AUSTRALIAN Prime Minister Anthony Albanese plans an Inflation Reduction Act (IRA)-style programme to stimulate green manufacturing industries and drive his nation’s economy beyond its traditional minerals extraction base while bolstering economic security.

Albanese will announce the plan in a speech in the northeastern state of Queensland on Thursday (Apr 11), highlighting that it fits into a global shift of governments backing local industries. There is a “new and widespread willingness to make economic interventions on the basis of national interest and national sovereignty”, he said.

By year’s end, Australia’s centre-left Labor government will legislate the “Future Made in Australia Act”, which the prime minister intends as a catchall for “new and existing initiatives” to boost investment and create jobs in the fields of green manufacturing and high-tech.

The policy will be a pillar of next month’s budget, as well as a major feature of a second-term agenda for Albanese’s government, ahead of an election due by mid-2025. The programme is designed to move Australia up the green supply chain to capitalise further on its vast renewable energy resources.

In a speech to the Queensland Media Club, Albanese will say that Australia is in a race with nations such as the US, which is successfully operating a similar programme under President Joe Biden that is drawing swathes of capital into America’s renewable industries.

“Our government wants Australia to be in it to win it,” Albanese will say, according to excerpts of his speech distributed in advance. “Obviously, Australia cannot go dollar for dollar with the United States’ Inflation Reduction Act. But this is not an auction – it is a competition.”

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The move marks a reversal of decades of Australian government policy of withdrawing from efforts to shape the private sector, with the scrapping of tariffs and subsidies and signing of trade agreements that were part of a global push for countries to focus on what they did best.

Australia’s car industry was shuttered about 10 years ago as it became uncompetitive with consumers shifting to higher-quality imports.

The government in Canberra has recently been ramping up incentives for green manufacturing and the extraction of critical minerals vital for the renewables transition. But senior ministers have been keen for further support given the growing competition internationally.

However, concerns that additional fiscal spending could damage efforts to bring inflation under control have kept a lid on a broader policy for much of Albanese’s first term. Now, as inflation begins to wane, the government is looking to boost growth and improve Australia’s economic security and industrial base. BLOOMBERG