National Reconstruction Fund: consultation paper

The Western Australian
Government’s submission to the National Reconstruction
Fund consultation paper
February 2023
Contents
1. Executive Summary ........................................................................... 2
2. Introduction ........................................................................................ 4
3. Economic diversification in WA ....................................................... 4
4. Feedback on consultation paper questions ................................... 7
4.1. NRF Projects and Investments ......................................................................7
4.2. Definitions and Measurements ......................................................................8
4.3. Level of detail on priority areas ......................................................................9
4.4. Opportunities for value-add, growth and diversification ...............................10
4.5. Capabilities needed to support priority areas ...............................................24
4.6. Strategic priorities for supply chains/enabling inputs ...................................26
4.7. Gaps and barriers to private sector investment ...........................................28
4.8. Investment pathway development ...............................................................31
4.9. Government policy priorities ........................................................................32

5. Investment mandate ........................................................................32
5.1. Benchmark rate of return .............................................................................32
5.2. Investment limits ..........................................................................................32
5.3. Returns, financial instruments and other investors ......................................33

6. Complementary reforms .................................................................35
6.1. Non-financial barriers...................................................................................35
6.2. Non-financial mechanisms of support ..........................................................35
6.3. Complementary reforms ..............................................................................35
6.4. Potential other levers ...................................................................................36
6.5. Driving the ecosystems for sustainable industry growth ..............................37

Submission to the 2023 National Reconstruction Fund consultation paper 1
1. Executive Summary
The Western Australian (WA) Government believes the National Reconstruction Fund (NRF) will be a powerful enabler for the national economy, helping to capture the opportunities of today and tomorrow by building on Australia’s significant natural and competitive strengths.
The WA Government welcomes the NRF’s national consultation on the framework, priorities and investment mandate. Aimed to support, diversify and transform Australia's industry and economy to help create secure, highly skilled and high value STEM jobs, secure future prosperity, and drive sustainable economic growth – the objectives of the NRF are closely aligned to the WA Government’s own vision and strategy to be a smarter, more sustainable and diversified economy by 2035.
The WA Government has reviewed the consultation paper and suggest that to maximise economic outcomes, NRF investment should:
 Support growth in industries identified as priority areas for each jurisdiction. The WA
Government has outlined priorities in Diversify WA, highlighting a range of
comparative advantages that include abundant natural resources, extensive and
affordable energy sources, existing export infrastructure, and strong trading
partnerships,
 Consider competitive advantages and viability factors, increasing the complexity and
productivity of our economy and creating high value STEM related roles,
 Support sustainable jobs growth by creating new and ongoing jobs without adversely
affecting the existing workforce, as well as consider upskilling opportunities for the
existing workforce and activities that contribute to labour market flexibility and
resilience,
 Induce activity beyond that which would have occurred in the absence of government
intervention (additionality),
 Support innovation and complement research and development (R&D) needs/gaps
in the priority sectors, creating complexity of product and supply chain resilience,
 Support activities that are able to contribute to new products and process, export
market growth and/or diversified export markets,
 Align to national medium to long-term global social, geo-political, economic and
market trends and foster sovereign capability,
 Support Government policy aimed at overcoming market failures (sector-specific
where appropriate) and reducing barriers to entry,
 Support projects located in Australia,
 Support projects in areas of strategic importance such as regionally and/or relevant
areas that provide common user infrastructure.

Submission to the 2023 National Reconstruction Fund consultation paper 2
The NRF will need to balance providing enough detail on the priority areas to send a clear signal to markets of the opportunities to access funding, while not being overly prescriptive to allow investment flexibility. A greater degree of flexibility in the program design will allow for consideration of a range of activities that could potentially increase sector complexity and promote innovation and the evolution of unforeseen or disruptive technologies.
In this paper, the WA Government suggests projects across the priority areas and recommends that Space be considered as a standalone priority area due to its potential to create significant value to the Australian economy and society. WA has more than 60 years’ experience in the space industry with our geographic and environmental advantages positioning the State to play an increasing strategic role in Australia’s civil and defence space activities and access a greater share of the global space market.
In addition, the WA government suggests that WA has potential to take on a greater share of naval shipbuilding, sustainment and maintenance work. This has been boosted by major upgrades, both planned and underway, at the Australian Marine Complex (AMC) and projects that support these objectives should be a focus of the NRF. Also, projects that facilitate digital capability should also be a key focus of the NRF. This capability is critical to the enabling of cross sector technologies, and WA offers many advantages for data centre operations and investment, including a safe location with large expanses of land, international fibre optic connectivity, access to competitive energy, plus renewable energy capacity.
The WA Government welcomes ongoing engagement with the Australian Government to achieve the objectives of the NRF within our State to advance the national interest.

Submission to the 2023 National Reconstruction Fund consultation paper 3
2. Introduction
The WA Government welcomes the opportunity to provide a submission to the Australian
Government’s National Reconstruction Fund (NRF or the Fund) public consultation.
This submission was prepared by the Department of Jobs, Tourism, Science and Innovation
(JTSI) in consultation with key agencies, on behalf of the WA Government. JTSI leads WA’s economic and industry development, operates the State’s international trade and investment network and builds new industry sectors and capabilities that advance science, innovation and technology and research and development.
The WA Government believes the NRF will be a powerful enabler for the national economy, helping to capture the opportunities of today and tomorrow by building on Australia’s significant natural and competitive strengths.
Aimed to support, diversify and transform Australia's industry and economy to help create secure, highly skilled and high value STEM jobs, secure future prosperity, and drive sustainable economic growth – the objectives of the NRF are closely aligned to the WA
Government’s own vision and strategy to be a smarter, more sustainable and diversified economy by 2035.
The WA Government looks forward to continuing to work closely with the Australian
Government’s Department of Industry, Science and Resources (DISR) to achieve the objectives of the NRF within our state to advance the national interest.

