The Albanese government’s $15 billion industrialisation investment should be used to build a handful of “internationally significant precincts” in strategic locations around the country, according to Australia’s key business lobby group.
In a budget submission published on Tuesday, The Business Council of Australia backed the yet to be deployed National Reconstruction Fund to “nurture industries of the future” but called for more clarity and focus on how money will be deployed.
The BCA, which was not formally consulted on the underlying NRF legislation, wants the NRF investment mandate to include “a clear expectation that part of its funding will be directed towards the development of a small number of internationally significant precincts”.
“These must focus the work of businesses, government, and the education system to bring together common activities into a single region,” the BCA submission said.
Investment mandates, along with an NRF board responsible for investment decisions, are yet to be established. The NRF bill is expected to be debated after a Senate Committee reports back on it in March, while a public consultation is also underway.
By clarifying that some of the NRF’s $15 billion will go to areas built around ports and airports stakeholders will be able to understand its importance of the precinct in the “global context”, the BCA said.
“This is not just the number of jobs created, but the significance it has for global trade,” the group’s submission said.
“This means showing export potential, through access to a strategic port or airport, years of investment behind them, or demonstrated success and agglomeration. This highlights the need for all parts of government to back in the priorities set out under the NRF.”
The $15 billion NRF will provide loans, equity investments and guarantees to projects in priority areas, with sub funds for areas like renewables, transport, value-add resources and enabling capabilities already carved out.
The Albanese government wants it operating like the Clean Energy Financing Corporation set up by the Gillard government in 2012.
The addition of a significant government investment mechanism raises the risk of “forum shopping”, the BCA warns in its submission.
“Government needs to provide a clear sense of how these funds will be interacting, to ensure investors can get a timely response to proposals and to reduce the risk of ‘forum shopping’.”
The business group added it will be important to grow the underlying capabilities in areas like data, quantum and battery technologies to support the goals of the NRF.
“The establishment of the National Reconstruction Fund is a positive step and one we support,” the BCA said. “But it is only part of the picture.”
BCA chief Jennifer Westacott said there was a window for Australian governments to get to working on meaningful reform that reshapes the economy.
“After the NSW election in March we will have almost a year and a half long election-free window, meaning we can get to work on reform without being distracted by politicking,” she said.
“We have an opportunity to do the work needed to create new and better jobs, equip people with world-leading skills and pay higher wages.
“But to deliver these things we’ll need a laser-like focus on lifting the business investment that delivers new industries and new ways of creating value and that makes our existing industries stronger.”
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