live our lives. We see it in these devices we carry in our pockets. So much of our daily lives and our work and our pleasure activities are on our phones. We see that the nature of the economy has changed over the last 50, 60 or 70 years. Much, much more of the economy now, compared to the 1950s, is in the services sector. That's where we've seen massive growth in our economy. Manufacturing output quadrupled between the 1950s and the early 2000s, but, yes, it has seen a relative decline against the really significant growth, from a very low base, of the services sector.

Why are we actually opposed to the National Reconstruction Fund Corporation Bill 2023? The cartoon caricature we get from those opposite is that we're voting against this bill because we don't like unions. My goodness, what a ludicrous argument that is. We're voting against this bill because it is completely the wrong thing to do at this time and because there are some serious objections to key parts of this bill that are just bad policy. In particular, from my point of view, the use of equity shareholdings in manufacturers by government is an exceedingly bad move. It's a poor policy decision. I know those opposite can say that other governments have done it in the past, but it is a very poor decision to make that a cornerstone of your manufacturing policy. Governments should not have equity stake stakes in business.

The trouble is that Labor governments from the past have form on this. We've seen Labor governments getting way too close to business at the state level particularly. A number of administrations in the past have become, well, infamous. I will go to an example in my home state. Senator Cash, who's in the chamber, very well remembers the WA Inc days. The name 'WA Inc' has become synonymous with political malfeasance at the highest level, where political players, proverbially, got into bed with corporate titans and sent government money, by way of investment vehicles, into private hands. The absolutely disastrous results of that are still well and truly etched in the memories of every Western Australian—at least, every Western Australian who is over 30 years old. The WA Inc era was a shameful era of Labor Party politics in Western Australia, and it involved far too cosy relationships, including equity relationships through the Exim vehicle, with businesses in Western Australia.

We actually saw the outcomes of this in my home town of Pemberton. Pemberton is heavy soil country. It grows a lot of vegetables. There is fruit production and a lot of cattle production. We saw a massive shearing shed built in Pemberton, of all places. It was built by one of those who had gained largesse through the WA state government. A shearing shed in Pemberton! I'm trying to think of an eastern states equivalent example, but it probably won't come to me on the fly. This really is something that's out of place. It's economically crazy, and yet there we saw the way money was being used as a plaything for political and large business leaders' purposes. It was a very foolish use of taxpayers' money.

When governments get involved with business they are in an extremely difficult position. What happens if the business tanks? There's clearly a massive moral hazard. Does the government just let the business go under? Does it put more equity in to try and prop the business up, even though it knows it's failing? We get a situation where rather than being a silent shareholder—what if a large manufacturing business that takes one of these equity injections from the government is in a marginal seat? I know you spoke about this, Senator Scarr. What if one of these businesses is in a marginal seat and the minister for industry has the local Labor member banging on their door saying, 'You can't let this business go under; it'll cost me the seat'? Regardless of what the government's decisions is, it's going to be seen through a political lens. You risk corrupting the process, and perception is important in politics. We all know that. Everyone in this chamber knows that. Perception is important. Governments should not be taking equity shares in this way.

Sadly, the WA Inc situation is not the only case we can cite. There's also the Victorian Economic Development Corporation. I'm certainly not as close to that one; I don't know the history, but I'm sure some of my colleagues in this place do. Again, a state Labor government vehicle tried to pick winners and racked up $110 million of losses for the taxpayer. Manufacturing is difficult. Small and medium-sized business is difficult. There is no doubt about that. There is a lot of private investment that goes into those businesses, and a decent percentage of them will fail. It is a sad reality of economic life that, through the economic process, we see businesses that cannot compete. Holding equity in those businesses puts governments in a very, very dangerous position indeed. We should stay out of the market where at all possible.

The coalition's program in the last term of government was a grants program. Yes, there will be purists who argue against even those sorts of programs, and I do have some sympathy with that view. But, in a hands-off grants program, you are awarding money on the basis of a project's merit; there are effectively no strings attached. It's about trying to speed up an investment and advance a particular process, growing it from initial stages to the point where it can be taken to market, and there is an argument that that sort of funding from government can be a positive on the economy. There are arguments against that as well, but, when we get to the point of equity, we are entering very dangerous territory indeed. That is why I'm particularly strongly opposed to this bill. We've seen it before. We've seen government getting too close to business.

Senator Sheldon said that every submission to the inquiry was in support of this bill. Well, gee, guess what—business looks at free money and says yes. Is anyone remotely surprised by that fact? That does not mean it's good policy. We have hundreds of cases—I've named a couple of them, such as WA Inc and the Victorian Economic Development Corporation, and I'm sure Senator Scarr can give me hundreds of examples from Queensland—where these sorts of approaches have resulted in very negative outcomes for the taxpayer. Throughout history and throughout the western world, there are plenty of examples of where governments haven't been able to help themselves—trying to achieve a particular economic outcome and protect a particular industry, they have got their sticky fingers involved, and it has never—or very rarely—ended in positive territory for the taxpayers of the nation involved. That is why I remain extraordinarily concerned about this bill and I will certainly, very happily, vote against it.

10:19 am

Photo of Ralph BabetRalph Babet (Victoria, United Australia Party) Share this | | Hansard source

Like most things that the Albanese government proposes, this $15 billion National Reconstruction Fund appears good—at first glance, anyway—but it raises more questions than it answers. The United Australia Party is, of course, completely supportive of the need to boost Australian manufacturing, but why is it being done first and foremost through subsidies rather than through tax cuts and regulatory reform? If the government is serious about helping the manufacturing sector in this country, it first needs to address the taxation environment and the regulatory environment. It needs to remove costs and unnecessary things that hinder business investment in our country. The best way to encourage business is not to shower elected winners with billions of dollars of taxpayer funded money; it is to free manufacturers from burdens and disincentives that inhibit investment. That's the best way to do it.

Speaking of disincentives, manufacturers in this country face more red and green tape than a Christmas tree. And it's not just manufacturers but all businesses. Doing business in Australia is too difficult. As a business owner myself, I can attest to this from cold experience. It is so difficult to have a business and turn a profit in this country—much more difficult than it has to be. If the Albanese government wants to spark a manufacturing boom, it should first remove the copious amounts of red tape—red tape that strangles creativity and stifles investment. I'm going to keep saying this. What's the point of showering billions of dollars on some hand-picked manufacturers if the overall environment still remains hostile to manufacturing? Throwing around other people's money is easy. It makes for a good headline. But look beyond the headlines, and there is a complete lack of intent to do the hard work of reform to free business from the constraints that hinder it so that we can all thrive.

Let's talk about that $15 billion for a moment—a huge sum of money. Politicians love to talk about huge sums of money because it makes it sound like we're doing something historic and monumental. The insinuation is that, if government is throwing billions at a problem, then that problem will somehow be fixed. That could not be further from the truth. As we all know, sometimes—actually most of the time—government spending only makes a problem worse. As Reagan said, the most terrifying words in the English language are, 'I'm from the government, and I'm here to help.' He was not wrong about that one; I tell you what.

Smart voters are attuned to the fact that, the larger the sum of money that a government proposes to spend, the more historic and monumental the waste is likely to be. As I have said before, the government couldn't organise a beer in a brewery. This is why cutting taxes and removing regulatory red and green tape is always preferable to throwing money around. Tax and regulatory reforms create an environment where business can thrive without subsidies. In other words, real reform creates real growth rather than a mirage of growth propped up by public money.

It should not be lost on people that this government has just broken a pre-election promise on superannuation—taking billions from hardworking retirees only to go and hand it out to a few hand-picked industries who may or may not deserve it. The better idea would be for the government to plan some major cuts to spending. That would be the better idea. Cut spending. That would be a better way to fund this reconstruction fund. Don't just borrow more money to fund a manufacturing boom that is not real. I say 'not real' because this boom will only exist because of subsidies; that's it. It's not because of a genuine business model—much like the entire renewables debacle which we are currently being made to suffer through. That's what's going on. If the government wants to spend $15 billion, find some savings across the budget to ensure that we're not just adding to our already severe and out-of-control national debt just so that a few headlines can be written in the legacy media for a couple of days.

At a time of uncontrolled inflation, 10 consecutive rate rises, the last thing that our nation needs is for the Treasurer, 'Super Jim' Chalmers, fresh from writing his 6,000-word essay on reimagining capitalism, to pump billions of dollars of borrowed money into an economy that is already much too hot. You don't need to have written a thesis on Paul Keating to know that such a move will only increase inflationary pressure and drive up interest rates. This is high-school economics. What are the struggling families who are trying to cope with constantly growing mortgage payments going to think about another rate rise?

The government has also cleverly and, in my view, cynically linked the reconstruction fund to defence spending. Defence is too important to play politics with, and it's a pity that the government has sought to use Defence to shield the reconstruction fund from critique and criticism. The UAP will not stand in the way of defence spending. In fact, we urge the government to find more in the budget to fund defence—to fund the defence of our great nation in these uncertain times. The defence of our nation is not made easier by continued borrowings for other areas, especially those that are ill conceived.

So we urge the government to supply the reconstruction fund through budget savings and to view the reconstruction fund not as the whole strategy but as part of a strategy to encourage investment. We also urge the government to start thinking about cutting our national debt while they're at it. The significant part should be, as I have said over and over again, removing disincentives so that manufacturing can flourish in this nation once again, not because of false economies created by taxpayer money, not because government trust in our manufacturers, but because government have the creativity and the daring to create an atmosphere in which things could be built in our country once again instead of, obviously, being sent overseas.

Australia and our citizens deserve better than what is going on at the moment. Yes, we do. We don't need to spend $15 billion that we don't have. What we need is to free our manufacturers from red and green tape, we need to exit bad international agreements and we need to, of course, reduce the cost of energy. We need more coal, we need more gas and we need to add nuclear. We need to get rid of this idea of solar panels and batteries being enough to power a First-World nation like Australia, because it's not enough. The only thing it's going to do is lead us into poverty. That's it.

Government is the problem. Government is not the solution—not now, not ever. What we need is a free market. The free market will take care of everything. The government will only make things worse, like it always does and like it always has.

10:29 am

Photo of Raff CicconeRaff Ciccone (Victoria, Australian Labor Party) Share this | | Hansard source

It's great to be here today to make a contribution on the establishment of the National Reconstruction Fund. It is great to have Senator Scarr also in the chamber here. He is no doubt championing what I'm about to say, so it is good to see him. Today's contribution is about one of the key election commitments that the Albanese government took to the last federal election. This $15 billion fund is about revitalising an Australian industry that this country desperately needs. This country desperately needs to start to make things again right here in Australia. In doing so it needs to also represent one of the greatest investments that this country deserves. Certainly the manufacturing sector has been undervalued for some time.

I listened to the limited contributions this morning. Australia suffered nearly a decade of policy drift, especially when the coalition goaded the car industry to leave this country. I remember—it is very much in my mind—the then Treasurer Joe Hockey famously telling the car industry to leave—'If you don't like it, just leave.' And they did; they left. That had a chilling effect right across our economy, particularly in domestic manufacturing. I remember that because a number of my family members and friends—and my father used to work in the car industry—unfortunately, lost their jobs as a result. A number of them who worked for Ford in Victoria, sadly, lost their jobs because the then coalition government basically told the car companies to go. They were no longer willing to support the industry that ensured that there were fantastic and good-paying jobs. Generations of people from when they were children looked forward to these jobs. Unfortunately, the manufacturing sector suffered greatly.

When we came to the 2019 election and subsequently the one after, Labor understood there was a need to address this. Currently we as a country rank dead last in the OECD when it comes to manufacturing and self-sufficiency. That is an embarrassment, considering the number of people that we have in this country. That is why I have risen today to make a very brief contribution about why I will be supporting the Albanese government's $15 billion fund.

The fund will have seven priority investment areas: value-adding in our resources sector; value-adding in our agriculture, forestry and fishery sectors; transport; medical science; renewables and low-emissions technologies; defence capability; and enabling capabilities, like quantum computing, robotics and AI. These areas have been selected to strategically drive economic development in our regions and outer suburbs, to boost our sovereign capability, to diversify the nation's economy and to help create secure jobs, because that is really the crux of this policy.

Throughout the COVID pandemic we all saw how our overreliance on international supply chains left us so exposed to disruptions outside of our control. We really need to have control over our supply chains once again. You can only do that if you have a strong domestic manufacturing sector. The Australian workers and businesses that stepped up to provide us with the goods and services that we all rely on have shown that there is great potential to improve our domestic capability. The National Reconstruction Fund is all about realising this potential. The fund will direct significant investment into regional Australia, creating jobs in agriculture, forestry, resources and other important industries. As the government previously announced, $500 million of targeted investment will be directed towards value-adding in agriculture, forestry, fisheries, food and fibre, and that is so important.

It was particularly disappointing to hear the contributions from those opposite. Their party pretends to stand up for regional Australia. I particularly point out that the National Party are refusing to support the establishment of this fund. It will benefit regional Australia. This is exactly the sort of policy the Nationals should be supporting. The government is stepping in to ensure that regional Australia benefits from the national building and industry development that too often does favour big cities.

Unlike the political cash flushes from those opposite when they were in government, the National Reconstruction Fund will be directed by an independent board. There will be no colour-coded spreadsheets and no short-term political thinking; just strategic investments that are based on the priority of this government—a future that is made here in Australia.

A couple weeks ago I stood up in this place and spoke about how the National Reconstruction Fund will stimulate defence manufacturing. It was interesting to hear the comments that Senator Ralph Babet made earlier around how the government is not doing enough in that space. But, putting that to one side, it is important to note that we are maximising sourcing requirements from Australian suppliers employing Australian workers. We should be very proud about the defence industry in this country, and we can ensure that our own country plays a much more active role in our defence supply chain.

It is also important for other industries, particularly some that are very close to my heart. For a long time I've argued that forestry will be key to our low-emissions future, and the four priority areas of the National Reconstruction Fund recognise this. By providing investment for value-add in forestry, we can ensure that demand for timber products, which only keeps increasing—and we know we must always, always go towards meeting our climate goals—can be met with Australian goods. The Australian Forest Products Association has welcomed assurances from the government that Australian firms, which add value to our native forest products in mills and manufacturing plants right across the country, will be eligible for investment through the National Reconstruction Fund. Value-adding activities in agriculture will also be eligible for investment through the National Reconstruction Fund, ensuring that Australian workers and businesses play a significant role in more steps in agriculture supply chains.

This is one of the fundamental purposes of the fund. We're a clever country, and with the backing of the government we can perform more of the value-adding activities in several supply chains right here in Australia, instead of just focusing on the first steps of the chain by supplying commodities.

The advanced manufacturing processes that will be supported through the National Reconstruction Fund are integral to a low-emissions future, not just in Australia but in every nation that is taking action on climate change. We want Australia to be in a position to play a role not just in providing the materials required to make future technologies but also in design and manufacturing processes. Our country is rich with valuable critical resources, but for decades we've mined those resources and shipped them overseas for other countries to process. Often, we then import these finished products at many times the price, leaving all the profits and jobs overseas. Australia has the knowledge and capability and capacity to do better than this. So many technologies have been invented here, including the technology behind solar panels, but these technologies are being manufactured overseas.

