Albanese reveals plan for interventionist green industry policy similar to Biden’s Inflation Reduction Act
Anthony Albanese is signalling a dramatic shift to unapologetically and directly supporting Australian industry and innovation, saying the country needs “sharper elbows when it comes to marking out our national interest” and competing with the rest of the world.
In a speech to be delivered to the Queensland Press Club on Thursday, the prime minister will effectively launch his bid for re-election with a plan for a green interventionist industry policy, promising direct government support to speed up the energy transition, provide certainty for business and stem the flow of money and ideas to countries offering investment incentives.
His speech contains a message to those who may see the move as a new form of protectionism for certain sectors and projects.
“We need to be clear-eyed about the economic realities of this decade, recognising that the game has changed and the role of government needs to evolve,” Albanese says in an advance copy of the speech, seen by Guardian Australia.
“Government needs to be more strategic, more sophisticated and a more constructive contributor. We need sharper elbows when it comes to marking out our national interest.”
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Albanese will emphasise the link between economic security and national security and will say attracting investment has “never been a polite and gentle process where every nation gets a turn”.
Borrowing and bending a phrase his predecessor, Scott Morrison, employed to defend the Coalition government’s slow acquisition of vaccines during the Covid-19 pandemic, Albanese will say of shaping the future economy: “It’s always a contest – a race.”
“Australia can’t afford to sit on the sidelines,” he will say. “Being in the race does not guarantee our success but sitting it out guarantees failure … Australia is in a race, no matter what. Our government wants Australia to be in it to win it.”
The prime minister will argue that Australia needs to be “willing to break with old orthodoxies and pull new levers” to advance that national interest.
He will foreshadow new legislation – to be titled the future made in Australia act – that he says will serve as the framework for the changed approach, with details to come in next month’s federal budget. He will describe this as coordinating a package of new and existing initiatives to “boost investment, create jobs and seize the opportunity” of an Australian-made future.
Albanese does not spell out what those incentives will involve, although possibilities may include concessions, grants, or underwriting of projects.
But he will emphasise that it will underpin the work of the new Net Zero Authority, which aims to facilitate investment in renewable, sustainable energy projects and help retrain workers in fossil fuel industries and guide them into new jobs.
Albanese will cite the US Inflation Reduction Act, which contains half a trillion dollars in green energy incentives, and the Chips Act, which subsidises research and production of semiconductor technology, as key reasons why Australia can no longer continue a level-playing-field approach to industry development and energy transition.
He will cite similar interventionist measures in Europe, Japan, Korea and Canada designed to boost their respective domestic industries.
“This is not old-fashioned protectionism or isolationism, it is the new competition,” Albanese will say. “These nations are not withdrawing from global trade or walking away from world markets or the rules-based order – and let me be clear, nor should Australia.”
Albanese will insist that Australia will continue to champion global markets and free trade and forge both bilateral and multilateral agreements, but that countries with which it seeks to partner are “moving to the beat of a new economic reality”.
His government will not necessarily replicate these other approaches, he will say. “But we must recognise there is a new and widespread willingness to make economic interventions on the basis of national interest and national sovereignty.”
He will say Australia can no longer be “running on the fumes of past economic reforms”, nor government be merely “an observer or a spectator”.
“We cannot afford another decade where government is a drag on business investment and productivity instead of a driver of it.”
The prime minister will say the new approach will shift the emphasis away from minimising risk towards maximising reward. It will seek to exploit Australia’s advantages and build sovereign capability – an issue that emerged during the pandemic – in a longer-term way, rather than just as a patch-up in a crisis.
“We’re building an economy with more good jobs for fair wages – that’s what I mean by a future made in Australia,” he will say, with an election-style pitch about a “stronger, fairer and more prosperous future”.
“One where we compete for and win the great prize of new prosperity – and win our way, by staying true to the values that make this the greatest country on earth.”