Ms Ley (Deputy Leader of the Opposition) 13 Feb 2023

On this side of the House, we know that the best way we can support the manufacturers of Australia is by creating the right economic conditions for them to succeed.

Unsurprisingly, our economy is being managed woefully by this government.

The Government says ‘We want Australia to be a country that makes things again’ … well I say to those opposite, we do make things in this country and we’re bloody good at it.

Instead of jetting over to the United States and socialising in the silicon valley, the Minister could have walked down to Glendenning in his electorate and listened to what our manufacturers actually need from their government.

They would tell you that their success depends on the government managing the economy in a way which creates the preconditions for their success.

Those opposite should listen to what our Australian manufacturers are actually saying:
• Energy prices are sending them to the brink;
• Businesses are being forced to drop products because supply chains aren’t coping; and
• They can’t expand because there aren’t enough workers.

Mr Speaker, this Bill does nothing for them.

This Bill is silent on the number one issue that’s raised by industry, whether you’re an aluminium smelter, a pill pressing plant or a lumber mill.

The Coalition is opposing this Bill because this arrogant government is telling our manufacturers what they think they need, rather than addressing what they want.

This is a Minister that talks big about ‘value add on shore’ but sells out as soon as he gets back to his desk.

Mr Speaker, the only value he’s adding is to offshore paper industries, wasting taxpayer dollars on $100 a ream paper rather than $8 a ream Australian paper which is used in every other printer in this place.

As Labor tries to rush its National Reconstruction Fund through the Parliament, it just demonstrates that while they talk the talk on supporting Australian manufacturers, they don’t walk the walk.

Quite frankly, the Minister’s commitment to Australian manufacturing isn’t worth the paper it’s written on.

Fancy ‘conqueror’ branded paper won’t do anything to conquer the rising pressures on our manufacturing.

The simple fact of the matter is that without addressing these key economic challenges which are holding industry back, government spending is useless.

Mr Speaker, under the economic mismanagement of this Government, any proposed financial support will be whittled away by increased input costs.

Instead of ‘reinventing’ economics and ‘remaking capitalism’, the Government should focus on economics 101.

Input costs affect the bottom line – and the price of energy is the first among those input costs for many of our manufacturers.

In a recent survey conducted by the Australian Industry Group, 83 per cent of survey respondents experienced rising energy prices … in fact, it represented the highest score in the history of the survey.

There has not been a single conversation I have had since I have taken on this portfolio where the cost of energy hasn’t been raised as a concern.

Take Solaris Paper – they have been manufacturing in Australia since the 1950’s, with products including Sorbent toilet paper, Deeko serviettes and Handee Ultra paper towels.

They’re facing a tripled gas bill.

Making their concerns public, they said that there is “a real crisis looming … it’s a tremendous challenge … [and] it’s only one of our costs”.

Regional Victorian manufacturer Advance Bricks have announced that they will let their brick oven go cold after 82 years of business … why?

Because they’ve gone from paying $6 a gigajoule of gas to more than $37 a gigajoule overnight.

This Bill offers no hope for manufacturers like second-generation family business Advance Bricks.

Each one of these closures has a human element to it … people out of work, craftsmanship lost and communities losing out as a result.

Speaker, so many of our manufacturers rely on gas, yet this Government’s demonisation of this essential element does nothing but drive prices up.

The Industry Minister thinks he can shirtfront gas companies into submission and as a result prices will drop.

I hate to break it to the Minister, but that’s not how economics works.

A government divided on the issue, with two cabinet ministers at loggerheads in a very public way also diminishes confidence in the supply of this critical resource.

The Minister for Resources has one view and the Minister for Industry has another.

Labor’s mismanagement of energy policy is making a bad situation worse.

Why do Australians always have to pay more under Labor?

We know that according to the Food Supply Chain Alliance that some businesses are facing 100 per cent – 300 per cent increases in electricity costs, with a further 56 per cent rise foreshadowed in the October Budget.

