Chapter 3The National Interest Framework, Sector Assessments and the Community Benefit Principles
3.1This chapter provides detailed views on the following aspects of the Future Made in Australia Bill (the FMIA bill): the National Interest Framework (NIF), Sector Assessments, and the Community Benefit Principles (CBP).
Support for National Interest Framework
3.2There was broad support for the two streams of the NIF—the net zero transformation stream, and the economic resilience and security stream—and the use of the framework itself to direct investment to areas where market failures are common.
3.3Dr Gareth Bryant of the University of Sydney, appearing in a personal capacity, was also supportive of the NIF and the broader goals of the FMIA plan, noting the need for acceleration of the clean energy transition in order for Australia to meet its climate obligations. Dr Bryant also recommended that FMIA initiatives be expanded to climate adaptation and resilience in Australia and the Pacific.
3.4Mr Tony Wood of the Grattan Institute described the NIF as the basis for a ‘more cooperative arrangement between industry and government’. He went on to say there are risks to this kind of cooperative industry policy, but these can be mitigated by having focused investment strategies and sharing risk between government and industry, which the NIF provides.
3.5Other submitters outlined how the NIF will support their industry. Ms Shahana McKenzie, CEO of Bioenergy Australia stated that the NIF would be helpful to the low-carbon liquid fuels industry, in particular the economic resilience and security stream:
This is really setting us up to be able to not only provide that resilience domestically but also potentially support decarbonisation within the region, for other countries that are unable to access the sorts of feedstocks that we can. There's also an export opportunity there.
3.6Ms McKenzie further emphasised the need for her industry to be supported in a timely fashion and at scale and argued the NIF would align with these objectives.
3.7Professor Robson of the Productivity Commission was also positive about the NIF, describing it as a good framework, even if ‘there are a number of enhancements that could be made.’
3.8Despite the broad support expressed by inquiry participants, some submitters raised concerns about the National Interest Framework, particularly calling for increased clarity and certainty within the Framework and minimising the compliance burden for industry.
Clarity and consistency of the National Interest Framework
3.9The Grattan Institute suggested that the FMIA bill needed more clarity on how the NIF would guide future funding and policy decisions, saying:
…without specifying the role these assessments will play and how they will factor into decision-making, there is a risk of falling into three classic industry policy traps: overreaching for competitive advantage, picking losers, and short-term policy thinking.
3.10The Grattan Institute suggested the economic security and resilience stream is particularly open to flexible interpretations for assessing proposals and would need strong boundaries to avoid unnecessary spending.
3.11The AI Group submitted that the extent to which Future Made in Australia support will change investment patterns will depend on the ‘form and quantum of support offered, and the obligations that accompany it,’ and that until additional detail is provided, increased private investment is unlikely to eventuate. It compared the FMIA bills to similar measures in the United States, and suggested the government clarify the supports which will be made available under the FMIA plan.
3.12The CMEWA called for greater clarity about the interaction between the two streams of the National Interest Framework–that is, the net zero transformation stream and the economic resilience and security stream–in the Minister’s rules and Treasury guidance. This would, the CMEWA argued, help reduce ambiguity, particularly around how different subsections of the FMIA bills would interact with each other.
3.13Fortescue also called for consistency of policies developed to support the National Interest Framework and submitted that these policies should be applied across all funding bodies, including the EFA, ARENA, the Clean Energy Finance Corporation and the National Reconstruction Fund Corporation. It reasoned that strong consistency would provide certainty for both private investors and project owners under both streams of the Framework.
3.14The AI Group added that the FMIA bills would benefit from additional principles which would explicitly address the kind of support which would be offered under the scheme. The AI Group suggested that these principles could be included in the National Interest Framework, alongside criteria for sectoral assessments. This would increase policy certainty and transparency for both the public and potential project participants.
Minimising the compliance burden for industry
3.15The CMEWA also commented that any new or existing policies, fiscal settings or regulations are consistent with FMIA policy and not create an increase in costs or compliance for businesses in Australia. They noted the importance of transparent industry consultation ‘to maintain and attract investment in Australia, while also facilitating efficiency in both the public and private sectors.’
