With the Federal Election only a couple of weeks away, both major parties have ramped up policy pitches in the fight to secure votes, in what appears to be a very tight race.
The Opposition has announced plans to wind back the $15 billion National Reconstruction Fund (NRF), the Rewiring the Nation fund and Future Made in Australia if it wins the election.
The remaining $14.5 billion that remains in the NRF budget will be reallocated to national debt repayments, infrastructure projects and the establishment of a $20 billion Regional Australia Future Fund (RAFF). This fund will fund regional infrastructure, healthcare, childcare and connectivity projects.
Under the Opposition’s plan current NRF projects will be honoured, but future deals will not go ahead.
The NRF was introduced by the current government in the lead up to the last Federal Election, with the aim of investing in the government’s key priority areas such as renewables and value add resources. However it wasn’t until November 2024 that the first project was approved for funding.
Since then $450 million has been allocated for projects across digital health, AI, mining and quantum computing. Despite the slow start, the National Reconstruction Fund Corporation, which is responsible for the funds day-to-day administration, is expected to have allocated the remaining $14.5 billion by 2029.
In contrast if the current government is re-elected, the NRF is expected to not only remain as is, but will have $1 billion of its funding allocated to a new interest-free loans program. This funding will form part of a new ‘economic resilience program’, in response to Donald Trump’s tariffs on Australian exports to the USA.
The Opposition’s pledged RAFF will be funded through the scrapping of the NRF, as well as the Rewiring the Nation Fund. The $20 billion Rewiring the Nation Fund connects green energy to the grid and has already supported several transmissions projects.
This fund would not continue if the Opposition forms government in May, and would instead allocate $5 billion to its planned RAFF.
Other policy differences between the two major parties include the unwinding of the government’s planned tax credits for green hydrogen and critical mineral production. The Opposition has vowed to scrap this program, which the current government announced in the 25/26 Federal Budget. In contrast, the current government if re-elected plans to also create a strategic reserve of critical minerals.
Research & Development (R&D) will also be affected if the Opposition forms government, with universities fearing the Opposition’s plan to reduce the number of international students will result in less funding for Australian research. Australian university research relies heavily on international student fees to subsidise the cost of research projects. While the current government has also capped the number of international students, if re-elected its cap will lead to 30,000 more international students than the Opposition’s cap.
While the current government has not announced any new R&D policies, the 25/26 Federal Budget did note that it expected the amount of funding for the R&D Tax Incentive to decline. Why this is the case is not clear in the Budget papers, although it may be due to gambling and tobacco companies no longer being able to claim the R&D Tax Incentive, which may have led the government to predict tax incentive payments will drop.
As the election nears, voters are being presented with two distinct policy approaches regarding economic investment, infrastructure, and research, highlighting differing priorities for Australia’s future.