With the National Reconstruction Fund legislation now before Parliament, and a consultation process opened with the publication of a discussion paper, Industry minister Ed Husic’s focus is on getting structures in place as soon as is practical to get money flowing.
The minister is not making any guarantees about when the first investments might be made via the $15 billion fund. The new financial year seems a logical starting point, but there is a lot to get done and much will rest on the development of the NRF investment mandate – and the frameworks that will help direct where the funds will land.
“We are working really quickly to try and get the National Reconstruction Fund Corporation set up as soon as we can,” Mr Husic told InnovationAus.com.
“We’re hoping that the legislation will get through early in the new year. And the sooner we can get the law through the Parliament, the quicker we can set the corporation up and the faster we can get investments made.
“But having said that, I don’t want to sugar-coat it. I appreciate it is a challenge to get something as big as this moving quickly.”
He is pushing hard, he says, but it won’t be rushed.
There are important decisions to be made, not least being the composition of the NRF References Group that will guide the creation of the NRF investment mandates, and then – much later – the composition of the NRF board which will ultimately oversee the investment of funds.
In the meantime, the Industry department opened its consultation process last Wednesday for the National Reconstruction Fund with the publication of a discussion paper. The department is taking submissions up until February 3, ahead of the first sitting of Parliament in 2023 the following week.
The NRF consultation discussion paper outlines in somewhat more detail the seven priority areas for the fund. This includes:
- Renewables and low-emission technologies – pursuing commercial opportunities in everything from components for wind turbines, to production of batteries and solar panels, to hydrogen electrolysers, to methane-reducing livestock, and modernising steel and aluminium production
- Medical science – investments that leverage Australia’s existing world-leading research, and providing domestic capability for essential supplies, from medical devices to medicines and vaccines
- Transport – looking for opportunities to develop capabilities in local manufacturing and supply chains, including for cars, trains and ships
- Value-add in agriculture, forestry and fisheries – investments in commercial opportunities to value add to raw materials in areas from food processing, textiles, clothing and footwear
- Value-add in resources – Expand Australia’s mining science technology, and ensure a greater share of raw materials extracted are processed domestically. From high-purity alumina from red mud in bauxite processing, or in lithium processing for batteries.
- Defence capability – Maximising sourcing of requirements from Australian suppliers employing Australian workers, whether it’s in be technology, infrastructure or skills
- Enabling capabilities –commercial opportunities to develop key enabling capabilities, from engineering, data science, software development, including artificial intelligence, robotics and quantum
The consultation paper sets out four key questions in relation to the government’s seven priority areas for the Australian economy:
- What types of projects or investments should the Government direct the NRF to focus on, or not invest in, within each of the seven priority areas to achieve the NRF’s purpose?
- How should industry ‘transformation’ and ‘diversification’ be defined and measured for each of the seven priority areas?
- How should ‘value add’ be defined and measured in relation to relevant priority areas?
- How much detail should be provided on each of the priority areas? How should greater detail and the need for flexibility be balanced?
“I genuinely approach consultation [with an open mind],” Mr Husic said. “There may be things that people see in the [consultation] paper, or the questions that are provided, that provoke different thoughts and ideas.”
“If there are ways in which we can do things better and quicker, then I am all ears to that. We needed to have a sense of what we want to be able to achieve with the fund, and we have spelt that out. We have a sense of how we want to get it done.
“But if there are people drawing off their own expertise or experience that can give us advice, they should rest assured that we will take it on board. We’re not dogmatic.
“We’re not fixed or set in concrete in our ways. That’s why we are undertaking this consultation process.”
The National Reconstruction Fund is talked about as one of the biggest peacetime investments in local industry in the nation’s history. Certainly, the last week has been a massive one for industrial policy in this country.
It’s not every day that the enabling legislation for a $15 billion pot of money hits the Parliament. The jockeying for input into the priorities for the fund began long ago, well before the federal election last May.
But now that the legislation is a reality and a consultation is underway, you get a sense that the local industry – and its attendant financiers and academic experts – are activated and engaged.
Mr Husic has likened the objectives of the National Reconstruction Fund to the original Snowy Hydro Scheme – as have many others – putting its nation-building capacity on the same level as that huge industrial development program of the 1950s and 1960s.
So, what does a 21st century nation building program look like? If its not physical in nature like the Snowy Hydro, what is it?
Mr Husic says the last time Labor was in government at the federal level, it engaged the National Broadband Network as “a multi-billion-dollar investment in platform infrastructure from which a lot of other businesses could get a lot of benefit, and [could] help improve the way that communities and societies function.”
What might that look like as an outcome for the National Reconstruction Fund?
“With the NRF, because we’ve got these seven priority areas, there is a lot of scope for new ideas to emerge,” Mr Husic said.
“But within it, I’m particularly focused on what quantum technology, and especially quantum computing might achieve. That [area] has the potential to entirely transform computing.”
More importantly, he says the advances that will be made through putting that massive new computing power to use will be huge, transformation at a global scale.
So if something comes out of the NRF as a result of some Australian ingenuity, backed up by the capital of the NRF, and if that leads to breakthroughs in quantum computing… That will be massive and not just for the nation, but for the world,” he said.
Do you know more? Contact James Riley via Email.