If we are to mine it here, we should make it here, and if we are to invent it here then we should make it here. As a co-investment fund—which always gets lost in this argument; it's a co-investment fund—the National Reconstruction Fund will make investing in seven priority areas more attractive for private capital, crowding in investment to create high-quality, sustainable industries and jobs.

There has been some commentary about the potential inflationary impact of this investment, and of course inflation is a very big economic challenge facing our country, but the fund will be required to generate a positive portfolio rate of return, reinvesting its returns to become self-sustaining.

Photo of Paul ScarrPaul Scarr (Queensland, Liberal Party) Share this | | Hansard source

What if it makes a loss?

Photo of Raff CicconeRaff Ciccone (Victoria, Australian Labor Party) Share this | | Hansard source

It's interesting to see the pessimistic view that the opposition—

Photo of Marielle SmithMarielle Smith (SA, Australian Labor Party) Share this | | Hansard source

Sorry, Senator Ciccone. Senator Scarr, the objections are disorderly. I'm finding it hard to follow Senator Ciccone's speech.

Photo of Paul ScarrPaul Scarr (Queensland, Liberal Party) Share this | | Hansard source

I was finding it hard to follow before the interjections!

Photo of Marielle SmithMarielle Smith (SA, Australian Labor Party) Share this | | Hansard source

Order, Senator Scarr! Senator Ciccone.

Photo of Raff CicconeRaff Ciccone (Victoria, Australian Labor Party) Share this | | Hansard source

Thank you, Acting Deputy President. Really, the Coalition are always doomsayers, always trying to play down the economy, always trying to say how bad it is that Labor is finally standing up for workers and for domestic manufacture in this country, somehow always playing the glass-half-empty approach. Why don't you come into this place and have a positive attitude about backing in Australian workers and Australian businesses, and let's give it a go together. Let's see some bipartisanship when it comes to manufacturing in this place. It is really, really concerning to see every time we try and put up a policy—one that we did take to the election, mind you; we did take this to the election, Senator Scarr. A bit of positivity will go a long way.

We saw that play out in the New South Wales election over the weekend. Chris Minns and his team very much took a fresh-start approach to restarting the economy in New South Wales, reinvesting in their manufacturing and investing in the people and the health and education sectors in New South Wales—and look what happened. The public backed in Labor. They backed in New South Wales Labor over a government that, quite frankly, was past its use-by date and was more interested in its own internals. But I'm not here to talk about the New South Wales election result, although I must say it was very hard not to drop that into my speech today, as well as Collingwood having a second win on the weekend. It's good to see that the Pies are finally back on top of the AFL ladder, but I'll put that to one side.

There's been a lot of commentary around the National Reconstruction Fund. This investment is expected to generate economic growth and boost productivity, which is why we are delivering this policy, and we know that's key to driving down inflation. We need to address the supply issues. Of course, the other way that the National Reconstruction Fund will actually help combat these pressures is by addressing the supply chain issues. We know that a lack of supply is driving up the cost of many of the inputs that are required across the economy, with these high input costs then rippling through producers and consumers. The fund will help address this lack of supply by improving our domestic capacity and insulating our economy from future supply shocks.

There has long been an argument made by government that it should play no role in picking winners, no role in guiding the industry and no role other than establishing guardrails, letting businesses to do the right thing and only stepping in when there has been market failure, as we've heard from some opposite. While those opposite do argue that we shouldn't be picking winners, the previous government spent almost a decade picking, unfortunately, some of these losers. We saw what happened when the car industry left this country, leaving many towns and communities in the lurch. The destructive ripple effect that that had through local economies cannot be overstated. The lasting impact on our ability to manufacture advanced products in this country is still being felt.

Passing this bill is a step forward in revitalising the industry after the damage that was caused. Let's all work together in this place. Let's all get together and support and rejuvenate the manufacturing industry in this country. Let's improve our sovereign capability across key areas. Let's reduce our reliance on fragile and uncertain international supply chains. I urge everyone this chamber, particularly the National Party, who say that they support regional Australia, to support this bill, and let's support the revival of manufacturing, support regional employment and support a future made here in Australia.

10:42 am

Photo of Ross CadellRoss Cadell (NSW, National Party) Share this | | Hansard source

I rise to make a brief contribution today. It's good to see that we can agree on many things in the house, and my speech will be short—but potentially 30 seconds longer because of Senator Ciccone's speech. I, too, like Senator Ciccone, am not here to talk about the—

Photo of Jenny McAllisterJenny McAllister (NSW, Australian Labor Party, Assistant Minister for Climate Change and Energy) Share this | | Hansard source

Is this about the Magpies?

Photo of Ross CadellRoss Cadell (NSW, National Party) Share this | | Hansard source

It may come up! I'm also not here to talk about the New South Wales election results, but I am here to talk about Collingwood's second win and them being top of the table again!

In relation to the National Reconstruction Fund Corporation Bill 2023 and where we're going, I'm a bit torn about this because, on first reading, it's a bill that has really good motives and really good goals, and it seeks to do something that Australia needs tremendously. I thank Senator Ayres for facilitating some briefings on how this will go, answering some questions and filling out some things for me. I think that's the way governments should work. We should be trying to work out how we can make these things happen. It's always great in question time to get up and be shouted at about how we didn't support energy relief on that single sitting day, but it was the mechanism that we didn't support—and without the consultation. There was more consultation here, and I would urge that it should have come sooner. I don't think it was impossible for this side to make some changes because, while it landed in an area which we wouldn't necessarily like to support, it was only a chip and a putt away. After a bit of work together, a bit of early consultation and a bit of cooperation, I think we would have potentially been able to get somewhere.

In relation to the mechanisms for injecting the money into the market and the transparency around that, there was a fear from a regional perspective that it might become a bit of a quango, where you could see money going into consultancies, money going into investment firms and lots more BMWs and Range Rovers getting around Vaucluse and Prahran—if I'm saying that right; it looks like 'prawn' to me. We were worried about how that goes and where that goes.

On the whole process, I would like to say that I think this is a bill with good motivations. As to it being a chip and a putt, I think some of the negotiations to get it across the line on numbers have made it more of a seven-iron shot—they have driven it a bit further away than we can support. I understand that, but that is not a bad process. What I do have a problem with is that we're talking about regional manufacturing and how all the bills from the other side aren't in line. We'll potentially address the safeguard mechanism later this week in this place, and that bill will undo some of the good things that this bill may do for regional manufacturing. So we have policy working against itself and not in alignment, which is a concern for me.

I specifically want to raise the grandfathering of existing contracts under the safeguard mechanism. I use the specific example of Orica and their ammonia plants. They've upgraded one in Newcastle, just north of my home base in the Hunter Valley, to be best-in-world practice based on contracts going out to 2029, and they were about to upgrade one in Queensland, at Gladstone, to be world's best practice on the basis of those ongoing contracts. But under the mechanism that will come forward later in the week, if it passes the other House, that is now grandfathered to two-year processes. So there is no investment certainty in that manufacturing industry for Queensland, so they've pulled out of the Queensland project, which would have made a cleaner project and a cleaner process for doing AN in Australia. We will lose manufacturing jobs because of inconsistency, so that is a real concern for me.

I'm happy to give credit where credit's due, and I note that this includes agriculture in a bigger way than the previous government's manufacturing plan last year did, which is a good thing. I think the $500 million allocated, as Senator Ciccone said, in the first batch of the $7 billion can only go up, and should go up, to help support agriculture. There are many things on which Australia gets battered by others—our emissions, our exports and our mining—for the damage we do to the region, but we don't get the credit for feeding the region—for all the food we produce to feed the region and the benefit that gives to others—with our wheat, and I think this can assist it.

In brief, I think the transparency, the mechanisms and the potential generation of a whole list of consultancies that will benefit out of this are a problem. I think there are issues with the timing of getting it to market soon enough. I know $7 billion has been allocated quickly, but that is a concern for us. In some of the negotiations about what's excluded, we don't know what's coming up. In the mining areas, we don't know what's going on there. If we're talking about existing mines and what we're doing there, that's fine, but, if we're talking about cobalt, lithium or copper mines—all these things—we don't know the number of mines we will need to bring on line. Some research and some manufacturing in the mining sector will bring that on line to help the current plan, which is the Rewiring the Nation plan. The Nationals understand. We feel the motive of creating regional jobs and we respect the government for doing that, but, unfortunately, we haven't been able to meet them on this bill. We hope to have longer, earlier consultations on the next one, but we'll be opposing this one. Thank you.

10:48 am

Photo of Malcolm RobertsMalcolm Roberts (Queensland, Pauline Hanson's One Nation Party) Share this | | Hansard source

As a servant to the many different people who make up our one amazing Queensland community, I speak to the National Reconstruction Fund Corporation Bill 2023. One Nation has, on occasion, pointed out that Labor will run a government for the benefit of their union boss mates, the Liberals for the benefit of their big business mates, and the teals and the Greens for the benefit of their sugar daddies, the billionaire climate-change carpetbaggers. So it was with amusement that I saw an exchange between Minister Gallagher and Senator Rennick on social media over the weekend. Senator Rennick mentioned in a speech that he did not agree with the slush funds that the Liberal-Nationals set up during their government. I appreciate and compliment Senator Rennick for his integrity. He has shown that repeatedly in this parliament and outside. Senator Gallagher could not resist. Oblivious to the irony of her comments, Minister Gallagher said Senator Rennick had 'belled the cat', admitting to 'slush funds and rorts galore'.

'The Bell and the Cat' is a medieval fable—a cautionary tale on the nature of impossible tasks. Admittedly, it's an appropriate choice, given the impossibility of the Liberals ever running government for the benefit of the people. But the irony of the minister's decision to engage the Liberals on the issue of rorting is tone deaf, considering that this bill was on the Notice Paper at the time. The minister's words are suggestive of a quite different fable—the pot calling the kettle black, which is 16th-century Spanish homily in which somebody accuses someone else of a fault which the accuser shares and, therefore, is an example of psychological projection—that's a polite way of saying 'hypocrisy'.

The National Reconstruction Fund Corporation Bill 2023 is 100 per cent pork barrel—the very thing of which the minister accuses others. This bill creates a $15 billion fund to oversee Australia's reconstruction. It would have been helpful to define the word 'reconstruction', Minister. Minister Husic must have overlooked the fundamental reason for this bill. The word 'reconstruction' does not appear in this bill. At a guess, reconstruction must involve infrastructure spending, right? Wrong. The word 'infrastructure' does not appear in this bill either. The word was added by the crossbench in the other place, the House of Representatives, as part of their amendment banning—banning!—certain types of infrastructure spending. The Greens and teals were helpful, as usual! For clarity, that was sarcasm.

The bill does provide for spending on priority projects, yet there's no definition of what a priority project actually is. I understand these will be manufacturing projects. Why, then, does the bill not mention the word 'manufacturing'? Not once is manufacturing mentioned. This is significant because the bill allows the minister to fill in all these details later. Yet if these much needed initiatives—reconstruction, manufacturing and infrastructure—were the purpose of this bill then section 5 would define these concepts and set out what is and what is not 'reconstruction', 'manufacturing' and 'infrastructure'. It does not. It fails to do this basic step.

I expected to see a statement of fairness, ensuring projects are funded based on the needs of the region in which the projects are located, having mind to the overarching concept of national interest. There's a novelty! It doesn't do that, either—which is not a novelty, because that's the way this parliament works. It's not in the national interest.

This bill does have a section on consultation, requiring the corporation to consult with the Australian Banking Association—Minister Jones's best mates are the first ones on the list; what a surprise!—and the Australian Council of Superannuation Investors, the Australian Council of Trade Unions, the Australian Investment Council, Industry Super Australia and the Law Council of Australia. What an odd list. If this was about infrastructure, the requirement would be to consult with Infrastructure Australia; it's not there. If this was about manufacturing, then you could consult with Manufacturing Australia, or, to drive manufacturing into a new era, one could consult—one would consult—with the Australian Advanced Manufacturing Council, but no. Taking Australian industry into the emerging space industry offers the prospect of billions in new sales and high-paying breadwinner jobs. The Space Industry Association of Australia should have been on that list; it was not.

There's $15 billion in funding without once mentioning the fundamental purpose of the spending—$15 billion, without once requiring consultation with the bodies that could help direct this spending to the national interest. There are no checks, no balances, no guidance to the minister, no guidance to the board of the corporation and no KPIs—key performance indicators. There's no measure of success, no measure of failure. To call this bill a blank cheque is an insult to blank cheques. And it's an insult to taxpayers, whose money is being spent.

The Senate Economics Legislation Committee's inquiry into the bill does cast some light on where this money will be spent. The inquiry heard from multiple witnesses advocating for spending the $15 billion on solar and wind energy boondoggles—more carpetbagging. Australia already has the clean energy fund, spending $25 billion on unreliable, weather dependent power to take us back to before the industrial revolution. If the transition to weather dependent power was actually in the national interest and was dictated by market forces, these solar and wind carpetbaggers would not be buzzing around reconstruction funding like flies in search of excrement. I foreshadow that I will be moving an amendment in the committee of the whole which requires that a corporation cannot invest in an energy project that meets the criteria for funding by the Clean Energy Council—no double-dipping. There is no justification for using this $15 billion of taxpayer money to make Australia's energy capacity worse.

The title of the bill raises an important question: what exactly are we reconstructing from? Are we reconstructing from three years of ruinous COVID lockdowns and restrictions that gutted the economy—destroyed the economy? Are we reconstructing from a generation of ruinous net zero measures that have seen cheap, reliable base-load power replaced with expensive and short-lived materials-heavy wind and solar power? Are we reconstructing from the exporting of Australia's manufacturing sector to China under the Hawke-Keating Labor government in the eighties? Indeed, discussion on the nuclear subs purchased last week shows that former prime minister Keating has lost none of his loyalty to China. Are we reconstructing from a generation of oppressive development constraints provided across the range of government?

Is it red tape from an out-of-control bureaucracy that demands more and more power with less and less oversight in pursuit of a war against common sense, freedom and basic decency? Is it green tape, designed to make rich, pampered inner-city luvvies feel better about their own environmental footprint while destroying any chance the rural sector has for a profitable business? Or is it blue tape from the mountain of unelected, unaccountable foreign bureaucrats spreading a gospel of everyday Australians having less so that predatory billionaires can own it all? It's about Australians having less so that predatory billionaires can own it all. That's their ideological bible. It is not the economy that needs reconstruction; it is the government that needs reconstruction.

Here's One Nation's reconstruction plan: just stop it. Stop it. Stop strangling the life out of the private sector. Stop strangling the life out of small business. Stop strangling the life out of families and taxpayers. Stop using taxpayers' money to pick winners and losers amongst new business ventures, when that task should rightly be performed by the free market and by personal enterprise and initiative, leading to personal responsibility. Stop rewarding your mates in the solar and wind sector, who have spent tens of millions of dollars earnt from renewable solar and wind boondoggles to get pet parliamentarians elected who now have seriously conflicted loyalties. Stop rewarding party donors with taxpayer money dressed up as reconstruction funding. Stop the cronyism.

