Ai Group welcomed the opportunity to provide a submission on the Future Made in Australia bills.
Future Made in Australia (FMIA) is a package of industry policies aimed at supporting the development of new industries associated with the net zero transformation and economic resilience of the Australian economy. It offers targeted government support for private investment in sectors where intervention is necessary to align economic incentives with Australia’s national interest.
Ai Group welcomes FMIA’s focus on encouraging private investment to support economic resilience and the net zero transition. It recognises that business possess the skills, capital, market information, risk management capabilities and flexibility required to develop Australia’s future industries. It also recognises that economic incentives are sometimes not aligned to enable such investments, and that targeted and proportionate government support has a role to play in ensuring that investor incentives align to the national interest.
Ai Group also welcomes and strongly supports the degree of rigour that FMIA introduces to industrial policy in Australia. The FMIA Bill establishes in legislation a National Interest Framework which identifies specific criteria for whether sectors and/or projects should warrant public investment.
Principles related to Australia’s competitive potential in an industry, support for private sector investment, genuine value-for-money, and specific criteria for economic resilience and/or net zero outcomes are equally important. They will help ensure that public investments are proportionate and targeted, and deliver on their intended objectives.
Provisions which vest Treasury with responsibility for conducting independent sectoral assessments before support is offered, and to codify expectations for supported projects in written FMIA Plans, will help ensure public support is offered in a rigorous, evidence-based and transparent manner.
This rigour brings a welcome degree of transparency and accountability to FMIA. It ensures that decisions to offer public support are based on clear policy principles, and can be assessed through a robust and transparent framework. It also allows the performance of FMIA support measures to be evaluated against objectives, and adjustments made as market structures and policy learning evolve.
However, further reforms are needed if FMIA is to genuinely deliver on its transformational objectives for Australian industry. There is an urgent need to increase investment in industries supporting net zero transition and economic resilience. Australia’s experience of supply chain disruptions during the COVID pandemic highlights how swiftly economic security challenges can arise. The long-term success of the decarbonisation efforts needed – whether in generation, distribution, transport or industry – depend on investments being made today.
Ai Group argues that six reforms are required to ensure FMIA successfully delivers on its stated objectives, and does so on the timeline required. These are:
This submission outlines the industry context, rationale for and benefits of these six proposed reforms to the FMIA package. If implemented, these reforms will ensure FMIA drives greater investment in the resilience and net zero transition industries Australia needs for our future security and prosperity.