3.16The IGCC expressed similar concerns, recommending that the sector assessments outlined under the National Interest Framework not duplicate work already being undertaken as part of existing sector plan consultations. The IGCC was supportive of such assessments as long as they added value and did not delay financial support for projects aligned with the goals of FMIA policy.
Sector Assessments
3.17Inquiry participants were generally positive about the sector assessments which would be conducted against the NIF. For example, the Productivity Commission describing them as ‘an essential component of the FMIA Bill’.
3.18The Productivity Commission went as far as to submit that FMIA support should be limited only to sectors that have undergone the sector assessment process, noting that this is not currently required in the FMIA bill, stating:
As currently drafted, sector assessments are only required if requested by the Minister. Subsection 9 (1) of the FMIA Bill requires that the sector assessment be provided to the Minister but this does not explicitly preclude FMIA support from being provided to sectors not found by an assessment to satisfy the NIF tests. Allowing sectors to bypass the NIF process would undermine its role in disciplining spending.
3.19A similar recommendation was made by the Australian Conservation Foundation in its submission.
3.20Some submitters, such as the Grattan Institute, raised concerns that a completed sector assessment would not be a prerequisite for receiving funding under the NIF and was not built into the funding assessment process. The Grattan Institute also noted that one of the streams of the NIF, economic resilience and security, was very broadly defined.
3.21In response to these concerns, Treasury outlined that the sector assessment process would consider a variety of factors, such as the availability of a particular resource, supply chains, the energy intensity of a particular resource and how that would impact decarbonisation goals, and whether Australia could be competitive in that sector.
3.22Ms Zaheed of Treasury went on to say that sector assessments will not look at specific projects, such as the Middle Arm Gas Project. Individual projects will sit outside the NIF assessment process. She went on to say:
What the sector assessment does is to create a robust and transparent assessment and fact base on which to shape how government can think about those issues: to what extent it's needed for economic resilience and security, what the barriers are and what strategies government can employ, including investing public funds or other resources, to address those barriers.
Accountability and transparency of sector assessments
3.23A common theme in evidence received throughout the inquiry process relating to sector assessments was increasing the accountability and transparency of these assessments.
3.24The Productivity Commission advocated for sector assessments to be independently evaluated and reviewed on a periodic basis, noting this was not explicitly required in the FMIA bill. They went on to say that periodic reviews would enhance transparency and public confidence in the program.
3.25The Productivity Commission was also in favour of the data and reasoning underlying sector assessments being made public. They noted that there was a requirement for tabling sector assessments in Parliament, and that ensuring that the data and reasoning for a sector assessment was also made public would further enhance transparency.
3.26The Business Council of Australia made the argument that the independence of sector assessments could be improved by having the Productivity Commission complete this analysis, noting that this would complement the government’s recently issued Statement of Expectations for Productivity Commissions. This Statement of Expectations includes expectations that the Productivity Commission will consider economic resilience and the net zero transformation.
3.27The Business Council of Australia also submitted that sector assessments should follow best practice public policy principles, including:
…well-defined identification of the problem to be solved, a range of genuine policy options capable of addressing the problem (with ranked preferences), adequate third-party consultation, and clearly defined indicators for success.
3.28Professor Robson commented that the Productivity Commission does have a strong capability for performing assessments of the kind anticipated by the FMIA bill’s sector assessments as well as any periodic review or evaluation of sector assessments which, as mentioned above, the Productivity Commission was in favour of instituting.
3.29Offering compromise between fully independent sector assessments and assessments conducted by Treasury, the Grattan Institute suggested that the assessments be conducted by Treasury but that the Secretary be required to invite independent bodies to take part in the assessment process, as ‘this should bring more rigor to the process, without establishing an extra bureaucracy.’
3.30The Clean Energy Council called for sector assessments to include public consultation as this would ensure that the assessments contain relevant and most up to date information, something particularly important for rapidly evolving industries like clean energy.
3.31Taking a more cautious approach, the CMEWA was supportive of redacting information within sector assessments, noting the importance of protecting commercial and confidential information, and recent cyber attacks on critical minerals. They also suggested that reporting requirements on sector assessments be regularly reviewed ‘to ensure it is an effective and efficient use of Treasury resources.’