3. Economic diversification in WA
Abundant with natural resources, WA is a leading energy, mining and mineral processing region with considerable reserves of iron ore, natural gas, lithium, critical minerals, and solar and wind power. Globally, WA is the largest supplier of lithium, the fourth largest supplier of rare earths, and has a highly successful primary industries sector that produces wheat, meat and livestock, dairy, wool, horticulture and seafood products, many of which are exported across the world.
The mining industry remains an important part of the state’s economy and makes a significant contribution to WA Government and Commonwealth revenue. The industry, and its investment in cross-sector innovation and technology, has supported WA to become one of the fastest growing developed economies over the past 20 years, with average real GSP growth of 4.1 per cent, well above the 2.7 per cent average growth for Australia as a whole.
In 2021-22, the state’s mining industry drove WA exports to peak at a record $242.2 billion, accounting for more than half of Australia’s exports and supporting the national economy through the COVID-19 pandemic.
Although WA’s economic performance has been relatively strong and current economic conditions are largely positive, it is critical to better balance the state’s future economic structure. Mining is by far the largest industry in the state, with its gross value added of
$169.6 billion in 2020-21, which was 47 per cent of total GSP. The high concentration of the state’s economic base poses risks for WA’s economy, revenue base and labour market,
Submission to the 2023 National Reconstruction Fund consultation paper 4
which are exposed to boom and bust cycles. To better safeguard the state’s long-term economic stability, grow the economy and transition the workforce into higher value jobs, creating a diverse and complex ecosystem is essential.
Recognising the heightened risk from a lack of economic diversification, the WA
Government has committed to attracting further investment into a broader range of industries, diversifying the state’s export markets and boosting complexities that add value to the supply chain to drive long-term economic development. This commitment is articulated within Diversify WA, the WA Government’s economic development framework, which identifies priority sectors for strategic development that match WA’s unique strengths with major global trends to achieve growth across the economy.
These priority sectors are:
 energy,
 tourism, events and creative industries,
 international education,
 defence industries,
 mining and mining equipment, technology and services (METS),
 space industries,
 health and medical life sciences and
 primary industries.
Further, Diversify WA also identifies four cross-sector activities that will improve value and productivity across the above priority sectors and our economy, namely:
 science, innovation and technology;
 supply chain development;
 advanced manufacturing; and
 environmental, social and governance frameworks.

Submission to the 2023 National Reconstruction Fund consultation paper 5
Launched in 2019, the Diversify WA framework sets out initiatives, actions and sector strategies that will contribute to WA achieving its vision for a strong and diversified economy delivering secure, quality jobs through increased investment across a broad range of industries.
The WA Government’s vision is for the state to be globally recognised for its unique set of strengths and capabilities and highly sought after as a place to live, visit, study, invest and do business across a range of industries.
To achieve this, the WA Government is committed to continue to engage with investors and attract them to work with the state’s thriving local businesses. By investing in new and emerging industries and markets now, and playing to WA’s strengths, the WA Government aims to ensure the foundations needed for Australia’s economic future are strong and export-ready.
To this end, the WA Government is developing a new, more targeted approach to economic diversification under the Diversify WA framework that will articulate the targeted and strategic investment opportunities of competitive advantage for WA, which will bolster the national economy for generations to come and raise living standards for all Australians.
These opportunities will support the economic development objectives and priorities of the
Australian Government and closely align with the areas of the NRF.

Submission to the 2023 National Reconstruction Fund consultation paper 6
4. Feedback on consultation paper questions
4.1. NRF Projects and Investments
The WA Government suggests that the types of projects or investments considered by the
NRF takes into account the economic priorities and competitive advantages of each jurisdiction, to ensure appropriate distribution of funding across states and territories. For
Western Australia, these include the priorities outlined in Diversify WA, and a range of comparative advantages that include abundant natural resources, extensive and affordable energy sources, existing export infrastructure, and strong trading partnerships that are supported by the state’s close proximity to key Asian markets.
It is also recommended investment be defined by investment criteria. The WA Government recently developed a set of high-level criteria to support the administration of the WA
Government’s flagship $180 million Investment Attraction Fund (IAF) that was launched in
March 2022. Like the NRF, the IAF aims to grow and diversify the WA economy, create sustainable local jobs, and secure new industry opportunities across the WA Government’s priority areas. The IAF criteria could be useful to inform investment direction of the NRF.
DISR has previously suggested a set of principles for designing industry policy in Australia.
These have informed some general factors that could be considered regarding the types of projects the NRF should invest in. The NRF’s investment selection should consider potential competitive advantages and viability factors, increasing complexity of our economy and create high value STEM related roles (including current and potential presence of the industry, access to utilities, access to labour and intermediate inputs). To maximise economic outcomes, investment should:
 Support growth in industries identified as priority areas for each jurisdiction,
 Support sustainable jobs growth by creating new and ongoing jobs without adversely
affecting the existing workforce. Quality jobs are demonstrated by pay and benefits,
job design, level of skill or training and future work prospects. Consideration for
upskilling opportunities for the existing workforce,
 Induce activity beyond that which would have occurred in the absence of government
intervention (additionality),
 Support innovation and complement R&D needs/gaps in the priority sectors, as well
as any prospects of commercialisation of new technology, creating complexity of
product and supply chain resilience. It should also support activities that are able to
contribute to new products and process, export market growth and/or diversified
export markets,
 Align to national medium to long-term global social, geo-political, economic and
market trends and foster sovereign capability,
 Support government policy aimed at overcoming market failures (sector-specific
where appropriate) and reducing barriers to entry that are unlikely to be relieved in
the short term in the absence of government activity,

Submission to the 2023 National Reconstruction Fund consultation paper 7
 Be located in Australia to maximise knowledge/human capital diffusion in Australia
and to ensure that government is not directly supporting economic activity occurring
in foreign jurisdictions,
 Support investment in activities with economic capacity to absorb excess labour
capacity during periods of economic downturns, contributing to labour market
flexibility and resilience, given the correlation between Australian economic growth
and commodity boom/bust cycles (felt particularly strongly in WA),
 Be based in areas of strategic importance such as regionally and/or relevant areas
that provide common user infrastructure.

4.2. Definitions and Measurements
Diversification vs Transformation
Diversification within the priority areas identified should reflect increased economic complexity within those industries. This could be realised through various factors, such as a greater diversity of products being produced, including highly unique or specialised products, new uses or applications for current products, as well as new and innovative production processes.1 It could also reflect a higher degree of diversity in destination and source markets and connections into global value chains for those areas.2
Measuring and evaluating economic diversification in the priority areas would ideally reflect the policy objectives of the program (e.g. higher output) and the factors that contribute to greater economic complexity. At the economy-wide level, economic diversification is generally assessed through measures of market concentration.3 However, these measures are unlikely to give tangible insight into how diversification initiatives are being realised within each priority sector. Indicators that could be applied to individual sectors to measure success in achieving diversification goals could include changes in:
 The number of products (including export-potential products) produced by a priority
sector, the degree of specialisation / uniqueness of those products, their contribution
to total exports, as well as number and quality of destination markets served;
 Number of permanent, high value, highly complex STEM related jobs created (both
directly and indirectly, e.g. as a result of efficiency gains), including levels of labour
market participation in priority sectors across regions;
 Industry expenditure on R&D and share of firms with new to market products;
 New business formation and foreign direct investment (FDI) attraction within each
sector;

1
Hausmann et al, ‘Economic Complexity Report for Western Australia’, CID Faculty Working Paper No 394, Growth Lab,
Center for International Development at Harvard University, April 2021,
https://growthlab.cid.harvard.edu/publications/economic-complexity-report-western-australia. Page 2
2
Deloitte, ‘Australia remade: a country fit for the age of disruption’, Building the Lucky Country series, 20 October 2021,
https://www2.deloitte.com/au/en/pages/media-releases/articles/deloitte-analysis-its-time-to-overcome-complacency-
remake-australias-economy-before-our-luck-runs-out-201021.html
3
For example, the Herfindahl-Hirschmann Index (HHI) measures the concentration of industries within an economy.