Manufacturers can’t afford this hit to their bottom line.

The Government claims it is prioritising manufacturers through the introduction of this legislation – the reality couldn’t be further from the truth.

This Bill does nothing to ameliorate the input costs pushing businesses to the brink right now.

Labor misled the Australian people at the last election saying that they would reduce energy prices.

Speaker, we know that the problem is much deeper than that, and it isn’t just inaction on energy costs which is hurting our industries.

Supply chain disruptions and staff shortages have also been left unanswered by this Government.

This ‘reconstruction’ Bill does not fix these economic drivers which are making it impossible for manufacturers to do business in this country.

The Food Supply Chain Alliance has said that a 30 per cent increases in fuel bills is cutting into the viability of our hard-working industries every time their truck drivers visit the bowser.

Cumulatively, the Independent Food Distributors Australia have said that the “fuel, electricity, transport costs and many other costs have risen by an average of 29 per cent in the last nine months”.

The Australian Industry Group says that 90 per cent of businesses expect to be affected by staffing shortages – what has the Government done to address this?

There is no point to this Bill ‘reconstructing’ our manufacturing base if there is no-one to carry out that renewed effort.

If they listened to our manufacturers, they would know these are the issues they demand action on, instead of arrogantly telling them what they need.

They did this with their radical industrial relations changes, putting a regulatory noose around the necks of our manufacturers … they didn’t care to listen … in case those opposite have short memories, this is what they said.

We know the Labor Party, when it suits them, is fond of walking into this House and quoting the business community.

The Australian Chamber of Commerce and Industry said that it “would be particularly damaging given already serious global risks and uncertainty”.

The Australian Industry Group called the Secure Jobs Better Pay Bill “flawed and unnecessary” noting that it “would implement major and regressive changes to Australia’s workplace relations arrangements that would set us back decades”.

But we know these trusted voices are not the ones those opposite listen to.

Millions of dollars in donations equals policy influence in this government and that’s at the heart of the Albanese Accord.

Donations go in and policy comes out.

Many Australians had to live through the last time industrial disputes wreaked havoc in our economy. They remember it vividly.

That was when the then Industrial Relations Minister, the Member for Maribyrnong, chose to scrap the Australian Building Construction Commission the last time that the Labor Party was in Government.

And we know what happened.

Unsurprisingly, industrial disputes skyrocketed, working days lost rose, and, as a result, the cost of infrastructure went up by 30 per cent.

That means that infrastructure like hospitals, schools, roads, they all cost 30 per cent more than they did before … a direct consequence of Labor’s ideological, industrial relations-induced mania.

But have they learnt their lesson? Of course not … instead, in a high-inflationary environment, they are once again encouraging an uptick in industrial disputes … driving up inflation and pressure on our manufacturers.

Mr Speaker – this Bill does nothing to support industries impacted by these inflationary pressures.

The Government is not listening to our manufacturers.

And by bringing this debate ahead of the senate inquiry process concluding, the Industry Minister is sneakily avoiding any scrutiny or due process.

In fact, the Senate Inquiry is yet to close submissions – they are open as I speak – let alone hold a hearing or report back to the Senate incorporating valuable industry feedback.

The Government was disingenuous at their Jobs Summit, and they’re disingenuous about their consultation for this Bill, as the Government cuts corners to get this flawed Bill through the House.

The Minister may be impatient when he is trying to ram-through his flawed Bill, but he has been on a ‘Go Slow’ in his ministerial duties.

Since the election, the Government has dithered and delayed, failing to support our manufacturers in any substantive way.

The government has delayed the provision of independently assessed grants funded by the Coalition, conducted excessive politically-motivated reviews, and chopped and changed the national manufacturing priority areas.

Entire industries have been put in a holding-pattern – a holding-pattern whilst international competition continues to rise.

The time it will take to establish the NRF will cumulatively cost our manufacturers some two years before they start seeing any government support for their work.

