Labor commits $1b investment fund for critical technologies

James Riley
Editorial Director

Federal Labor will create a $1 billion Critical Technologies Fund to invest through loans, equity and guarantees in companies that expand Australian capability in areas like artificial intelligence, robotics and quantum computing.

Labor leader Anthony Albanese will unveil the election policy in Sydney on Friday, saying that as interest rates start to rise and capital gets harder to obtain, if elected later this month his government would ensure there is a co-investment fund that works with superannuation and venture capital to back leading thinkers and their companies.

The Critical Technologies Fund is to be set up within the already announced $15 billion National Reconstruction Fund which Labor says will be used to rebuild and strengthen Australian industry as the nation emerges from the pandemic.

Labor says Australia has had recognised talent and potential across waves of emerging technology in recent years but says the Coalition had dragged its feet in backing local industry.

Sydney skyscraper
Big smoke: Albanese commits to $1b Critical Technologies Fund

From artificial intelligence to blockchain development, Australia had lost a flow of talent to other countries that put greater value on their skills – a brain drain that has resulted in lost commercial opportunities and jobs.

Mr Albanese is expected to point to Australian research leadership in the development of quantum computing and other quantum-related technology, and says that Labor would ensure make sure the nation does not lose its national competitive advantage through a lack of government support.

“Labor knows the value of high-tech jobs, and we are firmly focused on a bigger future for the industry,” Mr Albanese said in a statement. “Thanks to Labor’s $1 billion Critical Technologies Fund, we will boost high-tech manufacturing, and create more Australian jobs.”

Australian investment in high-tech manufacturing has been stagnant at less than 0.5 per cent of GDP under the current government.

Labor says the application of technology like AI improves the way that businesses operate and is supercharging whole economies. It is why other countries had developed their own national AI investment strategies while Australia had lagged behind, it says.

Shadow industry and innovation minister Ed Husic said the new fund was “an investment in building strategic industry capability in Australia, powering future economic growth, growing jobs and avoiding a brain drain that is sapping our country of vital talent.”

The Tech Council of Australia welcomed the billion-dollar commitment to a critical technology fund, saying it would enable the sector to capitalise on a once in a generation opportunity to make Australia a global tech powerhouse.

Tech Council chief executive Kate Pounder says the fund would help “deliver billions in economic activity, provide secure, flexible, well-paid jobs for Australians and make Australia the best place to start and grow a business.”

Over the past decade Australia shown itself capable of building global, best-in-class software from locations ranging from Sydney to the Sunshine Coast, Ms Pounder said.

Through companies like Atlassian, Canva, Afterpay, Wisetech and Airwallex, Australia had gained an important, new industrial strength in our economy – software development, she said.

“Now we need to do the same for the next generation of strategic tech industries. That is why we are especially pleased to note the Opposition’s investment will target key areas including quantum computing, artificial intelligence, robotics and software development.”

“Australia already has a good head start in areas such as quantum where according to research from McKinsey we attract 3.6 per cent of global funding for quantum, compared to our 1.6 per cent share of GDP,” Ms Pounder said.

“However, we do believe there is a genuine funding gap for these next-gen strategic industries, and this fund will help complement existing private funding,” she said.

The Critical Technology Fund from Labor follows a $100 million equity plan that Anthony Albanese and Ed Husic unveiled on Thursday to kickstart battery manufacturing in Australia. The announcement broke Labor’s near-silence on Industry policy since the start of the campaign a month ago.

Critical technologies are a focus for both major parties, although on policy announced so far, the approach of each is quite different.

The government unveiled a critical technologies blueprint and action plan as part of a presentation to the inaugural Sydney Dialogue in November last year.

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