What the federal government calls, “one of the largest peacetime investments in Australian manufacturing capability”, the $15 billion National Reconstruction Fund (NRF) passed the senate late on 28 March. Senate amendments will now return to the House of Representatives.
Industry and science minister, Ed Husic, said, “The most successful modern economies are built on strong, advanced manufacturing capability. We are delivering on a significant election commitment that will position Australia as a maker of high value-added products and creating good secure jobs in the process.
“The NRF shows the Government is serious about investing our human capital to keep Australian smarts on shore,” Minister Husic said.
The fund was first tabled in parliament in early December last year and is the cornerstone of the government’s “Future Made in Australia” agenda.
The NRF is modelled on the Clean Energy Finance Corporation, governed by an independent board making independent investment decisions through loans, guarantees, and equity, including with institutional investors, private equity, and venture capital.
When it was launched, Husic said the fund’s goal was to “better connect industry to science and ensure Australian innovations and discoveries are commercialised and scaled onshore”.
The NRF will invest across seven priority areas:
- renewables and low emission technologies;
- medical science;
- transport;
- value-add in agriculture, forestry and fisheries;
- value-add in resources;
- defence capability; and
- enabling capabilities.
Earlier this month, minister assisting manufacturing and trade, senator Tim Ayres, said, “There is also big potential in pulses, complementary proteins, health and wellness, and aquaculture. With government, industry and researchers working together, we can galvanise these food and agribusiness opportunities to move Australian products further up the global value chain.
“One of these will be value-add in agriculture, forestry, and fisheries, with $500 million of the NRF targeted to unlock potential by value adding in these areas as well as food and fibre.”
Things looked a bit wobbly in February, when the Coalition flatly refused to support the bill, the Greens put strict conditions on their support, saying no funds could be invested in coal or gas projects, and the bill was referred to a senate inquiry.
But Husic and finance minister Katy Gallagher were playing the long game. When the bill was first tabled back in December, the pair established an NRF Reference Group to guide the fund’s development and its investment mandate, and announced public consultations to further define the scope of the seven priority areas and how the fund would make investment decisions.
At the time, Husic said, “We are taking a collaborative approach and consulting across industry, the finance sector, unions, and the community on the implementation of the NRF. This consultation is a crucial first step to guide these significant investments.”
Fast forward to February, and it appeared the Coalition’s position caught the government off guard. Husic told ABC RN Breakfast host Patricia Karvelas the opposition had “dealt themselves out” with a “knee-jerk reaction” it had not flagged.
He was more conciliatory regarding the Greens.
“I respect that Parliamentarians will put their views and the parties will put their views forward and it's up to us to work it through. Not to do it in the way we've seen in times past where we just have a rolling brawl. Sometimes you'll have differences,” Husic said.
A week later, a deal had been struck with the Greens guaranteeing the fund would not provide any financing for the extraction of coal and gas, construction of gas pipelines, and logging of native forests.
With the bill passing the senate, Husic said, “We genuinely wanted this bill to be a moment where parliament came together to support the national interest. I am pleased the crossbench engaged constructively on this important bill that will help rebuild Australia’s sovereign capability.
“We want Australia to be a country that makes things, a nation that has faith in its know-how and ability to get the job done.”
More information on the NRF is here.
