View from The Hill: Albanese to walk Kokoda track and engage in some jungle diplomacy

Anthony Albanese will trek the Kokoda track on Tuesday and Wednesday, before attending the Anzac Day Dawn Service at the Isurava memorial site that commemorates one of the toughest battles the Australians fought in the second world war.

The trek is a favourite with politicians, more often made as they scramble up the political ladder. Kevin Rudd and Joe Hockey famously walked together in 2006, with Hockey ever after boasting of how he fished the future PM out when he’d slipped crossing a stream.

Apart from the deep historic symbolism, Albanese’s trek involves some jungle diplomacy, part of the Prime Minister’s continuing efforts to reinforce Australia’s ties with its close northern neighbour.

Marape plans to join Albanese on the trek, and will be at Thursday’s dawn service. The two leaders will already have had a meeting before the gruelling walk starts.

Apart from the long historical, geographic and political ties between the two countries, PNG, a nation beset with economic, tribal and social problems, has become increasingly important in the battle between China and Australia for influence in the Pacific. Australia signed a security and policing agreement with PNG last year.

Chinese Foreign Minister Wang Yi was in PNG at the weekend, when, in a remark seen as a crack at Australia, he told the media that Pacific Island countries “are not the backyard of any major country”.

Wang also took a swipe at AUKUS, saying that the partnership threatened regional peace and security. “Instigating division is not in line with the urgent needs of Pacific Island countries,” he said.

Albanese has met Marape frequently and the two leaders have addressed each other’s parliament. In his address in February Marape said the bilateral security agreement reflected the focus on PNG becoming a strong, economically resilient nation.

“A strong, economically empowered Papua New Guinea means a stronger and more secure Australia and Pacific,” he said.

Ian Kemish, high commissioner in PNG from 2010-2013, who is Distinguished Adviser at the Australian National University’s National Security College, says “it’s significant Albanese is visiting for several days and is spending so much time with Marape”.

Kemish says Australia is in a stronger position in PNG than in some other parts of the Pacific, because of the very broadly-based bilateral relationship.

“It’s not all government-to-government,” he says. There are extensive economic and trading links, links through development aid, and cultural links. (On the sports front, the federal government strongly backs PNG’s bid become a National Rugby League team 2027, on which talks continue.)

Kemish says China has had “a few runs at Papua New Guinea”, but these have amounted to very little at the political or strategic level.

But China has moved in significantly at the commercial level, in construction including building roads and bridges.

“While there is not a lot of vulnerability [to China] at the national political level, there are opportunities for China at the provincial level, where it can do economic and resource deals and convert them into strategic opportunity over time – for example if China engaged with a frustrated Bougainville. The regions are frustrated with the centre,” Kemish says.

The Kokoda campaign ran from July to November 1942, and involved some 56,000 Australians, of whom about 625 wre killed and more than 1600 wounded along the track.

Albanese said at the weekend: “The Kakoda campaign and the Kokoda track form part of our national identity, a defining chapter in the story of those who risked and lost their lives in defence of Australia and in our shared history with Papua New Guinea.

”Kokoda is a name that lives in Australian legend. It captures the spirit of courage, endurance, mateship and sacrifice forged between Australia and Papua New Guinea during world war two.

”Participating in this walk is a solemn way to honour, to reflect on the sacrifices made by those who walked this same ground, people from Papua New Guinea and Australia, serving and sacrificing together in defence of their home.”

The trip will yield plenty of pictures but probably none so striking as when in 1992, PM Paul Keating fell to his knees and kissed the ground at the Kokoda Monument. As Don Watson, historian and Keating’s speechwriter, later wrote, “Even by Keating’s standards it was a remarkable act”. Läs mer…

Grattan on Friday: Ethnic tensions will complicate the Albanese government’s multicultural policy reform

When ASIO boss Mike Burgess delivered his annual threat assessment earlier this year, he stressed the rising danger posed by espionage and foreign interference.

“In 2024, threats to our way of life have surpassed terrorism as Australia’s principal security concern,” he said.

But ASIO also remained concerned about “lone actors” – individuals or small groups under the radar of authorities with the potential to “use readily available weapons to carry out an act of terrorism”.

It was a concern “across the spectrum of motivations – religious and ideological”.

With minor variations, Burgess might have been describing what allegedly happened at Sydney’s Wakeley Assyrian Orthodox Church on Monday night, where Bishop Mar Mari Emmanuel was attacked with a very “readily available weapon” – a knife.

