Legislation to support Future Made in Australia agenda

Future Made in Australia Act 

Background

The net zero transition and heightened geostrategic competition are transforming the global economy. These factors are changing the value of countries' natural endowments, disrupting trade patterns, creating new markets, requiring heightened adaptability and rewarding innovation.

Legislation is currently before Federal Parliament that seeks to deliver on the Government's Future Made in Australia agenda, announced by the Government on 14 May 2024 in the 2024-25 Budget, which will invest $22.7 billion over a decade to build a more diversified and more resilient economy powered by renewable energy, create more secure, well-paid jobs and encourage and facilitate the private sector investment required to make the most of this structural shift.

In detail

The Government is establishing a National Interest Framework, which will be created under the new legislation, to support better alignment of economic incentives with Australia's national interests. The National Interest Framework consists of two streams:

• The net zero transformation stream, which relates to where:
  • A sector could have a sustained comparative advantage in a net zero global economy; and
  • Public investment is likely needed for the sector to make a significant contribution to emissions reduction at an efficient cost.
• The economic resilience and security stream, which relates to where:
  • Some level of domestic capability in the sector is a necessary or an efficient way to deliver economic resilience and security; and
  • The private sector will not deliver the necessary investment in the sector in the absence of government support.

The National Interest Framework will support Australian Government consideration and decision-making in relation to significant public investment that unlocks private investment at scale in the national interest.

Community benefit principles 

The Government is also establishing Community Benefit Principles to ensure public investment, and the private investment that it attracts, flows to communities in ways that benefit local workers and businesses. The Community Benefit Principles are:

• Promoting safe and secure jobs that are well paid and have good conditions
• Developing more skilled and inclusive workforces, including by investing in training and skills development and broadening opportunities for workforce participation
• Engaging collaboratively with and achieving positive outcomes for local communities, such as First Nations communities and communities directly affected by the transition to net zero
• Strengthening domestic industrial capabilities, including through stronger local supply chains
• Demonstrating transparency and compliance in relation to the management of tax affairs, including benefits received under Future Made in Australia supports.

Additional updates

Additional legislation introduced as part of the Future Made in Australia agenda contains amendments to the Export Finance and Insurance Corporation (EFIC) Act and Australian Renewable Energy Agency (ARENA) Act to:

• Enable Export Finance Australia (EFA) to make domestically focused investments under the National Interest Account (NIA), following referral to Government and commercial assessment, to fund domestic projects where support is not available through existing funds and programs.
• Establish funding arrangements in relation to the Innovation Fund for the deployment of innovative technologies and facilities linked to priority sectors, including green metals, low carbon liquid fuels and clean energy manufacturing such as batteries, and make necessary adjustments to the governance arrangements of the ARENA.

The Government announced in the 2024-25 Budget that it will invest $22.7 billion over the next decade to build a more diversified and more resilient economy, as part of the global net zero economy. The Future Made in Australia Bill 2024 seeks to embed into law the criteria and processes guiding the Government's investment decisions such that it is more closely aligned to Australia's national security and economic security interests, for the benefit of all Australians. An important part of the Future Made in Australia agenda is to unlock large scale private investment and the Bill should also give private sector investors the clarity and certainty to invest in areas of the economy that are selected under the National Interest Framework.