Bang for buck a priority for National Reconstruction Fund

Industry Minister Ed Husic has confirmed that all emissions-reduction technologies including carbon, capture and storage will be considered under the $15bn ­National Reconstruction Fund.

Industry Minister Ed Husic. Picture: NCA NewsWire / Gary Ramage

Industry Minister Ed Husic has confirmed that all emissions-reduction technologies including carbon, capture and storage will be considered under the $15bn ­National Reconstruction Fund if they deliver a “return to the taxpayer”.

Mr Husic, who in May cast doubt over whether CCS would ­effectively slash emissions, “work at scale and give us the best bang for buck”, said “we’ve set up a target fund on energy to manufacture the technologies that are needed in the transition towards net zero”.

Speaking after the first meeting of the fund’s board in Sydney on Monday, Mr Husic said “this is a situation where we can reduce emissions and increase jobs”.

Gas companies have lobbied the government not to freeze out CCS technologies, which they say will help slash emissions and meet Australia’s climate change targets.

“Where there are ideas or investment proposals put forward by Australian firms to help out, the NRF can consider those and where they stack up invest in them,” Mr Husic said.

“All these ideas have got to be able to stand on their own two feet and go through the independent assessment of the board and ­deliver a return to the taxpayer.”

The fund’s board, chaired by Martijn Wilder and including former Australia Post chief executive Ahmed Fahour, former Coalition government minister Kelly O’Dwyer and ex-Australian Workers Union boss Dan Walton, will make independent decisions providing loans, guarantees or equity to Australian-based investments.

The Australian understands the fund’s investment mandate will be finalised within three months, allowing the funding vehicle to approve applications under a first tranche of $5bn.

Responding to calls from the Business Council of Australia last month to narrow the fund’s investment mandate and support fewer industries rather than its seven priority areas, Mr Husic said business leaders have had ample time to contribute to the fund’s structure.

“We released the details of the National Reconstruction Fund in opposition in March 2021. The NRF became law in April 2023,” he said. “We’re happy to work with business, and the BCA did support the NRF at the time the legislation was being considered, but you need to get the ideas to us in time and they haven’t really engaged with that policy suggestion before it became law.”

Describing the establishment of the fund as a “milestone ­moment”, Mr Husic said it would be a critical vehicle to “revitalise manufacturing, sharpen our ­national technology edge and generate secure, long-term jobs”.

Mr Husic said the board would have the “authority and power to make investment calls in the ­national interest”. “What we are doing is a clean break from the past. We are not using grants in a political interest like the Coalition did. We’re investing money in the national interest,” he said.

“We don’t want colour-coded spreadsheets as we saw with the Coalition and decisions with taxpayer dollars made in political ­interest.”

Mr Husic said the Albanese government had reviewed the Morrison government’s manufacturing grant schemes and upheld some existing funding commitments.

“(Those) that couldn’t stack up or weren’t able to work in the ­interest of recognising taxpayer dollars didn’t necessarily proceed because they would have altered significantly the grounds in which they were applied for,” he said.

The National Reconstruction Fund Corporation Act was given royal assent in April after Mr Husic secured crossbench support in the Senate to push the government’s marquee election manufacturing policy through parliament.

Mr Husic said “each of the eight independent board members bring the skills needed to ­reboot Australian manufacturing and our industrial capabilities”.