Monday’s incident would have set off shock waves in ordinary times, especially given it was followed by an ugly riot as angry locals converged on the scene, trying to get at the alleged perpetrator, a 16-year-old boy.

In this case, the fear the attack triggered was dramatically heightened by context.

Tensions, especially in western Sydney, are much elevated because of the Middle East conflict. And the Wakeley attack came just two days after the Bondi shopping centre stabbings, which killed six people. While that atrocity did not fall under the definition of “terrorism”, inevitably the two incidents were conflated by an alarmed public.

The mix, further stirred by incendiary social media, increases the difficulty of keeping a sense of proportion about the church incident, which isn’t the first instance of a terrorist act in Australia and presumably won’t be the last.

We don’t know the background of the attack on the bishop. We do know that the wider pressures on our social cohesion – including dramatic rises in antisemitism and Islamophobia – are deeply troubling. Australia’s multiculturalism is enduring unprecedented strains, with all the difficulties that brings for political and community leaders.

When there are security crises, terror-related or not, the default call is, not surprisingly, for authorities to DO SOMETHING. More police (or security guards). Greater law enforcement powers. Tougher penalties. New controls on social media. (After the church incident, the eSafety commissioner ordered tech companies to take down images of the attack. These were widely available, because the church service had been live-streamed.)

Sometimes calls for action may be warranted, but often they’re little more than a knee-jerk response – and can open other debates (for example, over the justification for censoring certain images but not others).

The challenge for political leaders is not just dealing with the immediate increasing threats to cohesion, but with longer term policy.

Prime Minister Anthony Albanese recently flagged, when he met a Jewish youth group, that the government planned to appoint an envoy against antisemitism (a post existing in other countries) and a matching envoy against Islamophobia. There’s no timetable for these appointments.

Looking to the future, what’s unclear, given the present tensions, is the likely trajectory of Australia’s multiculturalism.

Will the strains worsen, seriously fracturing the society? Or will they ameliorate in the years to come? Multiculturalism is likely in transition, but what will be its pathway? And what are the political implications?

Labor is particularly worried about the erosion of its support among Muslim voters in western Sydney seats.

The cat was belled on the suburban multicultural vote in 2022, ironically not by a Muslim candidate but a Christian of Vietnamese heritage. Dai Le, whose family fled the Vietnam war, seized the previously safe Labor seat of Fowler in Sydney’s outer south-west.

It remains to be seen whether this is a one-off, or if more strong independent candidates will start to emerge as people from multicultural communities fight for a bigger direct presence in politics, or to exert more influence through strategic voting.

A recently-registered group called Muslim Votes Matter styles itself as “shaping our future through informed voting and collective influence”. It says on its website, “There are over 20 seats where the Muslim community collectively has the potential deciding vote”.

Kos Samaras, from the Redbridge Group, a political consultancy, says “the fire” has been raging for some years in multicultural communities in areas such as north-western Melbourne and western Sydney. The Israel-Hamas war has obviously fuelled it.

Samaras says the Muslim political alienation from the major parties has been strongest among members of the those communities who were born in Australia – people in their 20s, 30s and 40s.

This week, after the church attack, NSW premier Chris Minns called in faith leaders. But it is a moot point whether this consultation with predominantly older people reaches the younger, more alienated generation.

Young Australian Muslims grew up in a post-September 11 world, Samaras says, with a sense of being outsiders in the country. We saw this feeling during the pandemic, in the complaints about the different treatment of people in Sydney’s eastern and western suburbs.

Notably, Muslim community leader Jamal Rifi, speaking this week to Sky on behalf of the 16-year-old’s family, referenced the fact the Bondi killings were not labelled “terrorism” by the authorities while the church incident was. “I understand there is a difference between the two but unfortunately the overwhelming feeling in the community [is] that it is, you know, Tale of Two Cities,” he said.

Andrew Jakubowicz, emeritus professor of sociology at the University of Technology Sydney, highlights the three separate elements of multiculturalism. These are

“Settlement policy, which deals with arrival, survival and orientation, and the emergence of bonding within the group and finding employment, housing and education
”Multicultural policy, which ensures that institutions in society identify and respond to needs over the life course and in changing life circumstances, and
”Community Relations policy, which includes building skills in intercultural relations, engagement with the power hierarchies of society and the inclusion of diversity into the fabric of decision-making in society – from politics to education to health to the arts.”

