The Australian government has unveiled its strategy to boost economic activity and increase national security, in a direct response to overseas policies such as the US Inflation Reduction Act.

Speaking at the Queensland Media Club on Thursday, Australian prime minister Anthony Albanese said his government will introduce the Future Made in Australia Act this year in a bid to boost investment.

The IRA has spurred on a surge in infrastructure investment in the US, and while Australian prime minister Anthony Albanese said Australia cannot go “dollar for dollar” with the US policy, he made it clear that Australia is determined to compete.

“Securing jobs, attracting investment and building prosperity has never been a polite and gentle process where every nation gets a turn,” he said.

“It’s always a contest; it’s always a race governed by rules, driven by competition, and Australia simply can’t afford to sit on the sidelines.”

Albanese said Australia has an abundance of natural resources that can contribute to its growth, including minerals such as vanadium, cobalt, copper and lithium, as well as the space for large-scale solar plants that other countries in the region lack.

He said with these resources, it makes sense for Australia to invest in its local manufacturing capabilities, including for batteries, hydrogen and green metals.

Albanese said the government will build on existing initiatives like the National Reconstruction Fund and the Net Zero Economy Authority to drive growth in the economy, guided by three principles:

• Acting and investing at scale: “Moving beyond a hope-for-the-best approach where the priority has been minimising government risk rather than seeking to maximise national reward.”
• Building sovereign capability in areas of national interest, such as manufacturing facilities across the solar supply chain.
• Investing in the foundations of economic success, including affordable and reliable clean energy, modern infrastructure and a positive regulatory environment.

The Future Made in Australia Act will give Australia’s new Net Zero Economy Authority more tools to facilitate investment in new industries.

The act will build upon existing initiatives such as the Hydrogen Headstart programme, which provides revenue support for large-scale renewable hydrogen projects.

Albanese gave a nod to the initiatives of other markets, including the European Economic Security Strategy and Japan’s Economic Security Promotion Act, which both aim to minimise risks around supply chains and critical infrastructure.

South Korea and Canada are also tightening their national security strategies in tandem with their economic security.

“All these countries are investing in their industrial base, their manufacturing capability and their economic sovereignty,” Albanese said.

“This is not old-fashioned protectionism or isolationism; it is the new competition.”

“These nations are not withdrawing from global trade or walking away from world markets or the rules-based order. And let me be clear, nor should Australia.”

Albanese said with 27 percent of Australia’s economic output and one in four jobs depending on trade, Australia will continue to build bilateral and multilateral co-operation with other countries.

However, he said Australia should not risk being left behind while other countries realign their economies to drive growth through the energy transition.

“They’re investing in more clean energy, producing more clean energy and exporting more clean energy, and they are upgrading their ports, roads, rail, broadband and energy grids.”

Albanese said although Australia will form its own strategy, it can learn from the experience of other nations such as the US that have made bold economic interventions to stimulate investment.