Greens and teals give Labor the funding blues

Labor is facing a parliamentary showdown over its centrepiece manufacturing policy amid pushback from the Greens and teal independents.

Industry Minister Ed Husic. Picture: Getty Images

Labor is facing a parliamentary showdown over its centrepiece manufacturing policy amid pushback from the Greens and teal independents who are demanding a $15bn investment fund is not used to finance fossil-fuel projects.

The Australian understands teal independents including Mackellar MP Sophie Scamps and Curtin MP Kate Chaney are considering supporting a move from the Greens to ban the proposed multibillion-dollar National Reconstruction Fund from investing in any projects inconsistent with emissions-reductions targets.

Goldstein MP Zoe Daniel, another teal crossbencher, also said the fund “must not become cover for fossil fuel investment”.

Crossbencher revolt has been mounting following private meetings with Industry Minister Ed Husic this week, as the government seeks to win support for its lead co-investment vehicle designed to re-energise domestic manufacturing and reduce the nation’s dependence on supply chains.

The proposed fund, modelled on the Clean Energy Finance Corporation, will co-invest across seven priority areas including renewables, low-emission technologies, medical science, and defence capabilities.

Wentworth teal MP Allegra Spender also expressed concern about the economic impacts of injecting billions of taxpayer dollars into the economy amid surging inflation and a large deficit.

The pushback comes as the Greens prepare to introduce amendments to the bill on Monday to ensure the fund does not become a “ministerial vessel for fossil fuel finance”.

The fight comes after the ­Coalition, Greens and crossbenchers successfully inflicted the first major parliamentary defeat for Anthony Albanese on Thursday, joining forces to block government regulations overriding requirements that superannuation funds publicly disclose donations and payments.

Labor is facing a pushback on a number of legislative fronts, including manufacturing, climate change and the next tranche of ­industrial relations policy, with the Greens threatening to take a “more aggressive” approach to scuttling legislation.

Despite the government’s majority in the lower house, a parliamentary fight could spell trouble for Labor when the legislation gets to the Senate, where it will need to secure the support of the Greens plus two crossbenchers.

The government will be forced to negotiate with the Greens in the upper house who are demanding a ban on new coal and gas projects after the Coalition confirmed it would oppose the fund.

The Australian understands ACT senator David Pocock is expected to be briefed by Mr Husic on the legislation next week, and is yet to finalise a position.

Ms Scamps said the legislation must be explicit that funding was not spent on “any projects inconsistent with emissions-reductions targets”, including the logging of native forests and building new infrastructure to support fossil fuel projects.

Ms Scamps also criticised Labor’s bill, which grants ministerial discretion to appoint members to an independent board that will be set up to make ­investment decisions.

Pro-climate independent Warringah MP Zali Steggall confirmed she would be voting with the Greens, and has been lobbying the government to ensure small and medium sized businesses were prioritised for funding.

“While I support the legislation, I met with Minister Husic to discuss potential improvements which include making sure small and medium enterprises are a priority for funding and ensuring transparency and independence for the board,” Ms Steggall told The Australian.

“I also support the Greens’ proposed amendments to make sure funding does not go towards fossil fuels, but instead is directed towards emerging technologies.”

Ms Spender, whose blue-­ribbon Sydney electorate encompasses some of the wealthiest voters in the country, said she ­supported the growth of high-value Australian businesses but any additional spending needed to increase productivity.

“Any additional spending needs like this to be looked at through the lens of the inflation challenge,” Ms Spender said.