Federal minister for industry and science Ed Husic is set to introduce the legislation for the establishment of the $15 billion National Reconstruction Fund today.
The National Reconstruction Fund was announced by the Government in the Federal Budget for October 2022. At the National press Club yesterday, Husic said the fund will be governed by an independent board built on the model that Labor previously championed in the Clean Energy Finance Corporation.
“It will be empowered to invest through a combination of loans and equity including alongside investment from institutional investors, private equity and venture capital,” he said.
“From next week my department will open broad public consultation to further define the seven priority areas of the economy for investment and how the fund will make investment decisions.”
The National Reconstruction Fund will deliver targeted co-investments in independently assessed projects across seven priority areas: resources; agriculture, forestry and fisheries; transport; medical science; renewables and low-emission technologies; defence capability; and enabling capabilities.
The Government said it will consult with industry, unions and stakeholders across the country to ensure the National Reconstruction Fund is appropriately designed and targeted to maximise the benefits of this $15 billion investment.
The National Reconstruction Fund Reference Group is made up of leading figures in industry and investment circles to help guide the development of the fund and and its investment mandate.
In his speech, Husic noted the fund is one of the largest peacetime investments in Australian manufacturing capability.
“And we’re not the only country to have realised this. Around the world, industry policy is being remade before our eyes to shore up local manufacturing capability,” he said.
“In the US, President Joe Biden is delivering on Made in America commitments, with more than $100 billion in announced investments in electric vehicles, batteries and critical minerals, as well as nearly $80 billion in semi-conductor manufacturing. Singapore has unveiled a 10-year plan to boost local manufacturing by 50 per cent.
“Right now, Australia ranks dead last among OECD countries in manufacturing self-sufficiency. We have the smallest manufacturing industry relative to domestic purchases of any OECD country. Our consumption of manufacturing output is nearly double our domestic manufacturing output, and we have slipped in economic complexity from a modest 55th in 1995, to 91st in the world in 2020.”
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