Second Reading speech
27 March 2023
It’s great to be here today to make a contribution on the establishment of the National Reconstruction Fund. It is great to have Senator Scarr also in the chamber here. He is no doubt championing what I’m about to say, so it is good to see him. Today’s contribution is about one of the key election commitments that the Albanese government took to the last federal election. This $15 billion fund is about revitalising an Australian industry that this country desperately needs. This country desperately needs to start to make things again right here in Australia. In doing so it needs to also represent one of the greatest investments that this country deserves. Certainly the manufacturing sector has been undervalued for some time.
I listened to the limited contributions this morning. Australia suffered nearly a decade of policy drift, especially when the coalition goaded the car industry to leave this country. I remember—it is very much in my mind—the then Treasurer Joe Hockey famously telling the car industry to leave—’If you don’t like it, just leave.’ And they did; they left. That had a chilling effect right across our economy, particularly in domestic manufacturing. I remember that because a number of my family members and friends—and my father used to work in the car industry—unfortunately, lost their jobs as a result. A number of them who worked for Ford in Victoria, sadly, lost their jobs because the then coalition government basically told the car companies to go. They were no longer willing to support the industry that ensured that there were fantastic and good-paying jobs. Generations of people from when they were children looked forward to these jobs. Unfortunately, the manufacturing sector suffered greatly.
When we came to the 2019 election and subsequently the one after, Labor understood there was a need to address this. Currently we as a country rank dead last in the OECD when it comes to manufacturing and self-sufficiency. That is an embarrassment, considering the number of people that we have in this country. That is why I have risen today to make a very brief contribution about why I will be supporting the Albanese government’s $15 billion fund.
The fund will have seven priority investment areas: value-adding in our resources sector; value-adding in our agriculture, forestry and fishery sectors; transport; medical science; renewables and low-emissions technologies; defence capability; and enabling capabilities, like quantum computing, robotics and AI. These areas have been selected to strategically drive economic development in our regions and outer suburbs, to boost our sovereign capability, to diversify the nation’s economy and to help create secure jobs, because that is really the crux of this policy.
Throughout the COVID pandemic we all saw how our overreliance on international supply chains left us so exposed to disruptions outside of our control. We really need to have control over our supply chains once again. You can only do that if you have a strong domestic manufacturing sector. The Australian workers and businesses that stepped up to provide us with the goods and services that we all rely on have shown that there is great potential to improve our domestic capability. The National Reconstruction Fund is all about realising this potential. The fund will direct significant investment into regional Australia, creating jobs in agriculture, forestry, resources and other important industries. As the government previously announced, $500 million of targeted investment will be directed towards value-adding in agriculture, forestry, fisheries, food and fibre, and that is so important.
It was particularly disappointing to hear the contributions from those opposite. Their party pretends to stand up for regional Australia. I particularly point out that the National Party are refusing to support the establishment of this fund. It will benefit regional Australia. This is exactly the sort of policy the Nationals should be supporting. The government is stepping in to ensure that regional Australia benefits from the national building and industry development that too often does favour big cities.
Unlike the political cash flushes from those opposite when they were in government, the National Reconstruction Fund will be directed by an independent board. There will be no colour-coded spreadsheets and no short-term political thinking; just strategic investments that are based on the priority of this government—a future that is made here in Australia. A couple weeks ago I stood up in this place and spoke about how the National Reconstruction Fund will stimulate defence manufacturing. It was interesting to hear the comments that Senator Ralph Babet made earlier around how the government is not doing enough in that space. But, putting that to one side, it is important to note that we are maximising sourcing requirements from Australian suppliers employing Australian workers. We should be very proud about the defence industry in this country, and we can ensure that our own country plays a much more active role in our defence supply chain.
It is also important for other industries, particularly some that are very close to my heart. For a long time I’ve argued that forestry will be key to our low-emissions future, and the four priority areas of the National Reconstruction Fund recognise this. By providing investment for value-add in forestry, we can ensure that demand for timber products, which only keeps increasing—and we know we must always, always go towards meeting our climate goals—can be met with Australian goods. The Australian Forest Products Association has welcomed assurances from the government that Australian firms, which add value to our native forest products in mills and manufacturing plants right across the country, will be eligible for investment through the National Reconstruction Fund. Value-adding activities in agriculture will also be eligible for investment through the National Reconstruction Fund, ensuring that Australian workers and businesses play a significant role in more steps in agriculture supply chains.
