Stakeholders presenting evidence before the Economic Legislation Senate Committee on the Future Made in Australia (FMA) Bill extended broad support for the framework but expressed concerns about the law’s overly restrictive eligibility criteria, which could limit support for otherwise viable projects.
They also called for greater policy certainty to encourage private investment and stronger safeguards to ensure the judicious use of taxpayer dollars.
Future Made in Australia is a massive $22.7 billion (US$15 billion) scheme aimed at facilitating Australia’s renewable energy transition by providing sector assessment frameworks, taxpayer-backed incentives for subsidies to manufacturing and clean energy industries, and more.
“The eligibility criteria and design of FMA policies must not be so restrictive as to limit support for projects that otherwise meet the policy objectives,” said Bran Black, Chief Executive of the Business Council.
Louise McGrath, Head of Industry Development and Policy at the Australian Industry Group, echoed this sentiment, emphasising the need for “greater policy certainty to encourage private investment in the targeted sectors by specifying the form and quantum of support available.”
Stakeholders warned that government procurement requirements tied to union-endorsed agreements could limit competition, increase costs, and create incentives for side deals to secure these agreements.
“There is a risk that setting government procurement requirements for union-endorsed agreements can limit competition and subsequently increase costs. It also creates a honeypot and a potential incentive for side deals to secure these union agreements to gain access to contracts.”
Representatives also highlighted the importance of ensuring that “decisions on investment made under FMA must be determined by classic principles of value for money for taxpayers” rather than focusing too heavily on social objectives like regional communities and diverse workplaces.
They warned that too much emphasis on these aspects could overshadow the primary goals of economic competitiveness and productivity of the renewables and energy sector.
Andrew McKellar, Chief Executive of the Australian Chamber of Commerce and Industry (ACCI), also noted that while the bill’s primary purpose is to establish the national interest framework for assessing future “Made in Australia” projects, the term “national interest” has not been well defined.
“As per the current draft, the national interest framework is high-level and somewhat loosely defined, lacking clear and systematic assessment criteria,” he said.
However, stakeholders agreed on the necessity of such a framework, since economies like the United States have already implemented similar legislation with it’s Biden Inflation Reduction Act.
“Australia should not sit still while other countries are increasing their incentives, growing their competitiveness at a foundational level. To best grow our economy, we must, as a point of national urgency, become a more competitive place to do business,” said Black.
The report is based on the first panel of the hearing, which continued until late evening. It was chaired by Senator Jess Walsh of the Labor Party and co-chaired by Andrew Bragg of the Liberal Party.
