Mining superpower Australia announced on Thursday a US-style scheme to pour public money into manufacturing and clean energy industries, joining the global race to build a cleaner and more sustainable economy.
Prime Minister Anthony Albanese unveiled the “Made in Australia Futures Act” to help compete with global partners who are handing out massive subsidies to new industries.
The act, which will be debated by Parliament this year, would mark a departure from Australia’s decades of free market policies on trade and investment.
“We must be prepared to break with old orthodoxies and use new levers to advance the national interest,” said the centre-left Labor prime minister.
Although no figures were given, the taxpayer-funded stimulus scheme aims to compete with other nations’ efforts, such as US President Joe Biden’s massive investment through the US Inflation Reduction Act.
Other trading partners, including China, the European Union, Canada and Japan, have also invested heavily in their industrial base and manufacturing capabilities.
“Australia cannot afford to stand on the sidelines. Being in the race doesn’t guarantee us success – but being out does guarantee failure,” Albanese said.
Albanese described the coming climate and economic changes as “just as significant as the industrial revolution or the information revolution—and faster and more far-reaching than either.”
“We need to think differently about what government can – and should – do to work together with the private sector to grow the economy, increase productivity, improve competition and ensure our future prosperity.”
Albanese made the speech in the north-east state of Queensland, a key battleground and the heart of the country’s vast gas and coal industries.
– “Sharper Elbows” –
Australia cannot match the US investment dollar, he said, but the country will be able to compete for international investment.
A leading global exporter of minerals such as iron ore and coal, resource-rich Australia will not only use its “traditional strengths”, he said, but also offer new products and services in new markets.
“We need this change in thinking and approach because global economic circumstances are changing in much more profound ways than just the consequences of the pandemic or the conflict,” Albanese said.
“We need sharper elbows when it comes to marking our national interest.
The law would encourage investment in Australia’s renewable energy resources, including battery production, such as green hydrogen, green metals, create more jobs and ensure a competitive economy, he said.
Tim Buckley, director of independent public interest think tank Climate Energy Finance, said the act would lay the groundwork to make Australia a leader in zero emissions trade and investment and a global clean energy “superpower”.
About 27 percent of Australia’s economic output comes from exports to international partners and this new act will have a flow-on effect and help them decarbonize, Buckley told AFP.
“State intervention is the new competition. We cannot afford to “sit”. The Made in Australia Future Act puts Australia in the global race. This is an investment signal and de-risking of private equity needs,” he said.
But he said more details are needed to ensure local, state and federal governments work together to ensure the act is rolled out smoothly.
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