Productivity Commission chairwoman Danielle Wood has warned that governments picking winners risks diverting finite labour and materials away from more productive uses into lower-returning sectors
The Hawke-Keating economic reforms helped set up Australia’s three decades of Australian prosperity. But Albanese and Chalmers are veering on a different path. In Australia, it appears Treasury has been unsuccessful in stopping the prime minister from embarking on green industrial policy and the Productivity Commission has been largely ignored or bypassed.
History shows that successful industry policy via subsidies or protection – such as in the US and Germany in the 19th century and post-World War II in East Asia – has been in economies with large domestic markets with economies of scale, a pro-investment climate and ambitions to export. A medium-sized Australian economy less obviously has these attributes.
It is unclear if the Future Made in Australia is really about the green energy transition, economic sovereignty, national security, or manufacturing and mining jobs in politically sensitive regional seats.
Lobbyists who previously worked for Labor ministers were involved in Silicon Valley start-up PsiQuantum extracting $940 million from the federal and Queensland Labor governments to relocate to Brisbane, in a state that will be crucial in state and federal elections over the next 12 months.