Australia is not and never will be a centrally planned economy. In fact, no economy will be centrally planned; they all collapse. We have a trillion-dollar deficit, and the Albanese government is throwing around $15 billion like it were Monopoly money. It's time that the government got out of the way of the private sector, personal enterprise, and let the profit motive and free enterprise competition decide what gets built and what does not. Let the customers decide.

The National Reconstruction Fund Corporation Bill 2023 is last-century Soviet thinking, a product of the comrades deep in Trades Hall who do not seem to have noticed that the Soviet Union has fallen, because it failed to maintain the standard of living of everyday people. Standards of living in Australia are decreasing—the reverse of what is happening to energy prices. That is one of the many causes. This bill is ideological rubbish designed to reward businesses who promote joining union bosses. That is the sentence the minister will put in later. Subject to amendments, One Nation opposes this bill.

10:59 am

Photo of Karen GroganKaren Grogan (SA, Australian Labor Party) Share this | | Hansard source

I rise to contribute to this debate on the National Reconstruction Fund Corporation Bill 2023, and it's been interesting to hear the various contributions so far. But let's be clear: this bill is essential. This is an essential step for our country, for rebuilding our industrial capability and for creating secure and well-paid jobs. The lack of vision that we saw from the Liberal government has led to policy drift and decline in our manufacturing self-sufficiency. This bill is not just another piece of legislation; it is a crucial step towards rebuilding our industrial capability, creating those jobs and securing our future prosperity. And I assure Senator Roberts that it is most certainly in our nation's interest to pass this bill. We saw very clearly through the pandemic that our ability to manufacture world-class products and ensure our national resilience was brought into question. We sailed dangerously close to not having the supplies that we needed. We had challenges with PPE, with ventilators, with the things that were essential for us at the time, but we did not have the capability to produce them ourselves because we import the bulk of what we need from overseas.

The fact is that we have the smallest manufacturing industry relative to domestic purchase of any OECD country, and we need to address that. To ensure we have a prosperous future, we must prioritise building robust and adaptable industries that can produce essential goods in times of crisis. And to address one of the points raised by Senator Cadel, the safeguard mechanism, which will hopefully be introduced into this chamber later this week, will work very well with this bill. We have huge challenges to decarbonise our industry, and having those available funds to invest in essential areas will work exceptionally well with the safeguard mechanism. There is no shortage of enthusiasm or skill in business and in industry right across this country. We just need to harness it and structure it because we are heading in the right direction.

The opportunities we have as a nation are boundless. Australia is an innovative country, and we've proven that time and time again. But we must develop the pathways that allow our science and technology brains to create those new ideas and then allow our industry brains to turn them into profitable, deliverable, sustainable industries of the future. We're all tired of hearing about organisations going overseas because they couldn't find the capital to back their idea here but had a willing investment partner overseas. We can end that, and that's exactly what we are looking to do in taking this step. We can support those great Australian ideas into fruition, and this bill is Labor backing innovation, backing entrepreneurs, backing our industries and backing the growth of new organisations in our manufacturing sectors.

The plan to boost our regional economic development and accelerate our transition to becoming a renewable superpower, increase investor confidence and build on our natural and competitive strengths is quite frankly a no-brainer. Furthermore, the corporation will assist Australian industry to seize new growth opportunities by providing finance for projects that add value, improve productivity and support transformation. This fund will achieve similar structures to the Clean Energy Finance Corporation, which has been raised a number of times throughout this debate. The CEFC has proven that these kinds of structured funds do genuinely work. I remember that, when the CEFC was first brought to bear, there was a sense that it would default and there would be a lot of defaults within some of financing structures. But that was not the case. It has been a very successful structure, and basing this restructuring bill on that is a wise move because we know that it can work.

A lot of the intellectual property we have in various areas gets exported. We've seen that in the medical development industry and we've seen it, as has been mentioned here, with solar panels. A significant amount of that intellectual property was developed here but was shipped overseas, where it was further developed. The product is developed and then we buy it back. There are so many opportunities for us to cut out that step, to keep our industries and ideas onshore to the fruition of their development. That's good for us as a country, it's good for jobs, it's good for industry—it's good for everyone.

I think what we've seen, with the Liberals' lack of vision, over the past decade has resulted in us falling to last place in the manufacturing self-sufficiency index among OECD countries. That's not something to be proud of; that's something we should seriously address. This trend has to be reversed, and the National Reconstruction Fund is the first step in that direction.

This bill is a golden opportunity for us to revive Australia's ability to make world-class products, create well-paying jobs and secure a future prosperity. We cannot miss this opportunity. I encourage everyone in this chamber to put aside the political barbs and think very seriously about what this is doing for our development, our regions and our future in industrial and manufacturing opportunities.

11:06 am

Photo of Wendy AskewWendy Askew (Tasmania, Liberal Party) Share this | | Hansard source

I too rise today to contribute to the debate on the National Reconstruction Fund Corporation Bill 2023. The Albanese government is heralding the National Reconstruction Fund Corporation as the first step in Labor's plan to rebuild Australia's industrial base, and we've heard that again here today. This is a great ambition. I'm all for increasing manufacturing and building prosperity across the country, especially if it helps rural and regional communities, like my home state of Tasmania, but this bill has been rushed and it is not the right solution.

The National Reconstruction Fund is supposed to be up and running by next financial year, but the government has not even committed to a launch date yet. Clearly, it hasn't been thought through and doesn't have a lot of substance behind it. The National Reconstruction Fund will be administered by a corporation with a chief executive officer and an independent board that will oversee the corporation and its fund.

The Minister for Industry and Science, Ed Husic MP, has discretion to appoint the chair and board members. Can we trust Minister Husic to appoint truly independent members to the board of this $15 billion fund? This is the same minister who was caught out sending his official mail using paper made in the UK. Why not use paper made in Australia, Mr Husic? That may have been because Mr Albanese promised that forestry would be a priority under the National Reconstruction Fund before the election last year. But, less than a year on, he's broken this promise by agreeing to the Greens' demand to cut out the native forest industry in return for their support of the fund.

The corporation will be tasked with delivering funding for projects that are designed as national priorities by the government. Instead of vague and indiscriminate ideals, we need to drive investment into specific sectors and provide certainty for Australian manufacturers and industry. This proposed model makes accessing funding harder because it shifts from the existing competitive grant programs, which already have robust selection processes, to the government acquiring equity and providing loans for projects.

Some manufacturers could struggle to meet the return on investment thresholds, as part of these loans, while they are busy building capacity. Others will be ruled out of eligibility because their margins are too small or too risky—because of supply chain shortages. It will take years for the money to start flowing and to get the model for this fund right. So what happens to manufacturers in the meantime?

On top of these access issues, I want to highlight how the prescriptive nature of funding requirements and the need for a guaranteed return means those who receive the go-ahead will be unable to invest in innovation. We've all heard the stories of innovation that involve years of research and development and many failures before the right combination was found and developed. Australian John O'Sullivan and his CSIRO colleagues were investigating echoes of black holes when they came up with a way to send signals to a destination without interruption. We know this innovation as wi-fi, but it actually began as black-hole research. The National Reconstruction Fund model will not encourage innovations like wi-fi as it does not allow failure. How can we have innovations without trial and error? This idea—its design and its planned execution—is problematic.

We on this side of the chamber acknowledge the importance of having strong supports for Australian manufacturing. We achieved this through our Modern Manufacturing Strategy. This government's proposal is at a much greater cost and has a far greater risk for the taxpayers of Australia without any guarantee of the rewards that our policies have proved and delivered. What we do know, according to the Prime Minister's media release, is that the government plans to allocate funds from the National Reconstruction Fund to improvements in Powering Australia, medical manufacturing, value-adding in resources, critical technologies, and advanced manufacturing in agriculture, forestry, fisheries, food and fibre. That was how it was announced, noting, of course, that the government have now done that desperate dodgy deal with the Greens which will prohibit coal and gas from receiving finance from the fund.

So what we can see is the Albanese government proposing a corporation that can invest billions of dollars in projects in specific priority areas that already have designated funding arrangements. Consider, for instance, the Clean Energy Finance Corporation, the Medical Research Future Fund or the Modern Manufacturing Strategy that the coalition set up. These initiatives offered focused funding for specific industry areas, so the Labor government, therefore, is really just offering us a rebrand.

At a time when our country is battling rising energy prices, labour market shortages and disrupted supply chains, this government wants to add more manufacturing to a mix via a fund that is not needed and was not in the budget. This bill ignores the economic issues that we're already facing and that must be addressed first. Kickstarting a series of significant manufacturing projects requires strong economic conditions, and that is something we just do not have right now. This bill does not follow good fiscal considerations. The initial $5 billion appropriation is provided once the bill passes, but the timing of the remaining $10 billion is not subject to further parliamentary approval.

Indeed, similar financial structures to what we see proposed for the National Reconstruction Fund were criticised by the IMF, the International Monetary Fund, in February of this year. In its 2022 article IV consultation, the IMF stated:

Implementation of below-the-line activity through newly created investment … should be phased appropriately, and, more broadly, a proliferation of such vehicles should be avoided. Cost-of-living support in light of high energy prices should be targeted, aimed at protecting vulnerable households and small viable firms.

This is a clear indication of where our focus should be right now.

Manufacturers across Australia are struggling with rising power prices. The government's priority should be delivering inflationary support for industry rather than redirecting funds to manufacturing projects that had already been approved and costed under the Modern Manufacturing Initiatives. Projects came to a standstill and people lost jobs because of this government's redirection of funds to an initiative that does not have a launch date and industry feedback suggests could take some years to get right. Those will be lost years for manufacturers across Australia.

11:13 am

Photo of Perin DaveyPerin Davey (NSW, National Party, Shadow Minister for Water) Share this | | Hansard source

The Labor Party went to the federal election last May with a $15 billion commitment to deliver a National Reconstruction Fund. On the surface, it sounds like an exciting proposition. But, as with so many of Labor's election promises before and after the election, this one will not deliver what industry wants. It won't deliver what the economy needs, and it does not deliver what the community was expecting. It's not what Labor said it would do. But, frankly, why should any Australian be surprised that what Labor comes up with post the election is different to what they said before the election? This government has wasted no time in dismantling so many of its lofty election objectives. Their October budget slashed programs, particularly programs to deliver infrastructure in regional Australia. It pushed up the cost of living for families, and it put even greater pressure on rural and regional Australia.

I mean, let's look at what the Prime Minister promised. He went to the election promising he would drive down electricity prices—indeed, 97 times. Yes, 97 times he promised he would cut electricity bills and that they would fall by $275—a very specific number, and he was wedded to it. And indeed, they have not gone down by $275; they've gone up—a lot. And their proposed cap on coal and gas prices has done nothing to alleviate the rising electricity prices. The Prime Minister went to the election saying superannuation would not be touched; it was sacrosanct. We now know that one in 10 Australians will have their super impacted by the taxation changes that this government, who promised they wouldn't touch super, are now bringing in.

Let's not talk about what they're proposing for franking credits. That was another one: 'We won't touch franking credits.' Hmmm. He went to the election promising to strengthen Medicare, but instead he's cut back Medicare funded mental health support. They've cut back telehealth, and bulk-billing rates are falling everywhere. They promised cheaper medicine, but now we're seeing them remove medicines from the Pharmaceutical Benefits Scheme, meaning that people who depended on these medicines are now faced with higher prices, at a time of higher inflation, higher cost-of-living pressures across every single aspect of living. These are medicines that were on the PBS and they're being removed from the PBS—vital, life-saving medicines.

Labor have butchered the support available to encourage overseas trained doctors to move to rural areas through changes to the Distribution Priority Area classification system. So now, whereas the DPA system ensured that overseas trained doctors or bonded medical students had to move to regional areas or that only regional areas could recruit those doctors, Labor have reclassified it so that peri-urban areas have the same status as places like my home town of Deniliquin, Bourke and Wentworth in the south-west.

I have tried getting a doctor, thank, you Senator Pratt. We have also tried getting doctors to move to those areas through the Distribution Priority Area status, and Labor have just made that task impossible. Now doctors can move to Western Sydney under that DPA status, whereas before they couldn't. So, I don't accept—well, I accept your heckle, because you are wrong. We were seeing doctors move out to regional areas—not enough, admittedly. We introduced changes to ensure that the Murray-Darling Medical School was established to train doctors in regional areas. And what did we hear on the weekend? We heard your health minister, Mark Butler, say to the pharmacists that there will be health cuts in the budget. Where are those health cuts going to be felt the most? I can tell you where they're going to be felt the most: in rural and regional areas. It is despicable, the disrespect that this government has for rural and regional areas. They have butchered rural and regional infrastructure programs. The October budget set out clearly what this government thinks of rural and regional Australians. In the budget, they did have $4.7 billion for childcare support.

Photo of Glenn SterleGlenn Sterle (WA, Australian Labor Party) Share this | | Hansard source

Senator Pratt, a point of order?

Photo of Louise PrattLouise Pratt (WA, Australian Labor Party) Share this | | Hansard source

Yes, a point of order. I want to draw your attention to the relevance of Senator Davey's speech. She hasn't yet touched on the bill before us. Thank you.

Photo of Glenn SterleGlenn Sterle (WA, Australian Labor Party) Share this | | Hansard source

Senator Davey, you have been going for nearly six minutes, and I would concur with Senator Pratt. Can you come back to the subject of the bill in front of us, please.

Photo of Perin DaveyPerin Davey (NSW, National Party, Shadow Minister for Water) Share this | | Hansard source

The subject of the bill is very much that, with a $15 billion commitment to deliver this National Reconstruction Fund, I cannot see anything in what is proposed that reflects on how this fund is going to help rural and regional Australia. And I am making the very valid point that the actual bill is entirely different to what people expected prior to the election and to what was promised prior to the election. We took to the election a very strong manufacturing proposal, and this bill was Labor's answer to that. However, in this bill they're not going to make any changes.

We know manufacturing is a major contributor to the Australian economy and is a major employer in so many rural towns—small, medium and large businesses alike. They're all the lifeblood of these towns. Manufacturing makes a huge contribution to the prosperity of all Australians. Our manufacturing policy was designed to encourage manufacturing investment in rural and regional Australia. But, like the rest of the economy, manufacturing is being continually dragged down by the broken promises of Labor at the state and federal government levels. This includes the increasing cost of power, which is having such a negative impact on our manufacturing sector. This bill will undermine and confuse many industry sectors as to what the government's priorities are now and into the future.

In these uncertain international times, Australian industry needs to know that the federal government has their back, but too many of our major industries don't know where they stand. Take the forestry industry, for example. On this bill—I'll keep it relevant, so Senator Pratt can continue to play on her phone and listen in and understand why we're opposed to this bill—the forestry industry made a submission as an industry stakeholder. The Australian Forest Products Association pointed out that their timber processing facilities are limited in the investment they can justify because of a shortage of wood fibre. Why is there a shortage? Because Labor governments across Australia are shutting down native forestry industries. We've got Victoria shutting down native forestry and Western Australia shutting down native forestry. But the government makes assurances: 'Oh, it's okay. We'll accept plantation forestry.' How does that help Tasmania, which is entirely dependent on native forestry? The Labor-Greens-aligned state governments are consistently shutting down this viable sustainable industry, which, ironically, helps us with our carbon capture schemes. But, no, it's not good enough, because we know the Greens' only approach to carbon capture is to lock it up and walk away—let the trees do their thing, and walk away—with no management and no return on investment.