Submission to the 2023 National Reconstruction Fund consultation paper 8
 Industry value added and share of industry revenue contributed; and
 Industry income and relative correlation with commodity prices to drive export market
growth.

Value Add
For the purposes of the NRF, the concept and measurement of value adding is intrinsically linked to improvements in economic complexity.4 This means value adding should be considered beyond traditional (non-innovative) or minimal processing, through vertical integration through ‘moving downstream’ in existing value chains. This is important, particularly for WA, as a focus on value add limited to, for example, downstream processing, could miss opportunities or promote investment in non-competitive export sectors, where the activity is reliant on competing for inputs that would normally be exported and where
Australia does not have a real competitive advantage in downstream processing.
Arguably a broader definition of ‘value add’ that considers how investment in a project or activity increases product diversification, distribution activity, quality, or recovery of by- products - and is cognisant of how that activity reflects R&D, innovation and the creation of potential export pathways - would better serve the objectives of the NRF and support investment in areas with potential competitive advantage.
However, there is unlikely to be a single measure which would reflect this broad definition.
Measures of industry value added (gross output minus intermediate consumption) provide a basic indication of value added in each priority sector, but not improvements in economic complexity.5.

4.3. Level of detail on priority areas
The NRF will need to balance providing enough detail on the priority areas to send a clear signal to markets of the opportunities to access funding, while not being overly prescriptive to allow investment flexibility. A greater degree of flexibility in the program design will allow for consideration of a range of activities that could potentially increase sector complexity and promote innovation and the evolution of unforeseen or disruptive technologies.
Flexibility will also aid in commercially focused activities that support industry development and support portfolio returns, ensuring outcomes are contemporary and the program is responsive to industry needs.
Given the size of the Fund and the varied opportunities that might exist across the broad priority areas, a focus that errs on the side of investment flexibility would be warranted.

4
There is no single measure of ‘value add’. Value add within a sector could be defined to include any activities which
change the form of the product, from early-stage processing to more elaborate transformation or recovery of by-
products; change in the distribution of products between markets; or changes to meet consumer demand (e.g., different
varieties, quality of product). Discussion in the following report and its submissions proved insightful: House of
Representatives. Standing Committee on Industry, Science and Resources & Prosser, Geoff. (2000). ‘Of material
value?: inquiry into increasing the value added to Australian raw materials first report’ Retrieved December 20, 2022,
from http://nla.gov.au/nla.obj-1458703065
5
Greenville, J., K. Kawasaki and M. Jouanjean (2019), "Value Adding Pathways in Agriculture and Food Trade: The Role
of GVCs and Services", OECD Food, Agriculture and Fisheries Papers, No. 123, OECD Publishing, Paris,
https://doi.org/10.1787/bb8bb93d-en at page 10

Submission to the 2023 National Reconstruction Fund consultation paper 9
The priority areas identified for investment will foster Australia’s natural and competitive advantages, however there is an argument for Space as standalone area due to its potential to create significant value to the Australian economy and society.
Space technology and services underpin individuals and businesses daily activities through weather forecasting, emergency management, internet access, online banking and GPS. It also is a key enabler of growth and efficiency in other sectors like energy, mining, agriculture, transport and defence.
Space technology and services also significantly contributes to the development and advancement of critical technologies, responding to climate change and reducing carbon emissions, new employment, science, technology, innovation and inspiring a passion for
STEM.
Access to space data and services is vital to our national security through our dependence on satellites for communications; Earth observation; positioning, navigation, timing, security and intelligence. The establishment of Defence Space Command by the Australian Defence
Force in early 2022 recognises this importance and the need for Australia to develop sovereign space capabilities and secured access to space data and enabled services.
The creation of the Australian Space Agency (ASA) has been instrumental in providing strategic direction, funding support, collaboration and partnership opportunities and an enabling environment to grow our national space industry. However, compared to other
OECD countries, Australia sovereign space capability is significantly deficient. Current federal activities to develop our civil and defence sovereign space capabilities needs to be expedited for national security and broader economic benefits.
WA has more than 60 years’ experience in the space industry with our geographic and environmental advantages positioning the state to play an increasing strategic role in
Australia’s civil and defence space activities and access a greater share of the global space market. Under the WA Government’s Diversify WA framework, the Space Industry is identified as a priority sector for strategic development.
The NRF seeks to support, diversify and transform Australia’s industry and economy and secure sustainable economic growth. The space industry offers capability, technology and skills that underpin both the NRF aim and each of the priority areas. Furthermore, there is opportunity to leverage capability from terrestrial industry sectors to space.
In light of the above, it is proposed that ‘Space’ be recognised as a stand-alone priority in the NRF framework.

