14 March 2023



Tina Quinn: Well, the Coalition has hit out at a deal made between the Federal Government and the Greens which would exclude any new coal, gas or native forestry projects from receiving investment from the National Reconstruction Fund. One of the Albanese Government's big nation-building election promises, the NRF bill establishes an off-budget $15 billion investment aimed to support manufacturing and emerging industries.

But Nationals MP Pat Conaghan says this new agreement, which saw the bill passed through the lower house last week, will harm any would-be manufacturer's bottom line. However, the Assistant Minister for Trade and Manufacturing, Tim Ayres, refutes this. He says the fund was never intended to be used for any form of primary production.

Tim Ayres, Assistant Minister for Trade and Assistant Minister for Manufacturing: Every region in Australia has an opportunity to be a beneficiary of this nation-building investment. This is where the manufacturing opportunities are. The Mid-North Coast has a very strong manufacturing capability, but the future decisions of this fund are going to be based upon the merits of different project proponents. It is going to depend on whether they are bringing technology to the market that can be commercialised in Australia to create Australian exports and to create high-quality Australian jobs.

Quinn: Hardwood timber contributes $1.8 billion to our economy, and it employs many thousands of people. Why exclude it from the fund?

Assistant Minister: Well, there was never any prospect that this fund, which is a fund that is about rebuilding Australian manufacturing, was ever going to be engaged in timber harvesting or coal mining or gas extraction or any form of primary production at all, including agriculture. This fund is about manufacturing.

Quinn: Industry argues though, that without proper financial support, this makes it more difficult for the hardwood timber sector, for instance, to make the requisite changes that are needed for their industry to become more sustainable.

Assistant Minister: Well, the hardwood timber industry is undergoing a very significant transformation. This program, the National Reconstruction Fund, though, is about making sure that there are manufacturing destinations for this product to go to that will lift it up the value chain. That mean that there are manufacturing opportunities in country towns. The fate of, the future of the ag sector, forestry, the mining industry. These industries have got very strong futures in Australia.

Quinn: Right but you're excluding them from the fund. So, for those in the hardwood timber industry, are you able to explain how this will actually help to assist them?

Assistant Minister: Well, it means it will be manufacturing wood products. Absolutely. This fund will engage in food and fibre, in particular, in the processing of agricultural products. It just will not and never was envisaged that it would be engaged in timber harvesting or the direct extraction of products or in primary production of any kind. This is a secondary processing manufacturing fund.

Quinn: The Nationals are also raising a number of concerns that they have over the accountability of the proposed expenditure. What sort of oversight will there be for selecting the fund’s board?

Assistant Minister: Honestly, these guys are just having themselves on, they are trying to find a justification when there is no justification. This will be an independent board, just like the CEFC board, the Clean Energy Finance Corporation board. It will engage in these issues on the basis of its mandate in an independent way.

The problem for the National Party is they are addicted to grants and rorts. That's been the history of the Morrison Government and the governments that preceded it. That utterly addicted to rorts and grants, that became the subject of enormous public criticism and Auditor-General reports. This is quite a different approach. It is firstly, completely independent of government. It is secondly about co-investments and loans and guarantees that will ensure a return to the taxpayer so that this fund continues to grow.

Quinn: Okay, so can you give specific examples then of how there is going to be proper oversight when it comes to selecting this board so, it's not just going to be a board of Labor's captain picks deciding to spend $15 billion of taxpayer funds on Labor-picked priorities?

Assistant Minister: There will be a completely impartial capable board that will look a lot like the Clean Energy Finance Corporation, of which there's been no criticism of the investment decisions that it has made, billions of dollars in clean energy capability and low emissions technology. This fund will do the same on a basis, commerciality and independence, invest in future manufacturing capability. There won't be a Scott Morrison style grants operations here. This will be sensible, careful, independent investments with a high standard of governance and public accountability.

Quinn: They've also questioned the removal of a merit based competitive grants program for manufacturers to secure the funding. Why was this removed?

Assistant Minister: Well, it's astonishing, really, that the National Party would talk about merit based competitive grant programs. I mean that is not the history of the Morrison Government's approach with these issues. We've just worked our way through sports rorts, the commuter car parks grants, a whole series of these grants programs that were allocated on an utterly partisan basis. Not in the public interest. This fund is not a grant fund. It is a co-investment fund, it is a loan fund, it is an equity fund. That means that there will be a return to the Commonwealth and a return to the fund on the investments that it makes. And those returns will be able to be reinvested in future manufacturing capability.