Australia will follow similar measures in the United States and Europe and introduce subsidies and incentives to help the commodities exporter strengthen domestic manufacturing and promote industries it considers vital to national security.
Darian Traynor | Stringer | Getty Images
Australia will follow similar measures in the United States and Europe and introduce subsidies and incentives to help the commodities exporter strengthen domestic manufacturing and promote industries it considers vital to national security.
Prime Minister Anthony Albanese unveiled the Australian Future Manufacturing Act in a speech in Queensland on Thursday.
There’s no price tag, but incentives worth at least A$18 billion ($12 billion) renewable hydrogen, solar Manufacturing will be included in the new policy ambit, with more announcements likely in next month’s budget.
Albanese will point to government procurement contracts for local businesses, investor incentives and regulatory reforms to fast-track infrastructure projects as potential areas of support.
“Our government will be proactive in supporting Australia’s comparative advantages and delivering on our national interests,” Albanese said.
“Only government has the resources to do this, only government can pull the threads together across the economy and our country.”
Rich-world governments are spending billions on subsidies as they race to roll out clean energy and compete with China in electric vehicles and semiconductor manufacturing, seen as vital to economic prosperity and national security.
The biggest example is the United States, where the Biden administration has introduced a $430 billion inflation-cutting bill. The European Union, Japan and South Korea have also followed suit.
Albanese said Australia in turn needed the government to play a greater role as an investor and market participant.
“We must recognize that there is a general willingness to engage in economic intervention on the basis of national interest and sovereignty,” he said.
Australia is able to compete because of its rich natural resources, proximity to Asia, highly educated workforce and democratic society.
Albanese will stress that the shift to government intervention is not a return to old protectionism or isolationism, but a new form of competition.
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