Australia has been fairly good at the first, not so good on the second and “very poor” on the third, he says.

The Albanese government last year commissioned an independent review of the present multicultural framework. The report has recommendations for the short, medium and long terms. It envisages changes to institutions as well as policies and at federal and state levels.

Although the review is not due for release until mid-year, the May budget is likely to see some initiatives.

But there are differences between ministers about how far and how fast reform should go. A febrile combination of local and international factors is making crafting a multicultural policy for the next decade a much more sensitive operation than might have been envisaged when the review was launched. Läs mer…

Politics with Michelle Grattan: Independent MP Dai Le on the church attack in her electorate

After the stabbing of Bishop Mar Mari Emmanuel in an Assyrian Orthodox Church in Wakeley on Monday, and the killings in Bondi Junction shopping centre just two days earlier, many people in Sydney and in Australia more widely are tense.

With constant protests against Israel’s actions in Gaza and fears about a wider Middle East conflict, social harmony among religions and cultures in Australia is straining.

Dai Le is the independent member for the seat of Fowler, where the church incident took place. Hers is one of the most diverse electorates in the country.

On how the local community is feeling, Dai Le stresses:

The community is currently feeling on edge and there is tension in the community, since the attack.

As you can appreciate, people are on tenterhooks at the moment […] This just follows on from the Bondi killings that happened as well. So it’s just one day after another.

Talking about the alleged attacker, who is a teenager, she highlights some of the struggles facing young people:

Our young people are often very much feeling cut off from society. And I think that they are struggling with mental health issues. They’re struggling with the cost of living. They’re struggling with finding their identity and where they belong in today’s society, where it’s so fast paced, where there’s lots of expectations.

I can’t speak around this young man because I don’t know much about his history.

I do know is that young people need a lot of support, and need a lot to feel that they belong, that they are valued. And how do we do that? What can we create to make sure that they are valued members of our community?

Dai Le still remains hopeful and proud of Australia’s role as a multicultural society:

I still believe, though, that we are still a wonderful multicultural community. I believe that we have that great uniqueness. And Australia has always been welcoming, and I hope that Australia will continue to maintain our wonderful cohesiveness and harmony. If everybody, all the leaders, we work together to ensure the message is out there, that people are welcomed, that people have the right to practice their faith, that people feel that they belong in the community.

Finally, on her hopes for the budget, Dai Le focuses on the kitchen table issues:

I’ve asked the Prime Minister before to extend that excise fuel tax cut, because that will obviously bring down the petrol prices, which is above $2.10 and sometimes up to $2.50, for people because our community travels a lot for work. The grocery food prices that is kind of really just beyond anybody’s imagination how much it costs nowadays to do your grocery shopping. Läs mer…

Critical minerals receive multi-million dollar support under Future Made in Australia policy

Two major critical minerals projects in Queensland and South Australia are to receive hundreds of millions of dollars in federal government loans as part of the Albanese government’s new Future Made in Australia policy.

New loans worth $400 million will go to the Australian company Alpha HPA to deliver Australia’s first high-purity alumina processing facility in the Queensland port city of Gladstone.

The project is expected to create about 490 jobs during construction and more than 200 when it is completed.

The company will use Australian-owned intellectual property and technologies to produce high purity alumina, which is a critical mineral used in LED lighting, semiconductors, lithium-ion batteries and other high- tech applications.

The loans will be provided by Export Finance Australia through the government’s $4 billion Critical Minerals Facility and Northern Australia Infrastructure Facility.

The government is also lending $185 million to Renascor Resources to fast track the first stage of its South Australian Siviour Graphite Project at Arno Bay on South Australia’s Eyre Peninsular.

An earlier loan for the project was approved in February 2022.

Stage One will deliver about 150 construction jobs and 125 ongoing jobs when the project is operational. Stage Two is expected to involve another 225 construction jobs and more than 120 jobs operational once operating in Bolivar near Port Adelaide.

Renascor Resources will deliver purified graphite for lithium-ion batteries needed for electric vehicles and renewable technologies.

Prime Minister Anthony Albanese said the two projects would help bring “good and secure jobs in manufacturing, and clean, reliable energy”.

Resources Minister Madeleine King said Australia’s critical minerals and rare earths were “key to building renewable technologies such as solar panels, batteries and wind farms, as well as defence and medical technologies”.

Read more:
Anthony Albanese puts interventionist industry policy at the centre of his budget agenda

Queensland Premier Steven Miles – who faces an election this year – said the announcement by the Prime Minister showed “the confidence government and industry have in the great state of Queensland”.

