Business lobby groups are urging the federal government to boost Australia’s competitiveness to ensure the country would reap the intended benefits from the recently announced Future Made in Australia Act.
The proposed legislation, aimed to boost domestic manufacturing and facilitate the transition to renewable energy, has already received positive feedback from several concerned sectors.
For one, the act will provide $1.2 billion (US$775.5 million) for the Future Made in Australia Skills Plan to focus on closing the gap in key areas of skills shortages with new places at university and TAFE—an initiative welcomed by the education industry.
“Universities are central to this task—providing the highly skilled workers and the research and development to guide Australia through both challenges and opportunities in the coming decades,” Universities Australia CEO Luke Sheehy said. “Our graduates and our researchers hold the skills, knowledge and ideas that will continue to power the economy, spur Australia’s productivity and define Australia’s success in the coming decades.”
While the Australian Academy of Technological Sciences and Engineering (ATSE) said that the Act will help arrest Australia’s slowing productivity growth and declining economic complexity, the organisation also called for more funding for research and development.
“We need an immediate and sustained increase in R&D funding to make sure Australia doesn’t get left behind. Australian research and innovation will be the driving force behind our future prosperity. Australia cannot afford to neglect R&D any longer,” ATSE CEO Kylie Walker said.
Both the Clean Energy Council and Climate Council expressed support for the initiative, saying that it would help cut down pollution and cement the country’s advantage in clean energy.
“This is exactly the sort of leadership Australia needs to tackle climate pollution, generate clean jobs, and ensure a brighter future for our kids. In the U.S., we’ve seen similar policies dramatically ramp up investment and create tens of thousands of new jobs,” Climate Council CEO Amanda McKenzie said.
Businesses Call for Competitiveness, Policy Adjustments
However, the Business Council of Australia (BCA) said that the federal government must address Australia’s competitiveness settings and make it the cornerstone of the legislation to ensure that the private sector also invests in meaningful projects.“We welcome the government’s intent; however, critical to the success of this announcement will be reducing red tape, and at the very least ensuring there are no extra layers of red tape added to an already complex operating environment,” BCA CEO Bran Black said.
“Incentivising investment with the right regulatory settings is crucial, particularly for our net zero transition, so we reach our energy potential and make the most of our critical minerals advantage.”
The BCA has long been urging the government to respond to the U.S. Inflation Reduction Act (IRA)—a law that establishes programs, funding, and incentives to expedite the transition of the U.S. to a clean energy economy—and to establish a similar policy that can attract private sector investment into Australia.
Black said project funding, planning, coordinating, and facilitating should be appropriately outlined to avoid potential subsidy wars with other countries.
“For Australia to succeed we need to address the fundamental issues of our competitiveness, so the private sector can confidently invest given we know the government can’t do it alone,” Black said.
In its pre-budget submission, the BCA suggested a thorough review of the nation’s foreign investment framework, similar to that of the UK’s Harrington Review, to determine whether the country can unlock better overseas capital coming into it. The investment framework is also viewed as a means for “tapping into the vast global investment in the transition, and the policy required locally“ and a “crucial step towards a managed transition that brings communities on this journey.”
In addition, the BCA urged the government that once the legislation of the Net Zero Economic Authority commences this year, the body needs to play a comprehensive coordinative role by determining the viability of projects, identifying existing growth markets, flagging lacking workforce skills, addressing project approval times, and reducing interventions to industrial relations.
Similarly, the Australian Industry Group (AI Group) pointed out that industry policy remains a risk to the successful implementation of the Future Made in Australia Act.
“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,” AI Group CEO Innes Willox said.
“It works best when there are clear objectives, well-designed policy instruments, and the administrators charged with their implementation have a willingness to accept responsibility for and respond quickly to inevitable failures. Fundamentally, governments should be enablers not deliverers,” Mr. Willox said.
Mr. Willox added it is important for the government to divide the tasks among the partners best positioned to deliver them to ensure productive collaborations.
The chief executive also reiterated the need to train more workers, thus discouraging the cutting of apprenticeship incentives in the upcoming budget.
“Creating more places in a dysfunctional TAFE system is a nice announcement but a million miles from developing the workforce we need,” Mr. Willox said.
“Suggestions of cutting apprenticeship incentives in the upcoming budget are the polar opposite of what is needed. We have an energy transition to manage but no one knows where the thousands of electricians needed to deliver it are going to come from.”
