Transform Our Industries

Design rationale

Federal support for research, commercialisation, demonstration, and industrial development is divided across programs with different application processes, eligibility rules, funding limits, and institutional responsibilities. The 2026 Ambitious Australia review identified more than 150 federal research, development, and innovation programs across 13 portfolios and found that fragmentation creates duplication and makes the system particularly difficult for smaller businesses to navigate.

The existing system also provides uneven support between proving an idea and reaching commercial scale. The Industry Growth Program supports early commercialisation and growth but is limited to comparatively small projects. ARENA can support much larger demonstrations and first-of-a-kind deployment, but its remit is concentrated on renewable energy and low-emissions technologies. Australia's Economic Accelerator provided stage-gated proof-of-concept and proof-of-scale support for university research, but funding for new projects ended after 2025–26.

The unified pathway would retain different forms of funding where their purposes differ while removing the need for applicants to navigate separate commercialisation systems.

Unified pathway and specialist assessment

ARENA would be broadened and reconstituted as the institutional base for federal commercialisation and industrial scale-up support. Its existing expertise in assessing and managing complex technology projects would be retained and expanded beyond its current energy-focused remit.

Applicants would enter through a common intake process and maintain a single project record as they progress. Projects would be assigned to specialist teams organised around broad fields of technical expertise, with additional specialists involved where projects cross sector or technology boundaries.

Specialist teams would assess technical maturity, commercialisation risk, proposed scale, and the evidence required for progression. Earlier assessments, milestones, and project evidence would carry forward where they remain relevant rather than being recreated for each funding stage.

Funding governance

Individual funding streams would retain separate purposes, eligibility requirements, funding allocations, accounts, approval authorities, and reporting obligations.

Specialist teams would assess projects and identify potentially applicable funding streams but would not control or reallocate the money attached to those streams. Funding decisions would pass through a separate program-governance function responsible for applying the rules and approval requirements attached to each source of funding.

A project could draw on different funding streams as it develops where it independently satisfies their requirements. Consolidating the applicant-facing pathway would not permit money allocated for one purpose to be redirected to another outside the legal and governance processes applying to that funding.

Program consolidation

The Industry Growth Program would be subsumed into the unified pathway. Its adviser network, commercialisation expertise, and early-stage funding functions would be retained within the expanded institution rather than operating as a separate application system.

Existing Australia's Economic Accelerator commitments would continue under their existing agreements. Its stage-gated commercialisation functions would be incorporated into the unified pathway rather than recreated as a separate university-specific program after existing funding concludes.

ARENA-administered programs such as the Advancing Renewables Program and Future Made in Australia Innovation Fund would become separately governed funding streams within the unified system. Their dedicated purposes and funding conditions would remain, while applicants would access them through the common pathway rather than separate program-facing processes.

Programs whose defining purpose is collaborative research or research capability, including Cooperative Research Centres, CRC Projects, and existing Trailblazer university capabilities, would remain distinct. Projects emerging from them could enter the commercialisation pathway with relevant technical evidence carried forward.

Scale and funding discipline

Funding would be matched to the cost, maturity, and unresolved commercialisation risk of each project rather than applying a common grant ceiling across technologies with substantially different capital requirements. Larger industrial-scale support would require evidence that a project has progressed beyond ordinary research but still faces technical or scale risk that prevents conventional financing.

Projects would be assessed against defined national industrial priorities and require a material Australian productive or capability benefit. Support would be milestone-based, with continued funding dependent on evidence produced as projects progress through pilot, demonstration, proof-of-scale, and first commercial deployment where those stages are required.

Grant-based support would end once the remaining challenge is financing an established commercial proposition rather than proving its technology or industrial scalability. First-of-a-kind projects would be expected to carry genuine uncertainty, and failure at demonstration stage would not by itself indicate program failure. Performance would therefore be assessed across the pathway as a portfolio as well as through controls on individual projects.

System boundaries

Projects reaching commercial investibility would graduate from grant-based support into appropriate public or private financing without requiring the commercialisation pathway to reproduce those financing functions.

The National Reconstruction Fund Corporation would remain institutionally separate, preserving its investment mandate and independent assessment of debt, equity, and guarantee investments. The Clean Energy Finance Corporation and other specialist government financing institutions would likewise retain their separate investment mandates.

The Investor Front Door would remain a parallel major-project facilitation service. Projects within the commercialisation pathway that become nationally significant or encounter complex regulatory and investment-coordination requirements could be referred into its case-management process while remaining within the pathway for any continuing commercialisation support. The Investor Front Door could similarly refer suitable projects to the pathway where unresolved commercialisation or scale-up risk is identified.

