An uncertain and complex economic environment
The Australian economy has shown significant resilience to the impacts of the COVID-19 pandemic, ongoing natural disasters, and geopolitical instability and their associated domestic and global implications. However, the economic environment remains uncertain and subject to continued disruption including in industrial, financial and energy markets. The Australian economy must keep adjusting to remain productive, resilient and sustainable.
Our economy’s short-term growth will be affected by the rapid rise in global inflation and associated substantial tightening in financial conditions, exacerbated by ongoing supply chain disruption and skills shortages. Our long-term prosperity relies on continued productivity growth. And yet, Australia’s productivity growth has slowed over the past decade, as it has in other advanced economies. Reasons for this include a structural shift towards services, low rates of cutting-edge innovation domestically, and companies adopting new technologies at a slower rate.
Factors that will influence our policy advice and program implementation include:
- responding to the implications of geo-strategic shifts
- the challenge of adapting to and mitigating against climate change
- supporting equitable outcomes for all Australians – including economic empowerment for disadvantaged groups such as First Nations people
- our continued demographic transition
- technology changes that will shape how we work and live.
Growing business and industry
In this operating environment, we will support the government strengthen Australia’s prosperity by stimulating high-growth industries and increasing commercialisation of Australian research.
We are establishing the $15 billion National Reconstruction Fund (NRF), a major part of the government’s Future Made in Australia agenda. The NRF will target projects and investments that help Australia capture new, high‑value market opportunities to help Australian businesses grow and succeed. It will diversify and transform Australian industry to help create secure, high-value jobs and drive sustainable economic growth.
The NRF will complement existing grant programs that develop domestic manufacturing capabilities and upskill the sector’s workforce.
The importance of secure and resilient supply chains has been demonstrated over recent years. Our Office of Supply Chain Resilience will support the government to work with domestic and international partners to identify and monitor vulnerabilities and improve resilience to facilitate ongoing access to essential goods and services.
The world is currently in an acute energy crisis against the backdrop of a longer term transition to lower emission energy sources, both of which have significant implications for individuals and businesses. We will support the government’s broader energy market reform agenda, to ensure Australian industry has access to secure and affordable energy as they transition to lower emission energy sources.
We are providing targeted support to critical and emerging technologies that make the most of Australia’s potential and deliver solutions to real-world problems – for both commercial and societal gain. This includes support for next-generation technologies, such as quantum, robotics and artificial intelligence.
To lift our commercialisation performance, we will support entrepreneurs and businesses to invest in research and innovation, create new ideas, scale up and grow. This will promote the translation of Australia’s world-class business research and ideas into new, high value and in-demand products and services.
We will drive the delivery of the Australian Made Battery Plan, including publishing Australia’s first National Battery Strategy, supporting the creation of a battery Manufacturing Precinct, and implementing a Powering Australia Industry Growth Centre focusing on commercialisation, international market access, management and workforce skills, and opportunities for regulatory reform.
The Australian Made Battery Plan complements other government priorities including the NRF, Powering Australia (including the National Electric Vehicle Strategy and Australia’s emissions reduction target), Rewiring the Nation, the Critical Minerals Strategy and the Buy Australia Plan.
We will ensure a responsible regulatory framework for space activities and that space services, capability and investment supports Australia’s transition to a high-tech future, including underpinning our manufacturing industries.
Rapid scientific and technological advancement
Science and technology are key to addressing national challenges. They underpin the development of new jobs, businesses and industries, and enable existing industries and business to innovate and grow. We will support the government to create an environment that supports Australian know-how and harnesses investments in science and technology to improve the lives of Australians, contribute to national wellbeing and build our industry, science and research capabilities.
We are revitalising the National Science and Research Priorities and renewing the National Science Statement to provide a long-term vision for Australian science and support stronger alignment of effort and investment, to deliver greater benefits for all Australians.
We are partnering internationally to showcase Australian knowledge and ensure we have access to resilient critical technology supply chains. We work with domestic and international organisations to ensure Australia’s regulatory environment encourages investment, establishes trusted technology frameworks, and shapes global standards and ethics that will guide the development of safe and trusted technologies.
We ensure Australians receive the maximum benefits from rapidly advancing digital technologies. We encourage small and medium businesses to adopt digital technologies, make sure Australians have the digital skills to participate in the modern workforce, and contribute to the development of regulation to guide those developing or using new technologies. We monitor and coordinate digital technology policies across government so they are cohesive and consistent.
We will continue encouraging greater diversity and inclusion of women and under-represented groups in STEM. The government has commissioned an independent review of the effectiveness of existing government programs in these areas and the cultural and structural barriers to participation and retention. The results of the review will help us identify and use approaches that improve diversity and inclusion.
We will continue working with the science and research community to promote, enable and harness Australia’s world‑leading scientific research. Our public research institutions – including the CSIRO, Australian Nuclear Science and Technology Organisation (ANSTO), the National Measurement Institute (NMI), and Geoscience Australia – ensure Australia has access to world‑leading research infrastructure and expertise.
In 2023 we’ll start construction of the Square Kilometre Array, an innovative global project that will expand our understanding of the universe and support jobs and growth in regional Australia.
Questacon continues to strive to engage all Australians with science, technology and innovation, and connects communities across Australia with STEM opportunities.
NMI continues delivering independent, specialised measurement services and regulation that strengthens the international competitiveness of Australian businesses and underpins confidence in products and services for all Australians.
All of this contributes to creating a resilient economy through high-value jobs being retained in Australia, consistent with the government’s objective of growing technology-related jobs to 1.2 million by 2030.
Supporting a strong resources sector
A strong, competitive and sustainable resources sector is crucial to a thriving Australian economy. Our resources sector will provide export and employment opportunities, particularly in regional Australia, well into the future.
The resources sector has an important role in the transition to net zero emissions, both in Australia and internationally. We will prioritise the Critical Minerals Strategy and support the sector to seize the opportunities of this transition. This includes supporting the deployment of emissions abatement technologies across the sector and growing our critical minerals sector to provide the inputs required for low emissions technologies.
Australia’s resources sector can play a critical role in the global transition to net zero. We will keep supporting collaboration between governments to attract international investment in Australian critical minerals projects and support the sector to build, scale and grow its downstream processing capabilities.
Australia’s coal and gas exports will support our trading partners as they implement decarbonisation initiatives to achieve net zero. Gas will continue to have a role in Australia, ensuring energy security while we increase renewable energy generation. We will also work to understand the emissions impacts of coal and gas in Australia’s energy mix and support an orderly transition to net zero.
We need to carefully balance our domestic energy security with the needs of trading partners, who invest in our resources sector and rely on Australian commodities for their own energy security. A key priority early in 2023 is to support the government to reform the Australian Domestic Gas Security Mechanism and ensure there is sufficient domestic supply of gas to support our consumer and industrial needs.
We will ensure a sustainable and responsible approach to environmental management, including for offshore oil and gas activities and the way we manage radioactive waste. For example, we will continue to work with the offshore petroleum industry and regulators to encourage early and proactive planning for decommissioning and to ensure titleholders meet all costs and liabilities over the life of the project, including for decommissioning activities. We will also promote sustainable mine closure practices through the government’s participation in rehabilitation planning and regulation at the Ranger and Rum Jungle sites in the Northern Territory.
In supporting a strong resources sector, we will reinforce whole-of-government priorities including improving First Nations engagement, promoting gender equality and onsite safety to ensure that the development of Australia’s resources is done safely and benefits all Australians.