Greens demand changes to stop $15b measure turning into ‘fossil fuel slush fund’

Labor will be forced to negotiate bans on coal and gas in its new $15 billion industry fund after the Greens moved to amend the government’s draft law, widening a political fight over a program that is meant to create new manufacturing jobs.

The move will see the Greens use their leverage in the Senate to demand the changes after the Coalition decided to oppose the National Reconstruction Fund, leaving the government no choice but to seek a deal with the crossbench.

Queensland Greens senator Penny Allman-Payne said the fund lacked clear guardrails that dictate it can be used for.Credit: Alex Ellinghausen

Industry Minister Ed Husic has opened talks with the Greens and others on the crossbench while accusing the Coalition of abandoning working-class Australians by refusing to vote for the investments in manufacturing.

Deputy Opposition Leader Sussan Ley has ramped up her attacks on the fund, a Labor policy pledge at the last election, on the grounds it will need $15 billion in Commonwealth debt and waste taxpayer funds.

The amendments could constrain the new fund, which is to be led by an independent board and chief executive, because it is meant to help manufacturers, some of whom use gas, and invest in projects that create more local value in the resources sector.

The Greens prepared their move on Wednesday ahead of a vote in the lower house. However, the bigger clash will come in the Senate where Labor can pass laws with support from the 11 Greens senators and at least two others – such as independent David Pocock, former Greens member Lidia Thorpe and Tasmanian senators Jacqui Lambie and Tammy Tyrrell.

Greens industry spokesperson Penny Allman-Payne welcomed the goal of the fund to help the manufacturing sector, but wanted the draft law changed to restrict the investments, rather than leaving this to an investment mandate or other document.

“A central role of government should be investing in nation-building projects and that’s why we support getting public money where it needs to be,” she said.

“But in the absence of clear guardrails that dictate what the fund can be used for there is a strong possibility that the National Reconstruction Fund could be turned into a ministerial slush fund for fossil fuel finance.

Opposition Leader Peter Dutton told Coalition colleagues “we are the parties of the working class”.Credit: Alex Ellinghausen

“The Greens have been very clear that we won’t support any new coal and gas, and the legislation in its current form is wide open to abuse by governments that want to use the $15 billion for more dirty, climate-killing projects.

“As well as stopping investment in coal and gas, we will seek further amendments in the Senate to strengthen public investment and tackle the climate emergency.”

The Coalition’s decision to oppose the NRF bill, made by the shadow cabinet and endorsed by the Coalition party room on Tuesday, has galvanised debate over the policy by putting the plan in doubt and forcing Labor into negotiations over the outcome.

“It is another example of rushed legislation,” Ley said on Wednesday. “It’s a $15 billion fund and it’s not wise expenditure.”

The dispute over manufacturing comes after Opposition Leader Peter Dutton told colleagues on Tuesday that he saw the Coalition as the party of the working class.

“We’ll continue to put pressure on the government because we are the party of families, we are the party of small business and we are the parties of the working class,” he told the Coalition party room on Tuesday in their first meeting of the year.

“We are the Coalition that will inevitably have to clean up Labor’s mess when we come back into government.”

Husic took aim at that remark during question time by accusing the Coalition of neglecting manufacturing, letting carmakers shut down over the past decade and voting against the energy bill last December that sought to cut gas prices for producers.

“They voted against Australian manufacturing continually and they have learned nothing, they stand for nothing, they deliver nothing, they oppose everything – that is their standard,” he told parliament.

“You cannot be a party of the working class and pull the rug out from underneath the working class in the way your government did with manufacturing in this country.”

The argument in parliament turned the NRF into a wider test of support for workers, with Prime Minister Anthony Albanese, Treasurer Jim Chalmers and Resources Minister Madeleine King using questions from Labor MPs to attack the Coalition on the issue.

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