Research grants and research infrastructure would remain upstream of the pathway rather than being absorbed into it.

Federal procurement would remain a separate institutional surface under Build a Pro-Innovation Government, allowing government first-customer support to complement commercialisation funding where public demand exists.

Illustrative applications

The innovation-commercialisation pathway would be technology-neutral. Technologies that could benefit include precision fermentation and alternative proteins, fusion energy, quantum and biological computing, space technologies, new medicines and healthy-ageing technologies, carbon-removal and climate-repair technologies, advanced zero-emissions fuels, and emerging cybersecurity technologies.

These examples are illustrative rather than preferred industries. Support would depend on the same technical, commercial, scale-up, and strategic tests as other projects.

References

Department of Industry, Science and Resources — Ambitious Australia: Strategic Examination of Research and Development final report | Department of Industry, Science and Resources — Industry Growth Program | Australia's Economic Accelerator — Program Update | Australian Renewable Energy Agency — Future Made in Australia Innovation Fund | Department of Industry, Science and Resources — Investor Front Door | National Reconstruction Fund Corporation — What we do

Design rationale

Commonwealth Procurement Rules already provide substantial flexibility for innovative purchasing. Value-for-money assessment can consider innovation, adaptability, whole-of-life costs, and broader economic benefits; open tenders can use multiple stages; and specific provisions already accommodate research and development, prototypes, and first products intended for trial. Smaller procurements also receive specific Australian-business and SME access under the current rules.

The principal gap is therefore not a general legal prohibition on government buying innovation. It is the absence of a dependable pathway that connects a government problem to competitive development, operational testing, and an actual first purchase.

The 2026 Ambitious Australia review identified government procurement as a major underused innovation lever and described existing pathways as risk-averse, complex, slow, and costly. It recommended greater use of challenge-based procurement, expanded pathways for innovative startups and SMEs, and an "if not, why not" approach to Australian research and innovation.

The Business Research and Innovation Initiative already demonstrates part of this model. Agencies nominate problems, selected businesses receive staged support for feasibility and proof of concept, and successful projects develop working solutions around genuine government needs. However, the sponsoring agency is only given the option to negotiate a subsequent purchase and is under no obligation to become the customer. The first-customer pathway would extend the challenge model through to conditional deployment rather than ending at proof of concept.

First-customer pathway

Government entities would nominate genuine operational or service-delivery problems where existing products do not adequately meet their needs and where competitive development of new solutions is appropriate. Challenges would specify the outcome or capability required rather than prescribing a particular technology or supplier.

The initial competitive process would define the stages through which successful proposals could progress. Depending on the challenge, these could include feasibility, development, prototype demonstration, operational trial, and an initial deployment or purchase.

Multiple suppliers could progress through early stages where maintaining competition is useful, with subsequent stages narrowing the field against published technical, operational, safety, delivery, and value-for-money requirements.

The potential purchase stage and its conditions would be established when the challenge is first competed. A supplier meeting the published conditions could therefore progress from successful trial into the initial deployment contemplated by that process without being required to win an unrelated procurement from the beginning.

Where no solution satisfies the published conditions, no purchase would be required.

Shared first-customer risk

First-customer risk would be shared between the sponsoring entity and a central funding mechanism, allowing agencies to test emerging solutions without placing the full additional cost and risk of first deployment on the individual procuring entity.

A sponsoring entity would need to demonstrate a genuine need for the challenge and commit an appropriate share of the resources required for an initial deployment before the challenge proceeds. The pathway would not provide agencies with cost-free opportunities to commission speculative development for products they have no intention or capacity to use.

A central first-customer funding mechanism would share the additional cost and risk associated with development, testing, and initial deployment of an unproven solution. The procuring entity would continue to bear the ordinary cost associated with meeting its underlying operational need, while central support could meet an appropriate share of costs arising specifically because government is acting as the first serious customer.

Purchase commitments would remain conditional on requirements established at the beginning of the process, including performance, safety, regulatory compliance, delivery capability, and value for money. Where those requirements are satisfied and the underlying government need remains, the initial purchase or deployment stage would proceed under the terms established through the original competition.

First-customer support would decline or end once the product has established its performance and the relevant risk becomes ordinary commercial or procurement risk. Subsequent routine purchases would normally occur through ordinary procurement arrangements rather than continuing to receive first-customer support.