Critical minerals are defined as metallic or non-metallic elements found in the earth that are both crucial for modern technologies or national security and face the risk of supply chain disruption.

Australia has identified 26 such minerals, and in Feburay added nickel to the list.

Albanese announced plans to introduce a Future Made in Australia Act last week, saying he wanted to “bring together in a comprehensive and co-ordinated way a whole package of new and existing initiatives to boost investment, create jobs and seize the opportunities of a future made in Australia”.

On Monday the government announced a Medical Science Co-investment Plan that identified priorities for government support including digital health, medical devices, innovative therapeutics and sustainability. Läs mer…

Jim Chalmers seeks to allay fears industry policy will be financial ‘free-for-all’

Treasurer Jim Chalmers has flagged substantial public investment, likely tax breaks and other incentives in next month’s budget to encourage industry, while stressing there won’t be a “free-for-all” of public funds.

“We’re talking about incentivising private investment rather than replacing it,” he said, as debate rages about Anthony Albanese’s announcement last week of his new interventionist policy.

Chalmers also said he will soon unveil reforms to the government’s foreign investment guidelines. These will streamline processes for some bids but make the rules tougher for others.

The May 14 budget is still expected to have a surplus. But poor growth in the Chinese economy and a tumble in the iron ore price have produced headwinds.

Chalmers told the ABC the treasury had downgraded the forecast for China’s growth.

China’s growth was expected to have “a four in front of it, for three consecutive years,” Chalmers said. That would be the slowest period of growth in China since that country began opening in the late 1970s. More figures on the Chinese economy will be out on Tuesday.

The plunge in iron ore prices has delivered a hit to the budget’s bottom line. The price has gone from more than US$130 a tonne in January to the low US$90s. According to treasury, this fall has reduced the upgrade to the nominal economy by A$35 billion and cut the upgrade to tax receipts by nearly AU$9 billion over the forward estimates.

A major reason for the price plunge has been concern about demand for steel from China.

Chalmers sought to play down criticism of the government’s industry policy from the head of the Productivity Commission, Danielle Wood, whom he appointed. Wood last week warned of the danger of support becoming entrenched and urged there be an exit strategy.

“Danielle Wood made some important points but some obvious points about making sure we get value for money. We’ve got strict frameworks, we’ve got exit strategies and off-ramps and we’re taking into consideration the impact of these plans on the economy more broadly.”

Chalmers said the policy would align Australia’s national and economic security interests. “It’s how we deliver another generation of prosperity, by making ourselves an indispensable part of the global push to net zero.

”When it comes to public and private investment, it’s really important to remember that what we’re talking about here isn’t some kind of free‑for‑all of public funds, we’re talking about incentivising private investment rather than replacing it.

”The heavy lifting will still be overwhelmingly done by the private sector but there’s an important role to play by governments and by public investment as well.

”That will still only be a sliver of the hundreds of billions of dollars that we need to land this energy transformation, to make ourselves a renewable energy superpower and to secure our place in a future which will be dominated by the net zero economy.”

Chalmers said there would be “substantial” public investment in the budget.

“But it still won’t be the biggest piece of the story here and that’s why the budget will also have a very big focus on how we attract and deploy and absorb private sector investment as well in the service of these really important national economic objectives.”

Whatever is done on tax won’t include a cut in the company tax rate, the Treasurer said.

Chalmers will visit Washington this week for a round of economic meetings. Läs mer…

Danielle Wood pricks Albanese’s industry policy balloon – but leaves him with some good advice

Among the critics emerging to find fault with Anthony Albanese’s interventionist industry policy, the one who gave the most damaging prick to the Prime Ministerial balloon was Danielle Wood, the new head of the Productivity Commission,

Wood, former chief of the Grattan Institute, a policy think tank, made extensive comments to the Australian Financial Review and The Australian on Thursday, the day of the PM’s speech.

She said that while the government was responding to a changing world (a point stressed by Albanese), “we shouldn’t pretend … that this is going to be costless”.

“If we are supporting industries that don’t have a long-term competitive advantage, that can be an ongoing cost,” she said. It meant workers and capital were diverted from other parts of the economy.

“We risk creating a class of businesses that is reliant on government subsidies, and that can be very effective in coming back for more.” An “exit strategy” was needed, where support was stepped back from or at least reviewed.