The mining industry, for so long the backbone of our standard of living, is another industry that has been battered by Labor. In their submission on this bill, they 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.' The ALP is shooting their program in the foot, as mines can take up to a decade to approve. We're not just talking about coalmines here. We are talking about critical minerals, which are essential for us to have a renewable energy industry in Australia. But by beefing up the National Environment Protection Authority—this is not me saying this; this is the mining industry—their own policies are at odds with the outcomes of this bill. Similar sentiments and concerns have been expressed by so many other manufacturers. The steel industry, the cement industry, aluminium—all are unclear as to what it will mean. Even the Australian Chamber of Commerce and Industry said, 'There is no clear definition of what a "priority area of the Australian economy" is.'

On the matter of fiscal responsibility of this legislation, again, like so many of Labor's thought bubbles, no consideration has been given to the inflationary pressures of this bill. That was even acknowledged by the Assistant Minister for Manufacturing during a Senate estimates hearing. The International Monetary Fund has criticised financial structures similar to the one that underpins this bill. 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.

The Albanese government has been repetitive in its claim as to the state of the budget they inherited, but this bill is going to add $45 billion in off-budget spending. Off-budget, unaccountable, not transparent. It's not what this government promised. They promised increased accountability and increased transparency, and yet what we are seeing is increased off-budget spending measures. Where is the fiscal responsibility? The high ground that they claim to have is looking very low indeed.

This bill highlights the inability of Labor to deliver a nonpartisan program that will assist all sectors. This bill picks favourites. This bill should not be supported in its current form. I note that the coalition have several amendments which will go some way to improving outcomes under this bill, if the amendments are passed. I would strongly request that all senators give those amendments full consideration. As it stands, I cannot support this bill, and I do not endorse it to the chamber.

11:27 am

Photo of David PocockDavid Pocock (ACT, Independent) Share this | | Hansard source

The pandemic highlighted in the starkest possible terms how critical it is to maintain a sovereign national manufacturing capability here in Australia. I welcome the establishment of the National Reconstruction Fund through the National Reconstruction Fund Corporation Bill 2023. This $15 billion facility will begin to help rebuild some of that much-needed capability we have lost in recent years and will help set us up to be manufacturing into the future. It will help Australians have more confidence in supply chains and be better prepared for future shocks. It will help innovative companies, including those in the ACT, move along the innovation and commercialisation pathway.

Now, I know that when people think about the ACT, they probably think government and Public Service rather than manufacturing, but that overlooks the extraordinary startup and small-business sector we are so lucky to have based here in Canberra. Canberra has the highest number of startups per capita in the country, and some unbelievably talented, determined, passionate people doing some truly mind-boggling things, from Quantum Brilliance, whose mission is to make quantum computing an everyday technology using their diamond based tech, to Syenta, who used electrochemistry to develop a 3D printer like no other on the planet. The ACT is a microbrewing powerhouse. A local firm, Skykraft, recently deployed the largest ever Australian made payload sent into space.

We want to grow the potential of these firms even further. Currently Australia ranks below the OECD average of total government support to business research-and-development spend as a percentage of GDP. We need to turn that around. That's why I'm moving a second reading amendment to this bill, asking the government to commit to exploring additional policy mechanisms to provide Australian startups access to finance as they navigate the path to commercialisation.

We have to ensure that we have a startup ecosystem in Australia that provides the type of capital needed to keep world-leading innovation here in Australia. We've seen too many startups have to go overseas to develop technology that is important to Australia and is important to our future. For the NRF to succeed, we clearly need a sustainable pipeline of eligible projects at a stage suitable for funding through the corporation, and additional work ensuring that there is finance available for those startups will help address the challenge of early capital to get them through the valley of death.

The other second reading amendment I'm moving seeks a commitment from government to ensure the NRF Corporation has a presence here in Canberra. Yes, I'm being parochial, but I believe it's far more than that. The NRF will reach across so many sectors of our economy and it's vital that there is good engagement with other government agencies and departments. We can't afford to operate in silos. We need the NRF to be speaking to government departments like the department of industry, the department of agriculture, the CSIRO and so many more, and their presence here will help foster that.

I will also be moving a number of substantive amendments that go to governance, reducing the maximum board terms to four years plus four years, rather than the five years plus five years, and bringing forward the date of the first review to before the end of December 2026. This is not something we can set and forget. We need to know early if this is working as intended or if tweaks are needed. I thank the government for being open to these suggestions.

The other amendment I'm proposing on the bill goes to ensuring that we are meeting our international commitments under the Convention on Biological Diversity, from Rio in 1992, and the Kunming-Montreal Global Biodiversity Framework. These are related but separate to our obligations under Paris and so vital given the unique biodiversity of our great continent. We are a megadiverse country and one of only two developed countries that is megadiverse, and biodiversity often misses out on being considered. We have to ensure that in all the decisions we are making we are taking into account the impact, negative or positive, that it will have on nature. We're part of nature. If nature goes down, we go down with it, and so it makes sense to consider the impact on nature in all of our programs and funds that are being set up.

Finally, I'll be seeking commitments from government that the independent NRF board will give consideration to climate related risks and nature related risks when making investment decisions. TCFD and TNFD are gaining traction and momentum and will be critical tools in allowing companies to measure their climate and nature risks. This is more and more becoming an expectation overseas, and it will be a huge benefit to businesses for Australia to implement best practice so we are not at a competitive disadvantage when dealing with European or American based companies.

I believe the board should also be considering nature based solutions when making investment decisions as this is clearly a huge opportunity for Australia. We have some of the world's best environmental scientists and some of the world's best innovators in that space. Ensuring we can help them get that technology to the point where it is being scaled and manufactured here in Australia will open up huge markets into the future as the world grapples with the climate and biodiversity crises.

There's clearly huge potential to use the NRF to create the next generation of jobs, industries and environment we need to be front and centre in the kind of future we seek to build, so in principle I support this bill. Looking at the huge investments underway in countries like the US, with the Inflation Reduction Act and the CHIPS act, this is us taking a significant—in the context of things, smaller, but I think really significant—step in Australia, ensuring we are making things here in Australia and we're not just making things; we're helping Australian start-ups and Australian innovation produce things here and export to the world.

11:36 am

Photo of Hollie HughesHollie Hughes (NSW, Liberal Party, Shadow Assistant Minister for Climate Change and Energy) Share this | | Hansard source

I rise today to address the main reasons why the coalition will not be supporting the National Reconstruction Fund Corporation Bill 2023 in its current format, and I'm actually surprised that some opposite are going to be supporting it, because when they come in to address this bill, their bill, they're not selling the bill to us. They're not talking about how great it's going to be; all they do is keep looking back towards the coalition and talking about what the previous government did, and of course they're rewriting history significantly. But if this were so great, wouldn't you think they'd be in here to sell their bill, to talk about the positive impacts it's going to have, rather than just, hilariously, talking about using cheap political shots? They are the government and they should be in here selling the positive outcomes to the Australian people on the bills they propose, but unfortunately they can't do that, because this bill does not produce those outcomes.

Firstly, the bill ignores key economic issues, and we know that's a consistent message from those opposite. In order for any of these things to be successful, the government must address rising energy prices, labour market shortages and disrupted supply chains if we are to have a manufacturing sector that is able to succeed. Without policies that create strong economic conditions, any and all government spending is simply in vain. It would be money in one pocket and out the other, due to the cost pressures the government is just failing to address. The coalition is opposing this bill because this arrogant government is telling our manufacturers what it thinks they need rather than addressing what manufacturers actually want.

We know Labor have made a desperate dodgy deal with the Greens, their partners in crime, which will prohibit coal or gas from receiving finance from this National Reconstruction Fund. At a time when energy prices are causing businesses to close, those opposite are too busy doing deals with their Greens mates which are going to further restrict manufacturing in this country. Australian manufacturers—and we on this side understand this completely—rely on cheap energy to make things on shore, but Labor's continued demonisation of gas and broken promises to bring power prices down will force more Australian manufacturing overseas. Every expert in the country, every single one, is calling on the Prime Minister to unlock more supply of gas—more supply, meeting the demand, lowering the price. Indeed, some manufacturers have had their gas bills triple—not double, but triple. But these backroom deals they insist on making with the Greens undermine any effort to bring power prices down, and we know Labor will always work with the Greens to push their own agenda rather than support the needs of Australian businesses and families.

Secondly, we'll be opposing this bill because we know it will create even more lost time for manufacturers in this broken model and it will take a significant time for any money to start flowing. The Clean Energy Finance Corporation, on which the NRF is modelled, was established in 2012 and the first investment was only made some 10 months later. Manufacturers in Australian cannot afford to wait that long. The government announced that the NRF should be up and running by next financial year but haven't committed to a launch date. They said it 'should be' up and running. We remember all the broken promises made before the election—$275 off power bills; instead they're going the other way. Ninety-seven times Mr Albanese said that, and now no-one opposite can even mention that number. There were broken promises over superannuation. He said there would be no changes to superannuation, and now we regularly hear from Senator Gallagher that there will be 'modest changes'—modest changes that are scaring farmers, who may have to sell their family's property to pay a tax bill from an unrealised asset. We know there were going to be no changes to franking credits, but now they're back on the agenda. Why should manufacturers have any faith when those opposite say there should be a launch date by next financial year but won't outline when it will be up and running? Is this just going to be added to the litany of broken promises?

Industry feedback suggests that this type of funding mode takes years to get right and that those years will be lost to Australian manufacturers and cause the loss of a significant number of jobs across our country. Let's not forget that, while those manufacturers are waiting, we get closer and closer to a world where hard-to-abate industries will no longer exist in Australia. Think about all the refining resources in this country—iron, coal and oil will all be forced out. I've already spoken in this place about the impact the safeguard mechanism is going to have on the cement industry. We know that the cement industry in Australia cannot abate the creation of clinker, the most important and emissions-intensive part of the cement-making process. Those opposite are going to send if offshore, destroying Australian jobs and Australian companies and ensuring that we have no sovereign supply of cement.

We know that all of this is a recipe for economic disaster. We can't blame the public servants in each of the individual agencies. They only see the work that they're doing; they don't look at the broader implications across the different bills and the different departments. That is the job of the government—to look at what's being proposed across government departments and always consider the cost to our citizens, the impact on industry and what the unintended consequences may be—but this is a government that proves, day on day, that it is not up to the challenge.

The NRF has a poor funding model. The model shifts from a competitive grants program with robust processes, to government acquiring equity and providing loans. When we talk about unintended consequences, we absolutely know what's coming down the track. Government equity and loan schemes are less successful than grants. Manufacturers may struggle to meet the return-on-investment thresholds or put together detailed business cases in house. 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. 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.

Before the election—aside from the 97 claims of a $275 reduction to power bills—Mr Albanese also claimed that he was putting forestry at the heart of his manufacturing policy, naming it as a priority under the National Reconstruction Fund. On 17 May 2022, he wrote to Tasmanian forestry workers, pleading for their vote:

I promise you that, if I become Prime Minister, a government I lead will not shut down the native forestry industry in Tasmania … I will take up the fight against them—

Referring to the Greens—

to protect your job too.

Not even a year on, the Prime Minister has broken this promise as well. He's made a desperate, dodgy deal with the Greens in return for support for the National Reconstruction Fund—a deal which prohibits investment in native forest logging in the so-called reconstruction fund.

The bill also undermines investment certainty in national priorities, with the government changing Australia's national manufacturing priorities on a political whim, undermining investment decisions and eroding investor confidence. This is particularly pertinent to the space industry, complementary medicine and, to a lesser extent, recycling. The government's new priorities are too vague. The government don't know where their focus should be in order to drive investment into specific sectors. This is typical of Labor, choosing to spray money indiscriminately instead of continuing investment certainty for our manufacturers and industry.

The government has displayed a callous lack of understanding for how these delays may have already damaged these projects. But one of the key pillars of this new manufacturing strategy was our strategic decision to bolster Australia's capability in the space sector. We 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. The government has chosen to effectively 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 on which this shift in focus was made. The government must address the critical issues affecting our manufacturing, not tinker with a proven model. Power prices are forecast to spike—not to go down but to spike—by 56 per cent. I say to those in the gallery that, if you've already seen your power bills go up, they're about to go up a whole heap more, and you can thank those opposite for that. That is also to the businesses that are now going to be pushed to the brink. It's time this government delivered inflationary support for industry and put forward a plan to deal with these spiralling power prices.

Finally, the fifth reason the coalition will not be supporting this National Reconstruction Fund in its current form is the complete fiscal irresponsibility that it shows. Delivering funding well in excess of the coalition's Modern Manufacturing Strategy, an additional $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. So $10 billion of your money—$10 billion from those sitting in the gallery and every Australian taxpayer—won't be subject to any scrutiny in this place. Those opposite, the Labor government, will be able to put that money wherever they like. We know how those slush funds work and benefit their mates in the unions in this country—not small businesses, not Australian manufacturers and certainly not Australian families. We know that financial structures similar to the one underpinning this bill have drawn criticism from the IMF, who stated:

Implementation of below-the-line activity through newly created investment vehicles (National Reconstruction Fund, Rewiring the Nation, and Housing Australia Future Fund) should be phased appropriately, and, more broadly, a proliferation of such vehicles should be avoided.

The IMF is saying that it should be avoided. Other than that, this is the important part:

Cost-of-living support in light of high energy prices should be targeted, aimed at protecting vulnerable households and small viable firms.

Let's not forget that Labor is carelessly rushing through a total of $45 billion of off-budget spending. How's that transparency going, guys? Do you remember that new kind of place? Well, we know that hasn't worked; we saw a disgraceful performance by one of your frontbench cabinet ministers last week in this place. You promised more transparency, but instead you've moved $45 billion of off-budget spending, with no accountability, no oversight and no transparency.

The bill hasn't passed, and already unions are licking their lips at the prospect of the NRF and have listed their demands. A third of the board positions are hand-picked by the Australian Council of Trade unions, the ACTU, that bastion of morality—not! Their positions will determine who gets access to funding and an enterprise agreement with unions as a precondition to make an application. Applicants must not have engaged in conduct that treats workers 'unfairly'. That's a very vague term and a vague way of saying, 'If you're not with the unions, you're against them,' and demanding that applicants commit to direct employment. So, if contractors or an indirect workforce are used, they must be employed on the same conditions as the direct workforce. This essentially enshrines compulsory unionism if you want to be a successful applicant. It's for these reasons—amongst others, but for these five reasons primarily—that the coalition will not be supporting this bill in its current form.

11:49 am

Photo of Barbara PocockBarbara Pocock (SA, Australian Greens) Share this | | Hansard source

I rise to speak to the National Reconstruction Fund Corporation Bill 2023. The bill as I expect it to be amended creates a powerful new lever to move us further and faster towards a renewable future, towards improved employment and more secure jobs and towards strengthening and rebuilding our industrial manufacturing and agricultural base. It is a pathway towards better jobs and less pollution. The bill will increase flows of finance into priority areas of the Australian economy, financing the businesses, governments and other entities through loans, equity, guarantees and a wide range of other financial instruments. It requires that those investments will be solely or mainly Australian based, but the Australian government would otherwise have full discretion to define those priority areas. These are jobs in Australian companies for Australian citizens. It's focused on manufacturing and technology priorities and rebuilding our industrial base, which has been hollowed out over recent decades.