Some trials would be expected to fail to reach deployment. Innovation procurement necessarily tests solutions whose performance is not completely known in advance, and the pathway would therefore be evaluated across its portfolio as well as against the management and results of individual challenges.

Australian innovation in ordinary procurement

Relevant federal procurements would apply an "if not, why not" principle to Australian-developed solutions. Where Australian research, technology, or innovative productive capability could plausibly meet a government requirement, procurement planning would include reasonable market engagement to identify that capability and allow it to compete.

The requirement would create an obligation to consider and explain rather than an automatic right to receive a contract. Agencies could select another solution where it provides better value for money or better satisfies the requirement, but Australian capability would not be excluded merely because an established overseas or incumbent product is easier to identify.

Assessment of Australian innovation should reflect substantive research, development, or productive capability undertaken in Australia rather than relying solely on the registered location or ownership of the supplier.

The requirement would operate within Australia's procurement agreements and existing non-discrimination obligations. It would not establish a blanket local-content mandate or displace value for money as the core procurement rule.

Aggregate reporting would track the use of innovation procurement, participation by Australian research-and-development-active businesses, progression from trials to deployment, and the reasons relevant Australian options do not proceed. This would provide accountability without setting procurement quotas that could encourage purchasing for the purpose of meeting a numerical target.

Procurement integrity

Challenge processes would retain the normal federal procurement requirements for competition, probity, transparency, conflicts of interest, and value for money. Challenges would be framed around government needs rather than technologies tailored to a preferred supplier, and supplier-selection criteria would be established before proposals are assessed.

Where an open multi-stage procurement is used, the potential value and scope of later purchase stages would be accounted for from the beginning rather than splitting a procurement or adding an undeclared future contract to avoid normal competitive requirements.

Initial first-customer deployment would not create an indefinite preference for the successful supplier. Once the first-of-a-kind barrier has been crossed, later purchases would return to ordinary competitive procurement unless an existing lawful basis for another procurement method applies.

Contracting arrangements would normally preserve the supplier's ability to commercialise its technology beyond government while giving the Commonwealth the intellectual-property, licensing, data, interoperability, and usage rights reasonably required for the products it purchases. Different arrangements could remain necessary where national security, sovereign capability, or the nature of commissioned development creates a specific public interest in broader government rights.

Ministers and agencies could determine priority problems for innovation procurement, but individual suppliers would continue to be selected through merit-based procurement processes rather than political direction.

Institutional implementation

The Business Research and Innovation Initiative would be subsumed into the permanent first-customer pathway. Its challenge-identification, feasibility, and proof-of-concept experience would provide the foundation for the system, while the redesigned pathway would extend beyond proof of concept into pre-defined trial and purchase stages. Existing BRII commitments would continue under their existing agreements.

The Department of Finance would retain responsibility for the Commonwealth Procurement Rules and broader procurement framework governing the pathway. Procuring entities would remain responsible for identifying their operational needs, participating in trials, and purchasing solutions that satisfy their pre-agreed requirements. Central first-customer funding and procurement support would carry the additional risk associated with early deployment without transferring responsibility for the underlying purchasing decision away from the entity that will use the product.

Technical expertise could be drawn from relevant federal institutions where required. Evidence produced through Turn Good Ideas Into Productivity could inform a procurement assessment where the same technology enters a government challenge, but commercialisation funding and government purchasing would remain separately governed. A project requiring further technical or industrial scale-up could likewise be referred from the procurement pathway into the commercialisation pathway without converting procurement into an open-ended development subsidy.

Specialist national-security and Defence innovation systems, including the Advanced Strategic Capabilities Accelerator, would remain separate where their security, capability, and contracting requirements justify specialised processes. Equivalent challenge-based procurement undertaken through those systems would not need to be duplicated through the civilian first-customer pathway.

The pathway would apply only where government has a genuine need for the resulting good or service. Technologies whose prospective markets lie elsewhere would continue to rely on the commercialisation pathway and private or other public demand rather than manufacturing a government customer for the purpose of supporting them.

References

Department of Industry, Science and Resources — Ambitious Australia: Strategic Examination of Research and Development final report (Direct PDF Link) | Department of Finance — Commonwealth Procurement Rules | Department of Industry, Science and Resources — Business Research and Innovation Initiative

Design rationale

Australia's agricultural production depends heavily on internationally traded nitrogen fertiliser. Australia entered the 2026 Middle East supply disruption entirely reliant on imports for urea, with much of its fertiliser supply either sourced from the Middle East or dependent on Middle Eastern gas. Emergency sourcing and underwriting have helped maintain supply, while Project Ceres is expected to restore substantial domestic urea production.