The Productivity Commission is well known for its free market approach. In that sense, the views of its current head were not just unexceptional but the sort of thing someone in the role would likely say. The commission, there to give advice to the government, is (up to a point) independent.

But two factors made Wood’s contribution both surprising and potent. She had been appointed by Treasurer Jim Chalmers. And she was being very forthright, immediately after its launch, about what is a major government economic and political initiative.

Where it can’t manage the messages the Albanese government likes to be able to anticipate where the counter-messages will come from.

It was blindsided by the Wood critique – not least because it was before the full detail of the policy, centred on a yet-to-be-released Future Made in Australia Act, are known.

While Wood going public might have been unexpected, the substance of what she said was not. Everything she’s argued in the past would have led you to think she wouldn’t be a fan of the Albanese policy.

By her strong comments, Wood has sent a clear signal that she is determined, on occasion, to have a public voice in the economic debate. That can only be a good thing.

Former treasurer and current ALP president Wayne Swan fired off a salvo, telling morning TV Wood was “completely out of touch with the international reality”. Swan said: “We need energy independence and to do that, we’ve got to make up for a lost decade”.

Chalmers held his tongue. He and Wood get on well personally. When he does publicly respond, you can be sure he’ll be a lot more diplomatic than his old boss Swan.

Chalmers, for all that he might be uncomfortable that Wood has spoken out, will know her remarks contain some significant warnings.

With the new interventionism the government is embarking on a risky (and expensive) strategy. It will be vital the policy, when fleshed out, contains whatever safeguards can be mustered to ensure if wrong decisions on support are made, they are spotted early and there is, indeed, an “exit strategy”. One of the prime dangers in interventionism is that it become a rort for the rent seekers.

Wood’s advice is important, even if it was delivered inconveniently for the government through a megaphone. Läs mer…

View from The Hill: Danielle Wood pricks Albanese’s industry policy balloon – but leaves him with good advice

Among the critics emerging to find fault with Anthony Albanese’s interventionist industry policy, the one who gave the most damaging prick to the Prime Ministerial balloon was Danielle Wood, the new head of the Productivity Commission,

Wood, former chief of the Grattan Institute, a policy think tank, made extensive comments to the Australian Financial Review and The Australian on Thursday, the day of the PM’s speech.

She said that while the government was responding to a changing world (a point stressed by Albanese), “we shouldn’t pretend … that this is going to be costless”.

“If we are supporting industries that don’t have a long-term competitive advantage, that can be an ongoing cost,” she said. It meant workers and capital were diverted from other parts of the economy.

“We risk creating a class of businesses that is reliant on government subsidies, and that can be very effective in coming back for more.” An “exit strategy” was needed, where support was stepped back from or at least reviewed.

The Productivity Commission is well known for its free market approach. In that sense, the views of its current head were not just unexceptional but the sort of thing someone in the role would likely say. The commission, there to give advice to the government, is (up to a point) independent.

But two factors made Wood’s contribution both surprising and potent. She had been appointed by Treasurer Jim Chalmers. And she was being very forthright, immediately after its launch, about what is a major government economic and political initiative.

Where it can’t manage the messages the Albanese government likes to be able to anticipate where the counter-messages will come from.

It was blindsided by the Wood critique – not least because it was before the full detail of the policy, centred on a yet-to-be-released Future Made in Australia Act, are known.

While Wood going public might have been unexpected, the substance of what she said was not. Everything she’s argued in the past would have led you to think she wouldn’t be a fan of the Albanese policy.

By her strong comments, Wood has sent a clear signal that she is determined, on occasion, to have a public voice in the economic debate. That can only be a good thing.

Former treasurer and current ALP president Wayne Swan fired off a salvo, telling morning TV Wood was “completely out of touch with the international reality”. Swan said: “We need energy independence and to do that, we’ve got to make up for a lost decade”.

Chalmers held his tongue. He and Wood get on well personally. When he does publicly respond, you can be sure he’ll be a lot more diplomatic than his old boss Swan.

Chalmers, for all that he might be uncomfortable that Wood has spoken out, will know her remarks contain some significant warnings.

With the new interventionism the government is embarking on a risky (and expensive) strategy. It will be vital the policy, when fleshed out, contains whatever safeguards can be mustered to ensure if wrong decisions on support are made, they are spotted early and there is, indeed, an “exit strategy”. One of the prime dangers in interventionism is that it become a rort for the rent seekers.