4.4. Opportunities for value-add, growth and diversification
The NRF’s priority areas present significant opportunities for value-adding, growth and economic diversification that capitalise on Australia’s strengths and areas of advantage.
Across each of the priority areas, WA offers investment-ready diversification opportunities that strongly align with the objectives of the NRF, including national objectives around Made in Australia, which have synergies with major global trends and can increase the competitiveness of Australian industries in the global market. These opportunities are identified below.
Submission to the 2023 National Reconstruction Fund consultation paper 10
Renewables and low-emission technologies
Battery production
The battery technology market is rapidly growing in response to the global push towards decarbonisation and the increasing delivery of low emissions technology. Global demand for batteries is projected to continue to grow substantially over the next decade, with analysis from Roskill in 2021 projecting annual growth rates of 24-26 per cent and demand almost doubling every three years. In particular, mobile battery applications, such as passenger and commercial electric vehicles, are forecast to collectively represent 77 per cent (US$101 billion) of global battery pack sales in 2030, while stationary use of batteries in both on and off-grid energy storage systems is set to account for 18 per cent (US$23 billion) of sales.
WA is well positioned to help Australia unlock this opportunity and cement the nation into global supply chains. Advantages in WA that can be leveraged include: the abundance of high-quality battery and critical minerals, particularly lithium and vanadium, in the state; an emerging skilled battery chemical industry; established mining, processing and industrial infrastructure; a world-leading network of mining equipment, technology and services
(METS) firms; and local R&D through the Curtin University-led Resources Technology and
Critical Minerals Trailblazer hub, and the Perth-based Future Battery Industries Cooperative
Research Centre.
As a major supplier of battery and critical minerals and home to a rapidly expanding midstream processing industry, WA is strongly positioned to move further along the battery value chain and become a secure and reliable battery manufacturer. Already the world’s largest producer of lithium, WA is one of the only jurisdictions in the world that has commercially viable reserves of all of the minerals required for the manufacture of new battery technologies.
To position WA as a world leader in future battery production, the WA Government developed the Future Battery and Critical Minerals Industries Strategy to support the WA
Government’s vision to have a world-leading, sustainable, value-adding future battery industry. Since the launch of this strategy in 2019, WA has successfully attracted investment into value-adding activities, including global-scale investments in the production of battery-grade lithium hydroxide, a precursor chemical for the production of lithium-ion battery cathode materials.
Three of the world's largest lithium producers – Tianqui Lithium (China), Albemarle (United
States) and SQM (Chile) – are partnering with Australian companies IGO, Mineral
Resources and Wesfarmers to build and operate lithium hydroxide facilities.
Current expansions and new lithium hydroxide projects could see WA having up to 10 per cent of global refining capacity by 2024, rising to 20 per cent by 20276. These advanced processing facilities provide a strong foundation for more investment in midstream and downstream components of the state's battery and critical minerals value chain, including the manufacturing of cathode active materials.
WA is also unique among Australian jurisdictions with respect to two other key feedstock chemicals required to produce batteries, i.e. battery-grade nickel sulphate and cobalt
6
Department of Industry, Science and Resources, Commonwealth of Australia, Resources and Energy Quarterly, December 2022

