$22.7 billion over the next decade will be spent on the Future Made in Australia program in a sweeping package aimed at boosting manufacturing and strategic industries connected to the net-zero transition. However, many details are still yet to be revealed.
Treasurer Jim Chalmers has stressed this is about whipping up private sector investment with some assistance from government in what they deem is the “new competition”, as other nations pursue forms of industrial policy.
The new ‘National Interest Framework’ that will guide government investment, “particularly those used to incentivise private investments at scale” will use two streams. According to the budget papers, those are as follows:
Net zero transformation stream:
This stream is for if Australia is assessed to have grounds for sustained comparative advantage in a net zero global economy and public investment is needed for the sector to make a significant contribution to emissions reduction. Such as hydrogen, green metals and low carbon liquid fuels industries.
Economic resilience and security stream:
This stream is for industries where some level of domestic capability is needed to deliver adequate economic resilience and security, and the private sector would not invest in this capability in the absence of public investment. Such as the processing and refining of critical minerals and the manufacturing of clean energy technologies.
Further details are still to come. A Future Made in Australia Act will be introduced to parliament later this year according to the government.
According to budget papers, the government will be establishing a hydrogen production tax incentive for renewable hydrogen, with some commentators reporting it to be $2 per kilo, and a critical minerals production tax incentive — though the specifics are yet to be revealed.
Businesses that could possibly benefit from such investments and tax incentives are encouraged to stay up to date with developments.
The Commonwealth Government has stated it will create a “single point of contact for investors and companies with major investment proposals”. This is hoped to “streamline engagement with government”, assisting companies and investors and “fast-tracking major projects where possible” within the program.
A new $1.7 billion Future Made in Australia Innovation Fund will be established to “support innovation, commercialisation, pilot and demonstration projects and early-stage development in priority sectors”. Despite the Act not being introduced yet, many investments have already been announced with various businesses across the country.
You can read the Federal Governments Future Made in Australia fact sheet here.