Ceres materially strengthens domestic capability, but conventional urea production remains dependent on natural gas and large centralised facilities. At the same time, Australian researchers and businesses are developing alternative ways to produce ammonia and nitrogen fertilisers from air, water, and electricity, including renewable-ammonia, plasma, and electrochemical processes.

We would use Australia's fertiliser-security needs as a practical opportunity to develop and deploy these emerging production technologies at commercial scale, while maintaining conventional domestic production, diversified imports, and strategic supply measures where they remain necessary.

Next-generation nitrogen production

Commercial-scale demonstration and deployment support would prioritise nitrogen-production technologies that can reduce dependence on imported fertiliser and concentrated feedstock supply chains.

Eligible technologies could include renewable ammonia, plasma nitrogen fixation, electrochemical processes, and other methods capable of producing useful nitrogen fertilisers from widely available domestic inputs. Support would remain technology-neutral and would not depend on adopting any particular proprietary system.

Distributed and regional production would receive particular consideration where it can combine commercially credible production with additional supply resilience. Smaller production facilities located closer to agricultural users could complement large centralised plants by diversifying production locations, energy inputs, and transport requirements.

The objective would not be to replace conventional fertiliser production before alternatives are technically and economically capable of doing so. New technologies would progressively add to Australia's productive capacity as their performance is demonstrated.

Fertiliser security framework

National fertiliser-security benchmarks would identify where additional domestic production, supply diversification, or strategic inventories are justified. Assessments would consider the importance of individual fertilisers to agricultural production, available substitutes, seasonal demand, domestic production, feedstock exposure, import concentration, shipping routes, inventories, storage characteristics, and the time required to establish alternative supply.

Domestic production would form one part of this system rather than an absolute self-sufficiency requirement. Imports would remain appropriate where international supply is sufficiently diverse and dependable, while greater domestic capability would carry additional value where critical products depend on concentrated suppliers, feedstocks, or transport routes.

Existing conventional production, including Project Ceres, would contribute to these benchmarks alongside emerging production technologies. Strategic inventories, alternative import arrangements, and emergency supply measures could address risks for which constructing additional permanent production capacity would not be proportionate.

The framework would be reviewed against changing production, demand, trade, and technology conditions. Existing fertiliser monitoring and government-industry data collection could provide the basis for identifying structural vulnerabilities before a disruption requires emergency intervention.

Technology and investment discipline

New production technologies would need to demonstrate their performance progressively rather than receive support on the basis of technological promise alone. Assessment would consider production cost, energy requirements, reliability, agricultural suitability, scalability, expected operating life, and the degree of supply diversification created.

Commercialisation and first-of-a-kind scale-up would occur through the unified innovation-commercialisation pathway. Fertiliser security would establish the strategic capability case for eligible projects, while continued support would depend on demonstrated technical and commercial progress.

Projects would not be required to match the short-term cost of established imported fertiliser at every development stage. First commercial deployments can carry costs associated with proving technology and establishing supply chains that mature production would not retain. Continued support would instead depend on credible evidence that these costs can fall sufficiently for the technology to contribute economically at commercial scale.

Technologies that fail to demonstrate a credible pathway to competitive production or material supply resilience would not continue receiving support solely because they offer lower emissions or domestic production.

System interaction

Established commercial fertiliser projects would remain able to seek appropriate investment through the National Reconstruction Fund Corporation and private finance. The innovation-commercialisation pathway would concentrate on unresolved technology and industrial-scale risk rather than replacing ordinary financing for proven production.

Emergency supply measures would remain separately available for temporary disruptions. The Fuel and Fertiliser Security Facility demonstrated the value of underwriting alternative shipments when abnormal market risk prevented sufficient supply reaching Australia, but emergency import support would not substitute for addressing persistent structural vulnerabilities identified by the security framework.

Large conventional plants and emerging distributed technologies would therefore perform different roles within the same supply system. Additional domestic production would be assessed by the resilience it contributes rather than requiring one production technology, feedstock, or facility to carry Australia's fertiliser security alone.

Residual trade-off

Greater supply resilience can cost more than relying exclusively on the cheapest available international source. New production technologies may also remain more expensive than conventional fertiliser for substantial periods while their technical and commercial performance develops.

