Productivity Commission Chair Warns of Subsidy Reliance under Future Made in Australia Act

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Anthony Albanese has dismissed worries that a significant manufacturing initiative might result in an excessive dependence on government funding. The Future Made in Australia Act, which promotes domestic manufacturing and protects the country's sovereignty over resources and essential minerals, was unveiled by the prime minister on Thursday. The strategy has been compared to the US Inflation Reduction Act. Danielle Wood, the chair of the Productivity Commission appointed by Labour, has taken issue with it, though. She told the Australian Financial Review, "We run the risk of creating a class of businesses that are reliant on government subsidies and that can be very effective in coming back for more."

However, Mr. Albanese downplayed the worries, stating that action was required.

“We've certainly considered the opportunity that is there. And with the new competition in the United States - we have the Inflation Reduction Act - that we're not trying to compete with, because it's a much greater scale than what we have, but every country in the region, Japan has its Economic Security Act, Korea has a piece of legislation, the Europeans are doing it as well. Now, we can sit back and watch the whole world go past us, or we can take up the opportunities that are there. And I'll give you just one example, John - to our north, you would recall the debate over a long period of time about Liddell power station in the Hunter Valley.” The PM told Sydney radio station 2SM on Friday.

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Opposition Leader Peter Dutton expressed concern over Ms. Wood's point of view.

"The fact is that over the last two years, manufacturing businesses have gone into bankruptcy - it's gone up by 300 per cent," Mr. Dutton told Nine's Today program on Friday.

However, Australia needs more domestic manufacturing, according to Minister of Government Services Bill Shorten.

The Future Made in Australia Act, unveiled by Prime Minister Anthony Albanese on Thursday, aims to accelerate the clean energy transition by infusing government funds into the technology and infrastructure sectors.

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