The Albanese government’s National Reconstruction Fund (NRF) is expected to start rolling before the year is out.
Framed as a plan to rebuild Australia’s industrial base, the $15 billion fund was a key plank of Prime Minister Albanese’s election campaign.
In pursing this strategy, the government has all but shelved the plan that was already underway under the previous Morrison government.
Nevertheless, both plans demonstrate a commitment at Federal level to revive manufacturing in Australia, which has stalled since the demise of the car industry a decade ago.
So what implications will this have for manufacturing employment?
The Morrison plan
Prior to the Federal Election in May, the Morrison government’s Modern Manufacturing Initiative had doled out more than $800 million dollars in grants as the first phase of a five-year strategy.
The grants were focused on six key areas: resources technology and critical minerals processing; food and beverage; medical products; recycling and clean energy; defence; and space.
A number of those grants may now be under a cloud however, with Albanese stating in August there would be a review in light of revelations Morrison as Prime Minister had secretly sworn himself in as Resources Minister.
Morrison also copped flak from some quarters for not leveraging the fund to support local production of COVID-19 vaccines at the height of the pandemic.
That said, the local Moderna manufacturing facility announced by Albanese last month was the result of an in-principle agreement struck by Morrison with Moderna and the Victorian Government last December.
The Albanese plan
In contrast with the Morrison strategy’s emphasis on grants, the Albanese government’s NRF will aim to rebuild Australia’s industrial base through the provision of loans, guarantees and equity.
In formally announcing the Moderna facility, Albanese described it as an example of the kind of project the new government had in mind when it made promises of “a future made in Australia”.
“This is an example of the sort of activity we'll see replicated through our National Reconstruction Fund that we will introduce legislation on before the end of this year,” he said.
“This is precisely what we need to do, creating high-value jobs, creating a big bonus for Australia.”
While we’re yet to see the detail of how the NRF will be distributed, prior to the election Albanese had pledged $125 million to manufacture 130 electric buses in Perth.
And just last week Industry Minister Ed Husic announced the NRF’s $3 billion Powering Australia Plan would have “a strong immediate focus on [speeding] up the deployment of solar, wind, batteries, transmission for the electricity sector and potentially electric vehicles for the transport sector”.
Consultation is also underway on the 2022 List of Critical Technologies in the National Interest, which will guide the fund’s allocation of $1 billion in critical technologies.
What has been the impact so far?
Truth be told, it’s too early to tell.
Despite the funding commitments of the past two years, ABS data projects a fall of 2.7% in the manufacturing workforce by 2026.
However, it can take several years for the effects of such strategies to be realised.
Their impact can also be at the mercy of election cycles and political manoeuvring, as evidenced by Albanese’s mooted review of the Morrison grants.
Indeed, Shadow Treasurer Angus Taylor flagged in June the Coalition will mount a challenge to Labor’s plan.
Furthermore, the NRF’s emphasis on loans, guarantees and equity doesn’t come without risk. The reality is that some investments may come to nought.
“A lot of this stuff will not be easy and we may fail,” Husic admitted.
“We need to appreciate that nothing is perfect. What you learn from failure and apply from that lesson will build the next round of success.”
At the very least, it is heartening to see our national leaders walking the walk on rebuilding Australia’s domestic manufacturing capabilities, and boosting the manufacturing workforce.