3.32Other submitters made the point that sector assessments should be conducted for all areas critical for net-zero transformation or economic resilience, regardless of whether they were new or established industries in Australia. This would help extend the focus of the FMIA plan to supporting existing industries transition to net zero and resilience.
3.33The CMEWA suggested the power within the FMIA bill for the Minister to order a sector assessment when such an assessment has previously been completed may lead to duplication. To avoid duplication, the CMEWA recommended ‘flexibility instead to update and leverage an existing assessment’.
3.34Mr Wood of the Grattan Institute stated that, while his organisation welcomed the transparency of requiring that the sector assessments be tabled in Parliament, the current legislation required greater rigour. He suggested that the Treasurer or other relevant Minister be required to consider the sector assessments in making funding decisions about a particular sector.
3.35This recommendation was seconded by Ms Reeve, also of the Grattan Institute, who contended that without tying decision-making to the sector assessments there was a risk of Ministers making ‘captain’s picks’.
3.36Ms Zaheed of Treasury sought to allay some of the concerns raised by submitters in relation to the sector assessment process, confirming that sector assessments will be developed through a rigorous public process. This process, she advised, will involve consultation with a variety of stakeholders and experts from academia, the Productivity Commission and other relevant government departments. She also stated that, although a formal sector assessment hasn’t been undertaken, she expects that these assessments will include a public consultation process and drawing on both domestic and international data. Ms Zaheed also noted that Treasury is currently working across government, including with the Productivity Commission, to create detailed guidelines to support the sector assessment process.
Community Benefit Principles
3.37Broadly, inquiry participants expressed support for the Community Benefit Principles (CBPs), included in Part 3 of the FMIA bill. For example, the Centre for Policy Development (CPD) submitted that the Community Benefit Principles would help build local capabilities, enhance supply chains and skills, and promote diverse workplaces and secure jobs.
3.38Dr Gareth Bryant, appearing in a private capacity, described the CBPs as ‘essential for ensuring that benefits of Future Made in Australia are broadly shared.’
3.39Ms Beth Mitchell, Head of Beyond Zero Emissions stated that the CBPs and community benefit sharing can be highly beneficial to communities affected by decarbonisation. The key to unlocking these benefits could be found through early communication with affected communities by project proponents:
This can be key infrastructure like sewage treatment works that are required by that industry as part of its construction activities but that can actually leave a long-term legacy for that community. We've also heard of examples where proponents have gotten together and, instead of building temporary accommodation, they've built purpose-built accommodation that can be used by the community as aged care once those workers are gone
3.40However, other inquiry participants expressed some concerns with the CBPs, as explained further below.
Expanding the scope and application of the community benefit principles
3.41Several inquiry participants supported increasing the scope of the CBPs by adding further principles concerning consultation with First Nations communities, protections for workers, social equity and inclusion and action on climate change, among other matters.
3.42For example, the IGCC recommended that the legislative framework be amended to provide that regardless of which body provides financing, the CBPs are required to be considered. The IGCC noted that ARENA and Export Finance Australia are explicitly mentioned as delivering Future Made in Australia support, but that the Minister may award other bodies funding to deliver industry-building projects. They argued that policy objectives should be aligned across government, regardless of the body coordinating financial support, as investors need clarity around what risks and returns they may expect from an investment.
3.43The ACTU recommended that the CBPs should apply to all forms of government support under the broad banner of the FMIA agenda. They noted that given the breadth of specialist investment vehicles and other Government mechanisms that fall within the scope of the NIF streams of support, the actual list in the legislative framework should be broader to include ARENA, the National Reconstruction Fund, Powering the Regions Fund, the Northern Australia Infrastructure Facility and the Net Zero Economy Agency.
3.44Mr Jamie Lowe, CEO of National Native Title Council advocated for a separate CBP relating to engagement with First Nations communities, noting the large amounts of critical minerals on land where First Nations communities have a right to negotiate.
3.45Mr Lowe stated:
We estimate that about 60 per cent of critical minerals reside on First Nations lands where they have a right to negotiate, and that could increase to around 80 per cent if the native title claims that are on the books at the moment are resolved through determinations. We think that if they're not separated it does run a risk not only for governments but also for proponents in their operations when they're negotiating these agreements with First Nations peoples, particularly for those traditionally enshrined as native title holders. We need to ensure that safeguards are put into the legislation. That means separating the First Nations communities out from the general communities, so they're identified and so we can create good policy, particularly backed up by good legislation.