We see funding of up to $3 billion for renewables and low-emission technologies; $1.5 billion for medical manufacturing; $1 billion for value adding in resources; $1 billion for critical technologies; $1 billion for advanced manufacturing; and half a billion dollar for value-adding in agriculture, forestry, fisheries, food and fibre. These areas need support and investment to encourage their shift to innovative technologies and a long-term future. The fund will be funded by an initial $5 billion in equity and a further $10 billion by July 2029.

It is vital that we support our essential industries as they make the transition from fossil fuels and carbon intensive production to renewables and a low-pollution future. This is vital in our manufacturing, in our agriculture and broadly across our economy. We also must stop using public funds on new coal and gas and on the construction of gas pipelines, and we must not finance in any form native forest logging. I'm very proud that the Greens took a proposal to the 2022 election for a 'Made in Australia' bank that would support and finance manufacturing innovation and relocalising our supply chains. That was a very important policy, and I see many features of that policy in this bill before us today, especially through the amendments that we have secured that prohibit any investment in coal, gas and native-forest logging.

We need leadership to foster our local industries. Our history tells us how important the leadership of governments is to growing those industries in South Australia, in Adelaide and in places like Whyalla, Port Augusta and Port Pirie, let down over many decades by sporadic, intermittent investment, losses of jobs and insecure communities. So many of our kids have to leave those towns because there is not secure, ongoing employment. We need our clean, green agriculture in places like South Australia to find its way to a post carbon pollution world.

Our history tells us how important good leadership and good support are to a long-term investment future for our industries. I lived in Newcastle, a place I love, for many years in the early 1980s, and I knocked on the door of the general manager of BHP as he announced thousands of job losses in that industry, asking him to employ more female apprentices. It was a bad day to make the request, but we've learnt a lot from that transition in the township of Newcastle and the Hunter Valley. That region has learnt that it's very important to make appropriate investments in the future as communities transition. They need early advice about the plans for employment changes; early support to make the skills development and create the employment bridges to the jobs of the future; and, most importantly, access to the kinds of funds that are embedded in this bill as they support the emergent, new industries and sectors that are the job creators of the future.

I've lived now for many years in South Australia, and we there also know a lot about what goes wrong when investment and industry policy falls off the rails. We know too much about underinvestment in our manufacturing industries in our state. It was the failure to back manufacturing in our state that resulted in an enormous amount of hardship and job losses. We certainly don't need leadership like we have seen by the coalition in the state of South Australia in our recent history. Our state is the poster child of how not to do industry development. Joe Hockey slashed the Commonwealth's co-investment in the automotive industry by a 'mere' $300 million a year in 2013, and South Australia lost more than 1,600 direct jobs in the Elizabeth plant and thousands of indirect jobs in the parts sector. For the failure to find a way to invest in that last part of our manufacturing sector in our state, car production, we lost thousands of jobs.

Many families never found their way back to having a breadwinner in their household. Many of those workers with decades of experience and skill were not able to find their way into a labour market for their future. We lost the opportunity to be leaders in the transition economy, to be the 21st century manufacturing hub that we really need, with highly skilled, well-paid workers producing cutting-edge electric vehicles powered by South Australia's world-leading renewable energy sector. We had so many losses from the failure of vision and the failure of an equity fund like this to underpin the transition to the vehicles and the manufacturing industry we need in the future.

Senator Hume spoke about this bill, calling it a 'Greens-Labor backroom deal'. If a backroom deal means discussion, negotiation, thought, looking at the evidence and working out how to find a way forward, then I'm proud to be part of it, because it's an arrangement that will result in an act which will put billions of dollars into backing our manufacturing program for the future. She also referred to slush funds. She referred to unions having a say over how such funds might be used. What a mistake.

Unions so often know through their members and their delegates what's actually going on on the ground. They know what's happening at Port Pirie or Whyalla. They know how our steel industry, our shipbuilding or our future manufacturing needs to be adjusted. Don't think those workers on the floor of GMH, in the years before Joe Hockey took a hatchet to them, didn't know what was going on and what might be done to save that manufacturing industry. Don't think they didn't have a contribution to make. The opposition has a lot of experience with slush funds. As I understand this bill, it is very far from a slush fund. If it is properly implemented—and I'm sure amendments will be considered in this place—it will ensure a strong governance structure and transparency of decision-making, which is what Australian taxpayers expect.

In place of the positive spend that we needed, Liberal governments in that period of GMH decline gave South Australia a consolation prize in the form of a defence manufacturing industry. Across a range of shipbuilding projects, this created a fraction of the local direct jobs for a spend in the billions. We got the trade of our automotive industry for a set of jobs in defence, so the opportunity to supply a really good, strong manufacturing base in our South Australian economy was missed. We missed the opportunity for supplying electric vehicles into the domestic market and fighting climate change. That all took a back seat to an ideological project led by Joe Hockey and others, and by that government and other governments, to build weapons of war that endanger the peace and stability of our region, rather than finding our way to a renewable, safe and low-polluting future.

It is not sustainable, economically or environmentally, for this nation to continue to be reliant on the resources sector. Australia should aspire to do more than extracting and exporting fossil fuels that poison our air and water and drive the climate crisis. Surely the skilled hands and minds of our manufacturing workforce have more to offer the world than weapons of war. Our rich biodiversity, in particular, is worth more as a pristine world heritage wilderness than it is as wood pulp or cheap furniture. We cannot build our future by investing in an old economy. We need to innovate and find new and creative ways of doing this.

One of the weaknesses in the bill, in my view, is that it doesn't make enough of our arts and culture sector, which is a powerful industry for generating employment. That sector employs more Australians than coal and gas or defence manufacturing, and it doesn't rate a mention in the fund's priorities, despite the industry being decimated by the pandemic. If we aren't investing in the creative arts, Australia risks losing the design workforce, which is essential to giving function and form to modern consumer products. We cannot add value by manufacturing what we can't sell and, in a competitive national and international market, aesthetics are the key to the success of goods and services: the lines of a car, the cut of a dress, the feel of a device or the layout of an app. Without serious investment in arts and education and all of our technical areas, and in the important national cultural institutions that help nurture and create talent and keep it where it is in Australia, we're letting ourselves down.

So we need to rebuild our manufacturing and agricultural workforce through skill development and through support for investment in industries that create well-paying long-term jobs. Workers should feel secure to put down roots in our communities and to live in thriving communities, not boom-and-bust communities based on polluting industries with short horizons. Our young people should be able to find their way into decent jobs—and into the training for them—in renewable, low-emissions technologies, in agriculture and in regional Australia.

Many aspects of this bill are very welcome, and it's essential also that we see benefits from it arising for women alongside men. Women need access to training, to participation in research and innovation, and to the jobs that investments through this fund will create in cities and regions. They need access, alongside men, to good-quality, decently paying jobs and to long-term career paths.

Because of our Greens amendments, this fund will not use public money to fund coal and gas. This is a really important aspect of this bill. The coalition, when they were in government, tried to use public money to fund coal and gas through the Clean Energy Finance Corporation and ARENA. They couldn't, because we Greens and Labor made it impossible. Now the National Reconstruction Fund will be similarly protected. It'll focus on genuinely fostering our agriculture, manufacturing, innovation and research, and I hope it makes appropriate investments in our universities, in our young people and in developing the capability to do research that is original and new and is transmitted into real action in our manufacturing and agricultural sectors. This is so much more important and useful than padding out the profits of coal and gas, which will increase carbon pollution.

We need an industrial future that provides decent jobs and offers our planet a safe place. This is the shift we have to make. We as a country are more than a quarry. We have a very enterprising, well-educated workforce which needs opportunities through investment and support from government so that our regions and our clean and green industries of the future offer our kids and our men and women the jobs that they can build a life on.

We need to go further. We have to stop approving new coal and gas. The 116 new coal and gas projects in the pipeline must not go ahead. The IPCC made it clear last week that the planet cannot tolerate any new coal and gas. That's where we need to go, and we need to invest in our industries outside coal and gas and outside logging our native forests—our industries of the future which give our country the sovereignty in its manufacturing and agricultural supply chains that will secure the products we need for our future. So we need no new coal and gas and a lot more secure, well-paying jobs underpinned by strong government support and mechanisms like those proposed in this bill.

12:03 pm

Photo of Matt O'SullivanMatt O'Sullivan (WA, Liberal Party) Share this | | Hansard source

I rise today to speak on the National Reconstruction Fund Corporation Bill 2023. It's an interesting name that's been given by the government to this bill. When I first saw the title, I thought it was a bill aimed at establishing a fund to maybe help communities that are recovering from natural disasters or from a state of low economic impact or activity. But this bill probably would have been more appropriately named the union slush fund bill or something like that, because it's quite a misnomer. Those on the other side have coined a new phrase—the Liberal-National 'no-alition—like it's some sort of zinger. We're all sitting back, having recoiled into our positions over here, because they've got us on these zinger claims.

We oppose policy when it's a dud deal. We oppose policy if it's going to be bad for the economy or if it's going to be bad for the Australian people. Indeed, we'll oppose policy if it's clearly not going to meet its objectives. If it's not going to address the issue that they say it will address, we'll oppose it because that money could be better directed or better spent elsewhere, which is the case with this bill. We're opposing this bill because we don't believe it's good policy. We don't believe it's going to set up Australia for a better future. It's a big issue. Australians rely on having cheap and reliable energy, but because of Labor's deal with the Greens on this bill, this bill prohibits coal and gas from receiving finance from the National Reconstruction Fund. We think that's a real mistake. The best way for Australia to be competitive, particularly on the international stage, is to utilise the advantages we have as a nation, and one of the best advantages we have as a nation is access to cheap and reliable energy. Other countries don't have. We can capitalise on that, take advantage of that and have a real impact. This bill, because of the dodgy deal that they have done with the Australian Greens, takes away the ability of the fund to fund important projects that will build into the future of this nation.

The Australian Aluminium Council said:

The single biggest factor in determining the location of future refining, smelting and manufacturing locations is reliable, internationally competitive, low emissions energy.

Surely, everyone here understands. You don't have to be an expert in energy or an expert in the generation of energy to know that wind and solar are not reliable. They might be a good source of energy while the wind is blowing and while the sun is shining. Developments in technology for when the sun is shining and the wind is blowing are improving. The products that harness that energy are improving and becoming more efficient in their manufacture and how they are made ready. But they are not reliable, because the wind doesn't always blow and the sun doesn't always shine. Everyone, surely, can understand that. But there does seem to be a lack of understanding that the best way for us to transition technology to those forms of energy—there might be better storage of that energy so it can be used when the sun is not shining and the wind is not blowing, through batteries or other means of storage, such as hydrogen technology, for example, and the production of hydrogen. No-one, anywhere in the world, has yet built a big electrolyser to produce hydrogen. It might happen, and over time, the development of those technologies could certainly make a big difference. What seems to be missing in the Labor Party, and most certainly from the Australian Greens, is the knowledge that gas is the transitional fuel which will maybe get us to that point, if it does result.

Labor cannot continue to demonise reliable energy sources such as gas if it is serious about addressing the issue of having a carbon-free future. We must consider gas as a transitional option. I say that as a very proud Western Australian, because we have enormous potential and we have enormous reserves of gas energy in Western Australia. We have become the world leaders in the exploration, production and delivery of gas. I invite my colleagues in this place to go up to the North West Shelf and the Pilbara and have a look at the projects that are operating up there. You will see some real ingenuity, particularly when it comes to carbon sequestration. The work that has been done in CCS is quite phenomenal, and you will be inspired by that. I encourage people to do that. Unfortunately, what we're seeing with this bill is a recoiling from that industry when we need it more than ever. We need it for the future of the economy. We also need it if we're going to have a serious ambition to cut emissions. Gas is the transitional fuel that enables us to get there.

The Labor Party, because they're so reliant on the Greens—be it here in this chamber or, on election day, relying on their preferences to get over the line in individual electorates—have to succumb to the demands of the Greens every time. We're seeing that on the Safeguard Mechanism (Crediting) Amendment Bill 2022, which we'll be debating later this week, no doubt. They have to give in, because that's the only way they will be able to pursue their agenda. But deep inside, in every single one, there is this demonising of traditional forms of energy, and gas is the traditional fuel that will really make a difference.

This bill also ignores the key economic issues, such as rising energy prices, labour shortages and supply chain disruptions. But we all know, when it comes to energy prices, Labor can't keep their promise. This bill will cause manufacturers to lose time. In this broken model it will take significant time for money to start flowing. The National Reconstruction Fund has a very poor funding model. This bill shifts from a competitive grants program to government acquiring equity and providing loans.

This bill is fiscally irresponsible, in our view, delivering funding well in excess of the coalition's Modern Manufacturing Strategy. It 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.

We're seeing recurring examples, unfortunately, of this government's arrogant response: telling industry what to think and how they should conduct business. The Prime Minister is very adept and more than willing to tell Australians how to suck eggs and, indeed, telling industry how to suck eggs. Remember, we saw this behaviour with the union jobs summit—the Jobs and Skills Summit—they had right at the beginning of this term of parliament. We saw with this summit that they had more union officials than Western Australians. I think there were only six or seven Western Australians invited to this great talkfest that was held here in the Great Hall. There were probably more Johns or Bruces at that conference than there were Western Australians. It's a shame. There were certainly a lot more union officials—significantly more union officials—than there were Western Australians.

I remember standing on polling booths during the election. Obviously, the government won. The Labor Party won the election. But they stood there, in Western Australia, right throughout the campaign, with signs up all over the place saying 'Put WA first. Vote Labor'. This bill and other examples like it are not putting Western Australians first. As a Western Australian senator that's what I'm here to defend, and they're not doing that. They didn't do it when they had their union talkfest, their union jobs summit. They had far more unions than they had Western Australians. They're not taking into consideration the very important industries that exist in WA and what will drive investment and the future prosperity of this nation.

The Treasurer's first budget, last year, was a missed opportunity to support industry and business in tackling the rising costs of workforce shortages and supply chain issues. Rather, they decided to stoop to their union paymasters and run a radical industrial relations agenda that is having a devastating impact on business, and the Albanese government has failed to rule out radical union demands as they rush through this National Reconstruction Fund. The unions are demanding. To quote the Australian Manufacturing Workers Union submission to the department:

The composition of the NRF Board must include two ACTU-nominated positions, two employer-nominated positions, and positions from representatives from academia and pro-union elements of civil society.

That's who's going to be running this slush fund once it's set up. It's going to be Labor aligned, union interested individuals—be they unions themselves or, in their own words, 'pro union elements of civil society'.

Mr Albanese is rushing this bill through, just like he rushed through the industrial relations bill late last year, side-stepping parliamentary scrutiny and avoiding appropriate consultation with industry. Australian taxpayers will be the ones who will end up wearing the recklessness of this bill. That's because the National Reconstruction Fund delivers on what the Labor Party and the unions want. Let me say that again: this bill, this fund, delivers on what the Labor Party and what the unions want, and not what struggling Australian manufacturers need. The bill hasn't passed yet, but probably will sometime today, and unions are already licking their lips at the prospect of the National Reconstruction Fund and have listed their demands. They can't wait for this bill to pass.