The framework would therefore distinguish the value of resilience and technology development from permanent protection of uneconomic production. It could reduce Australia's exposure to major supply disruptions and concentrated feedstocks, but would not insulate farmers from global fertiliser prices or justify maintaining domestic production at any cost.

References

Department of Agriculture, Fisheries and Forestry — Fertiliser Supply Working Group | Department of Agriculture, Fisheries and Forestry — Fuel and Fertiliser Security Facility: fertiliser price-risk support | National Reconstruction Fund Corporation — Economic Resilience Program | Perdaman Chemicals & Fertilisers — Project Ceres | Woodside — Long-term domestic gas sale between Woodside and Perdaman becomes unconditional | Hort Innovation Frontiers — PlasmaLeap funding shows appetite for safeguarding fertiliser supply

Design rationale

Industrial hemp is already legally cultivated in Australia and used in food, fibre, clothing, and building products, but cultivation and processing remain governed through overlapping state, territory, and federal rules. Definitions, licensing, permitted uses, and regulatory treatment vary between jurisdictions, increasing compliance costs and fragmenting national supply chains.

The 2026 Senate inquiry into opportunities for an Australian hemp industry found that regulatory fragmentation, limited processing capacity, and uncertain end markets are preventing the sector from reaching sufficient scale. In particular, growers are reluctant to commit substantial crop volumes without reliable processors, while processors are reluctant to invest without dependable feedstock and customers.

We would address these connected barriers as an industrial-development problem: normalise the legal treatment of low-THC industrial hemp, establish the standards needed for downstream products, and help viable regional supply chains overcome the missing processing link between farms and manufacturers.

National hemp framework

We would establish a consistent federal definition of industrial hemp and work through National Cabinet to harmonise state and territory licensing, including mutual recognition of cultivation licences and reduced duplication between jurisdictions.

Low-THC industrial hemp would be regulated as an agricultural and manufacturing commodity wherever narcotics controls are not substantively required. Licensing, testing, reporting, transport, and other controls would reflect the actual risks of compliant industrial-hemp production rather than automatically inherit rules designed for intoxicating cannabis.

Any change to THC thresholds would be coordinated with relevant drug-control obligations and evidence, with a consistent threshold adopted across jurisdictions where responsibilities permit.

Economically useful parts of compliant industrial-hemp plants could be used where the resulting product satisfies the separate regulatory system applying to that use. Food, therapeutic goods, agricultural and veterinary products, controlled cannabinoids, and other regulated products would remain subject to their existing safety and approval requirements.

Clear national classification would help banks, insurers, payment providers, advertisers, and online platforms distinguish industrial-hemp businesses and products from cannabis activities subject to drug-control regulation. It would not require any provider to accept a customer or product contrary to ordinary commercial or risk requirements.

Regional processing capacity

Raw hemp is bulky and generally needs first-stage processing close to where it is grown, making processing capacity a central coordination barrier. Farmers require confidence that harvested crops can be processed, while investment in processing facilities depends on sufficient prospective crop volumes and downstream demand.

Targeted support would assist regional processing projects where credible growers and customers exist but missing processing capacity prevents the supply chain from forming. Projects would need to demonstrate plausible feedstock supply, downstream markets, suitable location, and a credible path to commercially sustainable operation.

Support would be matched to the actual barrier. Established processing technologies would use industrial finance, co-investment, or regional infrastructure support rather than innovation funding simply because the sector is emerging. Genuinely novel processing technologies could instead use the innovation-commercialisation pathway where unresolved technical or scale-up risk remains.

Public support would not guarantee continuing utilisation or protect facilities from ordinary changes in crop supply and market demand. Projects would remain responsible for securing commercially credible grower and customer relationships.

Product standards and market access

National standards would be developed where the absence of recognised specifications materially prevents hemp products from entering established markets.

Construction is the clearest immediate case. Hempcrete and other hemp-based building products currently face additional approval, certification, and insurance barriers because they are not comprehensively recognised through national building standards. Fire, structural, durability, and other relevant testing would support product standards and National Construction Code recognition.

Comparable standards would be developed for other hemp materials where a standards gap is preventing otherwise compliant products from being manufactured, insured, specified, or traded at scale.

Standards would regulate products according to demonstrated performance rather than creating preferential treatment for hemp as a material. Once recognised, compliant hemp products could compete with conventional alternatives under the same safety, performance, procurement, and value-for-money requirements.

System interaction

New hemp products, processing technologies, and manufacturing methods facing genuine technical or industrial scale-up risk could progress through the unified innovation-commercialisation pathway. Established processing equipment or ordinary business expansion would remain outside that pathway where the remaining challenge is conventional finance rather than commercialisation.

