Bold Budget, Stronger Australia: Delivering Australia's industrial and science future

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I begin, of course, by acknowledging the Traditional Owners of the land we’re meeting on today, the Gadigal people of the Eora Nation, and extend my respect to Elders past and present.  

I thank Andrew McKellar and the team here at the Australian Chamber of Commerce and Industry for facilitating this event.  

Paul Nicolaou and our hosts at Business Sydney, thank you very much.  

Ben Lazzarro, CEO of Australian Made, can I acknowledge your contribution this evening.  

And a particular thanks to Rob Williamson, President of the Gladstone Engineers’ Alliance and CEO of Alpha HPA. 

An excellent example of what Australian technology and Australian investment can achieve for Australia’s industrial future.  

I’m really delighted to have made it here – more or less on time.  

I was in Melbourne this morning at a business reception for the Australia–India Economic Roadmap, which was launched by the Albanese Government 18 months ago.  

The visit of Prime Minister Modi comes as Australia and India strive for even closer cooperation and alignment on critical technologies and cybersecurity, energy security, supply chain resilience and research capability.  

In this case as in so many of Australia’s other bilateral relationships, industry policy plays a key role in delivering on the national interests of Australia and its trusted partners.  

Partners with shared strategic priorities, economic complementarities and strong two-way flows of people, goods and capital.  

It is one of the achievements of the Albanese Labor Government that Australia’s standing in the world today is much better than it was in May 2022.  

Australia under this Government is trustworthy in Europe.  

Respected in Asia.  

Dependable in the Pacific.  

And valued in the world’s multinational forums.  

And the Government has worked throughout the current global energy and supply chain shock so that Australia’s international relationships deliver for Australia’s national interest.  

Securing fuel and fertiliser to shore up our domestic supply chains.  

Utilising our deeper regional, political, investment, business and trade relationships, strengthened by the Albanese Government’s four years of patient effort.  

Including the relationship with India, the Southeast Asian Economic Strategy and the Australian Investment Deal Teams in Southeast Asian centres.  

Strengthening two-way investment and industrial relationships.  

And that work is entirely consistent with our broader Future Made in Australia industrial objectives.  

Maximising Australia’s competitive advantage in renewable energy generation and transmission.  

Making Australia more secure and resilient, less exposed to global energy and supply chain shocks.  

Investing right now in the tools and facilities that give Australians greater fuel security and supply chain resilience today.  

Securing current heavy industrial facilities like the Boyne Island aluminium smelter, Mount Isa’s Copper Smelter and Phosphate Hill fertiliser facility, and the Whyalla Steelworks.  

Using the National Reconstruction Fund to secure the advanced manufacturing capabilities, essential technologies, medical innovations and energy breakthroughs that Australians need onshore.  

And giving every Australian a practical stake in the success of cutting-edge industrial firms like Alpha HPA.  

Backing the effort of the Australian Made team to encourage Australian consumers to buy local goods first.  

And deploying every lever at our disposal – including concessional finance, procurement requirements and Australian Renewable Energy Agency support for innovation in clean energy manufacturing, such as wind tower production – to deliver on the promise of a Future Made in Australia.  

Of course, the repercussions of conflict in the Middle East are making their mark on an Australia that was already wrestling with a status quo that undermined national competitiveness, resilience and social cohesion.  

A status quo marked by deindustrialisation, offshoring and outsourcing, falling economic complexity, slowing productivity growth for Australian businesses and real wage stagnation for Australian workers. 

A status quo that made the age-old dream of home ownership harder to realise, especially for young Australians.  

A status quo where resources and industry furnished our CBDs with wealth, but didn’t always return a fair share to the industrial and mining regions.  

The scale of these challenges has been made greater by the corrosive effects of social media on society.  

That’s why the Albanese Government set an example for the world with our new social media laws for under-16s.  

It’s also why we’ve moved to restrict access to Nudify apps, so that the online world is that little bit safer and fairer for young Australians.  

And acted on the big industrial and economic challenges to build a safer, stronger and more resilient Australia.  

