Finance Minister Katy Gallagher is co-leading the cabinet submission with Husic because the two ministers will jointly oversee the National Reconstruction Fund and will appoint its board and a potential reference group to advise on how it operates.
The cabinet decision will be the first major industry policy to be decided by the new government and will be crucial to shaping the amount of money available for new projects and the terms on which the investments will be made.
The goal is to establish the fund with Commonwealth debt and invest this money in manufacturing and industry alongside the private sector, producing a commercial return that would go back into its coffers.
Husic said the government could copy the CEFC model in order to get the fund operating quickly.
“The benefit of that is speed,” he said. “We can quickly put something in place and people would understand how it behaves.
“Having said that, I’m also aware that the CEFC was set up for a particular dynamic or industry segment, whereas the NRF is a lot broader. Consultation will be important.
“But we want people to be very confident that this is not about politicians with colour-coded spreadsheets making decisions about investment … There will be an independent board with talented people that will work off an existing model.”
Manufacturing companies have told The Age and The Sydney Morning Herald they were turned away by the previous government or forced to wait because decisions were delayed ahead of the federal election.
“We participated in all of the government’s medical manufacturing initiatives since the COVID-19 pandemic began in April 2020 and we are still waiting for government certainty and support,” said IDT Australia chief David Sparling, whose company manufactures pharmaceuticals in Melbourne.
Some companies received funding from the former government’s Modern Manufacturing Initiative but there was $148.6 million in unallocated funding in the scheme at the time of the election, leading Labor to book this as a budget saving.
Husic said he believed there would be a place for direct grants to projects in Australia as well as the loans and other investments from the NRF.
“Sometimes firms will not necessarily want to use venture capital early on because it gives up a lot of the ownership stake in that company, so grants do play an important role,” he said.
“I’ve been contemplating what runs alongside the NRF and what’s the evolution of the Modern Manufacturing Initiative that stand in parallel with the NRF.”
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