Wood’s advice is important, even if it was delivered inconveniently for the government through a megaphone. Läs mer…

Grattan on Friday: Albanese government can’t be accused of excessive caution any longer

Commentators used to complain the Albanese government was being too cautious. That charge can’t easily be levelled now.

Take two totally different issues on which the government in recent days has defined itself by its robust stances.

One is the Israel-Hamas conflict. The other is the swing to a highly interventionist industry policy, spelled out by Prime Minister Anthony Albanese in a major address on Thursday. Let’s look at each.

The government has steadily ramped up its criticisms of Israel’s conduct in Gaza over the months, as civilian casualties have mounted into the tens of thousands, international opinion demanded proportionality, and Labor felt the pressure of pro-Palestinian opinion in some key seats.

But the April 1 killing of Australian Zomi Frankcom and other aid workers by an Israeli strike was a trigger point that has taken reaction to a new level.

This week the government named a former chief of the Australian Defence Force, Mark Binskin, as its adviser to examine the adequacy of the Israeli investigation of the attack.

Regardless of whether it was a good or bad move, that was an extraordinary action. It sent a clear message – Australia was not satisfied Israel’s account could be trusted without being checked.

It remains to be seen whether Binskin will get full access to all the data he needs. While he is probing the Israeli inquiry, rather than doing an inquiry of his own, for proper scrutiny he’ll presumably have to see quite sensitive military information. It’s difficult to believe the Israelis will be happy to hand over such material during a war.

The government’s move is likely to be well received domestically, however, given the appalling circumstances in which Frankcom and her colleagues died.

Meanwhile, this week Foreign Minister Penny Wong toughened, albeit cautiously, Australian policy. She floated the possibility of recognising a Palestinian state ahead of agreement on a two-state solution.

This course is being canvassed internationally, and could coincide with a vote on Palestinian membership at the United Nations before long. But Wong’s comments were denounced by sections of the Australian Jewish community and the opposition. Opposition Leader Peter Dutton accused Wong of “irreparably” damaging Australia’s relations with Israel “for a crass domestic political win”.

Wong justified raising Palestinian recognition by pointing to the fact other countries, including Britain, are discussing it. Albanese also invoked the wider world, when he said Australia has to “break with old orthodoxies” and embrace a more interventionist approach to industry policy.

Albanese argued that in a changed international situation, we need “sharper elbows” to follow our national interest. “We have to think differently about what government can – and must – do to work alongside the private sector to grow the economy, boost productivity, improve competition and secure our future prosperity”.

He highlighted a range of countries, from the United States to South Korea, pursuing activist government intervention. Most notably, the Biden administration, under its Inflation Reduction Act, has huge subsidies to attract investment for re-industralisation, with an emphasis on green energy.

Albanese insists the reburnished interventionism was “not old-fashioned protectionism”. We had to recognise “there is a new and widespread willingness to make economic interventions on the basis of national interest and national sovereignty.” To an extent, this a reaction to the pandemic, which spurred fears of blocked supply chains.

Albanese is extremely comfortable with the interventionist pivot. After all, it takes him back to his political roots, when as a young left-winger he was critical of Labor’s embrace of the free market. It also taps into a broad Labor pro-manufacturing strand, partly but not only based in the union movement. Remember Kevin Rudd saying “I never want to be prime minister of a country that doesn’t make things anymore”?

To a degree Albanese’s interventionism is driven by the acute needs of the energy transition – that requires a massive capital injection only realisable by tangible government encouragement (like its underwriting scheme and other incentives to come). Australia can’t compete with the US incentives but it will be trying a mini-me approach.

Albanese’s interventionism will be reflected in the May 14 budget but it will also stretch right up to the election, gathering together a wide range of current and future initiatives under a “Future Made in Australia Act”.

The obvious question is: what does Treasurer Jim Chalmers think of this? Treasury has traditionally been a manufacturer of free-market Kool-Aid, selling it to its political bosses where it can. So you’d expect Chalmers might be sceptical.

But the treasurer, while he might not be the interventionist zealot Albanese is, walks a separate path towards a similar destination.

More than a year ago, Chalmers set out his views in a major essay about “values-based capitalism”. This revolved around public-private co-investment and collaboration and renovating economic institutions and markets. He has been busy with the latter task: changes have been made to the Reserve Bank and reforms are under way to aspects of competition policy, including announcing a new merger regime this week.

Chalmers has also pointed approvingly to a speech delivered last year by Jake Sullivan, National Security Advisor in the Biden administration, in which Sullivan set out the US approach.