Submission to the 2023 National Reconstruction Fund consultation paper 11
sulphate. Nickel sulphate has been in production by BHP Nickel West since 2021 and there is significant interest in the development of projects intending to produce cobalt sulphate.
These are key chemicals required in the production of precursor cathode active material
(PCAM) which is used to produce battery cathodes (the next stage is battery production).
WA’s potential to produce PCAM is supported by globally-recognised research capabilities, including the Future Battery Industries Cooperative Research Centre’s cathode precursor production pilot plant at Curtin University’s Perth campus. This plant is the first to be developed in Australia and will establish technology and capabilities for the design and construction of cathode precursor manufacturing facilities on a commercial and industrial scale.
The Minerals Research Institute of Western Australia (MRIWA) is also undertaking extensive research to create capability and deliver social and economic benefits for WA. The MRIWA partner with industry, academic and government stakeholders to activate innovation and research networks to attract investment in high value activities.
To further investigate this diversification opportunity, the WA Government is finalising a prefeasibility study which aims to identify the opportunities for the state to move further along the value chain into downstream activities, including battery manufacturing, assembly and recycling. Early findings suggest WA could establish a competitive battery manufacturing and recycling industry leveraging locally produced battery chemical inputs. The state’s capacity to generate affordable renewable energy, low sovereign risk and a highly skilled and productive workforce are also key enablers which support battery manufacturing in WA.
Furthermore, WA’s growing battery market offers a significant investment opportunity for manufacturers seeking to co-locate with end-users. The NRF presents a strategic lever to help attract battery manufacturers to establish operations in WA to capitalise on this major diversification opportunity.
Renewable hydrogen production
The world is moving to a low-carbon future. Hydrogen offers diverse applications as an energy carrier and chemical feedstock and has great potential to support decarbonisation of the world’s energy and industrial sectors. Because of this, there is a growing global demand for renewable and low-emissions hydrogen.
For Australia, renewable hydrogen production provides a means to diversify our energy exports and assist our international partners to meet emissions reduction goals. Analysis from ACIL Allen estimates that by 2030, the potential value of Australia’s low-emissions hydrogen exports could reach $2.2 billion and $5.7 billion by 2040.
Export demand is forecast to be driven by Australia’s long-term energy trading partners in
Japan and South Korea, as well as other markets such as Singapore, Europe, India and
China. For example, Japan is aiming to procure 300,000 tonnes of low emissions hydrogen annually by 2030, while South Korea is aiming to produce 6.2 million hydrogen cars for domestic use and export, as well as build 1,200 refuelling stations by 2040.
Similarly, the European Union (EU) is striving to diversify its energy supplies following the
Russia-Ukraine conflict, including through partnerships on renewable hydrogen. The EU has a target to import 10 million tonnes of renewable hydrogen by 2030, doubling its previous
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target, in order to replace natural gas, coal and oil in hard-to-decarbonise industries and transport sectors.
Renewable hydrogen is also expected to play a key role in decarbonising our local economy, particularly in the displacement of diesel in the heavy transport sector, as well as chemical feedstock in hard to abate sectors and as reductant for green minerals.
The WA Government is committed to developing the state’s renewable hydrogen industry to support the nation to become a leading global hydrogen producer. Since 2019, the WA
Government has been focused on implementing its Renewable Hydrogen Strategy and its targeted Renewable Hydrogen Roadmap, released in 2020. Together they aim to ensure the WA Government has the appropriate policy settings and industry activation initiatives in place to drive forward the development of the industry.
In line with this strategic direction, the WA and Australian Governments have collectively committed $140 million to support the development of a hydrogen hub in the Pilbara. This builds on the Australian Government’s $70 million allocation for the BP Australia H2Kwinana
Clean Hydrogen Industrial Hub which will include the installation of an electrolyser with at least 75 MW capacity, hydrogen storage, compression and truck loading facilities, and upgrades to BP’s existing on-site hydrogen pipeline.
In addition, the State government has invested around $55 million to activate the Oakajee
Strategic Industrial Area in the Mid-West region of WA as a hydrogen precinct. The State
Government is currently progressing several site activation studies at Oakajee and in
November 2022 allocated land to six hydrogen industry proponents. The value of the targeted investments anticipated to flow from these projects to 2027 could be over $90 billion.
The State government is also progressing a trilateral study with Port of Rotterdam
(Netherlands) and German Federal Ministry for Education and Research to investigate infrastructure requirements to fast tracking renewable hydrogen exports from the Mid-West
(Oakajee) to Europe.
Today, WA has more than 30 hydrogen projects at various stages of development across the supply chain. Together, current and planned projects under consideration could see WA produce up to 100 GW of renewable energy in the next 10 years for hydrogen production, which could increase to 200 GW by 2040.
The WA Government has valued collaborating with the Australian Government to establish clear policy and regulatory settings to grow the nation’s participation in global supply chains and support industry access to investment and partnership opportunities. Additional support for industry development through the NRF could help to significantly fast-track the growth and scale-up of this major opportunity by attracting and encouraging investments into new hydrogen production projects.
Hydrogen electrolyser manufacturing
As the expansion of hydrogen production continues, the demand for critical equipment such as electrolysers is also forecast to rapidly increase. As a result, Australia not only has an extraordinary opportunity to become a leading global renewable hydrogen producer and exporter but a significant hydrogen electrolyser manufacturer.
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In particular, the nation’s generous endowment of the critical minerals and rare earths needed to manufacture electrolysers and components presents a unique advantage for
Australia to capture more value from the renewable hydrogen industry and secure our supply chains by manufacturing electrolysers and components locally.
The International Energy Agency’s Net Zero Scenario forecasts that by 2030 low-emission hydrogen production will account for more than half of global hydrogen production (around
95 million tonnes). Around two-thirds of this production is forecast to be made via electrolysis, which would require an installed capacity of more than 700 GW of electrolysers worldwide. This presents an opportunity for Australia to manufacture and export hydrogen electrolysers.
Recent multibillion dollar hydrogen project announcements in WA such as Woodside’s
H2Perth hydrogen, the Western Green Energy Hub on the southern coast, and the massive
Australian Renewable Energy Hub planned for the Pilbara, signal global confidence in WA’s renewable energy credentials and ambitions. The number of renewable hydrogen projects being planned, developed and implemented in WA presents a significant, long-term pipeline of demand for hydrogen electrolysers and components that could be supplied by a local manufacturing industry.
To provide the initial steps towards this opportunity, the WA Government has allocated
$500,000 under the Climate Action Fund to support industry proponents to undertake feasibility studies regarding the potential size, scale and market for electrolyser manufacturing, assembly, and maintenance opportunities in WA. In June 2022, the WA
Government announced it will work with ITM Power in partnership with Linde Engineering in
Australia to develop a business case for local electrolyser assembly and manufacture.
These studies will allow the state to better position itself in the supply chain for renewable hydrogen, by providing clearly defined opportunities around potential manufacturing capabilities.
The WA Government is committed to working closely with industry and the Australian
Government to identify and support new electrolyser and other key componentry manufacturing opportunities to cement Australia’s position as a leading hydrogen industry hub. The NRF could present a key lever to help boost the establishment of this fledgling electrolyser manufacturing industry in WA.
Carbon capture, utilisation and storage
Carbon Capture Storage (CCS) and Carbon Capture Utilisation and Storage (CCUS) technologies will be critical to support the decarbonisation of hard-to-abate Australian industries and to ensure they remain globally competitive into the future. These technologies involve the capture of CO2 from fuel combustion or industrial processes, the transport of this
CO2 via ship or pipeline, and either its use (CCUS) as a resource to create valuable products or services or its permanent storage (CCS) deep underground in geological formations.
As a global leader in the production and export of natural gas and other emissions intensive exports, there is a significant opportunity to develop large-scale CCS and CCUS projects across Australia. The development of this technology also underpins the growth of other new low emissions industries, such as blue hydrogen and low-emissions cement and steel production, and provides the technology to meet international decarbonisation goals.
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Meanwhile, captured CO2 can be used in the production of CO2-based synthetic fuels, chemicals and building aggregates, amongst other uses.
WA is well positioned to support Australia to become a world leader in the deployment of
CCS and CCUS technology, leveraging existing infrastructure, suitable geological formations, our highly skilled workforce and globally recognised energy ecosystem. WA is already home to one of the world’s largest carbon capture facilities, the Gorgon CCS system.
The Western Australian LNG Jobs Taskforce, which brings together WA Government, industry and unions, is finalising the WA CCS/CCUS Hubs Study on the opportunities and benefits of CCS and CCUS development in the state. Conducted by the Commonwealth
Scientific and Industrial Research Organisation and the Global Carbon Capture Storage
Institute, the study will help inform the future of the state’s existing gas industry and the development of new industries and projects.
The WA Government’s draft Petroleum Legislation Amendment Bill (Bill) is open for public review until 24 February 2023. Once finalised, the Bill will provide the legislative framework to enable CCS and CCUS solutions to be deployed across WA.
Additional support to develop new CCS and CCUS projects across Australia via the NRF will enable local industries in hard-to-abate sectors to remain globally competitive amid increasing demand for low-carbon products.
Low-emissions livestock feed supplements
Primary industries, particularly beef and sheep production, is a critical market sector of the
WA economy. Work is underway to explore the use of renewable hydrogen as a feedstock for industrial processes, as well as production of livestock feed to reduce methane emissions
(linked to value add in agriculture) e.g.
 Commercial production of Asparagopsis feed additive,
 SheepLinks project, which aims to improve the feed conversion efficiency of sheep
to require less feed to produce more meat, while emitting less methane and carbon
dioxide.
In addition to low-emission livestock feed, other agriculture initiatives such as lower carbon fertiliser production and carbon farming for both land and sea, would be significantly fast- tracked by NRF support for industry development.
Modernising steel and aluminium
Steel and aluminium are both critical materials that underpin modern life, with their use projected to increase as the global economy integrates more renewable energy and electrifies in its transitions to a net zero future. Currently, however, the production of steel and aluminium is a significant source of global CO2 emissions, responsible for approximately 7 per cent and 3 per cent of annual emissions respectively, according to the
IEA. In response, manufacturers around the world are adopting modern techniques and integrating new technology to reduce their carbon footprint and improve efficiency.

