The Tools for Reconstruction - Labor's Industry Support Strategy
Anthony Albanese has been sworn in this week as Australia's new Prime Minister. His victory speech and the Australian Labor Party's campaign have given us some insights into what we can potentially expect from the new Government in support of science, innovation and industry.
What we know so far
Labor has campaigned on a $15 billion National Reconstruction Fund to be invested in organisations that expand Australia’s capabilities. Half of this funding has been pledged to key industry areas such as clean energy, medical manufacturing, emerging technologies, advanced manufacturing, and value-adding resources. Some details that have been announced so far include:
$1 billion for a Critical Technologies Fund to invest through loans, equity and guarantees to extend Australia’s capabilities in areas like AI, Robotics, Quantum computing and software development
$1 billion for an Advanced Manufacturing Fund to diversify Australia’s reach and industrial base in transport, defence, resources, agricultural and food processing, medical science, renewables and low-emissions technology manufacturing
$1.5 billion for a Medical Manufacturing Fund to turn science into more jobs and secure domestic supply chains for medical technology and vaccine production
$1 billion for a Value Adding in Resources Fund
$500 million for Agriculture, Forestry, Fisheries, Food and Fibre, and
$1.2 billion for an Australian Strategic Research Agency to drive defence innovation and boost collaboration amongst Defence and SMEs and universities.
The $15 billion Fund will be delivered via a combination of loans, equity, guarantees and grants. It has been suggested that a large proportion of the funding will be made available under a structure similar to the Clean Energy Finance Corporation (CEFC). This is somewhat different to the previous Government’s Modern Manufacturing Strategy which delivered benefits to industry via matched grant funding. As part of its plan, Labor will also reprioritise $150 million of unallocated funding from this previous Modern Manufacturing program.
What we don’t know yet
To identify worthy projects, the Labor leader has promised to conduct a wide range of consultations with local communities, businesses, regional development authorities and unions as well as state and local governments. We will be watching with interest to see how the remainder of Labor’s $15 billion pledge is allocated, both in terms of industries that will benefit as well as the mechanisms for delivery (grants, loans, direct investment, etc.).
For example, Labor's industry support strategy for the recycling and space sectors (National Manufacturing Priorities under the former Government) are yet to be announced. We would expect that both of these industries will see opportunities under Labor’s $15 billion fund.
There has also been little mention of the new Government’s support for or rejection of the proposed Patent Box program that would see businesses in select industries benefit from a lower tax rate on profits attributable to registered intellectual property.
Where to from here?
The new Government’s policy platform looks positive for Australian industry, science, technology and research. As always, the devil is in the detail and time will reveal whether it can be delivered efficiently, effectively and transparently in the interest of Australia’s future generations.