Establishing something like the NRF takes time – time to legislate … time to attract a board … time to hire staff … time to establish processes … time to prepare funding streams … time to market … time to select applicants … and time to settle contracts …

The government has modelled the National Reconstruction Fund on the Clean Energy Finance Corporation, the CEFC.

However, unlike the CEFC, the National Reconstruction Fund is more complicated as it is investing in multiple industries.

History shows us that the CEFC took three years to design, legislate, and start making investments – with the Gillard Government saying this was necessary due to “the complexities involved”.

In fact, so great was the task, that a full Treasury review was commissioned to design the scheme … and lets not forget this was for a fund into just one industry …

Mr Speaker, following all that work, for what was a complex initiative by the Gillard Government’s own admission, the CEFC was established in August 2012.

The first investment made was in June 2013, some 10 months later.

The Government has signalled its intent to get money out the door as quickly as possible, but at best, it will be over a year from the election that the Corporation will be effectively formed and quite possibly another year before funding is issued to manufacturers.

This is lost time for our manufacturers, prospective workers, our economy and dampens prospects for investment.

Our manufacturers cannot afford to wait, as their competitors forge ahead.

Those on the frontiers in tech, on the cusp of medical breakthroughs and any manufacturer with cutting-edge offerings cannot sit idly.

The Government announced that the National Reconstruction Fund should be up and running by next financial year, but haven’t committed to a launch date.

Speaker, that’s because they know it will take some time, that’s why they’re rushing it through the Parliament.

They were quick to stop, stall and stifle any industry program from the Coalition Government, but failed to replace it with any program, and worse, now rush through a lengthy and lacking Bill to compensate.

The Coalition Government’s Modern Manufacturing Strategy was delivering for our manufacturers, and dismantling many of these measures was a mistake.

A spiteful and partisan mistake by a bad Labor Government – undermining what could have been a bridging gap between our programs in Government and a properly designed and thoroughly consulted National Reconstruction Fund.

Industry has told us that this type of funding model takes years to get right and, Mr Speaker those will be lost years for manufacturers.

Consultation has been rushed.

Parliamentary oversight has been side-stepped.

This Bill poses more questions than answers.

The Government’s own departmental consultation only closed last Friday … and the Government will have you believe that this feedback was thoroughly reviewed, workshopped with experts and changes made to the Bill in only two working days.

What. A. Joke.

The Minister was clearly committed to reviewing the consultation, socialising with celebrities at black tie events in Los Angeles and having birthday burgers with his caucus colleagues in the Hunter – we know ambition when we see it!

I just wish the Minister for Industry was as ambitious for our manufacturers as he is for himself.

The Government is wilfully avoiding scrutiny and obfuscating consultation – and that’s because their flawed Bill seeks to introduce significant ministerial discretion, which every taxpayer should be concerned about.

The government really does give meaning to that word ‘shortlist’ because only a special handful had a chance to contribute to the design of the Bill.

Unsurprisingly, this list included some frequent flyers to offices of those opposite … the Australian Council of Trade Unions … former Labor cabinet minister Anna Bligh who heads up the ABA … and Industry Super Australia … who would’ve thought …

The Albanese Accord strikes again.

Donations go in and policy comes out.

The Bill hasn’t passed but, unions are already licking their lips at the prospect of the NRF, and have listed their demands:

A third of the board positions, hand picked by the Council of Trade Unions, positions which will determine who gets access to funding;

• Enterprise agreement with unions a precondition to make an application;
• Applicants must not have engaged in conduct that treated workers ‘unfairly’ – a very, very vague way of saying if you’re not with them you’re against them; and
• Demanding that applicants must commit to direct employment … and if contractors or indirect workforce is used, they must be employed on the same conditions as the direct workforce.

This essentially enshrines compulsory unionism to be a successful applicant.

The Minister must today rule this out, and immediately distance the Government from such egregious outcomes.