3.46This view was echoed by Ms Karrina Nolan, Co-Chair of the First Nations Clean Energy Network, who stated:
One of the other things that we're seeing with the whole range of other initiatives being rolled out at a federal level—hydrogen, the Critical Minerals Strategy and others—is a lot of resources going to proponents, and what we would be arguing is that, if we want to actually see our communities negotiating equally at the table, some of those resources also need to come to our communities. We need to specifically call that out. We need to signal to industry and to the market that, actually, it derisks projects if First Nations communities are involved, and it's not the same as other stakeholders. We actually have a specific right and interest, so we should actually have a specific community benefit principle.
3.47Ms Nolan also observed that there was a need for proper resourcing of First Nations traditional owner entities to ensure that agreements made between project proponents and traditional owners were done with free, prior and informed consent
Protections and conditions for workers
3.48Several inquiry participants called for enhanced protections and conditions for workers in the CBPs to ensure that the net-zero transformation brings prosperity to Australia’s workers and communities.
3.49For example, the ACTU argued that businesses receiving support under the Future Made in Australia agenda should be investing in their workforces and the communities which they are operating in. The ACTU noted that similar net-zero policies internationally, such as the IRA in the United States and the EU Green Deal, ‘are being paired with strong labour social conditionalities to help ensure public money delivers genuine public benefits’.
3.50The ACTU also noted the importance of creating a ‘social license’ for Australia’s energy transition to net-zero and stressed the importance of ensuring that public investments in clean energy projects deliver tangible and consistent benefits to the community.
3.51The Centre for Future Work (CFW) supported efforts to ensure that Future Made in Australia promotes community benefits, particularly in providing safe, secure, well-paid jobs with good conditions and pathways to skills development. The CFW submitted that conditionality relating to employment practices in public industrial support is common practice and that Australian state governments frequently consider job quality as an important factor when granting financial assistance to private investment. The CFW stated that incorporating this approach in the FMIA framework would attract and maintain the skilled workforce necessary to develop an advanced green manufacturing capability.
3.52Similarly, the Electrical Trades Union (ETU) welcomed the inclusion of CBPs which would enable social conditions and fair labour standards to apply to all investments receiving support under the Future Made in Australia agenda. The ETU argued that conditionalities and labour standards are crucial to ensuring ongoing social license for an historic, economy-wide transition and properly used, would ensure that government investment is used to develop the workforce of the future.
Expanding the Australian shipping and transport industries
3.53Some inquiry participants expressed support for including an additional CBP to expand the strength of the domestic and international shipping and transport industry.
3.54The Maritime Union of Australia (MUA) emphasised the significant role of the Australian shipping industry in supporting the FMIA agenda. Accordingly, the MUA recommended that ‘strengthening domestic and international transport resilience and capability, across all modes including Australian shipping’ should be included as one of the CBPs. The MUA submitted that this would encourage applicants for Future Made in Australia support to consider how to better structure their projects to strengthen Australia’s supply chains.
3.55Similarly, the ACTU also recommended that an additional CBP on transport resilience and capability be added to the FMIA legislative framework. The ACTU submitted that the FMIA agenda provides an opportunity to revitalise Australian shipping and that transport services, which will play a key role in underpinning the the transition to net-zero. The ACTU concluded that drawing on an enhanced domestic shipping industry will create more jobs in Australia and substantially increase the domestic footprint and economic return of any export projects received under the FMIA agenda.
Equity and inclusion as a community benefit principle
3.56The Australian Council of Social Service (ACOSS) recommended that the objectives in the FMIA framework be amended to ensure that the community benefits are ‘equitable and inclusive’. ACOSS expressed concerns that poorly targeted and inequitable policies, which are ostensibly to reduce emissions, often disproportionately benefit wealthy people with significant choice and control. ACOSS claimed that these policies often leave people and communities experiencing disadvantage worse-off. ACOSS submitted that adding equity and inclusion to the objective would help ensure that people experiencing disadvantage are considered in projects receiving support under the FMIA agenda and will help create social license for the energy transition.
