"The broad contours of the Government's plan to introduce a Future Made in Australia Act announced by the Prime Minister today foreshadow several positive directions. But the approach also holds clear risks and unanswered questions which will need to be addressed as the plan is fleshed out," Innes Willox, Chief Executive of the national employer association Ai Group said today.

"There is a welcome focus from the Prime Minister on the vital need to address vulnerabilities to supply chain risks. Some areas of defence capability are clear examples of these vulnerabilities with other candidates in areas such as health products and essential materials. Making more things in Australia is one strategy to mitigate these risks.

"The Prime Minister's commitment to better coordination of government action is another positive direction. At present we have an unseemly mix of policies pulling in too many directions.

"Industry policy is fraught with pitfalls. It works best when there are clear objectives, well-designed policy instruments, and the administrators charged with their implementation have a willingness to accept responsibility for and respond quickly to inevitable failures. Fundamentally, governments should be enablers not deliverers.

"Without question Australia also needs to accelerate progress on decarbonisation – not just of our energy and emissions intensive industrial sectors but also of agriculture, transport and the built environment. Decades of policy delays, false dawns, reversals and double-speak have left us short of time and scared to act.

"The most obvious risks in today's announcement relate to the policy and political failures over more than a decade that impede our progress. Too often, government policies distort activity, create unintended consequences and are slow to adapt as circumstances change and flaws are exposed. Yet we are today invited to make a leap of faith that more government guidance and support is the answer to our ills. Industry will naturally view the promise of more government intervention with suspicion, if not alarm.

"The Prime Minister rightly identifies cooperative partnerships between governments, business and the community as necessary. The key to great and productive partnerships lies in dividing the tasks involved between the partners best positioned to deliver them.

"As a first and most fundamental step, we need governments to get much better at delivering on their responsibilities.

"Our skills and training systems are woefully inadequate. Creating more places in a dysfunctional TAFE system is a nice announcement but a million miles from developing the workforce we need. There is a plan to fix this but much more rapid progress is needed. Suggestions of cutting apprenticeship incentives in the upcoming Budget are the polar opposite of what is needed. We have an energy transition to manage but no one knows where the thousands of electricians needed to deliver it are going to come from.

"We have over-promised and under-delivered in meeting our infrastructure and housing needs. The way out of this remains uncharted.

"Our regulatory structures are overly complex and under-coordinated. Yet governments of all persuasions routinely skirt around their own commitments to undertake firm cost-benefit analysis to new regulation and to weed out poor regulations. A clear case in point is the Federal Government's industrial relations changes that manifestly detract from productivity and add complexity and cost to employment.

"We have tax systems that are widely recognised as imposing undue costs and distortions to economic decision-making. Yet there is a refusal to rummage around in the too-hard basket and look at the sensible solutions that have been cast aside.

"The challenge for the Government is to ensure that this new path – the Future Made in Australia path – will see governments deliver on their existing responsibilities and their new commitments," Mr Willox said.

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