The federal government is in pre-budget mode with prime minister Anthony Albanese announcing a new wave of economic reform under the banner of the Future Made in Australia Act. Thin on detail but heavy on promise, Albanese says it's time for the government to step in and shore up the country for a more competitive global economic reality.
Albanese said the country needed to be “clear-eyed” about the economic realities of this decade and the government “more strategic, more sophisticated and a more constructive contributor”. The reform would “drive growth, improve competition, lift productivity and create the next generation of prosperity and opportunity”.
Also, treasurer Jim Chalmers had recently said, “Australia’s economy is not productive enough, not resilient enough and not competitive enough”, so, game on, as they say.
Albanese said this was a time for the government to be hands on, not a spectator, and that reactive patchwork approaches had to be replaced with maximising long term opportunity ones.
Albanese drew a picture of a changed economic world, with countries restructuring their economies on a scale as significant as the industrial and information revolution, but faster.
“Domestic economic policy settings are being re-shaped by a new set of global economic imperatives. And domestic economic priorities are re-shaping trade policy.
“Nations are drawing an explicit link between economic security and national security,” he said, going on to cite changes in government economic policies across the world.
The US has implemented a ‘small yard, high fence’ approach to critical industries, and introduced the Inflation Reduction Act (US$400 billion to support clean energy industry) and CHIPS Act (US$280 billion to boost semiconductor manufacturing). The EU introduced its European Economic Security Strategy, Japan has the Economic Security Promotion Act, Korea is framing its economic policy around a National Security Strategy, and Canada has brought in new rules to tighten foreign direct investment in its significant critical mineral reserves.
“All these countries are investing in their industrial base, their manufacturing capability, and their economic sovereignty.
“This is not old-fashioned protectionism or isolationism – it is the new competition,” he said.
“We must recognise there is a new and widespread willingness to make economic interventions on the basis of national interest and national sovereignty.
“The heavy lifting of economic transition and industrial transformation is not being done by individuals, companies, or communities on their own. It is being facilitated, enabled, and empowered by national Governments from every point on the political spectrum.
“Because this is not about ideology, it’s about opportunity – and it’s about urgency.
“Securing jobs, attracting investment, and building prosperity has never been a polite and gentle process where every nation gets a turn – it’s always a contest, it’s always a race.
“Governed by rules, driven by competition. And Australia can’t afford to sit on the sidelines.”
So, what will the Future Made in Australia Act actually do? According to Albanese it will bring together – in a comprehensive and co-ordinated way – a whole package of new and existing initiatives.
Existing programs – the National Reconstruction Fund, Solar Sunshot, Hydrogen Headstart, Critical Minerals Facility, Net Zero Economy Authority – will come under the Act, as will any new initiative that falls into this net:
- affordable and reliable clean energy;
- a better and fairer education system;
- skilled workers, secure jobs, fair wages;
- modern infrastructure;
- shared ambition with business and private capital; and
- and a positive regulatory environment.
“Our government is investing in manufacturing to make more things here. We’re building the infrastructure and clean energy to power new growth. We’re training people in new technologies. We’re facilitating private sector innovation and catalysing new investment. We’re building an economy with more secure work and fairer wages. That’s what I mean by a future made in Australia. A future where we compete and win for the great prize of new prosperity.
“And win our way – by staying true to the values that make this the greatest country on earth. Fairness at work, equality in society, compassion and dignity in our social safety net and an unshakeable belief in opportunity for all. Reform that holds no-one back, progress that leaves no-one behind. A stronger, fairer, and more prosperous future – made right here in Australia,” he said.
Industry reaction
Advanced Manufacturing Growth Centre (AMGC) CEO, Jens Goennemann, said there was a lot riding on Albanese’s announcement.
“An inspiring speech, a gesture, or media release is only the beginning. The real job must be done by real companies, real entrepreneurs, and real people with real skills getting their hands dirty to keep the environment clean – in concert with Government,” Goennemann said.
He said the AMGC welcomed the prime minister’s enthusiasm and was encouraged by his pledge to proactively “back Australia’s comparative advantages”.
“The winds of change are well and truly blowing. Let’s lean into it and make it an agent of change and opportunity.”
For national employer association Ai Group CEO Innes Willox, while the “broad contours” of the plan foreshadowed several positive directions, it needs to be fleshed out before judgements made.
“The most obvious risks in today’s announcement relate to the policy and political failures over more than a decade that impede our progress. Too often, government policies distort activity, create unintended consequences and are slow to adapt as circumstances change and flaws are exposed. Yet we are today invited to make a leap of faith that more government guidance and support is the answer to our ills. Industry will naturally view the promise of more government intervention with suspicion, if not alarm,” Willox said.
The challenge for the government in delivering Future Made, will be getting itself to deliver on existing responsibilities and new commitments, he said.
For the welding industry body, Weld Australia, the act presents a critical opportunity to bolster local economic participation, particularly in the renewable energy transition.
But CEO Geoff Crittenden said, “It is essential that specific, enforceable local content requirements are formally incorporated into the Future Made in Australia Act.
“Australian businesses have long advocated for specific, measurable local content requirements in government contracts. However, tangible examples of local content procurement policies are yet to materialise in Australia.
“Besieged by vague specifications, a lack of enforcement, and loopholes that allow for non-compliance, the initiatives have struggled to provide local businesses with a fair shot at government contracts. Current requirements are fragmented across state jurisdictions and often fail to lead to new production capacity. Without action, the Future Made in Australia Act will be just as toothless.
“The federal government must work with the state and territory governments to implement a coordinated, nation-wide approach to local content requirements to maximise impact and enable new production capacity. The government must be specific when it comes to the use of Australian materials and components, and registers of business providers and their level of domestic versus foreign ownership.”