Now of course Labor will consult their faction bosses, the union movement and their donors from industry super … but given the significant ministerial discretion in this Bill it became clear something was not quite right.

Speaker, it says a lot about this Bill that Ethical Clothing Australia, a CFMMEU front, believes they stand to gain from the NRF as recipients of a $6 million commitment before the election.

The Minister must explain how during the election, support was promised from a fund that:
• One – hasn’t been established; and
• Two – makes investment decisions via an independent board that is yet to be formed.

Mr Speaker, it defies logic and certainly does not reflect the ‘transparency and accountability’ the government led the Australian people to believe they would exemplify in office.

It’s the quid-pro-quo of the Albanese Accord, money comes in, policy goes out.

What. A. Joke.

This is symbolic of a deeper structural problem with this legislation.

It is the typical cloak-and-dagger politics those opposite engage in to benefit trade unions.

In Opposition, the Labor Party jumped up and down in fits of hysteria about what they perceived to be unfair allocations of funding by way of competitive grant processes.

They claimed these were “terrible grant processes” … which their own review cleared as being completely appropriate.

According to those opposite, grant funding is so terrible that this Bill would outlaw grants which our industries have come to rely upon.

Mr Speaker, so terrible that the Minister has instituted grant programs to work alongside the NRF … can you believe anything that comes out of those opposite?

The government promised the Australian people transparency, but what this Bill seeks to enshrine by way of ministerial discretion is opaque beyond belief.

This is incredible – out of everyone in the hard-working textile industry a union front gets the first funds from the NRF slush fund?

Only the Labor Party would endorse an organisation with a rampant history of criminal conduct.

Corrupt unions doing well under Labor – no surprises there.

Mr Speaker, this decision will not provide any certainty to the taxpayer that this fund will be administered in the transparent and independent manner that the Government promised.

The Australian public aren’t stupid – they know the fix is in.

We know the Prime Minister and the Minister for Industry have provided assurances that the fund will be overseen by an independent board, but it is becoming clear that this board is likely to be stacked with Union mates.

It is difficult to foresee any other outcome when their first decision was to hand money to the CFMMEU … and Mr Speaker, this is a Minister with form.

Since the election, it has been revealed that Minister Husic rejected recommended ministerial appointments, made by his Department, and instead installed others.

More alarmingly, Minister Husic has made questionable appointments to committees demanding subject matter expertise.

Take his recent appointment to the Robotics Strategy Advisory Committee.

Did he appoint a scientist? … No.

Did he appoint an engineer? … No

Perhaps he was appointed the head of an industry body?
… No.

Minister Husic appointed the President of the Australian Manufacturing Workers Union, Andrew Dettmer.

Mr Dettmer is not your run-of-the-mill union boss, he is a self labelled socialist, who on social media publicly called the Leader of the Opposition a ‘pig’ and called the Productivity Commission a ‘front for neoliberal ideology’.

Sounds like he might also be moon-lighting as the Treasurer’s ghost-writer.

A union boss, not a scientist, not an engineer, but under Mr Dettmer’s watch the AMWU has donated millions of dollars to the ALP.

This dangerous Bill allows the Minister to appoint members of the Board, appoint the Chair and indeed committee members.

The Minister will have direct discretion to appoint board members overseeing the rollout of $15 billion dollars of taxpayer funds … leaving the door open to the situation wherein significant funding could be ticked off or denied on the whims of union officials.

The Coalition will be engaging in good-faith with the Senate processes underway, unlike this bad Labor Government.

If the Senate processes ask for significant amendments, we will work constructively to that end.

We will try to make this bad Bill less bad.

But Mr Speaker, there are also issues with the funding model which will enrich vested interests and leave small and family manufacturers behind.

By ditching competitive grants with robust processes, the government cuts out a stream of funding which may be more accessible to many smaller manufacturers that may not have the capabilities to apply for complicated equity or loan programs.

Another question about the funding model is what will happen to failing or failed loans – should a NRF recipient encounter economic uncertainty, at what point would the Corporation withdraw its loan?