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With world-class renewable energy potential and as a leading exporter of iron ore, bauxite and other iron/aluminium related products, WA has a natural advantage to decarbonise, modernise existing metal manufacturing processes and establish new operations in WA.
The WA Government is actively supporting the modernisation and decarbonisation of steel and aluminium production in the state. In October 2022, WA opened its $15 million Carbon
Innovation Grants Program, to support WA’s heavy industries to transition to net zero emissions. This was followed by the launch of the $200 million Collie Industrial Transition
Fund in November, which aims to, amongst other activities, encourage green metal manufacturing in WA’s industrial Collie region in the state’s South West.
Furthermore, as a Key Partner of the Heavy Industry Low-carbon Transition Cooperative
Research Centre (HILT CRC), the WA Government is collaborating with industry and researchers to explore ways to transition the steel, iron, alumina and cement industries to reduce their CO2 emissions. This includes using a range of technologies and clean energy sources, including the use hydrogen and electrification.
The WA Government welcomes the opportunity to work with industry and the Australian
Government to identify ways for the NRF to unlock, modernise and decarbonise local iron, steel and aluminium production.
Components for wind turbine manufacturing
Increasing Australia’s renewable energy generation capacity will be critical for the nation to reach net zero emissions by 2050. While allowing clean energy to be supplied to households and businesses connected to the grid, unlocking greater renewable generation can also help to power off-the-grid operations such as green hydrogen production, low-carbon mining and agriculture.
With world-class wind resources, an extensive coastline, and a landscape featuring large swathes of land with low population density, Australia is strongly positioned to become a renewable energy superpower by, amongst other sources, harnessing the nation’s onshore and offshore wind power potential.
In particular, WA is uniquely placed to help lead the growth of wind energy generation in
Australia. The state’s Mid-West and Southern regions boast some of the country’s greatest potential for wind generation, with wind resources extending hundreds of kilometres inland and with capacity factors for wind turbines in the region demonstrated to exceed 45 per cent.
This has been acknowledged by the Australian Government with the Indian Ocean region off Perth/Bunbury being considered for future offshore wind energy projects. Furthermore, as the largest state in Australia, covering 2.5 million square kilometres and featuring one of the longest coastlines in the world, WA has a natural advantage to accommodate renewable energy generation at scale.
To facilitate the growth of a reliable and sustainable local wind energy industry in Australia, the WA Government has established a targeted action group of industry and government representatives to guide the establishment and development of a wind turbine manufacturing industry in the state. By boosting domestic capacity to manufacture components locally, the WA Government aims to help improve the efficiency of developing

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wind energy infrastructure, create new export opportunities and sustainable local jobs, and diversify the economy.
The WA Government is undertaking a full feasibility study as part of its $10 million Wind
Turbine Manufacturing Initiative to investigate the prospect of manufacturing and maintaining wind turbines in the state. It builds on a pre-feasibility study commissioned by the WA Government and completed in 2020 which recommended actions to progress wind turbine manufacturing in WA, including developing a detailed approach for WA Government trading enterprises in the energy sector, and identified that government investment and financial assistance is critical to transition local businesses to wind turbine component manufacturing.
When finalised, the WA Government would welcome the opportunity to share the findings from the full feasibility study with the Australian Government and collaborate to explore how the NRF can support the growth of this local industry to support the diversification and decarbonisation of the national economy.

Value-add in resources
Advanced critical minerals processing
Critical minerals are fundamental to the world’s clean energy transition. The componentry of electric vehicles, wind turbines, solar panels, electrolysers, fuel cells and rechargeable batteries all require critical minerals. Critical minerals also have a range of essential medical, defence, telecommunication and aerospace applications. As a result, the International
Energy Agency projects global demand for critical minerals could increase six-fold between
2020 and 2050.
WA is already a leading supplier of battery and critical minerals. WA accounts for half of global lithium supply and is a major exporter of nickel, cobalt, manganese and rare earths.
There is an opportunity to capture significant additional value by undertaking more advanced processing in Australia.
The state hosts a multi-billion dollar critical minerals processing industry (see ‘battery production’ opportunity above for further information). This includes global scale investments in battery grade lithium hydroxide and nickel sulphate which provide essential inputs for the manufacturing of rechargeable batteries, and rare earth processing facilities, which are set to make WA one of the few jurisdictions outside of China offering export quantities of processed rare earths.
Rare earth projects currently under development in the state include Iluka’s rare earths refinery at Eneabba which will be the first of its kind constructed in Australia and Lynas Rare
Earth’s processing facility in Kalgoorlie to process the Rare Earth concentrate from its Mt
Weld mine – which has one of the highest grade rare earth deposits in the world. Together this significant industry capability strategically positions WA to grow this opportunity for
Australia.
Furthermore, a greater focus on ethical and sustainable supply chains by the end users of technology products, concerns regarding security of supply, and the quality and consistency of production has resulted in increasing international interest in WA as a jurisdiction to establish critical mineral processing operations.
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The WA Government’s transparent and evolving policy and regulatory settings, particularly relating to labour and environment laws, make commodities from WA among the most ethically mined and processed in the world.
The world’s leading car manufacturers including BMW, Tesla and Ford are exploring ways to certify their supply chains and have each taken steps to ensure they are sourcing minerals from ethical producers in the future. BMW, for example, has identified WA as an ethical and sustainable producer of lithium and cobalt, and has negotiated supply contracts with local mineral companies directly to ensure its products are sourced responsibly.
Acceleration of this opportunity is needed now as global demand for energy storage systems continues to grow rapidly, and as other jurisdictions vie to establish commanding positions in critical mineral supply chains. The NRF, together with the important Critical Minerals
Facilitation Office, can leverage WA’s capability and world-class environment, social and governance (ESG) credentials to allow Australia to become a leading exporter of value added critical minerals.

Decommissioning of oil and gas infrastructure
The decommissioning of oil and gas infrastructure is an essential operation which presents long-term economic and environmental benefits for the nation. Decommissioning involves the safe removal of equipment, infrastructure, plugging and closing of wells associated with petroleum activity and the restoration of the environment.
The Centre of Decommissioning Australia (CODA) estimates that, by 2050, over $50 billion will need to be spent to decommission Australia’s ageing oil and gas infrastructure.
Approximately 27 per cent of this spend is forecast to occur by 2025.
The WA Government committed $5 million for the CODA in its 2022-23 WA Government
Budget to support the establishment of a decommissioning industry in WA.
Investment in this opportunity through the NRF will build Australia’s capability, positioning the nation as a world-leader in end-of-life-cycle asset management to assist with the significant decommissioning needs of the global industry over the next decade. This sector will also face rising ESG expectations that will drive global demand for environmentally responsible decommissioning and rehabilitation services.
WA, and the waters off its coastline (both WA and Commonwealth), are home to the overwhelming majority of Australia’s oil and gas assets. This positions WA as a world-leader in oil and gas decommissioning, providing expertise and services to support the safe and environmentally responsible decommissioning of assets from projects in WA and regional markets.
The significant task to decommission assets off the WA coast equally presents an opportunity to attract investment into the domestic supply chain from international oil and gas decommissioning businesses from mature markets. The decommissioning of oil and gas infrastructure also presents opportunities to add-value through repurposing, reusing or recycling of materials where possible. This could support low-carbon steel manufacturing and plastics recycling in Australia.

