Coalition says Future Made in Australia lacks clarity for manufacturers

The Coalition has warned that Labor’s legislation fails to provide ‘clarity’ for manufacturers about how the scheme works in practice, as industry urges the government to ensure a ‘level playing field’.

Opposition Treasury spokesman Angus Taylor has said there were doubts over how taxpayer funds would be distributed under the Future Made in Australia program. Picture: NewsWire/Martin Ollman

The Coalition has warned that Labor’s Future Made in Australia legislation fails to provide “clarity” for manufacturers about how the scheme works in practice, as industry urges the government to ensure a “level playing field” as well as transparency for businesses seeking support.

Labor introduced legislation last week for a national interest framework to ensure investments made under the Future Made in Australia scheme were subject to proper rigour, with the Coalition not yet indicating if it will support the industry assistance shake-up.

However, opposition Treasury spokesman Angus Taylor told The Australian there were doubts over how taxpayer funds would be distributed under the program and questions still remained about the operation of the flagship Labor scheme.

“The Coalition, along with economists and industry leaders, have raised serious concerns about poor consultation, opaque tender processes and bad policy,” Mr Taylor said. “The legislation does not provide any clarity for manufacturers.”

According to the legislation introduced last week, Labor’s proposed national interest framework will require the Treasury secretary to conduct “sector assessments” and project proponents to develop plans before Future Made in Australia funds can be distributed.

But these guardrails will not apply universally to all investments made by Labor’s key off-budget funds such as the $15bn National Reconstruction Fund, the $20bn Rewiring the Nation plan, $10bn Housing Australia Future Fund or $4bn Critical Minerals Facility. The Australian understands they will apply only to those investments deemed to fall under the Future Made in Australia banner.

A spokesman for the NRF told The Australian its investments were only required to “comply with our legislation obligations”, which were contained in the separate National Reconstruction Fund Corporation Act.

Australian Industry Group chief executive Innes Willox. Picture: Aaron Francis/The Australian

When contacted by The Australian, neither Housing Australia, administering HAFF investments; Export Finance Australia, administering the Critical Minerals Facility funds; nor the Clean Energy Finance Corporation, administering Rewiring the Nation’s spend, would detail which investments under their respective off-budget funds would be required to comply with the Future Made in Australia legislation.

Australian Industry Group chief executive Innes Willox told The Australian that for the credibility of the program, it was “essential that clear and transparent criteria be followed when the federal government distributes taxpayer money from its Future Made in Australia program”.

“This is important to give industry confidence that the program is rigorous, there is a level playing field and there is no picking winners,” he said.

Mr Willox said industry had watched a range of government support programs come and go over the years with varied degrees of success, and the NRF was a disappointment.

“The failure so far to gain traction for the much-touted National Reconstruction Fund, which seems to have been folded into a broader program, is a salient warning that government programs to support industry are more difficult to implement than they first appear.”

He said the Future Made in Australia program would “take time to develop” but argued it needed to “go beyond supporting just narrow sectors of the economy or choosing one technology over another”.

“Putting all our eggs in one basket sets us up for failure,” Mr Willox said. “The funding priorities and criteria need to be clear and there needs to be accountability for it to be successful.”

A PsiQuantum wafer. The US-based company has received $1bn to build a world-first quantum computer in Brisbane. Picture: Supplied

Two contentious billion-dollar announcements were made under the Future Made in Australia program before the government even introduced the legislation for its national interest framework.

These included $1bn for US-based PsiQuantum to build a world-first quantum computer in Brisbane and $1bn for the Solar Sunshot program in the NSW Hunter Region to make more solar panels in Australia.

The Australian understands neither project was subject to a “sector assessment” or required to complete a Future Made in Australia “plan” as set out in the legislation.

But government sources insisted both had gone through their own rigorous assessment processes.

Mr Taylor told The Australian Labor had failed to tackle more pressing issues faced by struggling manufacturing businesses, including doing too little to tame inflation.

He said manufacturing insolvencies had tripled since the last election, domestic energy prices were among the highest in the world, invoice defaults were at record highs, declines in new orders were at lows not seen since the global financial crisis, and growth rates were anaemic for Australian industry.