This year’s Federal Budget, of course, is about tackling Australia’s big social and economic challenges with young people in mind.  

Yes, it has been a contentious Budget.  

But we are working to make life better for young Australians.  

For those that don’t yet own a home.  

For working Australians.  

For those who want Australia’s tax system to be fairer, more equitable and less skewed against them.  

Robert Menzies – nearly 50 years gone but back in the news at the moment – described the family home as the ‘foundation of sanity and sobriety’, and a major determinant of the ‘health of society as a whole’.  

It’s a measure of the decline of the Liberals and Nationals that none of them today could credibly articulate an economic and social vision like that for Australia.  

Because they’re too busy opposing every measure this Government has introduced to lift home ownership, improve social cohesion, boost productivity and accelerate industrial progress.  

You can’t build a credible policy program with relentless negativity, much less build a stronger, more resilient and dynamic, confident Australia.  

At the heart of the Budget was its approach to Australia’s productivity and resilience.  

We’ve allocated $2 billion in new spending on R&D across government.  

Providing for Australia’s association to this round of Horizon Europe, the world’s largest research, development and innovation fund.  

Invested in the work and infrastructure of national science agencies like the CSIRO.  

All of us know that the world’s successful industrial economies do not just throw money at research and development.  

They have industrial and R&D systems that are joined up, cohesive and mutually reinforcing.  

Without that, Australian research has nowhere to land.

That’s why this year’s Budget established the new National Resilience and Science Council: to better coordinate public sector investment in R&D, aligning that effort more closely with key national priorities.

And a range of tax reforms in this budget are about encouraging small and medium Australian businesses to take informed risks and invest in dynamism-enhancing, productivity-raising opportunities.  

Expanding access to venture capital.

Loss carry-back reforms.  

Permanence for the $20,000 instant asset write-off.

Loss refundability for startups.  

And of distinct significance to my portfolio, a reformed Research and Development Tax Incentive.  

Making it simpler, more focused and with greater impact for Australian innovation and productivity.  

Businesses will only need to track and claim their core R&D expenditure, which will now be offset at a higher rate.  

The intensity threshold will be lowered, meaning more firms doing core R&D will qualify for higher offset rates.  

That’s a substantial win for Australian manufacturing firms in particular.  

And it will mean Australian research and development delivers greater flow-on benefits to the broader economy.  

There has been robust debate, including within the business sector, about the nature of the Government’s tax reforms.  

A range of voices from a range of sectors articulating the case for the interests of their sector – especially as it applies to capital gains.  

There are a range of views about RDTI reform, too.  

I welcome that contest of ideas and perspectives.  

This is a Government that listens and consults and improves measures in partnership with the community and with industry.  

We are not afraid of people’s ideas.  

The Treasurer has been consulting on a proposed Innovative Business CGT Concession, so that innovative startups with high productive potential aren’t penalised for growing from a low cost base.  

It’s in addition to the consultations that led to adjustments in the turnover threshold and 50 per cent active asset reduction eligibility, benefiting every single one Australia’s 2.7 million active small businesses.  

The Government has been engaging with stakeholders on the details of these reforms as well as changed to the RDTI, and we’ll continue to do that over the coming months.  

It pays to stand back for a moment and restore a sense of proportionality in the public discussion of tax reform.  

The arguments of an earlier era of tax reform are echoing in this debate.  

When the Hawke Government introduced the Capital Gains Tax as part of its major package of tax reform in 1985, the response from some quarters was positively apocalyptic.  

In response, the then-Treasurer Paul Keating politely reminded the critics that there was, beyond their own sectoral interests and objectives, a larger Australian national interest.  

‘We have the chance’, he said, ‘to set a framework in which the Australian economy can move forward with greater dynamism’.  

I might add, given the challenges of today, “and more economic diversity and real resilience”.  

That is the opportunity in front of us today.  

And the Albanese Labor Government is determined not to waste it in defence of a status quo that has become, in every economic and social respect, indefensible.  

And I’m looking forward to seeing us deliver on the promise of a stronger, more dynamic Australian economy together.  

Thanks very much.