How will the Government manage these situations?

Examples from similar ALP programs such as the Victorian Economic Development Corporation (VEDC) have resulted in manufacturers being uprooted and the taxpayer footing an expensive bill.

There is no clarity on thresholds for applicants … presuming that loans and equities will generate a higher threshold for applicants, how many manufacturers will be ineligible to apply, will some industries be too risky to invest in, and what will happen to industries with diminishing margins threatened by international competition?

The NRF, by design, risks excluding certain industries and could become an idle fund if the thresholds are excessive.

There are also concerns about crowding out investment – government intervention will artificially distort capital markets.

Each sector has different challenges, and a cookie-cutter approach won’t satisfy each of these challenges.

This is just an old fashioned Labor policy of spraying money indiscriminately.

Mr Speaker if these investments were so promising, and rates of return were viable, then why hasn’t private capital funded them already?

The equity funding model is flawed because it also disregards the importance of ownership, which the Minister would’ve registered if he actually took the time to listen to manufacturers instead of prescribing what he thinks works.

Many manufacturers which are family-owned businesses would be reluctant to give up control of their businesses through an equity model.

This funding model will stifle innovation – it’s a funding model that does not entertain failure, and in some industries, innovation comes with an inherent amount of risk.

The pressure of providing positive returns will disincentive innovation – something which has so many Australian success stories on the map.

This funding model is seriously flawed – but even more so is the fact that on a political whim you could cut a whole industry out of the national conversation.

This Government has shown they play politics with funding, and this Bill does nothing but undermine investment certainty.

Mr Speaker, what this Bill shows us is that this Labor Government is more interested in pursuing its agenda than keeping the course for our manufacturers.

Prior to the election this fund promised to be everything to everyone.

These new priorities are vague and do not provide the focus needed to drive investment into specific sectors where we can achieve critical mass.

This is why the Coalition established six critical focus areas with specific priorities to maximise the impact of our resource.

In their desire to establish their own National Reconstruction Fund, Labor has spitefully redirected funds away from the national manufacturing priorities.

Indeed in their submission, the Ai Group note that “cuts to the Modern Manufacturing Initiative and Entrepreneurs Programme in 2022 deprive the NRF of two main pipelines of preparing innovative SMEs to be investment-ready”

This was all done to lay the ground for the National Reconstruction Fund, a fund which, by the Government’s own legislation, will see zero dollars spent this financial year.

With a tenth of the investment, the Coalition Government made real strides to support industry through some of their toughest years.

Instead of supporting manufacturing in a bipartisan manner, the Government has embarked on a brazen attempt to undermine the Coalition’s previous policy priorities, deprioritizing our investments in the space industry, food and beverage and in complementary medicines.

Complementary Medicines Australia noted in their submission that “unlike the previous Government’s Modern Manufacturing Strategy, the NRF does not specifically identify Complementary Medicines as a high-value priority growth area”.

Furthermore, “the funding mechanism provided by the NRF will not be as appealing to industry … [and] it will therefore not deliver the same benefits as a model which provides grant funding”.

The Government must explain what – other than an election – precipitated this change.

The Government’s decision to abandon Australia’s space industry as a policy priority has left a previously revitalised sector in a state of confusion and uncertainty.

The Minister has provided no reasoning as to why this massive policy shift has occurred.

The industry was simply left to find out from departmental officials at Senate Estimates that this industry was no longer a priority for this Government.

This important industry was set to create opportunities to grow whether it be in rocket engines, component parts, or satellites.

Our dedication signalled our commitment to the industry and helped enable the first of three launches by NASA in the Northern Territory.

And I would note that there are Australians, of whom we should be very proud, who are heavily involved in further planned NASA launches to the moon.

The Labor Government were gutless in explaining their reasons why this was no longer a priority during Senate Estimates.

We have already heard from industry that Labor’s decision to wipe space industry as a priority will see manufacturers leave our shores.