“A modern American industrial strategy identifies specific sectors that are foundational to economic growth, strategic from a national security perspective, and where private industry on its own isn’t poised to make the investments needed to secure our national ambitions,” Sullivan said.

“It deploys targeted public investments in these areas that unlock the power and ingenuity of private markets, capitalism, and competition to lay a foundation for long-term growth.”

While what the Australian Treasury bureaucrats (who are at the centre of the work) privately think of the Albanese interventionism is unclear, some of those working on free trade agreements in the Department of Foreign Affairs and Trade will be finding the approach challenging.

Many economists will welcome the plan. But some, like independent economist Saul Eslake, will be harsh critics.

Eslake says terms like “national sovereignty” and “national security” are “covers for bad policy” and a way of stifling questioning or criticism (“we can’t let grubby concepts of cost and benefit get in the way of ‘security’”). He recalls such talk when the Morrison government did not make enough efforts to get COVID vaccines from abroad because it had its eyes on local production, leading to delays.

Eslake also derides the “manufacturing fetish” that is one driver of interventionism. In Australia (unlike some other countries) manufacturing is an area of below-average labour productivity, he says – so shifting resources there lowers rather than increases productivity.

As for following other countries’ example, “as my mother used to say, just because your sister puts her head down the toilet doesn’t mean you should too”.

Wherever the economic wisdom lies, the focus groups are telling Labor it is likely to be on a winner with the new interventionism. People will warm to the sound of it, accompanied by the mantra of extra jobs. There are a lot of manufacturing fetishists about. Läs mer…

Politics with Michelle Grattan: Josh Burns on being a Jewish MP during a terrible conflict

The death of Australian Zomi Frankcom and other World Central Kitchen aid workers in Gaza in an Israeli strike has led to yet more intense and critical scrutiny over how Israel is prosecuting the war against Hamas.

This week Foreign Minister Penny Wong has floated the possibility of recognition of a Palestinian state ahead of a two-state solution. Her comments were condemned by Peter Dutton as “irreparably” damaging Australia’s relations with Israel.

To discuss the government’s position on this and the Middle East crisis, we’re joined by Labor MP Josh Burns, who represents the inner Melbourne seat of Macnamara, which has a significant Jewish community.

Josh Burns’ family history goes back to the early post-world war two days of Israel, when his grandfather settled there.

There was an incident that happened where there was some conflict between Israelis and local Palestinians, and it was really distressing to my grandfather. And he hated it. He hated the fact that there was conflict around him, he’d just lived through world war two, and he didn’t want to raise his family in a place where there was conflict. And he said he made one of the hardest decisions of his life to leave Israel and to go and start a new life in another country.

Burns reiterates his support for a two-state solution.

I desperately want to see a peace agreement signed between the Israelis and the Palestinians. I really, really went to see that in my lifetime; it will be a magnificent day for humanity where we can we can properly see this conflict that has been devastating for decades end.

As a person who is a part of the Jewish community, Burns explains why the recent months have been profoundly difficult.

I think this has been probably the most difficult period that I can think of in my lifetime to be a Jewish person in Australia. And I think that the Jewish community feels under immense pressure. It saddens me greatly that this has been such a difficult time for the Jewish community in Australia.

He stresses the importance of respectful communication with all sides of the issue, on which Muslim ministers Ed Husic and Anne Aly have been outspoken in bringing the intense Palestinian suffering to the fore.

I’ve been friends with Ed Husic for a long time, and Anne Aly is a dear friend of mine and Fatima Payman, the three Islamic members of our caucus I speak to regularly, and I admire them all very much. And I think it’s very important that we have a space where we can have these respectful dialogues and disagreement, which is okay. Läs mer…

Anthony Albanese puts interventionist industry policy at the centre of his budget agenda

Anthony Albanese will outline on Thursday a strongly interventionist role for government to make Australia competitive in a world requiring us to “break with old orthodoxies”.

In a major pre-budget address that puts industry policy at the heart of this agenda, the Prime Minister will declare his government “will not be an observer or a spectator – we will be a participant, a partner, an investor and enabler”.

“We have to think differently about what government can – and must – do to work alongside the private sector to grow the economy, boost productivity, improve competition and secure our future prosperity,” he says in the speech, released ahead of delivery.

To anchor the government’s reform program it will this year introduce a “Future Made in Australia Act”.

Although detail is thin, the Act would provide an overarching framework to coordinate government support for industries.

