Addressing Australia’s competitiveness settings must be at the heart of the Government’s new Future Made in Australia approach to ensure the private sector also invests in critical projects, according to the Business Council.  

The BCA has long called for the Government to respond to the US Inflation Reduction Act and establish a policy which attracts private sector investment into Australia. 

BCA Chief Executive Bran Black said more detail was needed on how much funding will be provided given the importance of avoiding a direct subsidy war with other nations.

“For Australia to succeed we need to address the fundamental issues of our competitiveness, so the private sector can confidently invest given we know the Government can’t do it alone,” Mr Black said.

“We welcome the Government’s intent; however, critical to the success of this announcement will be reducing red tape, and at the very least ensuring there are no extra layers of red tape added to an already complex operating environment. 

"Australia has many natural advantages and we can't rest on our laurels by assuming that past wins will translate into future success. 

“Incentivising investment with the right regulatory settings is crucial, particularly for our net zero transition, so we reach our energy potential and make the most of our critical minerals advantage.”

Mr Black said the BCA has always advocated for more open and free trade, however a new global approach means increased government engagement is needed.

“Any Government intervention needs to be carefully calibrated and measured so taxpayer funding isn’t wasted, inflation isn’t fuelled further, and private funding isn’t crowded out.

“We will need to see the detail of how projects will be funded, planning co-ordinated and facilitated, and no further changes in areas such as workplace relations which make Australia uncompetitive.”

The BCA in its pre-budget submission has called for a review of the nation’s foreign investment framework, to see if we can better unlock overseas capital coming into Australia. 

This review would follow a similar approach to that taken by the UK Government’s Harrington Review, which recommended sector-based investment plans.

As part of the response to decarbonising the economy, the BCA believes the Net Zero Economy Authority needs to play an overarching coordination role by identifying where growth markets exist, determining the viability of a project and flagging where workforce skills are lacking. 

Mr Black added addressing project approval times and reducing industrial relations interventions is vital.

“Projects critical to the net zero transition need faster approval times and we cannot have any further industrial relations policies introduced given we are yet to see the full impact of the recent legislation.

“If we don’t address our competitiveness settings for businesses, including all the input costs, consumers will end up paying more and any intervention will be put at risk.”

The BCA will need to see the full extent of the Act before making a final decision on the policy and will welcome consultation with Government.