ReGen Strategic
Photo credit: ABC News: Matt Roberts
The internecine bloodlust that has beset the right-wing and centre-right of Australian politics has presented a New Year gift for the Albanese Labor Government.
2026 is a rare calendar year without an election nationally or in WA, representing an opportunity for governments and proponents to focus on delivery.
The size of victory by both the Cook Labor Government and the Albanese Labor Government at their respective re-elections in the first half of 2025 provides a healthy majority and to press forward with major reforms.
However, this implied mandate is only as strong as the next inevitable crisis, be it an economic shock, a foreign policy shift or a domestic scandal.
Increasingly with the energy transition and industrial decarbonisation, the big decisions associated with our economy - and future productivity - will require the Federal Government and its sovereign credit rating to chaperone private investment and the major financial institutions that have historically supported economic growth in Australia.
Last week, Federal Industry Minister Tim Ayres proposed a renewed investment mandate for a $5 billion tranche of the $15 billion National Reconstruction Fund.
The newly announced $5 billion Net Zero Fund is being orientated to support large-scale and hard-to-abate industrial facilities decarbonise.
Importantly, this concessional finance will be allocated with target rate of return below commercial levels, in order to crowd-in private investment.
Frustration had been building over successive years that the hesitancy to provide support prior to final investment decisions was cruelling new sectors and preventing industrial innovations from commercialising.
In a global market that is competing for limited sources of capital, this delay has two notable impacts.
Firstly, and most obviously, local projects may lose critical funding opportunities to jurisdictions that can move more quicky. Australia has a number of sizeable competitive advantages when pursuing the energy transition, but only if we activate them.
Secondly, shifting project milestones do not signal to potential customers that new products are on the horizon (e.g. ammonia, green iron, long-duration energy storage). Without the ability provide product and delivery certainty, the downstream components of any market do not invest either.
In prior generations, this support from government has taken the form of State Agreements, common-user infrastructure or publicly backed purchasing contracts.
Without these mechanisms, it is doubtful that the LNG, iron ore and alumina sectors would be the size that they are presently.
As a middle power in an increasingly fractious world, Australia has a once-in-a-century opportunity to use its enviable natural resources, wealth and geography to its advantage.
Coming back to Canberra and parliamentary fracases that may occur, 2026 once again provides a golden opportunity to deliver.
Opponents – both free-market ideologues or small-government populists – are likely to bemoan these initiatives as unnecessary public largesse. But these emerging sectors and the employment they can provide through regional Australia will stand in stark contrast to climate change denialists and short-term opposition.
Proponents will need to set a course through 2026 to stay on message and remain aligned to the strategic priorities of government.