Historic reconstruction fund bill passes Senate

By Peter Roberts

The federal government’s big promise to manufacturers at last year’s election, the $15 billion National Reconstruction Fund will become a reality after the National Reconstruction Fund Corporation Bill passed the Senate last night.

The National Reconstruction Fund is seen by the government as a key part of ensuring Australia is a country that makes things – a promise made by many governments but never followed through with cash and the mechanism to at least kick start the process.

Minister for Industry and Science Ed Husic welcomed the passage of the bill, calling the NRF one of the largest peacetime investments in Australian manufacturing capability.”

Husic said: “The most successful modern economies are built on strong, advanced manufacturing capability. The NRF will help deliver this for Australia.

“We genuinely wanted this bill to be a moment where Parliament came together to support the national interest. I am pleased the crossbench engaged constructively on this important bill that will help rebuild Australia’s sovereign capability.”

While investment cash for manufacturers is most welcome, so too is the mechanism that will operate the NRF.

It is not a grant scheme of funding projects according to electorate as with so many of the grant programmes of the former coalition government.

It is modelled on the Clean Energy Finance Corporation which makes a financial return for the government and has been critical to establishing new energy projects and technologies in Australia.

Managed by an independent board, the NRF will invest alongside manufacturers, bringing with it funds that have rarely flowed to manufacturers such as the country’s huge superannuation savings pool.

Husic said: “We are delivering on a significant election commitment that will position Australia as a maker of high-value added products and creating good secure jobs in the process.

“The NRF shows the government is serious about investing our human capital to keep Australian smarts on shore.

“We want Australia to be a country that makes things, a nation that has faith in its know-how and ability to get the job done.”

While the government has put its money where its mouth is the $15 billion commitment is still small compared to massive funds overseas such as those announced by US President Joe Biden’s Inflation Reduction Act (IRA).

Critical to its success will be how much private cash can also be mobilised for manufacturers, traditionally shunned by Australia’s capital markets.

Minister for Finance Senator Katy Gallagher said that after a decade of uncertainty, the National Reconstruction Fund would support Australian innovation and industry.”

“More things being made here means more jobs for Australians.”

Senate amendments will now return to the House of Representatives.

Picture: BlueScope Steel/Pt Kembla steelworks