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Medical science
Manufacture of medical products and digital health devices
Global demand for new medical products and digital health devices is projected to rise over the coming years, driven by an ageing global population and an increasing prevalence of chronic and infectious diseases.
The COVID-19 pandemic has further accelerated demand for a wide range of medical products and services, including digital health, medical technology, biotechnology, pharmaceuticals and health and wellness offerings. The pandemic has also exposed the vulnerabilities of the sector’s supply chains and funding model, highlighting the importance of building sovereign capability and creating a favourable economic environment.
Australia is well placed to build its sovereign medical manufacturing capability by leveraging its internationally recognised research ecosystem, world-class infrastructure and highly skilled workforce to transition research into product development and commercialisation.
WA’s rapidly developing health and medical life sciences industry can support Australia’s push to boost sovereign manufacturing capability and become a significant link in global health and medical supply chains. Led by the Health and Medical Life Sciences Industry
Strategy, the WA Government is committed to supporting local industry to manufacture medical products and digital health devices, commercialising world-leading research, further investment from the NRF would be beneficial to support the implementation of this.
In the five years to 2021, the number of health and medical life sciences companies in WA has doubled from 119 to 244, employing nearly 24,000 employees across the sector, including in research institutions and support organisations. These businesses and research institutes are already delivering significant results on a global scale. For example, of the 15 drugs developed through the Australian university sector that have achieved US Food and
Drug Administration approval, 6 are from WA.
This is bolstered by the WA Government’s Future Health Research and Innovation Fund
(now $1.6 billion), which provides further support for the sector by creating a secure source of funding to drive health and medical research, innovation and commercialisation.
Through the provision of loans, guarantees and equity, and potentially fostering a more favourable tax environment for medical research, the NRF can support the scaling of this vital industry to ensure Australia has the potential to play a leading role in developing the healthcare solutions of tomorrow. This will not only provide Australians with access to cutting edge health products and services, but also enable local manufacturers to export their advancements, supporting wellness worldwide.

Transport
Marine construction, sustainment and maintenance
Maritime construction, sustainment and maintenance at WA’s world-class Australian Marine
Complex (AMC) Common User Facility (CUF) offers the infrastructure and industry capability to help diversify the national economy. The WA Government is investing more than $89.3 million in key infrastructure upgrade projects at the AMC to enable local industry to boost their capability. The AMC-CUF agglomerates businesses involved in the
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manufacturing, fabrication, assembly, technology, repair and maintenance for marine, defence and resource sectors. This industrial area supports supply chains, including small to medium size businesses and related workforce, with their existing and transferable skills.
One identified opportunity is the construction, sustainment and maintenance of marine industry operations like superyachts, which has flow on benefits to the economy through tourism and hospitality. To support the development of this diversification opportunity, the
WA Government has created an Industry Working Group and with additional investment through the NRF there is significant potential to accelerate the development and position the nation as a superyacht industry hub for the Asia-Pacific region.
Investment, through the NRF, in projects that support innovation processes and production of both military hardware, particularly for the Navy, and commercial vessel construction, sustainment and maintenance, including tourism vessels, like superyachts and ferries, will enhance the local advanced manufacturing capability; securing supply chains and diversifying the economy.
Advanced Manufacturing of Iron Ore Railcars and Graincars
There is significant opportunity for the development of advanced manufacturing capabilities that will increase equity in supply chains and value-add to WA’s export-oriented industries.
NRF support for the development of innovative manufacturing techniques for Iron Ore
Railcars in particular, will ensure supply chain security and foster the ecosystem, including the skilled workforce that will not only support innovations in the resource sector, but also support cross-sector advanced manufacturing capability, such as the production of graincars and potentially autonomous and electrified vehicle production. Development of the advanced manufacturing capability is also critical to ensure key major infrastructure projects such as those being undertaken by METRONET have the highly skilled workforce required to ensure WA’s future prosperity.
The METRONET public transport program is focused on supporting economic growth with better connected businesses and greater access to jobs and deliver transport infrastructure that promotes easy and accessible travel and lifestyle options.
With approximately 72 kilometres of new passenger rail and 23 new stations, METRONET is a catalyst to turn more than 8,000 hectares of land around new stations into desirable places to live, work and play.

Value-add in the agriculture, forestry and fisheries sectors
Value-added food and beverage production
Australia is a longstanding, internationally recognised producer of premium quality, safe, and certified raw agrifood and beverage products. However, consumer demand is steadily increasingly for more value-added food and beverages products that meet medical dietary requirements, deliver health and wellbeing benefits, have a longer shelf life, and are more convenient, sustainable and safer to consume.
In WA, approximately 80% of the agriculture, food and beverage exports are raw and unprocessed with only the remaining 20% value added. While already contributing more than $8 billion each year to the state’s economy, this opportunity presents significant scope

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to increase the sector’s value-adding capacity. This will allow local producers to meet the growing demand for high-quality processed food and beverages and access new consumers and markets.
Overall, food and beverage manufacturing presents a major value-adding opportunity to diversify the national economy. Research undertaken by Food Innovation Australia Limited
(FIAL) estimates that health and wellness value-added food and beverage could contribute
$45 billion by 2030 to the Australian economy. FIAL modelling also suggests that, under a moderate growth scenario, Australia’s plant-based protein market will generate an additional
$2.9 billion in domestic sales and create 6,000 manufacturing jobs by 2030.
By identifying value-added food and beverage manufacturing as a key opportunity under the
NRF’s ‘value-add in agriculture, forestry and fisheries’ priority area, the Australian
Government can help to encourage investment to scale this industry and capitalise on rising consumer demand for high-quality processed food and beverages. For example, with $17.56 million committed by the Value-Added Investment Grant program, the WA Government unlocked $152 million in private-sector investment and created an estimated 909 new jobs.
Similarly, the International Competitiveness Co-investment Fund has supported agrifood businesses to achieve significant export growth success, including by responding to international demand for value-add products.
Other projects that the NRF could support include the agrifood supply chain optimisation, the improvement of domestic and export meat processing through fostering advanced manufacturing processes and capabilities, the local packing capability, emerging products such as those highlighted in the Western Australian Industry Snapshots, including plant protein processing, plant-based milk, premium honey and animal-based health products.
Additionally, projects that increase the effective use of desalinated water, initiatives that reduce food waste in agriculture, and food and beverage manufacturing, Satellite Earth observation (EO) systems that improve productivity of agricultural systems by optimising sowing, optimising fertiliser/pesticide/herbicide use monitoring crop development, monitoring potential yield and determining optimum harvest times, and GPS based technologies for precision agriculture processes like application of fertilisers, herbicides and seeds.
Projects that support the Food Innovation Precinct, WA (FIPWA) which provides local and global entrepreneurs, food companies, and agri-enterprises an environment to research, develop and commercialise new value-added food products, would also be suitable projects for NRF consideration. Also projects that foster innovative technologies to increase efficiencies in forestry maintenance and monitoring and productivity of fisheries.
Opportunities for aquaculture development are profiled in the Aquaculture Development
Plan for Western Australia. Realising the potential of the blue economy and linked opportunities for Aboriginal economic development in the north of WA and along the State’s expansive coastal waters could be a focus area for the NRF.
WA is renowned for its production of high quality, sustainable fisheries. There are opportunities for the potential growth or development of markets for some of the State’s lower value or underutilised aquatic resources. An example of this can be seen in the processing and value-added component of the growing WA Octopus Fishery.