Government could act as an early customer for suitable new hemp products through the first-customer procurement pathway where a genuine public purchasing need exists. Mature hemp products would otherwise compete through ordinary procurement rather than receiving a permanent purchasing preference.

Industrial-hemp reform would remain separate from the regulation of medicinal and personal-use cannabis. Products entering therapeutic-goods, food-safety, drug-control, or other specialised regulatory systems would continue to be governed through those systems according to their actual use and composition.

Hemp production or hemp-based materials would not receive automatic carbon credits. Any eligibility would depend on the same requirements for additional, measurable, and sufficiently durable abatement as other activities.

References

Parliament of Australia — Opportunities for the development of a hemp industry in Australia | Parliament of Australia — Opportunities for the development of a hemp industry in Australia: List of recommendations | Parliament of Australia — Trade, economic, and regional development | Food Standards Australia New Zealand — Hemp seeds as food | Legalise Cannabis Party — Party Policy: Hemp Policy | Legalise Cannabis Party — Sowing the Seeds of a Green Industrial Revolution

Design rationale

Australia has the world's largest identified economic resources of zircon and is one of the world's largest producers, but much of the higher-value zirconium and hafnium processing chain remains offshore.

Western Victoria is also developing a substantial new mineral-sands industry. The approved Donald project will mine and process 7.5 million tonnes of mineral sands annually and transport its products to the Port of Portland, while the proposed Avonbank project would also transport mineral-sands products to Portland.

We would use this emerging mineral flow to build downstream processing at Portland rather than treating the port solely as an export point.

Portland processing node

Portland combines an emerging regional mineral-sands supply with Victoria's only naturally deep-water commercial port, existing mineral-sands storage, national road and standard-gauge rail connections, an established aluminium-smelting industry, major electricity infrastructure, and substantial land suitable for additional heavy industry.

Federal and Victorian co-investment would focus on shared infrastructure needed to establish and expand the processing node, including electricity, water, freight, port capacity, and common industrial services where these are shared constraints rather than requirements of a single plant.

Existing Victorian supply chains could provide bulk chemicals and other process inputs where local production is unnecessary. Portland is connected through the national standard-gauge freight network to metropolitan intermodal facilities, allowing specialised inputs to be brought into the precinct without requiring every supporting industry to be co-located there.

Additional industrial water demand would be supplied without relying on municipal water required by the surrounding community. Open-ocean desalination could provide additional supply where required, with its capital and electricity requirements incorporated into the economics of the processing node.

Public investment in shared infrastructure would favour assets that remain useful to multiple processors or future industries rather than bespoke infrastructure whose value depends on the continued operation of a single company.

Zirconium and hafnium processing

Processing at Portland would include mineral separation and zirconium-hafnium separation, creating a local pathway from Victorian mineral sands into high-value refined products.

Australia already has substantial technical capability in zirconium and hafnium separation. ANSTO has undertaken extensive process and pilot-scale development covering zirconium and hafnium separation, zirconium compounds, zirconia, and high-purity separated zirconium and hafnium products.

The objective is to extend Australian production beyond separated compounds into zirconium and hafnium metals, alloys, and other advanced materials. Expansion into these downstream stages would proceed as the required technology, customer qualification, and commercial demand are established.

Western Victorian mineral sands would provide the regional feedstock base, while Portland could also accept suitable zirconium and hafnium intermediates from elsewhere in Australia. This would allow upstream producers to specialise in the processing stages suited to their operations while supporting a broader domestic downstream industry.

Strategic processing nodes

Portland would demonstrate a broader model for identifying where Australian minerals should move to their next stage of processing.

Strategic processing nodes would be selected according to the economics of each processing stage, including freight flows, material value and volume, energy and water requirements, reagent supply, waste management, industrial land, workforce, port access, and customer markets.

Where a node meets this test, we would co-invest with states and territories in shared enabling infrastructure that can serve multiple processors or future industries. The same approach would be used to develop other Australian mineral value chains where shared infrastructure is the barrier to further domestic processing.

Investment and system interaction

Novel separation, metallisation, or advanced-material processes facing unresolved technical or industrial scale-up risk would progress through the unified innovation-commercialisation pathway. Proven commercial operations would instead rely on private investment and appropriate industrial-finance institutions.

