Albanese argues, however, that companies cannot kick-start new projects on their own and will need the financial capacity of the government to scale up their plans.

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

“It is being facilitated, enabled and empowered by national governments from every point on the political spectrum.”

Albanese will promise new budget initiatives to boost investment but says the government cannot match all the incentives in the US under the Inflation Reduction Act, which US President Joe Biden unveiled in November 2022 to attract investment.

The IRA offers tax credits to companies that invest in renewable energy, electric vehicles, batteries and other projects. The Biden administration estimated it would cost $US369 billion, but that could grow as more investors shift money to the US, potentially at the expense of projects in Australia.

“Obviously, Australia cannot go dollar for dollar with the United States’ Inflation Reduction Act,” Albanese says.

“But this is not an auction – it’s a competition. And 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.”

The Albanese speech explains the reasoning behind decisions to be announced in the May budget to offer financial assistance to key sectors, with no estimate at this point on the scale of the financial commitment.

“Our government is investing in manufacturing to make more things here,” he says.

In one example of an imminent policy, the government is preparing incentives for battery manufacturing because Australia has raw materials such as lithium and nickel but mostly ships those to other countries to make the big batteries needed for homes and industrial use.

The government outlined $840 million in loans and grants last month to help Arafura Rare Earths develop a major lithium mine in the Northern Territory, with similar support likely for other projects to supply the critical minerals needed for batteries, electric vehicles, smartphones and other technologies.

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The new law will be called the Future Made in Australia Act and is expected to be put to parliament around the time of the May 14 budget. The government is not ruling out offering tax incentives for major projects.

The new law is intended to set an overall agenda that adds to existing measures such as the $10 billion National Reconstruction Fund, the Net Zero Authority, the $1 billion commitment to making solar energy panels and the $2 billion subsidy for hydrogen fuel last year.

“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,” Albanese says.

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

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