Future Made in Australia Bill 2024: CPD submission to the Senate Economics Legislation Committee Inquiry

The submission offers 7 recommendations designed to maximise Australia’s competitive advantages, enhance support criteria, align various government frameworks, and ensure that the benefits are widely shared by the Australian public.

1. Increase support for the development of new, pre-commercial technologies: Future Made in Australia support should focus on both the development of new technologies and the scaling up of nascent markets through facilitation of financial flows to new industries.
2. Strengthen the criteria for the selection of priority industries under the National Interest Framework: The criteria for selecting priority industries under the National Interest Framework should be made more stringent. Public investments should strategically convert Australia’s competitive advantages into long-term economic and climate benefits, ensuring that support is only provided where private investment is insufficient. For example, it is not clear that solar and battery manufacturing will be able to provide significant economic benefits or secure, long-term employment after the initial set-up phase
3. Ensure alignment with the Sustainable Finance Taxonomy: Eligibility for Future Made in Australia support under the ‘net zero transformation’ stream should be aligned with the Sustainable Finance Taxonomy. Support should only be available for activities in the Green category, or classified as “decarbonise” or “substitute/replace” in the Transition category of the taxonomy. Additionally, eligibility for support should align with the Do No Significant Harm principles of the Taxonomy. This alignment ensures that Future Made in Australia funding supports genuinely sustainable and impactful projects.
4. Set minimum guidelines for satisfying community benefit principles: Minimum guidelines or thresholds should be established to ensure that community benefit principles are properly realised and that entities receiving support aren’t incentivised to make minimal contributions. Aligning with the Sustainable Finance Taxonomy’s Minimum Social Safeguards criteria can enhance the social and environmental standards of supported projects.
5. Include profit-sharing mechanisms when providing Future Made in Australia support to ensure “benefits are widely shared”: CPD recommends implementing profit-sharing mechanisms such as royalties or super-profit taxes where appropriate. This approach ensures public investments yield long-term returns for the community.
6. Apply community benefit principles consistently across all relevant Commonwealth Government support mechanisms: At a minimum, the Government should require investments by the Clean Energy Finance Corporation and National Reconstruction Fund as well as all components of the Australian Renewable Energy Agency (not just the Innovation Fund) to adhere to the conditions set out by the National Interest Framework and Community Benefit Principles.
7. Simplified access to funding: Establishing a “front door mechanism” for large projects should be complemented by simplified access pathways for small and medium-sized projects. Coordinating investments at federal and state levels can streamline support, fostering innovation and commercial success.