Individual processing businesses would remain responsible for establishing credible feedstock arrangements, customers, and commercially sustainable operations. Public investment in the processing node would not protect producers from ordinary commodity, technology, or market risk.

Public support would be staged with downstream expansion rather than committed to the entire value chain upfront.

Residual trade-offs

Shared infrastructure is long-lived while mineral markets and processing technologies can change quickly. Even with multiple users, staged investment, and credible customer demand, infrastructure built for a processing node could become underused if the industries it supports later lose their competitive position. However, Portland's deep-water port, major electricity connection, rail access, established metallurgical workforce, and access to scalable open-ocean desalination make it a strong location for alternative industries that could reuse that infrastructure if mineral-processing demand declines.

References

Resources Victoria — Donald Mineral Sands Project | Resources Victoria — Avonbank Mineral Sands Project | Port of Portland — Port Storage & Facilities | Glenelg Shire Council — Portland Industrial Investment Prospectus | Geoscience Australia — Australia's Identified Mineral Resources 2025: Commodity Summaries | ANSTO — Minerals Capability Statement | Australian Energy Market Operator — Heywood to Alcoa Portland 500 kV transmission line | Victorian Government — About Victoria's rail freight network | Australian Strategic Materials — The Dubbo Project

Design rationale

A circular economy requires more than products being technically recyclable. Materials must actually be recovered and reprocessed into a form ready for productive reuse.

Australia already has product-stewardship arrangements covering parts of the economy and a national objective to increase circularity, but existing arrangements vary between voluntary, co-regulatory, and mandatory approaches. The federal Circular Economy Framework aims to double Australia's circularity by 2035 and safely recover 80% of resources.

We would create a standing economic incentive for businesses to close their material loops rather than relying on separate regulatory intervention each time a waste stream becomes problematic.

Demonstrated circularity

Circularity would be based on material demonstrably recovered and processed into a form ready for productive reuse, rather than whether a product is technically recyclable or merely collected for recycling.

Producers and importers would not need to trace individual products where materials enter shared recycling systems. Established systems could instead use independently audited mass-balance accounting comparing material entering the relevant market or recovery stream with usable recovered material produced from that stream.

Reuse and remanufacture could qualify directly, while recycled materials would qualify once processing produces material suitable for use as an industrial input. Subsequent sale or consumption of that material would not be required. This prevents falling production or consumption from artificially reducing circularity simply because recovered material temporarily exceeds demand.

Producers and importers could also participate in accredited collective schemes or establish their own recovery and reprocessing arrangements. Businesses that create or co-invest in higher-performing systems would therefore be able to improve their circularity score beyond the ordinary market rate.

Collection, sorting, stockpiling of untreated waste, or processing that does not produce a usable secondary material would not establish full circularity.

Circularity levy and credit

Each covered product or material category would have a reference circularity charge appropriate to that category.

Liability would change linearly with demonstrated circularity. Every additional percentage point of material successfully recovered and made ready for productive reuse would produce the same incremental improvement in the applicable rate.

At a defined high level of circularity, liability would reach zero. Performance beyond that point would generate an increasing circularity credit, up to a capped maximum.

The initial linear structure would provide a simple and predictable incentive while industries build recovery capability.

Collective recovery systems

Businesses would not need to recover their own products individually.

Producers and importers could establish their own systems, contract with independent reclamation businesses, or participate in collective industry schemes. Their circularity assessment would reflect verified material actually recovered and made ready for reuse through those arrangements.

It is expected that industries using similar materials would generally share collection, sorting, and reprocessing infrastructure rather than duplicating facilities simply to qualify for the incentive.

Imported goods

The circularity system would apply to goods supplied into the Australian market rather than only to goods manufactured here.

Importers would therefore face equivalent liability for imported goods and could receive equivalent reductions or credits where those products participate in demonstrated recovery and reprocessing systems.

This prevents Australian manufacturers from being placed at a competitive disadvantage for improving their circularity while imported competitors avoid the same cost. Structuring the measure as an equivalent internal charge on domestic and imported goods would also avoid making the mechanism dependent on discriminatory tariff treatment.

Building reclamation capacity

Net levy revenue would support shared collection, sorting, reclamation, and reprocessing capacity where missing infrastructure prevents industries from improving their demonstrated circularity.

Support would favour infrastructure that can serve multiple producers, materials, or future users rather than facilities dependent on the continued operation of a single company.

As new recovery capability becomes available, producers would have an incentive to use or co-invest in it because doing so would directly improve their circularity performance and reduce future liability.

