Australia to Implement IRA-Like Act for Green Manufacturing Shift

TL/DR –

Australian Prime Minister Anthony Albanese is planning a program to stimulate green manufacturing industries to enhance the country’s economy beyond its traditional mineral extraction base. By the end of the year, the Australian government will pass the “Future Made in Australia Act” to boost investment and create jobs in green manufacturing and high-tech sectors. This shift in policy marks a reversal from Australia’s long-standing approach of pulling away from influencing the private sector and comes as the government seeks to foster growth and improve the country’s economic security and industrial base.

Australian PM’s Green Plan to Drive Economy Beyond Traditional Minerals Extraction

Australian Prime Minister Anthony Albanese is set to announce an Inflation Reduction Act-inspired program to stimulate green manufacturing industries and drive Australia’s economy beyond traditional minerals extraction base. The move, aimed at bolstering economic security, aligns with a global trend of government interventions to support domestic industries based on national interest and sovereignty.

The initiative, called the “Future Made in Australia Act,” will be legislated by the end of the year by the center-left Labor government. This comprehensive plan encompasses new and existing initiatives to boost investment and create jobs in green manufacturing and high-tech sectors. This policy, a major feature in Albanese’s second-term agenda, will be a key component of next month’s budget.

Albanese will make the announcement during a speech in Queensland, emphasizing that the program is designed to elevate Australia’s position in the green supply chain by capitalizing on its vast renewable-energy resources. It comes ahead of an election due by mid-2025.

In his speech, the Prime Minister is expected to state that Australia is competing with nations like the US, which is successfully implementing a similar program under President Joe Biden. “Our government wants Australia to be in it to win it. Obviously, Australia cannot go dollar for dollar with the United States’ Inflation Reduction Act. But this is not an auction – it’s a competition,” Albanese will say.

A Reversal of Decades-Old Australian Government Policy

This strategy signifies a shift from the long-standing Australian government policy of refraining from efforts to shape the private sector. In the past, such interventions included scrapping tariffs and subsidies and signing trade agreements to allow countries to specialize in their strengths. The car industry in Australia closed almost a decade ago due to competition with higher-quality imports.

The government has recently been increasing incentives for green manufacturing and extraction of critical minerals essential for the renewable energy transition. However, fear of damaging efforts to control inflation with additional fiscal spending has prevented a broader policy for much of Albanese’s first term. As inflation starts to decline, the government is now focused on stimulating growth and enhancing Australia’s economic security and industrial base.

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