“We will bring together in a comprehensive and co-ordinated way a whole package of new and existing initiatives to boost investment, create jobs and seize the opportunities of a future made in Australia,” Albanese says.

“We want to look at everything that will make a positive difference,” he says, including “investing in new industries – and ensuring that workers and communities will share in the dividend”.

While his speech is not specific about the budget, “future made in Australia” will be a central theme, as will incentives – albeit limited by fiscal constraints snd inflationary pressures.

To underpin the case for the government’s direction, Albanese highlights comparable countries that are investing in their industrial base, manufacturing capability and economic sovereignty.

‘Not old-fashioned protectionism’

“This is not old-fashioned protectionism or isolationism – it is the new competition,” he says.

Australia continued to champion global markets, but “equally, we must recognise that the partners we seek are moving to the beat of a new economic reality”.

“We must recognise there is a new and widespread willingness to make economic interventions on the basis of national interest and national sovereignty.”

Albanese points to the US Inflation Reduction Act which will direct nearly US$400 billion (A$605 billion) in federal funding to support clean energy and the US CHIPS Act which will direct $280 billion (A$422 billion) in new funding to boost research and manufacturing of semiconductors.

Read more:
Economists say Australia shouldn’t try to transition to net zero by aping the mammoth US Inflation Reduction Act

The Prime Minister says the European Union has introduced an Economic Security Strategy, Japan has introduced an Economic Security Promotion Act, the Republic of Korea is re-framing its economic policy around national security, and Canada has tightened foreign direct investment in critical minerals.

“All these countries are investing in their industrial base, their manufacturing capability and their economic sovereignty. And – critically – none of this is merely being left to market forces or trusted to the invisible hand.

”The heavy lifting of economic transition and industrial transformation is not being done by individuals, companies or communities on their own.

”It is being facilitated, enabled and empowered by national Governments from every point on the political spectrum. Because this is not about ideology, it’s about opportunity – and urgency.

”Australia can’t afford to sit on the sidelines”.

Last month two thirds of the leading economists surveyed by the Economic Society of Australia and The Conversation backed “more grants to innovative firms across the entire economy” as a response to the Inflation Reduction Act. Another quarter backed support specifically tied to renewable energy projects.

Only four of the 42 surveyed counselled against extra support for industry.

Albanese is delivering the speech in Queensland, which he talks up as having “a pivotal role” in realising and building   a future made in Australia.

Queensland, in which federal seats are overwhelmingly in Coalition hands, is where Labor needs to make some inroads at next year’s election. At a state level, the Labor government is on the back foot ahead of this year’s election.

Albanese says Australia needs “a new wave of economic reform” “to drive growth, improve competitiveness, lift productivity and create the next generation of prosperity and opportunity”.

In its role as a participant, partner, investor and enabler, the government would be guided by three principles.

“First, we need to act and invest at scale. Moving beyond a ‘spray and pray’ approach where the priority has been minimising government risk, rather than seeking to maximise national reward.

”Second, we need to be more assertive in capitalising on our comparative advantages and building sovereign capability in areas of national interest.

”Our government will be proactive when it comes to backing Australia’s comparative advantages and delivering on our national interests,” he says, pointing to investments made in solar manufacturing, the Hydrogen Headstart program and the Critical Minerals Facility.

“Thirdly, we will continue to strengthen and invest in the foundations of economic success,” ranging from improving the skills base to ensuring a positive regulatory environment.

“We recognise that for Australians to share fully in the rewards, government needs to be prepared to use its size and strength and strategic capacity to absorb some of the risk.

”Only government has the resources to do that, only government can draw together the threads from across the economy and around our nation”.

Albanese says the government is “open to all good ideas” – from business, unions, state and local governments, and across the parliament.

While Australia could not match dollar for dollar the US Inflation Reduction Act, “Australia can absolutely compete for international investment when it comes to our capacity to produce outcomes, the quality of our policies and the power of our incentives”.

Ramping up a rhetoric of urgency, Albanese says: “We need to be clear-eyed about the economic realities of this decade. Recognising that the game has changed – and the role of government needs to evolve.

”Government needs to be more strategic, more sophisticated and a more constructive contributor.

”We need sharper elbows when it comes to marking out our national interest.

”And we need to be willing to break with old orthodoxies and pull new levers to advance the national interest.”

There must be a combination of the private sector and government action to grow the economy.

“Combining market tools, with government action to create wealth and create opportunity.” Läs mer…