The Business Council of Australia said, 'To successfully diversify and transform Australia's economy, we need to get macroeconomics right. If we fail to do this, Australia will continue to fall behind our competitors.' Well, this government doesn't understand economics. Senator Paul Scarr often likes to pull out that Economics 101 book and quote from it. It's a very good source and something that lot on that side should probably read. Senator Scarr's very willing to hand it over, I'm sure, at any time that anyone from the economic frontbench want to take a look at it. It's clear that this lot over here don't have a grasp of basic economics. They don't have an understanding of basic economics and they're not getting the settings right with this bill. The out-of-control inflationary pressures currently being experienced by Australian families speak to that. This bill is actually going to add further fuel to those inflationary pressures that exist. This government do not build up industry confidence. Rather, they leave industry in the lurch and concerned that the current government will just change their direction on a whim. That is a real concern.

I get that deals are done in this place. The Australian Greens have done their deal, and possibly the crossbench have sorted themselves out on this, but I urge them to reconsider it. This is a big issue. Getting the settings of our economy right is critical to putting downward pressure on cost of living—that's the big issue Australians are facing right now. That is the biggest issue. I don't know if the Labor government realise that. They probably don't talk to enough people other than those in their little union circles. But let me tell you, you talk to anyone out on the ground—come with me to Western Australia and I'll introduce you to some people who are feeling it right now, who are feeling the cost-of-living pressure. They're under pressure because those opposite are not doing anything to address the issues that people are facing. This bill is only putting further inflationary pressure on the economy, and that's going to drive up costs even higher for people's living.

12:18 pm

Photo of Larissa WatersLarissa Waters (Queensland, Australian Greens) Share this | | Hansard source

I rise to speak on the National Reconstruction Fund Corporation Bill 2023. I'm really pleased, thanks to Greens amendments, that this fund can now facilitate decarbonisation and an actual focus on rebuilding manufacturing and a renewables industry, rather than propping up fossil fuels. The National Reconstruction Fund will set aside $15 billion to rebuild an industrial base in Australia. The NRF, as it's known, will have seven priority areas. Pleasingly, renewables and low-emissions technologies will receive $3 billion set aside in particular. The other priority areas include medical science; transport; value-add in the agriculture, forestry and fisheries sectors; value-add in resources; defence capability; and enabling capabilities.

I'm very pleased that the Greens have secured amendments that ensure that coal and gas and native forest logging are prohibited investments for this fund. This is the same amendment that was put in place by the Greens for the Clean Energy Finance Corporation and the Australian Renewable Energy Agency, or ARENA. This prevented the CEFC and ARENA from being used as a slush fund for coal and gas by the previous government. The amendment we have secured to the National Reconstruction Fund makes sure that the fund will be focused on the task of rebuilding a manufacturing base, not just propping up coal and gas corporations—who, frankly, are already overly subsidised and don't even pay their fair share of tax, all the while cooking the planet—and that the fund won't prop up native forest logging. But we managed to secure a further amendment to make sure that investments made by the National Reconstruction Fund board must align with Australia's legislated climate targets and any future updated commitment by Australia under the Paris Agreement.

We're very pleased to receive those amendments and secure those changes. In fact, we're pleased also because the National Reconstruction Fund looks remarkably similar to an election policy that the Greens took to the last federal election, where we elected a record number of Greens. We took a policy to create a $15 billion made-in-Australia bank and manufacturing fund. Because of the amendments that we've managed to secure to the National Reconstruction Fund, today that fund reflects much of what we had hoped and aspired for in that Greens made-in-Australia bank. The point of that was to decarbonise our existing manufacturing base and to make stuff again. Let's make stuff again in this country. We've got brilliant scientists. We've got skilled engineers. We've got a world-class workforce. If we back them and invest in our manufacturing industry we can tackle the climate crisis. We can strengthen local communities and we can create well-paid, secure jobs. There's no downside to that.

I'm reminded that Australian technology and Australian nous invented solar panel tech, invented wi-fi and invented the bionic aye. We used to make our own cars, and we could in fact do that again. We took a plan to that last election that, as I said, now looks remarkably like the National Reconstruction Fund. Under our plan we wanted a manufacturing Australia fund to help local manufacturers recover from the pandemic, move off coal and gas, and expand into new sectors. We wanted to use government investment to drive new export industries in green hydrogen and minerals processing and ensure that Australia could become a renewable energy superpower. We wanted to facilitate that rapid transition to 100 per cent renewables—which, of course, would create jobs and encourage new industries and innovation in the course of achieving that. And if we use low-cost green energy to rebuild our manufacturing industry we can support those new green export industries and bring back jobs that have gone overseas.

Manufacturing still has a place in Australia, and I'm so pleased that this $15 billion fund—which, as I said, remarkably resembles what we took to the election—can now support manufacturing, innovation, industrial decarbonisation and a relocalisation of supply chains. When we campaigned on this we referenced the fact that clean, cheap abundant energy from our vast solar and wind resources could be Australia's competitive advantage in net zero global trade, but only if we seize it. We know we've gotten further and further behind as the world decarbonises and moves towards 100 per cent renewables. But with such an abundance of sun and wind energy we could drive energy costs close to zero, which would see the return of manufacturing to our shores. Australia's manufacturing renaissance could occur in those areas where we know we've got an advantage in a zero carbon economy, from manufacturing electrolysers to heat pumps to battery technologies. But it could also extend to medical equipment and pharmaceuticals, to food and packaging projects. There's also great opportunities in supply chains for electric vehicle components, for wind towers and for public transport infrastructure made with emissions-free steel.

The manufacturing bank that we have envisaged, which this fund now closely resembles, would support manufacturing, innovation, industrial decarbonisation and a relocalisation of supply chains. In our minds it would have had a similar structure to the existing Clean Energy Finance Corporation and provide direct grants, equity investment, financing and concessional loan options, depending on the structure of the corporate applicants. And it would target small business, workers co-ops, green not-for-profits and social enterprise that are engaged in innovative production, research and development.

We need this more than ever, because Australia currently ranks 91st for economic complexity, because we've traded our previously self-sufficient manufacturing base for an entirely fossil fuel reliant economy of extraction. We are deeply reliant on a globally integrated open-market economy. Therefore, shocks abroad reverberate through the Australian economy. We saw that and felt that so viscerally during COVID. The mining boom has not translated into a sophisticated economy capable of handling those shocks. Rather, we've failed to build up an industry base or the infrastructure necessary to handle a bust in the resources sector. Previously, the former government accelerated the death of the car industry in Australia, and this really added a devastating blow to our manufacturing base. But we have the capacity to rebuild a strong industrial base with a focus on renewable energy.

Coming to the National Reconstruction Fund Corporation Bill 2023, this bill would invest in rebidding Australian industry and manufacturing, and it's a public policy outcome that the Australian Greens have long pushed for and very much welcome. We strongly support public investment in rebuilding manufacturing in Australia. Broadly stated, the aims of the fund are supported by the Greens, in particular a reinvigorated role for state led investment in designated priority areas of the economy. During the inquiry into this bill we heard some very persuasive evidence from a number of experts, including the Tech Council, who said, 'Given the long-term and strategic nature of these investments, governments are often the best placed actors in an economy to address this gap by being patient funders of strategic investments and crowding in further private investment.'

Whilst the aims of the National Reconstruction Fund were always consistent with Greens policy, we were very concerned regarding the potential for fossil fuel finance under the original bill as it was pro-proposed, prior to the discussions that my colleague Senator Allman-Payne and our leader, Adam Bandt, were able to successfully have with the minister. The legislation as originally proposed was wide open to abuse by governments that wanted to use the $15 billion for more coal, oil and gas, and that's a risk that the Greens simply would not take. We needed legislative restrictions to stop public money from being used to prop up oil and gas. As I mentioned, $11 billion in subsidies in cheap diesel and accelerated depreciation already get given every year to the big fossil fuel companies. That is too much. They certainly didn't need any more. We know that coal and gas are the main causes of the climate crisis, and to have any chance of getting the climate crisis under control and meeting even the net zero climate targets that this government claims to support—too weak and too late—there can be no new coal or gas projects. This is also the view of the usually conservative International Energy Agency. It's the view of the United Nations Secretary-General, Antonio Guterres, and it's the view of the world's scientists.

But, concerningly, there was nothing in the proposed legislation to prevent investment in coal and gas or in the projects that would lock in and extend the use of coal and gas. Anything that the government of the day chose to support could have been declared a priority area for investment in the future. Under the original proposed legislation the minister would have issued the investment mandate as a non-disallowable legislative instrument and then declared the priority areas of the Australian economy in the form of a disallowable legislative instrument. The minister provided a good deal of detail on the proposed priority areas, and we again thank the minister for his collegiate approach.

But the detail provided was effectively going to be a moot point, where there were so few limitations on what the government of the day could choose to direct NRF funding towards. When we asked in Senate estimates, the government confirmed that they could have used the $15 billion as a slush fund for coal and gas—although I don't believe they used the term 'slush fund', but certainly that was our concern. The Department of Industry, Science and Resources confirmed that the government of the day could have invested in coal and gas by simply changing the priority investment areas and subject to revised priority areas not being disallowed by the Senate. There was a real risk with this legislation that this government, or, indeed, subsequent governments, would have had almost unlimited discretion to declare priority areas for a gas fired recovery or a coalmine renaissance—flying in the face of global trends, climate science and community sentiment. This, in fact, was a view that was shared by some of Labor's own members, who made a submission to the department's consultation. In a submission to the Department of Industry, Science and Resources's consultation on the National Reconstruction Fund, the Labor Environment Action Network, or LEAN, stated:

LEAN strongly recommends that the NRF not invest in any technology which will support further fossil fuel development including discredited carbon capture and storage processes or 'clean gas or coal' technologies. All NRF investment should support the delivery of policy to deliver net zero by 2050, an end to extinctions and delivery of Kunming-Montreal Global Biodiversity Framework obligations. All proposals should be tested for alignment with the government's existing commitments and policy priorities.

Those were the words of the Labor Environment Action Network. They were not alone. Many other submitters highlighted the fact that coal and gas should not play a part in the future of modern manufacturing in Australia, including learned experts such as Ms Lee, who is the CEO of Beyond Zero Emissions. She said:

When we looked at shoring up and giving confidence to the manufacturing sector and the businesses in it—nobody is looking for any fossil fuel input streams for that. What we hear are people looking at the time frame for when they can turn off existing coal and gas use in their facilities, and this is because, for the facilities that we are looking at, everyone is dependent not just on Australian financiers but also on global finance, so the medium- to large-end-of-town businesses. All of that investment money is looking for ways to decarbonise, so we're seeing that in so many commercial, financial and other businesses. There's a whole lot of pressure on these businesses from all sides—from shareholders as well, for those that are public—and all the pressure is on transitioning to renewables. The question is: how fast? There is a need to make sure that energy is reliable today, but there is no increasing demand that we see for future-proofed manufacturing to have any fossil fuels.

It was against that background that we were insistent, and successfully so, in our request that this fund be precluded from investing in coal and gas or in native forest logging. Our amendments create a class of prohibited investments within the legislation that explicitly bans the National Reconstruction Fund from financing the extraction of coal and gas, the construction of gas pipelines and the logging of native forests. As I mentioned before, we also secured an amendment that investments made by the board will have to align with the legislative climate targets and any future updated commitment by Australia under our nationally determined commitments under the Paris Agreement.

We now have an opportunity to actually invest in regional Australia to build stuff again, to make our economy more resilient and self-reliant and to genuinely give regional communities a sense of opportunity. As we transition off coal and gas and towards 100 per cent renewables, let's ensure that we've got a strong manufacturing base for those communities to aspire to work on and to help build the things that our new clean, green economy will need and will be based on. The Greens are really pleased to have secured amendments that ensure this fund can't just be a slush fund for coal or gas or for native forest logging, and we're very pleased that it might kickstart local manufacturing again.

12:33 pm

Photo of David FawcettDavid Fawcett (SA, Liberal Party) Share this | | Hansard source

I, too, rise to make some remarks on the National Reconstruction Fund Bill 2022. I'll talk briefly of the overview of the bill and some of the areas that the coalition has concerns about. I'll also touch on the issue of rhetoric versus reality because I'm hearing a lot of rhetoric from those opposite about what has occurred over the last 10 years and it is simply not matched by the reality on the ground. So I want to touch on a few of those points and put a few facts onto the public record here around what has actually been occurring.

I'd like to talk specifically about space, which was an area of focus for the coalition's modern manufacturing fund. In our home state of South Australia we have seen a huge amount of investment and growth, and it's something that is missing from this bill from the government.

I'd like to talk about opportunity. There's been a lot of talk here about Australia becoming resilient and self-reliant, but it will need a change to the way government—via the persuasion of, in particular, the Department of Finance—deals with the Commonwealth Procurement Rules and breaking the negative cycle which has existed for many years around how the Commonwealth views startups and small companies when it comes to contracting, as opposed to defaulting to the safe option of a big company, often offshore.

Lastly, I'm going to touch on the point of energy. Those opposite have been talking a fair bit about energy and what they see as opportunities. But, again, the rhetoric, the ideology and the narrative which is being put forward is directly contradicting the science out of the IPCC, the economics out of the OECD and the engineering out of the International Energy Agency on the impact of an overreliance on variable renewables moving into an economy, as opposed to having baseload power, and also the role of abatement on fossil fuel projects. So there's a fair bit there, and I'll see what I can get through in the remaining 12 minutes that I have.

I have a few concerns. Colleagues have spoken about the economic issues and the fact that this fund doesn't address some of those key enablers, and I will come to power shortly. They've talked about delays. Not only have we seen delays built into how this legislation is put forward, but one of the things that were deeply distressing to industry in South Australia was that, for companies that had indications from the coalition that they had been granted funds under the Modern Manufacturing Initiative, those funds were delayed, causing huge interruptions to their capital productivity. The money they had put aside to co-invest in new capability and a new workforce was then put on hold, which was a significant handbrake on the development of manufacturing in South Australia.

There's a concern about national priorities. I will come to the report of the Joint Standing Committee on Foreign Affairs, Defence and Trade, which looked at the lessons of COVID and why it is so important for the Commonwealth to set and invest in national priorities, collaborating with industry so that we can get national resilience in that area.

On the funding side of it, the coalition put some $5 billion into the Modern Manufacturing Initiative. It was against quite specific areas which were targeted as national priorities, including things like space, as well as medical products, food products and defence—a range of sectors that were important for our economy. It was a competitive based program in those important sectors, whereas here we have $15 billion, $10 billion of which is not targeted against anything and will not be subject to further parliamentary scrutiny. That is an enormous amount of taxpayers' money to not have a structured, strategic plan for its investment or the oversight of the parliament, as the Australian taxpayers' representative, to make sure that it is spent wisely.

I come to the topic of rhetoric and reality. One of the things that have been said frequently by those opposite is that Australia's manufacturing went into a nosedive as a result of the coalition government and particularly the demise of Holden. I encourage people who are interested in this to go back and have a look at a speech I gave in August 2015 on this exact topic. It goes to my experience as the member for Wakefield—a seat which no longer exists, unfortunately. That was the electorate in the northern suburbs of Adelaide, as well as regional areas, where General Motors-Holden had their manufacturing plant.

