$15b fund boss aims to pull investors back from Biden’s IRA Jacob GreberAug 9, 2023 – 5.28pm
The inaugural chairman of the $15 billion National Reconstruction Fund, Labor’s primary vehicle to reboot domestic manufacturing, says he aims to lure back investment dollars that would otherwise flow to Joe Biden’s vast clean industry program.
Martijn Wilder, founder of climate investor and consultant Pollination, said he wanted the new fund to help the economy “reposition itself” to the reality of rapidly expanding global industry policy.
Martijn Wilder: “If you can crowd in some of that finance that would have otherwise gone overseas, that’s really important.” Oscar Colmannone
“You’ve got this tremendous sort of coming together of the UK, the US, Australia, Germany and Japan all looking at things around critical minerals, around hydrogen, around manufacturing,” Mr Wilder told The Australian Financial Review on Wednesday.
“There’s an opportunity for us to actually value-add on those existing industries that we have and to actually build some of that manufacturing base here.”
Mr Wilder is a former chairman of the Australian Renewable Energy Agency and a former member of the Climate Council and Clean Energy Finance Corporation boards.
The National Reconstruction Fund was established by parliament in late March, with the support of Greens and the crossbench. It will provide finance to seven priority areas, including renewables, medical science, transport, agriculture, resources and defence. The board is charged with ensuring the NRF generates a commercial rate of return.
Mr Husic described the fund as the biggest investment in manufacturing capabilities “in living memory” and said the new board’s priority would be to appoint a chief executive and leadership team.
“We are very keen to bring people with different viewpoints on board, and we want this to be something like the CEFC that manages to continue through different political administrations because its job is very important.”
Treasurer Jim Chalmers on Wednesday emphasised the fund’s role in addressing vulnerabilities exposed by the pandemic and the war in Ukraine.
“Busted supply chains and weakness in the industrial base is one of the key reasons for the inflation we are seeing in the economy. So investing in the supply side of the economy is a key part of our plan to address cost of living pressures.”
Deputy opposition leader Sussan Ley accused the government of “slapping itself on the back for filling another government board” while manufacturers are “going to the wall”.
All in the timing
Mr Wilder joins the fund after decades of work in sustainable finance and climate change policy, including founding Pollination, which manages $US650 million in assets.
He said the fund was part of an ecosystem that was “part of that response to the IRA”.
“We’re seeing, at the moment, a lot of people who will say ‘we were planning to allocate large amounts of capital in Australia’ who are now starting to reallocate part of that to the US because the IRA.
“Whereas I think mechanisms like this, where we have an incredibly dynamic market in Australia ... this will help attract those investors to Australia. There’s no doubt about that.
“If you can crowd in some of that finance that would have otherwise gone overseas, that’s really important.”
Asked how Mr Wilder’s ongoing role as chief executive at Pollination would affect his chairmanship, he said the fund’s focus was different.
“The fund is really focused on areas that we’re not in [at Pollination]. A lot of those areas, like defence, medical science, resources are not really near it.
“But like all these institutions you’ve got to have very good, proper governance procedures and as part of these processes you have to declare all of that.”
Ms O’Dwyer, a former Coalition industrial relations and financial services minister who retired ahead of the 2019 election, said she was looking forward to participating on the board after receiving an offer from Mr Husic made “with goodwill”.
“I’ve always wanted to play a constructive role in Australian policy and economic policy,” she told the Financial Review.
“I was obviously invited to join the board of the NRF to help strengthen Australia’s economic capacity and capability, and I will use the skills and experience I have to do that.”
Ms O’Dwyer declined to be drawn on a controversial Productivity Commission reportthat warned the government against forgetting the lessons of the 1980 economic reform era, which included dismantling industry subsidies.
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