Ensuring the quality and proper enforcement of the CBPs
3.57Several inquiry participants expressed concerns that the FMIA framework did not provide for adequate enforcement of the CBPs and called for the bills to be amended to ensure strict adherence to these principles.
3.58For example, the ACF acknowledged the inclusion of accountability mechanisms within the FMIA bill to ensure beneficiaries of public investments are held accountable for the delivery of community benefits through FMIA project plans. However, they also expressed concerns that the legislation lacks detail concerning when these plans will be required, whether they are a precondition for government support and how they will ensure accountability.
3.59The ACF recommended that the bills be amended to ensure that FMIA plans enforce adherence to the CBPs by making sure that they are public, operate as a precondition of all public investments and provide an avenue for beneficiaries of the CBPs to seek redress for non-compliance with FMIA plans.
3.60Similarly, the Centre for Policy Development (CPD) welcomed the CBPs in the legislative framework, but argued that they could be strengthened by specifying minimum activities that recipients of FMIA support would need to undertake to satisfy the CBPs. The CPD also argued that government entities should be able select projects for funding based on whether they satisfy the CBPs.
3.61The Australian Manufacturing Workers’ Union (AMWU) also recommended that the framework should impose requirements on recipients of FMIA support to provide regular information on their performance against the CBPs. The AMWU also recommended that the intended beneficiaries of the CBPs should be able to seek a remedy where the CBPs have been breached or have not been met.
3.62The Clean Energy Council (the CEC) expressed support for amending the FMIA framework to make it easier for the CBPs to be amended over time. The Council noted the possibility that the Parliament may wish to amend the CBPs in the future to reflect the evolving expectations and priorities of communities, industry, and government. Accordingly, the Council recommended that the CBPs as defined in paragraph 10(3)(a) be removed and that the CBPs be moved to subordinate legislation in accordance with the rule making powers outlined in paragraphs 10(3)(b) and 12. The CEC submitted that these changes would ensure that the CBPs are fit for purpose, reflect the desires of the groups they are designed to support, and are consistent with the need for further consultation to operationalise relevant standards for the meeting of the CBPs.
3.63The IGCC also expressed support for greater clarity on how the CBPs would be measured when deciding whether to allocate financing under the FMIA agenda. The IGCC claimed that principle-level support is outlined in the bill, but mechanisms that standardise good community outcomes are absent. The IGCC suggested that options may include workforce, training and apprenticeships, and local content requirements on financing, noting that a secure workforce increases investor certainty that industries will be durable.
3.64The ACTU expressed concerns about the independence of the enforcement of the CBPs under the legislative framework. The ACTU noted that paragraph 10(3)(b) may be an unnecessary catch-all clause at the Minister’s discretion and submitted that the preceding subparagraphs 10(3)(a)(i) to (v) were broadly sufficient in encapsulating the community benefit principles. The ACTU stressed the importance of ensuring that these provisions are read in conjunction with paragraph 9(4)(b) to ensure both assessment and enforcement are conducted independently without influence.
Compliance burden of the CBPs on industry
3.65Several inquiry participants expressed concerns that the CBPs and the requirement to develop a ‘Future Made in Australia Plan’ would impose a compliance burden on recipients of government support under the policy.
3.66For example, the BCA submitted that there is significant uncertainty concerning the compliance burden or costs which the CBPs would impose on recipients of FMIA support. The BCA argued that investment is more than just the capital needed to fund projects to allow businesses to grow and expand, delivering considerable economic benefits. In this context, the BCA noted that any additional cost arising from the CBPs would undermine the viability of these projects and threaten the economic benefits of the FMIA agenda. The BCA cited evidence that similar industry policies in other jurisdictions have materially increased project costs. The BCA expressed concerns that the CBPs would create barriers for small and medium sized businesses participating in the Future Made in Australia agenda. The BCA expanded on this point in their written submission:
The Community Benefit Principles must be fit for purpose, while also objective and clear to provide certainty for taxpayers to at least initially self-assess eligibility for final investment decision deliberations. If the conditions are too onerous, it will become a disincentive. Similarly, the proposed legislative instrument allows for additional Community Benefit Principles to be introduced.