I was a frequent visitor to the manufacturing plant, dealing with Mike Devereux as the head of the organisation at that time, as well as dealing with Ian Macfarlane, as the minister for industry, and the then Prime Minister, Prime Minister Howard, about opportunities for us to invest. There were countless times when I spoke to General Motors about things like co-investment by the federal government to bring research and development on things like electric vehicles and other opportunities here to Australia. But the consistent message was that General Motors was a global organisation that had made investments in other countries, both in research and in manufacturing, and the ultimate demise of that industry, as Mr Devereux later said in public, was unrelated to decisions by the federal government about funding they would or would not make. Those opposite can point as often as they like, but it's like someone saying the earth is flat. You can say it a thousand times; it doesn't make it true. When the Australian public listen to this debate, I would encourage them to challenge the rhetoric by looking for the facts. Just because those opposite say a hundred or a thousand times that it was then Treasurer Joe Hockey who caused the demise, that is not matched by the reality that I know, as the then local member in that last period of the Howard government, and of the statements made by Mr Devereux subsequently around why General Motors made that comment.

Importantly, it's good to look at what actually happened, not just to the 80 per cent of workers who went on to find other jobs in the manufacturing industry but to the parts suppliers. For example: for the Nissan Leaf, an electric car, there was a firm here called Nissan Casting that went from one shift a day struggling to provide parts into General Motors to, after that change of focus, running three shifts, seven days a week to keep up with export demands for parts. There is Heliostat, a subsidiary of Precision Components, who started manufacturing solar components. Again, that was a significant investment in an export capability into the solar industry. We have seen a whole range of investments in manufacturing through the coalition's time that have led to a range of important things. In 2022 the National Centre for Vocational Education Research found that the proportion of Australian businesses with apprentices and trainees was at its highest level since 2011. What that is saying is that the government's investment not only in training but also in creating the environment where the private sector wanted to invest was leading to people coming on board.

Here are just some of the grants in South Australia. In October 2014 the Industry and innovation magazine made the comment that Australia's manufacturing was in decline. 2014 was at the end of a long period of those opposite being in government. They were talking about companies that were actually moving ahead. One of those, just to highlight, is a company in South Australia called REDARC. REDARC is an innovative company, and Commonwealth support—the AMGC grants, for example, in February 2021—led to an expansion of the workplace there, adopting things like industry 4.0 technology. The point REDARC make is that advanced technology doesn't necessarily mean fewer jobs; it means better jobs. A $20 million expansion by REDARC created over 100 jobs there. REDARC are one of Australia's best-known suppliers into not only the automotive industry but also the defence industry, particularly with lighting and other components into naval programs overseas. Tindo Solar, again in South Australia, I think are the only company here in Australia that actually makes solar panels. There was a $5.3 million investment, assisted by $1 million from the Australian government, to expand their facility to actually become a significant manufacturer of solar panels for the Australian market, creating jobs and creating sovereign capability. Those are the things that were happening under the coalition government.

In the space sector, the Centre for Defence Industry Capability, for example, is investing in small companies like Inovor. I've had a fair bit to do with Inovor. They are a company in South Australia making satellite buses. They are an example of the kind of company where we need to continue the investment not just in grants but in contracts to give them the opportunity to grow. The federal government, under the coalition, invested some $65 million into the nation's space industry. Not only did we actually create the Space Agency; we invested in the industry because of the opportunity not only to have sovereign capability but also to get into the $12 billion worth of international market. The Space Agency also received funding around Australia's launch capability, some $32.5 million, to help the local sector gain what they call flight qualifications. But what do we see under this plan? That focus on space has gone. Space industry is vocal in media at the moment, highlighting the concern that the lack of focus and the lack of investment will hurt the sector and its growth, which was stellar—no pun intended—under the coalition, and which is now at risk of stalling.

One of the significant things that is disappointing is that the planned strategic update for the space sector, which was launched by the coalition in an attempt to bring together the streams of both civil investment and defence investment has gone nowhere under this Labor government. Given the strategic update of 2020, which highlights the threats that Australia is facing, this is a classic example of where sensible procurement policy from the Commonwealth could actually help Australia have sovereign capabilities. So we're not talking about just making a widget for a satellite that's going to be made overseas but the kind of investment we see in South Australia, where we now have a space manufacturing park—funded partly by the coalition government, partly by the then Liberal government in South Australia and partly by industry—which is looking to manufacture satellites.

We have the launch capability, funded in part by the coalition government, to have three space ports in Australia capable of launch. What it means is the kind of outcome that governments should be looking for are very specific; in this case, military response options. How do we work with Australian industry, not to make a widget but to have the capability to build a payload for ISR—intelligence, surveillance and reconnaissance—the satellite bus, the vehicle they put it in, and the launch platform, so that, in a conflict, if the assets we rely on, often from Europe or particularly the US, are either taken out of service by an adversary or deployed to areas of greater priority, we have the ability, within a short time frame, to design an appropriate payload, put it in an appropriate bus, put it into a launch platform and launch it into an orbit that will meet our sovereign needs. Companies that can achieve that for Australia will be well placed to get products town the global market. That's the change of thinking we need.

I'm going to run out of time to talk about energy, but the last part on this procurement is that many companies, particularly in the defence and national security space, but even for things like personal protective equipment, need the government to move beyond giving them a grant to actually purchasing things from those companies. PPE is a classic example we looked at during the COVID-19 report my then committee, the Joint Standing Committee on Foreign Affairs, Defence and Trade, conducted. We found that the focus of both the private sector and governments of both persuasions to go competitively to the international market for things like respirators and surgical masks meant that in 2015 Kimberly-Clark closed down the last remaining spun bond factory here in Australia, which is a critical component.

Through COVID there was massive investment to rebuild the capability to make things like respirators, but what we find is that government departments largely continue to buy through panels or other policies that push them to overseas suppliers. There has been some change in some states and some change in the Defence department here, but what we need to see is federal governments not just looking at these large industry policies from a grant perspective but then following through with contracts, because it's the contracts that will actually enable these businesses to become sustainable, and to invest more in workforce and innovation so we can have sovereign capabilities, whether it be in space, in medical products or in other areas. On another occasion, I will come back to talk about energy, because that is a critical thing for this nation's future.

12:48 pm

Photo of Dorinda CoxDorinda Cox (WA, Australian Greens) Share this | | Hansard source

I rise to speak to the National Reconstruction Fund Corporation Bill 2023. Firstly, I want to echo the comments of my colleagues Senator Allman-Payne, Senator Barbara Pocock and Senator Waters and acknowledge the huge win that Senator Allman-Payne and our leader, Adam Bandt, have managed to negotiate with the government. Due to the hard work of my colleagues, the National Reconstruction Fund now and under future governments will not fund fossil fuels and native logging projects. It was confirmed in the most recent round of Senate estimates that there was nothing currently stopping the proposed corporation investing in these destructive industries. In the past we've seen the coalition try to use public money to fund coal and gas through the Clean Energy Finance Corporation. They were unable to do so because of the guardrails that the Greens and Labor put in place. Now we have the same assurance for the NRF, which won't be used to fund the climate crisis.

The amendments that the Greens have secured will ensure that the National Reconstruction Fund will be focused on creating high-quality jobs across a diverse economy, particularly in regional Australia. Senator Brockman, my fellow Western Australian senator, earlier spoke of the importance of this for our home state. These amendments, which passed in the other place, create a class of prohibited investments within the legislation to explicitly ban the National Reconstruction Fund Corporation from financing the extraction of coal and gas, the construction of gas pipelines and the logging of native forests. This is absolutely critical in the climate crisis because we simply can't keep pouring petrol on the fire while we're trying to put it out.

The Greens have also secured a government amendment so that the investments made by the board will have to align with the legislated climate targets and any updated future commitment by Australia under the Paris Agreement. I cannot understate how important this is, as the Greens continue to fight for stronger climate action and for the government to listen to the climate science. This is a huge win for our climate, jobs and the economy. It's aligning us with a global movement and not propping up some of those dying industries. The Greens took a policy for a manufacturing fund to the election. I was in Kalgoorlie in regional Western Australia talking about the importance of investment in manufacturing. We strongly support public investment in rebuilding manufacturing in Australia. Every cent spent on coal and gas will wreck the climate and divert much-needed funding from manufacturing initiatives, especially in regional Australia.

This win is extremely timely, as the IPCC report was released last week. This will be the last report until the 2030s. Many are seeing this as a final warning, as we are on track to fly past 1.5 degrees of warming and beyond under the current regime. This report clearly states that we cannot open any more new coal and gas projects and that we must rapidly move away from this approach. That means that there is a sprint required, not the casual walk that we've been taking, away from fossil fuels. We have to do that to move towards a decarbonised economy. That means a 75 per cent reduction in emissions by 2030 is required. We are not on track to meet this, for the key reason that this government's emissions target is not even close to what we need. It also means that we must stop giving public money—yes, that's right: taxpayer money—to fossil fuel companies to fund these dirty projects. I'm so pleased to see that this fund will not be doing that, but there is still a long way to go before we see not a single cent being given to these greedy companies, which, quite frankly, don't need or deserve this money. In the 2021-22 financial year, the Australian government handed out $11.6 billion in fossil fuel subsidies. Let me repeat that: $11.6 billion was paid just in subsidies to the fossil fuel industry. That's almost the size of the National Reconstruction Fund that we're debating today.

Let's imagine what could be done with that money. It could be added to the NRF, to almost double it. It could support our health sector and our education sector. It could help with flood recovery. We are in a cost-of-living crisis, and a government that is willing to place billions of dollars straight into the pockets of these companies that are seeing record-breaking profits is absolutely unacceptable. This $15 billion fund will help support our economy, create jobs, drive regional development and grow our sovereign capability, but we must ensure that it's sustainable and that these investments will help us face the climate crisis, not make it worse. This fund, if we use it well, could go a long way to helping transition away from fossil fuels and into that decarbonised economy. What could also go a long way in helping the transition would be a commitment to a national transition authority, something that Senator Allman-Payne has also done some amazing and incredible work on—so I congratulate her.

As the Greens spokesperson for resources, I'm pleased to see that this will not be used as a slush fund for greedy fossil fuel companies but will help us extract the resources we will need as we transition away from fossil fuels: the minerals we need to make our solar panels, wind turbines and batteries. I'm also pleased to see that the NRF will be used to invest in renewables. However, again, it is so important that we ensure that this is done sustainably and also not just in consultation with traditional owners but actually with their free, prior and informed consent and with First Nations people owning some of the projects that are happening on their country. This goes beyond simply signing an Indigenous land use agreement and paying them some royalties. This will ensure that the traditional owners are deeply involved in every aspect of projects that are happening on their lands and that they will have a say about the types of projects, the locations, and who will operate and maintain them and be involved in restoring their country.

There is so much possibility for First Nations people to be the owners and beneficiaries of what is happening on their lands, and I would like to point out that the benefits aren't only in terms of money and jobs. These projects could foster connection to country and culture and having people work on the land. First Nations people know which areas are sacred and therefore should be left alone, which areas need to be preserved and protected from development, and which areas will be suitable for solar panels, wind turbines, offshore wind and whatever else is required, since we have been the custodians of this country for 65,000 years.

In terms of mining of critical minerals, we must ensure that mine rehabilitation is at the forefront of these projects—in fact, it must be included as part of the approvals process—and that companies behind these projects are actually committed to the process before they begin. Far too many of these companies will take government money to operate mining projects—again, without free, prior and informed consent from traditional owners—and make enormous profits, which they give to their executives and shareholders, and, at the end of the life cycle of the mine, cry poor and claim that they cannot afford to rehabilitate the mine. So either the infrastructure is left on site, pits are not closed and potentially harmful chemicals are not cleaned up or, as we have seen with the Northern Endeavour case, the government—but really that is a pseudonym for the taxpayer—has to step in and foot the bill.

Again, think of everything that we could do with this money that is tied up in bailing out mining companies. We cannot keep making the same mistake. It is unacceptable that mining companies are allowed to get away with this in this country. We know that many companies will put away bonds, but, as we've seen with the Ranger mine, these bonds are put away to cover the rehabilitation costs as estimated at the start of the mine—in this case, some 40 years ago. Now they don't come close to covering the cost, because since the mine opened the standards have changed and there have been many unforeseen circumstances that are not accounted for.

We have a lot of work to do in this space. I acknowledge that we need these minerals for the transition to the net-zero economy, but we must carefully consider the need for these minerals and the risks to water and to the environment and also the risk of destruction of cultural heritage. This will not be an easy balance. I know we must consider all of those factors, but we cannot keep contaminating water sources, destroying sacred sites and driving native and endangered species out of their natural habitats.

On another note, this fund will be critical in the research and development of new technologies and methods. As the science portfolio holder, I'm glad to see this investment in research and development. We need to see this through from the research and development stage to production, preferably here on Australian soil.

Another exciting potential for this fund that has not been widely discussed is in growing native botanicals and bush foods. This brings so many benefits in relation to food security, caring for country, supporting First Nations businesses and creating and sustaining a First Nations led bushfoods market, both domestically and internationally. It also brings investment in this sector that can support connection to country and culture, and this is particularly important in northern and regional Australia.

There are hundreds, if not thousands, of plants that grow only in Australia and have been used in a variety of ways in First Nations communities for thousands of years—for food and also for medicine. Recently, I've noticed an increase in the use of these ingredients by companies that are not First Nations businesses, and, due to this, these ingredients are not always used in a culturally appropriate way. I'll give an example. The moodjar tree, commonly known as the Christmas tree, which grows in Western Australia, contains the spirit of our old people, the spirit of our ancestors. I have seen companies place this into alcohol, particularly gin, which is not an appropriate use. If we make sure that First Nations people are not only growing these botanicals and bush foods but also owning the businesses that are processing and developing the products using them, this could be avoided, with good legislation and regulatory frameworks. I really hope the government sees the large number of benefits that this might bring by encouraging and supporting First Nations businesses to access the fund to grow native botanicals and bush foods on our country. This fund represents so much opportunity for First Nations communities, for addressing the climate crisis, for science and technology and for jobs right across this country.

At the request of Senator Whish-Wilson, I seek leave to move the second reading amendment in his name, on sheet 1896, highlighting the need for the NRF to invest in a circular and decarbonised economy, as such investments can bolster Australia's capability and reduce supply chain vulnerabilities.

Leave granted.

I move:

At the end of the motion, add ", but the Senate:

(a) is of the opinion that:

(i) building a circular economy is a central element of delivering net-zero emissions,

(ii) a circular economy can bolster Australia's capabilities and reduce supply chain vulnerabilities, and

(iii) the benefits of a circular economy could add $210 billion in GDP by 2047-48, creating an additional 17,000 full-time equivalent jobs; and

(b) calls on the Government to:

(i) invest in projects that facilitate the establishment of a circular economy for renewable energy and other products,

(ii) incorporate circular economy principles into the Investment Mandate for the National Reconstruction Fund; and

(iii) seek that the National Reconstruction Fund Board give regard to outcomes and advice from the Circular Economy Taskforce".