I call on a Government Member or the Minister to come to this place and explain why they have taken this ill-informed step.

Because this Bill does nothing to provide a reasoning or a reconsideration of support to this crucial industry.

Scrapping the space industry as a policy priority is a short-sighted decision, which strips the manufacturing industry of a key pillar of forward-looking policy.

Of further concern to the Coalition is the government’s decision to scrap Food and Beverage manufacturing as a standalone priority for Australian industry.

The Coalition had laid out an ambitious plan to double the value of this industry by 2030.

This boost to the industry could not be more crucial at a time when Australians are struggling through inflationary and cost-of-living pressures.

We know that in the Government’s haste to put this legislation before the house, they have ruthlessly ripped funding away from the successful Modern Manufacturing Initiative, which was delivering.

Families across the country are feeling the pinch every week at the checkout.

Every time they push the trolley through the checkout they are hit with higher prices than the week before.

The cost of groceries are up along with everything else. Everything except your wages, of course.

The Government could prevent future price-shocks by encouraging sovereign capability in the food and beverage manufacturing sector.

No, instead, they have chosen to sideline these crucial industries by lumping them in with an array of other sectors.

The Minister for Agriculture even went so far as to state that “unlike many other countries, Australia does not face food shortages”.

He must be forgetting the lettuce shortages we had earlier in the year.

The Prime Minister said at the last election that ‘he would leave no one behind’ but Mr Speaker, he is leaving whole industries behind.

Every incoming Government has the right to develop policies based on their priorities; however, it must be done based on expert advice, especially for something as important as our sovereign manufacturing base.

Changing these priorities leave investment decisions in limbo.

Under the Coalition’s Modern Manufacturing Strategy, six National Manufacturing Priority sectors were selected based on extensive analysis, informed by assessments of Australia’s comparative and competitive advantages made over the past decade by McKinsey, the World Bank and the OECD.

We have significant concerns with this Bill, its financial implications and the investment uncertainty it will create.

In fact, similar financial structures to the one underpinning this Bill have drawn criticism from the IMF who stated that “implementation of below-the-line activity through newly created investment vehicles” such as the NRF, “should be phased appropriately, and more broadly, a proliferation of such vehicles should be avoided”

And this is the important part, the IMF said that “cost of living support in light of high energy prices should be targeted, aimed at protecting vulnerable households and small viable firms”.

Speaker, an initial $5 billion appropriation is provided upon passage of the Bill, but the timing of the remaining $10 billion will not be subject to further parliamentary approval with the Bill’s explanatory memorandum stating “it is not necessary to provide for further parliamentary scrutiny of the timing of particular transfers to the Special Account”.

With the Labor Party and this Albanese Government, there is always a need for further scrutiny.

The Bill’s explanatory memorandum states the remaining $10 billion appropriation can occur anytime within 6 years before July 2029.

Ultimately the Government’s design choices in this Bill add significant fiscal uncertainty, around $15 billion that taxpayers have to borrow.

Speaker, by scrapping the established Modern Manufacturing Strategy the Government is failing to address the numerous concerns our manufacturers face.

We do not support this legislation and we do not support the Government’s vain attempts to extricate itself from Coalition policy that was delivering for Australian industry.

At his recent address to the National Press Club, the Minister for Industry said, and I quote “Australia can be a place that makes things … but it won’t just happen because we declare it so”.

Well Minister, we do make things here in Australia, but that is at risk because of the government’s ‘Go Slow’.

Speaker, this government does nothing but pay lip service to our manufacturers … ‘declaring it so’ … without actually acting on the things that our manufacturers are crying out for.

Our industry deserves better than a Minister who claims to represent them and ‘Aussie Made’ in public, but does something very different behind closed doors.

The Opposition stands with our industries, our industries who are facing significant and growing challenges.

We will fight every day to ensure their interests are front and centre.

The Coalition will be opposing this Bill.