National Reconstruction Fund passes Senate despite being labelled as an ‘irresponsible deal’ by the Coalition

The Labor government’s National Reconstruction Fund will be established in law after the National Reconstruction Fund (NRF) Corporation Bill passed the Senate last night.

Minister for Industry and Science Ed Husic welcomed the passage of the National Reconstruction Fund Corporation Bill through the Senate.

“The Government’s $15 billion National Reconstruction Fund is one of the largest peacetime investments in Australian manufacturing capability. The most successful modern economies are built on strong, advanced manufacturing capability. The NRF will help deliver this for Australia. We genuinely wanted this Bill to be a moment where Parliament came together to support the national interest. I am pleased the crossbench engaged constructively on this important Bill that will help rebuild Australia’s sovereign capability,” Minister Husic said.

“We are delivering on a significant election commitment that will position Australia as a maker of high-value added products and creating good secure jobs in the process. The NRF shows the Government is serious about investing our human capital to keep Australian smarts on shore,” Minister Husic moted. 

The Bill did not pass without some dispute, however.

“What this dodgy, irresponsible deal has done is ensure that we make it as difficult as possible for Australian manufacturers,” claimed Liberal Senator Linda Reynolds.

“The fund will be administered by a corporation with an independent board, who will deliver against an investment mandate set by the government, but that framework is fundamentally flawed. The government must address rising energy prices, and they must address labour market shortages and disrupted supply chains, if our manufacturers are to succeed. Without the policies any government spending like this, apart from being inflationary, will have no positive impact on our economy.

“This Bill will create even more lost time for manufacturers. In this terribly broken model, it will take far too long for money to start flowing to manufacturers. The government announced that the NRF should be up and running by next financial year, but, of course, they have not yet given any indication of a start date.”

Senator Reynolds added “The NRF is based on a highly flawed and very poor funding model. The model shifts from competitive grant programs, which have built within them robust processes for government to acquire equity and for how government provides loans. Government equity and loan schemes are less accessible than grants, and manufacturers are almost certainly going to struggle to meet their return-on-investment thresholds or put together detailed business cases inhouse.”

Minister for Finance, Senator Katy Gallagher, said today is an important step toward building a better future for Australians.

“After a decade of uncertainty, the National Reconstruction Fund will support Australian innovation and industry. More things being made here means more jobs for Australians.”

The Bill will return to the House of Representatives for a final-sign off on amendments raised in the Senate.

The NRF will be administered by an independent board making independent investment decisions. It is modelled on the successful Clean Energy Finance Corporation.

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