3.67Mr Bran Black, CEO of the Business Council expressed concerns that the CBP relating to ‘promoting safe and secure jobs’, saying that in some jurisdictions this kind of CBP had been interpreted as investment proposals requiring support from unions and that this has added significant costs to projects. He did concede however that this outcome had only been put to him through anecdotal feedback.
3.68The BCA recommended that the CBPs be designed to avoid undermining the eligibility and competitiveness of projects, recognise the significant broader economic benefits of current projects, minimise the compliance costs related to the CBPs, and clarify how the CBPs will apply in practice on an ongoing basis. In particular, the BCA expressed concerns about the CBP relating to promoting ‘safe and secure jobs that are well paid and have good conditions’. The BCA argued that elements of this principle remained unclear and that it could create significant uncertainty for businesses, imposing a significant compliance burden. The BCA claimed that the definitions of ‘safe’ and ‘secure’ jobs would mean that the principle would be implemented in a way which significantly increased labour costs for projects in receipt of FMIA support. The BCA submitted that a clearer, more coherent and objective approach to this principle is needed to minimise the compliance costs for businesses.
3.69The MCA also expressed concerns about the workplace relations and labour standards elements of the CBPs, claiming that they would increase compliance costs for entities receiving FMIA support. The MCA submitted that unlocking value along the materials supply chain requires productive workplaces that allow for businesses to continue to provide the most competitive terms and conditions to attract and retain new workers. It expressed concerns that the workplace relations elements of the CBPs could be used to make particular workplace arrangements a condition of government support under the FMIA agenda. The MCA submitted that inappropriate government conditions which reduce productivity and impose unnecessary workplace burdens will deter new investments in Australia and recommended that the workplace relations and labour standards elements of the CBPs be removed.
3.70Similarly, the CMEWA expressed concerns about the compliance burden which the CBPs may impose on recipients of FMIA support. The CMEWA submitted that it was unclear how the CBPs would be contractually enforced or have ‘regard’ to the National Interest Framework and sector assessments. The CMEWA also suggested that the legislation and the explanatory memorandum were ambiguous on whether it will seek to establish new requirements that could duplicate existing regulations. Noting the reporting requirements and regulations already applying to its members, the CMEWA disagreed with the explanatory memorandum’s assertion that the bills do not have any impact on compliance costs. Accordingly, the CMEWA recommended that the committee consider whether the CBPs would create a net increase in compliance costs for applicants and recipients, including whether the existing requirements can be adopted to satisfy compliance.
3.71The AMEC also expressed concerns about the compliance costs associated with adherence to the CBPs. AMEC noted that to obtain state and Commonwealth approval for minerals exploration projects, the proposing entity must satisfy multiple pre-existing social, environmental and community benefit tests and that proposing entities invest considerable sums of money to establish projects in Australia. Given these substantial pre-existing requirements, AMEC expressed concerns that the CBPs would create a duplicative administrative burden. To mitigate this, AMEC recommended that the whole corporation of the proposing entity be considered when receiving support under the FMIA agenda. AMEC brought the committee’s attention to difficulties associated with apportioning adherence to the CBPs between different aspects of a project such as the mine and the downstream processing component. AMEC expanded on this point in their submission:
Industry understands and provides a wide range of community benefits back to the community beyond substantial royalty and taxation payments. However, the purpose of the Future Made in Australia legislation is to incentivise downstream processing that has not occurred before. The risk of this community benefit test is that downstream processing may not occur because of the difficulties in meeting these requirements. This is an unintended consequence that must be avoided.
3.72Fortescue recommended that the FMIA framework be amended to align the CBPs and rules relating to the provision of government support with current, accepted and applied Commonwealth and industry policies, regulations and processes. Fortescue noted that infrastructure, resources and energy companies are currently required to produce and report on numerous community benefits and argued that incorporation of these existing community benefits would provide clarity and limit costs to projects which receive Future Made in Australia support.
3.73The Productivity Commission submitted that the CBPs should be applied in a transparent way which supports the efficient achievement of the NIF objectives. It argued that the subordinate role of the CBPs in assessing sectoral FMIA support could be more clearly articulated and that the CBPs should be implemented to support the efficient achievement of the primary policy goals of the FMIA program. The Productivity Commission submitted that to achieve this outcome, the CBPs should be applied using eligibility rather than merit criteria and be focused on achieving appropriate standards which are not overly prescriptive.