1:03 pm

Photo of David ShoebridgeDavid Shoebridge (NSW, Australian Greens) Share this | | Hansard source

I rise to speak to the National Reconstruction Fund Corporation Bill 2023. Before commencing, I want to acknowledge the contributions of my Senate colleagues, Senator Cox and Senator Allman-Payne. I particularly want to give credit to our regional Queensland senator, whose work has been critical to ensuring amendments that will see this $15 billion fund deliver long-term security, long-term jobs and clean, renewable investment across not just her state of Queensland but the entire country. It's an example of Greens senators and MPs understanding their brief, talking to their community and then delivering real, measurable change in this place. We saw those amendments adopted downstairs, and they will make a nationally significant contribution to this bill.

The National Reconstruction Fund Corporation Bill is designed—from the Greens perspective, anyhow—to move us towards a decarbonised manufacturing industry. It will have an actual focus on rebuilding manufacturing and rebuilding a renewables industry, literally stepping into the gap that has been created by the dead years of the coalition government federally and, before that, a lack of strategic investment in green renewable manufacturing by the previous Labor government. But we should acknowledge just how much ground there is to cover. The last nearly decade of the coalition's dead hand on manufacturing, it's dead hand on any kind of investment in a renewables industry, its direct messages to that industry that the then coalition government didn't want those jobs, didn't want that investment, didn't want that future for Australia—we have to lift off that dead hand.

The Australian public went a long way to doing that in the last election, when they put in a minority Labor government and a big increase in Greens representation in this place and in the other place. We're hopefully seeing through that commitment from the Australian voting public, with millions of Australians not only throwing out the coalition but also voting in this government, a parliament that's going to look to rebuilding Australia, a government that will rebuild with those green jobs and that renewable investment. Critically, we're looking at this parliament, which sometimes looks like a petrostate with both major parties literally owned by the fossil fuel industry, somehow turning this parliament around and getting that investment in jobs that are not only going to be there for our kids but going to sustain our kids' and grandkids' future.

What will the National Reconstruction Fund deliver? This is a $15 billion fund to help rebuild an industrial base in Australia. The National Reconstruction Fund will have seven priority areas. The first is one that I've been passionate about throughout my political life, and that is renewables and low-emissions technologies. Again, this is about lifting the rotting corpse of the previous coalition government out of industry and out of manufacturing so that we actually have that future and will see significant investment in renewables and low-emissions technologies. We're talking about a $3 billion investment in renewables and low-emissions technologies, which will hopefully be leveraged with other investment from industry to make a significant difference.

The second priority area is in medical science. If you wanted a lesson in how important it is to have domestic capacity in medical science, we've just been through a three-year lesson on that with COVID. We've seen the need to have onshore manufacturing, facilities and R and D in Australia—that has been proven to us—I'm hoping we see with this that the parliament—or at least that part of the parliament sitting in the majority on this and supporting this bill, which includes the Greens—is listening. Again, the coalition are trying to tear it down and take us back to the 1950s. but, thankfully, a majority in this house are listening to those millions of Australians who want a different future and are putting aside $1.5 billion for medical manufacturing.

The third is transport. I've got to tell you how frustrating it is to see government after government in the past not actually investing in low-emissions transport but investing in reports and studies. If I see another study on a fast train from Sydney to Canberra or on a fast train from Sydney to Newcastle, but I don't see another fast train, I think, like five million other people from the Greater Sydney region, I'll have a singular revolt. We don't want another study, we don't want another brochure, we are not another episode of Utopia, which is what we really got from the coalition; we want investment in clean, green transport. I would love to be catching a low- or zero-emissions fast train home from here at the end of every session and, I can tell you, so would every other Greens senator and MP. Let's start making it happened with this kind of strategic investment in transport.

The fourth area is value add in the agriculture, forestry and fishery sectors—low emission, securing regional jobs, securing regional investments. From a New South Wales senator perspective, when you go to the western slopes and ranges in the southern half of our state of New South Wales or you go around the region of Oberon and see the jobs and industry and regional wealth that follows from investment in the plantation industry—rather than the destruction that happens in native logging—it gives you a sense of hope in how strategic government investment can fundamentally change lives in regional New South Wales. The Greens are hoping this will provide that value-add investment in industries like plantations. That will make a real and meaningful change for generations to come in regional NSW.

I'll speak later, briefly, about the amendments negotiated by my colleague Senator Allman-Payne that will prohibit investment in native forest logging. That's a critical part of ensuring this investment goes where it's needed—not in native forest logging but in plantations and value-adds, genuine long-term value-adds, in the agriculture, forestry and fishery sectors. It's also going to invest in value-adding resources. Again, that cannot—and must not—be fossil fuels. Thankfully, key Greens amendments will make that happen.

Investments in defence capability are a matter we will have a watching brief on. The obscene amount of money that this government seems to want to spend on defence is something that should trouble anybody interested in their kids' future. But if we are going to have an expenditure on defence, and there will be some, ensuring as much of that is spent locally, rather than as part of a global arms industry, is going to be an important way of keeping Australia safe without fuelling a global arms industry. And, lastly, in enabling capabilities. We're talking about, out of the $15 billion fund, $500 million for that value-add in agriculture, a billion dollars for the advanced technology and a billion dollars for critical technologies. This, I hope, will be nation-shaping investment.

I want to highlight and give credit for the amendment moved in the other place on behalf of the Greens but negotiated by my Senate colleague. It secures an amendment that ensures coal and gas and native forest logging are prohibited investments from this fund. That was make or break for us with this investment fund. We told the government that straight up, in negotiations. We will not see billions of dollars more of public money going into coal and gas or native forest logging. That was an absolute red line in negotiations. Thankfully, we've been able to deliver on that, in the amendment in the other place.

Let's remember, that is the same amendment that was put in by the Greens for the Clean Energy Finance Corporation and ARENA. That prevented the Clean Energy Finance Corporation and ARENA being used as a slush fund for the coal and gas industries—as the coalition so wanted to do. The coalition has never seen a bucket of public money that they don't want to dip in to the corporate coffers of the fossil fuel industry. It has taken the Greens, using their balance of power in this place, to prevent Labor doing exactly the same with this bill.

Photo of Paul ScarrPaul Scarr (Queensland, Liberal Party) Share this | | Hansard source

Power sharing!

Photo of David ShoebridgeDavid Shoebridge (NSW, Australian Greens) Share this | | Hansard source

I'd like to call what we're seeing in this 'renewable power sharing' and delivering the hope and lifting that dead hand of the coalition off investment in renewables, in a green, clean future for regional Australia. That amendment also ensures that the NRF will be focused on the task of rebuilding a manufacturing base, because we don't have endless amounts of public money. Every dollar that we dip into the corporate coffers of the fossil fuel industry, the gas industry, every dollar we spend destroying our native forests, which I know is where the coalition likes sending public money, is a dollar we can't spend on building our manufacturing base.

I know that there are minor right-wing parties that want to see endless amounts of taxpayers' money—paid for by hardworking Australians—go into fossil fuel corporations. They love doing that. The Greens don't, and we won't let it happen on our watch. Those Greens amendments mean it won't happen on our watch.

The Greens have also secured an amendment that will ensure that investments made by the National Reconstruction Fund board align with the legislated climate targets and with any future updated commitment by Australia under the Paris Agreement. This will track in line as, I hope, our national targets become more ambitious and our climate targets become more ambitious and start getting close to meeting the science. This will mean that investments by the National Reconstruction Fund board need to also align with those improvements going forward.

Why do we need this investment in manufacturing? If you look at some of the data and compare Australia's economy with other economies around the world, we have an economy that is excessively reliant on the resources industry, with a lack of complexity that makes our economic future extremely fragile as those changes happen—as they will happen in the fossil fuel industry and other parts of the mining sector. Australia ranks 91st in the world for economic complexity, and that's because we have literally, through years of neo, of—

Photo of Paul ScarrPaul Scarr (Queensland, Liberal Party) Share this | | Hansard source


Photo of David ShoebridgeDavid Shoebridge (NSW, Australian Greens) Share this | | Hansard source

Thank you! I choked on the word 'Liberal'—in the Australian context, Paul—that's all! Through years of a neo-liberal economic policy agenda of tearing down every protection for local manufacturing, of handing it over to the brutality and the lack of love of the global market, we have literally destroyed our self-sufficient manufacturing base, to become an almost entirely fossil-fuel-reliant economy based on extraction. It's those industries of extraction that keep coming here and trying to derail national policy. That's why we need this key investment, to step back some of those aggressive attacks on Australian manufacturing that have been designed, really, to destroy manufacturing at the expense of a few extractive industries. That's why we need this investment through the National Reconstruction Fund.

What we saw from the coalition was literally the squandering of the mining boom—and we saw it partly from Labor, too—from the massive increase in offshore gas and the massive increase in revenues being generated by multinationals. Both the coalition and Labor have joined together to prevent there being a fair share of tax revenue being put into things like the National Reconstruction Fund to build our future. Tax concessions for big gas, tax concessions for big coal—that has been a joint ticket from the coalition and Labor over the last decade and a half. Hopefully, we are going to see some of that being turned around, because that has meant that the mining boom has literally been squandered. It hasn't translated into a sophisticated economy that is capable of handling the shocks that our economy will face in the future. That's why we have to have this spending to rebuild our industrial base.

I do also want to commend the second reading amendment moved by my colleague Senator Whish-Wilson talking about a circular economy. Building that into our planning is a critical way forward. With those comments I commend the amended bill to the Senate.

1:18 pm

Photo of Sarah Hanson-YoungSarah Hanson-Young (SA, Australian Greens) Share this | | Hansard source

I am speaking in support of this legislation, the National Reconstruction Fund Corporation Bill 2023. The Greens have been able to negotiate with the government to improve this package to ensure that the money that comes from the Reconstruction Fund is actually spent on high-quality jobs that are going to future-proof our nation. The key amendment moved by Senator Whish-Wilson is to ensure that none of this money is squandered by the fossil fuel industry, which for far too long has taken dollar after dollar—tens of millions; in fact, billions—of taxpayers' money in order simply to carry on polluting and ruining our climate. It is time it stood on its own two feet. It doesn't need any support from any type of government fund going forward. This should be the first break in handouts to the fossil fuel industry, the first break in what should be a long list of cuts to handouts to corporate welfare to the coal and gas industries in this country.

We heard the resources minister herself, Madeleine King, saying that, if fossil fuel industries can't stand on their own two feet, it's up to them. Come on then, Minister, scrap all the fossil fuel subsidies in this year's budget, scrap all the fossil fuel subsidies that continue to be a drain on the public purse and that in fact should be going into projects and programs that help everyday Australians and not line the pockets of these corporations who are continuing to pollute our environment. And, most of them, of course, are shipping all of their profits offshore as foreign entities. This amendment that the Greens were able to secure to ban this fund going to any fossil fuel projects is fundamental, and it is a shot across the bow to an industry that needs to evolve and move on.

When you hear of those statistics and when you hear the science from the world's scientists and through the IPCC report released last week, we are running out of time, not just as a nation but as a globe, to tackle dangerous global warming. For every step we take to reduce pollution, you have the fossil fuel mafia doing what they can to make the job even harder. In the dying throes of the fossil fuel industry, they want to double down and get it while they can to make the profits while they can. And, yet, time after time after time, they have their hand out for public subsidies and support from the public purse. So this amendment is fundamental to how this parliament and the current government must start dealing with the fossil fuel mafia in this country—no more corporate blackmail from any industry that is pushing our climate to the brink, that is sucking our public purse dry and that continues to mislead the Australian community with their bogus greenwashing claims.

I would like to commend the huge amount of effort that my colleagues in this place have put into getting this bill to a point where we can support it. Senator Allman-Payne, from the great state of Queensland, has put in an awful lot of effort in relation to this piece of legislation and is someone who understands that if you want a thriving community you must invest in the jobs of the future, is someone who understands what real transition means for a community like Gladstone and is someone who is willing to roll up her sleeve sleeves and put in the effort to ensure that when we pass pieces of legislation in this place it actually has a real impact on people's lives. So I would like to thank her for her efforts in this.

This legislation of course is being debated on the day that the Greens have just announced that we will pass the government's safeguard legislation. It, too, when first drafted, did far too much to help the fossil fuel industry than it should have. Thanks to the abilities of the Greens to negotiate and drive a hard bargain, we will now see pollution under the safeguard mechanism go down and not up. It is ludicrous that the government thought that they could put a piece of climate legislation in 2023 into this parliament that would have allowed pollution to grow and with the rank greenwashing that comes from suggesting that as long as you can offset everything you can keep pushing pollution sky high. Well, the Greens' hard cap on pollution will mean that actual pollution goes down, not up, and that is a significant win for the climate and a good move from the Greens in this place to deliver an outcome that is much better for our environment. I'm sure that as the days roll out this week we will hear the squealing from the mouthpieces of the fossil fuel industry in this place about how hard done over they are. Well, let me say this. For every squeal of the fossil fuel industry this week over these negotiated amendments, there is a smile from mother nature. Every time you hear the mouthpieces of the coal industry over these coming days as we debate this legislation, just remember that future generations will know and will be thanking us for pushing pollution down, because we are on the brink of climate collapse, and tinkering around the edges is not enough.

What we've been presented with by this government has been a pretty weak attempt at dealing with the issue. Their climate target is too weak. Their impost on the fossil fuel industry is too weak. But we have managed to improve and strengthen that legislation so that, for the first time, we now have a cap on real pollution; pollution will go down, not up. That is exactly what the scientists are telling us we need to be doing—and we need to be doing quickly.

We also know we have to clean up the bogus offsets in this country. It's not good enough to have a set-and-forget scheme where some people are raking in millions of dollars because no-one's really looked at the legitimacy of their offset projects. One of the key negotiations the Greens have managed to get out of this package is that the integrity of those carbon offsets will be frozen, looked at, considered, reviewed. Those offsets that are found to be dodgy will need to be scrapped. It beggars belief that it even had to be a negotiation, frankly. If we are determined to set the train back on track to have a liveable climate, we desperately need to be acting now.

But of course we know who pulls the strings in this country in terms of the politics of both major parties in this place, and it is the coal and the gas industry. They continue to roll out the donations. They continue to have the slick PR machines. They greenwash their way through the halls of parliament and put their hand out every chance for a public subsidy and a cash handout from the public purse. It's time that came to an end. Both in this reconstruction fund and through the safeguard mechanism negotiations, the Greens have blown a hole in the fossil fuel industry in this country, and we are very proud of that. I can't wait to hear the squeals from the fossil fuel mafia.

The types of manufacturing jobs that we need to be investing in and using this fund to invest in should be the high-quality jobs of the future. And I say this as a proud South Australian. When our car industry collapsed in South Australia, workers were promised new manufacturing, and they're still waiting. Funds like this should be used to invest in an electric car industry in Adelaide. They should be used to invest in the renewable energy industry right across the country, creating the real clean jobs of the future. We know that, during COVID, one of the biggest problems we had was accessing supplies, because we had seen a decade of undermining and unhelpful policy from the government, which meant we had a sovereign risk. We couldn't even make—

Photo of Louise PrattLouise Pratt (WA, Australian Labor Party) Share this | | Hansard source

Senator, you will be in continuation. It is now time for two minutes statements.