On Tuesday, Albanese confirmed $1 billion in grants, equity stakes and loans would be made by the federal and Queensland governments to US-based PsiQuantum for it to establish the world’s first commercial-scale useful quantum computer.
Chalmers will argue the world faces its most challenging strategic environment since World War II as countries deal with decarbonisation, national security challenges and a dramatically altered economic outlook.
He said Australia would target its government support at areas such as quantum computing, refining of critical minerals and renewable hydrogen as it could not compete with the subsidies being used by nations such as the United States.
“The scale of subsidies in the three major global economies of course dwarfs anything Australia can offer, which is why we will be smart and strict. We can’t replicate or retrofit the approaches under way elsewhere,” he will say.
“But it would be preposterously self-defeating to leave our policies unchanged in the face of all this industry policy taking shape and taking hold around us.”
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Chalmers will also use the speech to reveal changes to foreign investment rules that will toughen regulations around parts of the economy considered “sensitive” while easing restrictions in other sectors.
The government will increase resources to screen investment in critical infrastructure, critical minerals, technology, businesses that hold sensitive data and where a foreign firm wants to invest near existing defence sites.
The Treasury will get extra support for on-site business visits to ensure they are abiding by conditions set by the Foreign Investment Review Board.
But restrictions in less sensitive areas will be eased. Repeat investors will have paperwork requirements reduced, timelines for decisions will be shortened while foreign investors will be able to buy established build-to-rent projects.
“Our reforms will make Australia a more attractive place to invest, boost economic prosperity and productivity, while strengthening our ability to protect the national interest in an increasingly complex economic and geostrategic environment,” Chalmers will say.
Tighter rules on foreign investment around Australian military bases will be introduced by the federal government.
According to Deloitte Access Economics, Chalmers will deliver a second successive budget surplus but for the coming year the nation’s finances will go back into the red.
Deloitte partner Stephen Smith said Chalmers is on track to follow the $22.1 billion surplus recorded in 2022-23 with a $13.4 billion surplus this financial year, before forecasting a deficit of $7.9 billion.
A deficit of $7.9 billion would be an improvement on the mid-year budget forecast of $18.8 billion and well ahead of the forecast from May last year of $35.1 billion.
Smith said a second successive surplus would be a proud moment for the government, it had to look at ways to bring spending under control.
“Although the government should take credit for producing the surpluses, its fiscal plan ultimately relies on banking upside revenue surprises. It’s a short-term approach that does little to firm the foundations of the long-term budget position,” he said.
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