The Albanese Labor Government will establish a National Reconstruction Fund, to create secure jobs for Australian workers, drive regional economic development, boost our sovereign capability and diversify the nation’s economy.
The COVID pandemic has exposed serious deficiencies in Australia’s economy, in particular our ability to manufacture products and be globally competitive when it comes to innovation and technology.
Building new industries and boosting our existing industries represents an opportunity for Australia to recover from the COVID pandemic with a stronger economy. After 8 long years of policy drift presided over by consecutive Liberal leaders, this country now has a government with a vision to put the country back on a road to prosperity.
Labor’s National Reconstruction Fund will allocate $15 billion to partner with the private sector, including superannuation funds, to support investments which demonstrate they will grow the economy and increase employment.
From commercialising our historic capacity in science and innovation to boosting the development of medical devices and pharmaceuticals, through to reviving our capability to make cars, trains and ships, the National Reconstruction Fund will support the businesses in these industries to secure the capital and investment to grow and prosper.
Australia must be a country that makes things, to have our own industrial and manufacturing capabilities.
If there is anything that COVID has taught us, it is the need for Australia to be a place which makes things – to have our own industrial and manufacturing capabilities – our own sovereign capabilities.
This will build on Labor’s Future Made in Australia agenda to invest in Australia and Australian workers.
The Fund will be legislated and be governed by an independent Board using the successful model which Labor created through the Clean Energy Finance Corporation.
It will provide $15 billion of investment through a combination of loans, equity, co-investment and guarantees. The Fund will be administered on the basis that it will achieve a return to cover borrowing costs, with an expected positive underlying cash impact.
Labor’s plan to unlock investment opportunities is the first part of our comprehensive plan of our national reconstruction agenda.
Australians have a government that is on their side.
National Reconstruction Fund Investment Mandate
On 30th November, 2023 the Minister for Industry, Ed Husic and Minister for Finance, Katy Gallagher announced the National Reconstruction Fund's investment mandate. The mandate sets out clear expectations for the NRF Corporation including areas for investment across seven key priorities (renewables and low emission technologies; medical science; transport; value-add in agriculture, forestry and fisheries; value-add in resources; defence capabilities and enabling technologies).
The mandate requires the Corporation to target a rate of return of between 2 and 3 per cent above the five-year Australian Government bond rate over the medium to long term.
The NRF Board will make independent decisions to provide finance, including debt and equity, to Australian-based investments in seven priority areas of the Australian economy.
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The National Reconstruction Fund is the first step in Labor’s plan to rebuild Australia’s industrial base.
Australia has suffered nearly a decade of policy drift since the Liberal’s goaded the car industry to leave. We rank dead last in the OECD when it comes to manufacturing self-sufficiency.
We need to revive our ability to make world-class products and, in the process, create secure well-paid jobs for Australians.
The National Reconstruction Fund provides a crucial financing vehicle to specifically drive investment in projects that will build prosperity across the country, broadening our industrial base and boosting regional economic development.
The $15 billion in capital provided through the National Reconstruction Fund will support projects that create secure well-paid jobs, drive regional development, and invest in our national sovereign capability, broadening and diversifying Australia’s economy.
Through the National Reconstruction Fund, Labor will partner with businesses to unlock further potential private investment of more than $30 billion1. Like the CEFC, the Fund would operate in a way that is expected to make a return to the budget bottom line.
This investment will play to our strengths supporting new and emerging industries, transitioning existing industries to net zero emissions and by making it easier for people to commercialise innovation and technology.
The National Reconstruction Fund will be legislated to demonstrate our commitment to delivering a $15 billion capital injection into Australia’s prosperity giving business certainty for the life of projects.
The mission of the National Reconstruction Fund is to:
- create secure well-paid jobs
- build on our national strengths
- diversify Australia’s industrial base
- develop our national sovereign capability
- drive regional economic diversification and development
The National Reconstruction Fund will be administered by an independent board with government setting its mandate to drive investment in key sectors focusing on value adding and capability development to leverage Australia’s natural and competitive strengths including:
- Value add in resources. Expand our mining science technology, ensure a greater share of the raw materials we extract are processed here, for example, high purity alumina from red mud in bauxite processing or lithium processing for batteries.
- Value add in the agriculture, forestry and fisheries sectors. Ensure we unlock potential and value add to our raw materials in sectors like food processing, and textiles, clothing and footwear manufacturing.
- Transport. Develop our capabilities in car, train and shipbuilding supply chains.
- Medical science. Fulfil our potential, given our world leading research, in providing essential supplies such as medical devices, and Personal Protective Equipment (PPE), medicines and vaccines.
- Renewables and low emission technologies. Pursue commercial opportunities from; components for wind turbines; production of batteries and solar panels; new livestock feed to reducing methane emissions modernising steel and aluminium; hydrogen electrolysers, and innovative packaging solutions for waste reduction.
- Defence capability. maximise our requirements being sourced from Australian suppliers employing Australian workers, whether they be technology, infrastructure or skills, complimenting Labor’s Defence Industry Development Strategy.
- Enabling capabilities. Supporting key enabling capabilities across engineering, data science, software development including FinTech, EdTech, AI and robotics.
National reconstruction must include a focus on regional development. Ensuring our regions are able to sustain secure well-paid jobs and building are broader industrial base in key areas is a focus of the National Reconstruction Fund.
Labor’s national reconstruction agenda will include wide-ranging consultation with communities, businesses and unions on how we build a more prosperous Australia.
Projects eligible for the National Reconstruction Fund will also benefit from Labor’s National Rail Manufacturing Plan, the Defence Industry Development Strategy and Rewiring the Nation which prioritise domestic procurement.
In accordance with Labor’s Secure Australian Jobs Plan, the Fund will only enter into financial arrangements with businesses and organisations that are providers of secure jobs.