3.74The Clean Energy Council (CEC) expressed concerns that the CBPs would impose a significant compliance burden on projects involving the construction industry. The CEC argued that flexibility is required for employers to attract talent for time-bound projects, without the requirement for jobs to be made permanent, also noting that clean energy construction jobs will also be in remote and regional locations. They submitted that these jobs and the projects that create them should not be devalued because of these characteristics and should remain eligible for FMIA support.
3.75Ms Reeve of the Grattan Institute made the following point generally about the CBPs:
I think the thing about the community benefit principles is that they look like they're trying to achieve things, which might be quite laudable, through quite an indirect route. If people are concerned about working conditions, the best way to do that is to change the IR legislation. If they're concerned about environmental protection, they should reform the EPBC Act. If we're concerned about Indigenous participation, we should fund programs within Indigenous affairs. In our view, there's nothing wrong with those principles per se, but the best way to address the issues behind them is not to build them into this act; it's to build them into the actual areas of portfolio responsibility.
Committee view
3.76The committee is encouraged by the government’s commitment to unlock investment in industries critical to decarbonising the economy and securing Australia’s national advantage in the face of strategic challenges.
3.77The committee is further encouraged by the significant level of interest, support, and enthusiasm that has been received across the economy and community for these bills and the Future Made in Australia agenda more broadly.
3.78The committee draws attention to the role Future Made in Australia will play among the suite of initiatives from the government to realise Australia’s economic opportunities in the net zero global economy, including its legislated renewable energy targets the Safeguard Mechanism, the Next Zero Economy Authority, the Capacity Investment Scheme, and the National Reconstruction Fund, among others.
3.79The committee further notes these Bills form just one part of the government’s significant Future Made in Australia Agenda and looks forward to the implementation of this policy and the positive impact it will have on industries and communities in Australia.
3.80The committee particularly welcomes the approach in these bills to introduce a higher level of rigour and accountability to the decision-making processes of public support and investment, facilitated by the National Interest Framework and the Sector Assessment processes.
3.81The committee considers that the National Interest Framework will be an important and useful tool in signalling to investors locally and globally the Australian Government’s industrial priorities. The two priority streams of net zero transformation and economic security and resilience are an appropriate and important focus.
3.82The committee is heartened by the requirement in the bills for Sector Assessments undertaken by the Treasury to be done consultatively, and agrees with submitters that the tabling of Sector Assessments in Parliament will allow for an appropriate level of public analysis, that will assist government decision-making. The Committee considers that this transparency will strengthen the rigor of public investment without it being necessary for sector assessments to be a precondition for all supports, as such a requirement could be duplicative of existing research undertaken by government and delay investments.
3.83The committee is strongly of the view the Community Benefit Principles are an integral aspect of the Future Made in Australia agenda. In particular, the requirement to have regard to them during government decision-making and for recipients of Future Made in Australia Support to adhere to them will ensure that the public benefit of the Future Made in Australia agenda is genuinely felt in the community and the economy.
3.84The committee appreciates views shared by First Nations organisations and Traditional Owners on the bills, and in particular their advocacy to be further incorporated into the Community Benefit Principles in a way that meaningfully recognises their unique role and experiences and their rights and interests as native title holders and under other land schemes. The committee is of the view this could be addressed during the further consultation on operationalising of the Community Benefit Principles.
3.85The committee does not agree with some views that the Community Benefit Principles could have an adverse impact on investment, and particularly notes that Future Made in Australia Support should be awarded to good corporate citizens, which includes offering safe, secure and well paid jobs, complying with tax obligations and undertaking genuine consultation – all of which are set out in the Community Benefit Principles.
3.86The committee notes the wide variety of views from witnesses on what industries and sectors should receive Future Made in Australia Support and believes the bill is an appropriate framework to align investment with the net zero transformation and economic security and resilience priorities in the National Interest Framework.
3.87The committee recommends that the bills be passed.
Senator Jess Walsh
Chair
Labor Senator for Victoria