Category calibration

Different products have different useful lives, material compositions, recovery costs, and practical recycling pathways. Reference charges, measurement periods, qualifying recovery methods, and the point at which liability becomes a credit would therefore be established by product or material category rather than applying one arbitrary rate to every good.

Measurement would reflect product life. Short-lived goods would generally use material placed on market and subsequent recovery flows, while long-lived goods would be assessed against material reaching end of life rather than current-year sales.

The financial endpoints would be calibrated so that incentives are commercially meaningful without allowing circularity credits to become disproportionate to the material consequences of the product itself.

Use of recovered materials

Where suitable recycled material is demonstrably available, continued use of equivalent new material would reduce a product's circularity score. Availability would account for material specification, quantity, location, safety, and technical suitability rather than assuming that any recycled material can substitute for any new input.

This would create demand for recovered materials without penalising recycling systems simply because overall production or consumption has fallen.

System interaction

The existing Recycling and Waste Reduction Act 2020 already provides federal mechanisms for voluntary, co-regulatory, and mandatory product stewardship and covers manufacturers and importers, product reuse, remanufacture, recycling, recovery, and lifecycle responsibility. The circularity system would build on this regulatory architecture rather than create an unrelated parallel waste regime.

Current product-stewardship priorities also demonstrate that voluntary industry action does not always produce sufficient recovery, with the federal government already able to move toward mandatory regulation where voluntary progress is inadequate.

International extended-producer-responsibility systems increasingly use modulated fees and bonus-malus arrangements to strengthen incentives for circular product design and material recovery.

Residual trade-off

Demonstrated material circularity is not a complete measure of a product's environmental impact. A product can perform strongly under this system while still carrying significant impacts through energy use, emissions, toxicity, or other parts of its lifecycle. The circularity mechanism would therefore remain focused on the specific problem it is designed to solve — keeping material resources in productive use — rather than attempting to replace environmental, emissions, or product-safety regulation.

Implementation outline

We would establish covered product and material categories progressively, beginning with high-volume waste streams where material flows can be measured reliably and meaningful recovery pathways already exist or can be developed.

Category rules would establish the reference charge, linear circularity scale, credit threshold and cap, acceptable recovery pathways, evidence requirements, and audit standards. Financial liability would be administered using independently verified circularity performance, with equivalent treatment for domestic producers and importers.

Existing stewardship arrangements could be recognised where they provide the evidence and recovery outcomes required by the new system rather than being unnecessarily duplicated.

References

Department of Climate Change, Energy, the Environment and Water — Australia's Circular Economy Framework | Department of Climate Change, Energy, the Environment and Water — Minister's Product Stewardship Priority List | Recycling and Waste Reduction Act 2020 | OECD — Modulated Fees for Extended Producer Responsibility Schemes | French Ministry for Ecological Transition — General Framework for Extended Producer Responsibility Sectors | World Trade Organization — GATT Article III: National Treatment on Internal Taxation and Regulation

Design rationale

Skilled migration is most defensible when it fills real capability gaps that matter to the country, not when it becomes a general-purpose labour supply valve. Australia does face genuine shortages in some occupations and sectors, but a credible skilled migration system must be tied to evidence and national need rather than treated as the easiest response to every workforce pressure.

Evidence base

Skilled migration settings should use independent shortage assessment and national workforce evidence as their starting point. That matters because employer demand alone does not always tell you whether the problem is a genuine shortage, a pay and conditions problem, a training failure, or a regional distribution issue.

Capability focus

Skilled migration should help where Australia faces real capability gaps, especially in sectors that matter to national resilience, industrial transformation, or critical services. It should not displace the need to train workers locally or to improve the conditions that make key sectors unattractive in the first place.

System interaction

This reform works best when skilled migration settings are tied to occupation shortage analysis, industrial strategy, and domestic workforce planning at the same time. The aim is not to treat migration and local workforce development as opposites. It is to stop skilled migration from becoming a substitute for doing domestic workforce policy properly.

Residual risks

Even with stronger evidence settings, shortage assessment will never be perfectly current. Labour markets shift, and some sectors will continue to argue for wider access than the evidence supports. This improves the basis for judgement, but does not remove the need for judgement altogether.

Implementation outline

Skilled migration pathways and occupation access would be tied to independent shortage evidence and national capability priorities, with regular review so visa settings follow genuine need rather than stale lists or routine employer demand.

References

Jobs and Skills Australia — Occupation Shortage | Jobs and Skills Australia — 2025 Core Skills Occupations List Consultations