This is one of the fundamental purposes of the fund. We’re a clever country, and with the backing of the government we can perform more of the value-adding activities in several supply chains right here in Australia, instead of just focusing on the first steps of the chain by supplying commodities.
The advanced manufacturing processes that will be supported through the National Reconstruction Fund are integral to a low-emissions future, not just in Australia but in every nation that is taking action on climate change. We want Australia to be in a position to play a role not just in providing the materials required to make future technologies but also in design and manufacturing processes. Our country is rich with valuable critical resources, but for decades we’ve mined those resources and shipped them overseas for other countries to process. Often, we then import these finished products at many times the price, leaving all the profits and jobs overseas. Australia has the knowledge and capability and capacity to do better than this. So many technologies have been invented here, including the technology behind solar panels, but these technologies are being manufactured overseas.
If we are to mine it here, we should make it here, and if we are to invent it here then we should make it here. As a co-investment fund—which always gets lost in this argument; it’s a co-investment fund—the National Reconstruction Fund will make investing in seven priority areas more attractive for private capital, crowding in investment to create high-quality, sustainable industries and jobs.
There has been some commentary about the potential inflationary impact of this investment, and of course inflation is a very big economic challenge facing our country, but the fund will be required to generate a positive portfolio rate of return, reinvesting its returns to become self-sustaining.
Senator Scarr: What if it makes a loss?
Senator CICCONE: It’s interesting to see the pessimistic view that the opposition—
The ACTING DEPUTY PRESIDENT (Senator Marielle Smith): Sorry, Senator Ciccone. Senator Scarr, the objections are disorderly. I’m finding it hard to follow Senator Ciccone’s speech.
Senator Scarr: I was finding it hard to follow before the interjections!
Senator CICCONE: Thank you, Acting Deputy President. Really, the Coalition are always doomsayers, always trying to play down the economy, always trying to say how bad it is that Labor is finally standing up for workers and for domestic manufacture in this country, somehow always playing the glass-half-empty approach. Why don’t you come into this place and have a positive attitude about backing in Australian workers and Australian businesses, and let’s give it a go together. Let’s see some bipartisanship when it comes to manufacturing in this place. It is really, really concerning to see every time we try and put up a policy—one that we did take to the election, mind you; we did take this to the election, Senator Scarr. A bit of positivity will go a long way. We saw that play out in the New South Wales election over the weekend. Chris Minns and his team very much took a fresh-start approach to restarting the economy in New South Wales, reinvesting in their manufacturing and investing in the people and the health and education sectors in New South Wales—and look what happened. The public backed in Labor. They backed in New South Wales Labor over a government that, quite frankly, was past its use-by date and was more interested in its own internals. But I’m not here to talk about the New South Wales election result, although I must say it was very hard not to drop that into my speech today, as well as Collingwood having a second win on the weekend. It’s good to see that the Pies are finally back on top of the AFL ladder, but I’ll put that to one side.
There’s been a lot of commentary around the National Reconstruction Fund. This investment is expected to generate economic growth and boost productivity, which is why we are delivering this policy, and we know that’s key to driving down inflation. We need to address the supply issues. Of course, the other way that the National Reconstruction Fund will actually help combat these pressures is by addressing the supply chain issues. We know that a lack of supply is driving up the cost of many of the inputs that are required across the economy, with these high input costs then rippling through producers and consumers. The fund will help address this lack of supply by improving our domestic capacity and insulating our economy from future supply shocks.
There has long been an argument made by government that it should play no role in picking winners, no role in guiding the industry and no role other than establishing guardrails, letting businesses to do the right thing and only stepping in when there has been market failure, as we’ve heard from some opposite. While those opposite do argue that we shouldn’t be picking winners, the previous government spent almost a decade picking, unfortunately, some of these losers. We saw what happened when the car industry left this country, leaving many towns and communities in the lurch. The destructive ripple effect that that had through local economies cannot be overstated. The lasting impact on our ability to manufacture advanced products in this country is still being felt.
Passing this bill is a step forward in revitalising the industry after the damage that was caused. Let’s all work together in this place. Let’s all get together and support and rejuvenate the manufacturing industry in this country. Let’s improve our sovereign capability across key areas. Let’s reduce our reliance on fragile and uncertain international supply chains. I urge everyone this chamber, particularly the National Party, who say that they support regional Australia, to support this bill, and let’s support the revival of manufacturing, support regional employment and support a future made here in Australia.
