Labor’s Future Made in Australia fund is shrouded in secrecy

The current argument over Labor’s Future Made In Australia Bill has some high stakes — more than just Labor’s dream of returning to the glory days of Australian manufacturing, or its political strategy of posing as the party of making things here at the next election.

The fund — which the government says totals over $22 billion — could become the biggest pork-barrel in political history in the wrong hands, with only a fairly flimsy “National Interest Framework” to protect taxpayer interests.

The PsiQuantum deal, which saw $900 million committed to a US company by the federal and Queensland governments, amid extraordinary secrecy and no rationale or cost-benefit analysis, could be a glimpse of the future under the bill — complete with Labor-connected lobbyists smoothing the way for the deal.

Of particular concern is the “Economic Resilience and Security Stream” of the fund, which panders to the delusion that Australia must join with other countries in onshoring production of “strategic” industries to secure supply chains in the name of sovereignty and security. In the words of the framework, that opens the way to anything where a politician decides “some level of domestic capability is a necessary or efficient way to protect the economic resilience and security of Australia, and the private sector will not deliver the necessary investment in the absence of government support”.

The word “necessary” is doing an awful lot of work in that sentence, because it’s virtually guaranteed that anything funded under the framework won’t be “efficient”. The government’s bill requires “sector assessments” to be undertaken to identify where we need such “domestic capability”, and for those assessments to be tabled in Parliament — but only after Treasury has redacted anything deemed commercially sensitive. That’s a guarantee that any independent analysis of those assessments will be hamstrung by the withholding of key information.

As the PsiQuantum deal confirms, secrecy will be an abiding theme of this vast trove of cash. Tasmanian economist and national treasure Saul Eslake made a key point back in May: not only does the word “security” invariably signal bad policy, it becomes a justification for secrecy — producing “the tendency of governments to use ‘security’ as a reason to conceal some or all of what they are doing”.

That’s the case just as much under Labor as it was under the obsessively transparency-resistant Morrison government. Anthony Albanese and crew are every bit as bad when it comes to allowing taxpayers to see what they’re doing.

Independent MP Helen Haines — who last year proposed a new non-government controlled parliamentary committee to oversee grants administration, which would have been a big step forward in terms of preventing pork-barrelling — is leading the charge against A Future Made In Secrecy. She is proposing that the Joint Committee of Public Accounts and Audit be given a permanent role in overseeing the unredacted sector assessments and the tabling of details about who has been awarded taxpayer largesse under the scheme.

In truth this doesn’t go far enough — the sector assessments are only the framework for investment decisions that government will be making in each of the industries it has decided to intervene in. And the threat isn’t so much pork-barrelling as governments investing in ridiculous projects that happen to be in a sector deemed “security”, “sovereign” or “strategic”.

A glimpse of how absurd A Future Made In Australia could be is available in a great piece today by the Financial Review’s Michael Read, who contacted a bunch of industries that patently have no claim on any strategic or “sovereign” status, like chocolate manufacturers and caravan markers, to hear how they intended to try to plunder taxpayer funds.

Their risible claims are only different in degree, not kind, from the rationale for any “strategic” or “sovereign” industry. And the absurdity of the “Economic Resilience and Security Stream” is that a bunch of other countries are doing exactly the same thing, including a number of Australia’s allies. As the Productivity Commission has noted, if we don’t want to rely on China for crucial supply chains in the event of a number of pandemics, fear not — the Americans are spending large amounts of their taxpayers’ money (or, more correctly, borrowed money, given the extraordinary US budget deficit) onshoring supply chains there.

Australia is ideally placed to free ride on the idiot protectionism of other countries like the US — but instead we’re wasting our own money doing the same.

Nor is it clear why, instead of building up entire supply chains, we don’t do what we already do with fuel and simply stockpile goods we deem to be at risk in case there’s another virus or China attacks Taiwan — something far cheaper and more efficient, given we can take advantage of other countries’ decisions to produce their own supplies, thus producing a global glut (think solar panels, the target of the Albanese government’s most absurd investment).

Here’s something for Haines and the Greens and crossbench senators to think about: one of the best things Labor has done in recent decades is establish Infrastructure Australia (IA) to provide an independent assessment of infrastructure projects, free from the interference of pork-barrelling politicians. Anthony Albanese was the minister who created IA and he’s restored it under his prime ministership after the Coalition politicised it. For a similar-sized pool of taxpayer funding, why isn’t Labor prepared to establish Resilience Australia, or Sovereignty Australia, or whatever they want to call it, to independently examine what investment projects politicians want to put taxpayer money into?

If a Future Made In Australia is everything Labor claims it will be, there should be no qualms about allowing an independent assessment.

Are you concerned about pork-barrelling under a Future Made in Australia? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.