The Albanese government’s Future Made in Australia plan risks making Australians poorer and evolving into protectionism, undermining decades of reform aimed at creating a vibrant trading economy, the Productivity Commission has warned.

The commission on Thursday reiterated calls for Labor to ensure that billions of dollars in green subsidies were subject to rigorous cost benefit analysis, urging the government to develop “off-ramps” to terminate assistance that failed to create internationally competitive industries.