The federal government’s $15 billion manufacturing fund could be stripped by a Dutton government, which would use around $14.5 billion from its unspent allocation for Coalition priorities.
As the opposition announced on Thursday plans to establish two new funds for national debt repayments and infrastructure, the future of Labor’s National Reconstruction Fund (NRF) was thrown into doubt.
Already announced NRF investments in mining manufacturers, quantum computing and digital health companies will be honoured, but a Dutton government would reportedly cut off any future deals.
The $15 billion off budget National Reconstruction Fund was promised by Labor ahead of the last election but took until last November to unveil its first deal in a Queensland mining equipment maker.
The NRF invests in the Albanese government’s economic priority areas like renewables and value add resources, and will only back transformative ventures that can provide a return to taxpayers.
So far it has also backed two quantum companies, an AI health startup, the Gina Rinehart backed Arafura Rare Earths project, a sovereign cloud company, an IoT satellite startup, and partnered on a mining innovation fund.
The deals have committed around $450 million, but several more are in the pipeline, and the corporation running the NRF is expected to have drawn down the full $15 billion by 2029.
The Australian Financial Review this week reported Coalition sources saying a Dutton government would reprioritise the NRF’s unspent funds.
The Coalition has voted against enabling NRF legislation and been critical of its progress but has not publicly stated it would completely unwind the NRF.
The office of shadow Treasurer Angus Taylor did not respond to questions about the NRF, while shadow Industry minister Sussan Ley referred them to the Coalition Campaign Headquarters, which did not respond on Thursday.
The Coalition has already committed to unwinding the Albanese government’s Future Made in Australia plan, including its flagship policy to provide tax credits to producers of green hydrogen and refiners of critical minerals.
On Thursday, the opposition also confirmed it will scrap the Rewiring the Nation Fund, a $20 billion off budget measure to connect green energy projects to the grid.
The fund has already supported several transmission projects but would not continue under a Coalition government, which would take $5 billion from it to help seed its new regional spending fund.
The pledged Regional Australia Future Fund (RAFF) will eventually use windfall revenue gains – tax revenues that are higher than Treasury forecasts and typically from resources prices — to pay for infrastructure and services that local councils cannot afford.
A similar fund used by the Morrison government was criticised after the audit office revealed 65 per cent of its funding went to projects that were not assessed as being the most meritorious.
A Dutton government would also establish a separate Future Generations Fund would with windfall revenue to pay down debt, invest in infrastructure, national security, or sovereign capabilities.
“Unlike Labor’s approach, these investments won’t be fuelled by borrowing,” Mr Taylor said on Thursday. “They’ll be fuelled by windfall revenues.
“ Some of those windfall commodity revenues will go back to where they were created in the first place, in regional Australia, and that’s an important part of the makeup of this fund.”
Do you know more? Contact James Riley via Email.