National Reconstruction Fund

A piece of machinery cutting into metal, with sparks flying

*Speech delivered on 27th March 2023.

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I rise to speak on the National Reconstruction Fund Corporation Bill 2023.

I believe in supporting Australian businesses so they can make things here in Australia. Australian-made means Australian jobs. It's even better if things are made in my home state of Tasmania instead of on the mainland. I also believe in giving Australian businesses the best opportunity to innovate. This not only creates jobs here at home but it also prevents our best and brightest from going overseas to find a more favourable environment to do their important and exciting work.

This bill is pretty good, but there are some obvious problems that I think are really important to clean up before this bill is passed. The bill establishes a national reconstruction fund corporation. The functions of the corporation are investing in and liaising with stakeholders about this investment—it's pretty light on the detail here, don't you think? The Minister for Industry and Science has been banging on about how this $15 billion fund will make Australia a global leader in high-value manufacturing. Fun fact: this bill doesn't mention the word 'manufacturing' once. What happens when the government changes its mind or there's a new government? This $15 billion slush fund could be used for anything—maybe even some car parks or a shooting range in the minister's electorate. I think the government should make the purpose of this fund clearer in the legislation.

The bill establishes a board. The board will decide the strategies and policies to be followed by the corporation and will ensure the performance of the corporation's functions. The board has four to six members, and these members must have experience or expertise in certain fields. Under the bill's current drafting, you could end up with four lawyers or four bankers deciding how to spend $15 billion. No offence to the lawyers and bankers out there, but I don't think that's a great idea. I would prefer it if it were necessary for there to be board representation across a range of fields, and I'd go one step further and add an area of expertise that is currently missing. We need the board to have representatives who work in the commercialisation of research. Isn't that what this fund is really about?

The bill also gives the ministers the power to make an investment mandate, and this legislative instrument would allow the ministers to give directions to the board about investment functions or investment powers. Again, this is pretty broad. At the moment the bill doesn't identify areas for funding. I think that's good. It gives the ministers some flexibility and allows for innovation. But we do need to ensure, to the extent that we can, that there's continuity in these investments, even if there is a change of government. The last thing we want is for a board to set itself on some particular path involving some particular priority area, only for there to be a cabinet reshuffle in 12 months time, with a new minister, and for the new minister to say the board, 'Forget all that other stuff; here's what you need to invest in now.' It shouldn't be that easy to tear up every contract of a $15 billion fund.

The areas the fund is supposed to invest in should be set slowly, deliberately and strategically. You want there to be a forward plan for investments. You want there to be some sense of a time line. If the board sees opportunities coming down the pipeline that aren't there right now, it should be able to flag those early so firms know that the fund is taking an active interest in helping them. If this fund is going to be successful, it's not going to be by taking advantage of opportunities that are already there in businesses that are already flourishing; it's going to by using its might to say to the market, 'We've got a gap here and, if you're prepared to take a risk to plug that gap, we're going to back you.' But companies can't have confidence that the message from the fund's board will still be the same 12 months from now if they don't know what the fund's priorities will be 12 months from now. 

To have confidence and to encourage investment, you need stability and consistency, and you don't get that by giving every minister from here until the end of time the opportunity to completely turn on a dime a $15 billion fund because they had a bright idea in the shower that morning. You can have stability and still be agile. You can still act quickly, but acting consistently is the goal. You get that by having the flexibility to change your pace but the rigidity to keep on the track. That's why we want the board to set its own strategic direction. The board's members are the experts in the room, not the government.

There's another issue that I've been talking about, and that's the deal the government did with the Greens in the other place to apparently get them over the line on this bill. The Greens amended the bill so that the fund would not directly finance the logging of native forests. This deal is a broken promise from the Prime Minister to Tasmania, and, no, I'm not just being dramatic. 

During the election last year, the then opposition leader, Anthony Albanese, wrote an open letter to the Tasmanian forest industry. He said that the Liberals were engaging in a scare campaign by saying that Labor would listen to the Greens on forestry. He confirmed he would support native forest harvesting. They're great words when you're trying to win an election, but at the first opportunity Labor folded to the Greens on this one. I won't apologise for pointing that out and for looking after industry in my patch. The Jacqui Lambie Network proudly supports the Tasmanian forestry industry, and we aren't going to tolerate anything that puts it at risk, directly or indirectly.

It's in that spirit that I'm foreshadowing an amendment on sheet 1844. The government told me that this amendment won't affect investment in native forest related projects. It's not that I don't trust the government, but I'd like the bill to make this very clear. I want the bill to clearly state that companies who engage in other activities as well as native logging, like Hydrowood in Tasmania, can still receive funding from the fund. 

Hydrowood is logging native trees, but under the water surface of Lake Pieman on our west coast. Those trees are drowned. They are being salvaged in one of the world's first underwater forestry operations. It's technology we're innovating to salvage product that would otherwise rot in darkness and turn it into manufactured products that are sold to the world. That is the sort of thing that this fund should be able to support with investment, but instead a Tasmanian manufacturer is locked out of the National Reconstruction Fund.

Is this really what the Greens intended when they were drafting their amendment, to stop companies like Hydrowood? That's what their amendment does; it stops a company that is salvaging native trees from underneath the lake's surface—trees that would otherwise rot and release carbon into the atmosphere—from being converted into products that sequester carbon for decades. No living trees are logged, no carbon emissions are released and no fossil fuels are extracted, yet no investment is possible. My amendment clarifies that, for the purpose of companies like Hydrowood, investment is possible. 

The Greens say this amendment would water down the effect of their amendment; the government says this amendment wouldn't. One of them is wrong. If it's the Greens then there is no downside to supporting this amendment. If it's the government then this amendment is a guardrail against companies being prohibited from investment by accident. If the Greens amendment has the potential to extend way beyond what is intended, then that should be fixed so this bill doesn't end up locking out companies doing good work.

Finally, the bill appears to be doubling up with some other funds. There is the Medical Research Future Fund, the Clean Energy Finance Corporation and the Medical Research Endowment Account. I asked about this in question time last sitting period, and the response I received wasn't very convincing. At the moment, it looks like these funds in the NRF could be bidding against each other. This blind bidding of one government fund against another could drive up costs. What a waste to the taxpayer this would be. 

I've expressed my concerns to the government, and I think it's up to them to clean this up. As outlined, I've put forward some reasonable suggestions on how to make this bill better. My proposed suggestions will help strengthen the integrity of the fund and prevent wastage of taxpayer money. I hope the government agrees.