Treasurer Jim Chalmers is tempering expectations for a Budget “cash splash”, on Thursday saying the focus will be on catalysing investment to builds domestic capabilities that take advantage of the energy transition and global supply chains.
In an address to business leaders in Sydney, the Treasurer foreshadowed a smaller surplus than forecast late last year and noted many new initiatives in the May Budget have already been announced.
Dr Chalmers, who is putting the finishing touches on industry policy built around clean energy, critical minerals and cleaner export industries, said the Budget will still have a big focus on investment as a driver of “sustainable” growth.
“By this I mean a bigger emphasis on foundations and drivers,” the Treasurer said in a budget preview address to the Committee for Economic Development of Australia on Thursday.
“That’s why the Budget will be all about: A future made in Australia; The energy transformation; A human capital base capable of adapting and adopting technology and catching up and keeping up with changing workplace needs; A bigger emphasis on women, wages, and workers in the care economy; And perhaps most of all a big new focus on investment.”
While business investment has grown under the Albanese government, Dr Chalmers said outlook is now “a little less certain, and a little less predictable” so Australia needs to be able to absorb as well as attract private investment.
After meeting with influential economist Mariana Mazzucato, the Treasurer acknowledged the Australian government needs to get better at working together.
“It will need a more obvious front door for investors, regardless of whether you first talk to Government through AusTrade or the National Reconstruction Fund,” he said.
“It will need a more coherent approach to co-investment with industry, including better assistance for priority projects navigating approval processes.
“And it will need better partnerships with the regions, bringing together states, businesses and investors around key opportunities for economic development, like we have been starting to do through the Net Zero Authority.”
In a noteworthy speech last year the Treasurer flagged national industrial policy still needs to be “recast” to take advantage of decarbonisation.
Four sectors have already been identified by a government taskforce as priorities – critical minerals, energy generation and storage, renewable hydrogen, and green steel.
The Albanese government is understood to be finalising a new multi-billion-dollar package of subsidies and co-investment for renewables an new industries.
Prime Minister Anthony Albanese said last month hinted at the upcoming industry support, saying government must be “a partner in this, not just an observer”.
“We can be an exporter of clean energy technology and clean energy itself. Helping our neighbours reduce their emissions and bolster their energy security,” Mr Albanese said.
“There is a huge prize on offer here, across every sector of our economy and in every market in our region.”
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