Tightened Foreign Investment Rules Possible as Australia Invests in Domestic Manufacturing and Clean Energy

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The upcoming federal budget will include funding for significant manufacturing and clean energy projects, despite Anthony Albanese's suggestion that foreign investment regulations may be tightened. The Future Made in Australia Act, which would promote manufacturing and protect the country's sovereignty over its resources and vital minerals, was unveiled by the prime minister on Thursday. The strategy has been compared to the US Inflation Reduction Act. According to Mr. Albanese, the initiative will receive additional funding in the May budget.

In a interview with 7.30, The PM said they know, that there is a global competition for new jobs, and new opportunities. This isn't the old protectionism. This is the new competition, which is there, and unless we participate in, we will fall behind. So we've got to be in it to win it, for those new jobs, new industries, and new opportunities.

“By making sure that we look at the comparative advantages that we have. The resources that we have under the ground, the resources have in the sky, we have the best solar resources in the world. So we can effectively produce green aluminium, green steel. For example, we need to produce batteries here.” He said

He continues, “We compete on the basis of the advantages that we have. And by not trying to compete on everything, this isn't competition with the IRA, we can't compete with the Inflation Reduction Act. What we can do, is identify where Australia has particular advantages, particularly because of our resources, because of our location in the fastest growing region of the world in human history, our workforce, skills and universities. But making sure as well, that when we have innovation and breakthroughs, like we have in solar technology, we commercialise those opportunities here.”

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When he made the announcement earlier, Mr. Albanese stated that "greater sovereignty over our resources and critical minerals" was the goal of the policy. “Well for example, what Canada has done, is have a program of ensuring that their critical minerals, they maintain some national sovereignty or ownership over it domestically.” He said.

He added They have very strict rules. But what we want to do is to make sure that we value add here, rather than just export the raw materials, wait for someone else to value add, wait for someone else to create the jobs, and then import it back at greater value.

When asked if Labour was willing to consider toughening up regulations governing foreign investment, Mr. Albanese replied that the government was.

“No, not necessarily. But you'll see some of the measures in the Budget that will come forward, and in the legislation that I foreshadowed today, the Future Made in Australia Act. But one of the things that we are looking at, is areas of identifying two different motives, if you like, for intervention. One is where Australia has a comparative advantage. The second is where our national sovereignty matters. So for example, we've invested in the creation of mRNA vaccines here. That is, because we identified during the global pandemic, the problem, if we don't have the resilience by having our own pharmaceutical industry here. That's an example of protecting our national sovereignty. Similarly, we can't have a situation where we have the best per capita solar panel usage in the world, but we don't make hardly any here.” He concluded.

Meanwhile, Beyond Zero Emissions (BZE) warmly welcomes the Australian Government’s announcement of the Future Made in Australia Act. 

BZE CEO Heidi Lee said the independent think tank had been calling for government investment in Australian manufacturing capability, having highlighted through its research that Australia’s natural advantages in terms of existing infrastructure, materials, a skilled mining industry, regional workforce and more.

“This is excellent news for every Australian household, who will see the cost of energy fall as we bring online new renewables at scale, and for local businesses to sell their products into the clean economy” Ms Lee said.

“Communities in regional Australia stand to benefit from the investment in affordable and reliable clean energy, and modern infrastructure that will link our resource-rich areas to clean industry clusters built around our established ports and smelters. This will see jobs and prosperity flow to places that need it most.

Meanwhile, Geoff Crittenden (CEO, Weld Australia) said , “Weld Australia congratulates Prime Minister Albanese on his announcement of the Future Made in Australia Act. It has real potential to ensure Australia has affordable, reliable clean energy, a strong manufacturing industry, skilled workers, secure jobs and modern infrastructure. It could see Australia become a renewable energy superpower.”

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