Anthony Albanese rushed uncosted $1bn loans program in response to Trump tariffs
Treasury documents reveal Anthony Albanese's $1bn trade policy was announced without costings and cannot be implemented under current investment rules.
Anthony Albanese rushed out an uncosted $1bn trade policy in response to Donald Trump’s “Liberation Day” tariffs, promising zero-interest loans that were not allowed under investment rules underpinning the $15bn National Reconstruction Fund.
Treasury and Department of Finance documents confirm the Prime Minister’s marquee $1bn Economic Resilience Program for “firms to capitalise on new export opportunities” was announced on April 3 without any costings analysis conducted by the government or a third party.
The Australian can reveal that Mr Albanese lodged a request for formal costings on April 17 but the work on budget impacts and assumptions wasn’t completed until April 24 – nine days before the federal election.
Ahead of the election, senior Labor sources revealed new legislation would be needed to change the NRF’s mandate, which currently focuses on seven priority areas and requires investment returns of between 2 and 3 per cent.
Amid industry concerns about timely access to a raft of prominent government funding vehicles, which they believe are moving too slowly, the official costings documents show the government provided no clear direction on the “term of the (zero-interest) loans being offered” through the National Reconstruction Fund Corporation.
The government has set a hard termination date for the capped $1bn trade fund of June 30, 2027, with assumptions that $500m in zero-interest loans would be provided in 2025-26 and 2026-27.
“The costing request (from the Prime Minister) did not set out the term of the loans being offered. A term of seven years has been assumed based on the currently assumed term for loans made through the NRFC. The costing request did not anticipate impacts beyond the forward estimates,” the Treasury and Department of Finance costings document said.
“The underlying cash balance (analysis) reflects foregone loan interest revenue only. The fiscal balance impact reflects: concessional loan discount expense, $165.3m in 2025-26 and $165.3m in 2026-27 (and) foregone interest revenue (equivalent to the underlying cash balance amounts) and unwinding concessional loan revenue.”
An August 13 statement from Trade Minister Don Farrell after meeting state and territory counterparts reiterated Mr Albanese’s April promise to “establish a new economic resilience program through Australia’s National Reconstruction Fund”.
Mr Albanese’s “five-point plan” in response to Australia being hit by Mr Trump’s tariffs blitz also included a critical minerals strategic reserve, $50m for sectors hit by tariffs, prioritisation of Australian-made products and stronger anti-dumping laws.
The costings document prepared by Treasury and the Department of Finance assumed a raft of methodology including that “all zero-interest loans would be repaid in full at the end of the loan term”.
A spokeswoman for Industry Minister Tim Ayres said on Wednesday the economic resilience program was “in its design phase” despite $500m being allocated for zero-interest loans for 2025-26.
Asked when the government would change the NRF investment mandate allowing the zero-interest loans and about interest from the private sector to take up the loans, she said “in a time of global uncertainty, the Albanese government is focused on supporting Australian industry”.
“The program, facilitated through the National Reconstruction Fund, is currently in its design phase. This is an election commitment which we will deliver, costed in the usual way,” the government spokeswoman said.
Amid concerns about global trade upheaval as Mr Trump imposes blanket tariffs, Jim Chalmers, Senator Farrell and Senator Ayres on Thursday announced the government would abolish 500 “nuisance tariffs” to cut red tape and deliver savings for businesses.
The Treasurer said removing the tariffs – on top of 457 tariffs abolished in July last year – would help streamline about $23bn worth of trade and save businesses $157m in annual compliance costs. If the nuisance tariffs are cut as planned following Treasury consultation, the government says products including tyres, televisions, wine glasses and airconditioners could be cheaper.
Dr Chalmers said the government must act on “multiple fronts at once, and this is part of ensuring that we do that in the trading system”.
Senator Farrell said “our whole message to the United States has been we don’t support the introduction of these tariffs that you’ve imposed on us, even though we have the lowest tariffs of any country in the world”.
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