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Projects that support the Food Technology Facility (State funded advanced food manufacturing pilot plant) located within FIPWA will assist primary producers and food and beverage businesses develop, test and produce new and improved products using advanced manufacturing technologies and processes. This will allow businesses to test innovations, confirm market demand and source buyers prior to investing in new large scale commercial production lines themselves. This facility will stimulate the food and beverage manufacturing capacity and capability in WA.
In the area of forestry, the WA government is investing $350 million to expand Western
Australia’s softwood plantation timber industry. This investment is expected to provide at least an additional 33,000 hectares of softwood timber plantation, with up to 50 million pine trees planted, sequestering between 7.9 and 9.5 million tonnes of carbon dioxide equivalent.
This will support the growth in softwood processing industry supplies for the high demand housing and construction markets, along with a range of other markets such as particle board, pallet timber, fence posts and power poles and therefore, projects that support this industry should be prioritised by the NRF.

Defence capability
Naval shipbuilding, sustainment and maintenance
Australia is well-placed to grow its naval shipbuilding, sustainment and maintenance industry and become a reliable and secure global maritime hub to service the Indo-Pacific region – an area of increasing strategic importance.
Positioned at the gateway to the Indian Ocean, WA can play a key role in unlocking this valuable opportunity to bolster the national economy. WA is home to a world-class naval shipbuilding, repair, maintenance and heavy engineering industry. The state also boasts world-class infrastructure, an existing highly skilled workforce, a thriving marine industry ecosystem, leading technological capability and cybersecurity expertise.
WA’s marine industry has the knowledge, capacity and capability to build, sustain and maintain the next generation of naval vessels, with local industry already delivering on a multi-billion dollar pipeline of contracted work.
The WA Government’s defence industries ecosystem features leading defence prime contractors, including Austal, BAE Systems, Civmec, Luerssen, Raytheon Thales and
Lockheed Martin who are supported by an established and specialised network of small and medium enterprises.
WA’s potential to take on a greater share of naval shipbuilding, sustainment and maintenance work has been boosted by major upgrades, both planned and underway, at the AMC. The AMC is one of only two naval shipbuilding locations in Australia and is currently utilised by over 150 local small and medium enterprises.
Works underway include a major wharf upgrade to create additional berth capacity for all
Royal Australian Navy vessels, including Anzac class frigates, Offshore Patrol Vessels and the future Hunter class frigates, and other larger naval ships. A new vessel transfer path at the AMC has also reached practical completion and earthworks are now underway for a new shipbuilding hall. The Australian Government has also committed to developing a Large

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Vessel Dry Berth at the AMC, which will significantly enhance the WA Government’s capacity to build, sustain and maintain a range of larger naval vessels.
NRF support for projects that foster entry for small to medium enterprises to leverage off these significant infrastructure investments will secure supply chains, and create local supplier skills and capability. Developing a defence industry workforce with smart Industry
4.0 skills will be critical to keep up with demand for increasingly sophisticated technology in the sector, and this is especially true in the context of the AUKUS trilateral security partnership announcement, where Australia will share technologies with the United Kingdom and the United States.
NRF support will transform existing commercial or civil infrastructure capabilities into dual use for military and defence support and facilitate establishing or relocating specialised defence support capabilities to WA in the defence domains of remote operations, cyber and cyber security, robotics, unmanned and autonomous systems and vehicles, undersea sensors, communications and vehicles, space capabilities and infrastructure. Capability and capacity building in these areas will cement WA’s position as a hub for naval activity in the
Indo-Pacific region.

Enabling capabilities
Manufacture, utilisation and maintenance of space and cross-sector technologies
Space and cross-sector technologies, in particular robotic, autonomous and remote operations7, including AI, have been increasingly adopted across the globe to improve safety, productivity and sustainability across a range of sectors. Australia has a significant opportunity to grow its capability to manufacture these space and cross-sector technologies and provide operation and maintenance services.
While creating new industry opportunities for businesses directly providing remote operations, robotics and automated technology and support services, it will also enable
Australian industry across the NRF’s priority areas to benefit from productivity and efficiency gains, thereby increasing their global competitiveness. Analysis from the Australian Remote
Operations for Space and Earth (AROSE), a not-for-profit, industry-led consortium headquartered in Perth, highlights that automation could significantly boost Australia’s productivity and national income, potentially adding up to $2.2 trillion in value to the
Australian economy by 2030.
The use of space and cross-sector technologies can also play a key role in the transition to a low-carbon economy and help Australia achieve its ESG goals. AROSE’s 2021 Australian
Remote Operations Capability Review notes that digital transformation initiatives in the global mining and metals industries are expected to cut CO2 emissions by an estimated 400 million tonnes between 2017 and 2027 as a result of increased operational efficiency.
Further, digitisation in mining alone is expected to save lives by up to 10 per cent and reduce the number of injuries to workers by up to 20 per cent over the next 10 years globally.
In WA, space and cross-sector technologies have been successfully deployed to boost productivity and de-risk operations in the health, agriculture, defence, space, mining and oil

7
Remote Operations technologies include: sensing, communications, integrated operations centre, data processing and
robotics technology

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and gas sectors, positioning the state as a world-leader in the use and deployment of these technologies, particularly remote operations. There are over 400 autonomous vehicles and a further 48 autonomous drilling rigs in operations across WA and this sector represents a significant opportunity for the future. WA’s $20m investment in the Australian Automation and Robotics Precinct will further strengthen the WA innovation ecosystem and NRF support for projects that foster manufacturing and maintenance capabilities will be critical.
WA industry is now pivoting this expertise toward space applications. By building the state’s capability to manufacture, utilise and maintain space and cross-sector technologies, the WA
Government aims to create significant skilled employment opportunities, attract international investment and boost revenue.
The growth of these space technologies and supporting services, particularly space communications, satellite remote sensing and space domain awareness (the study and monitoring of satellites), is supported by the more than 100 international and Australian companies operating in space and space-related services in WA. Development and deployment of these technologies will facilitate the growth of Australia’s space industry, with revenue projected to reach $8.5 billion by 2025-26, up from $5.7 billion in 2019-20.
Building Australia’s capability to manufacture, operate and maintain space and cross-sector technologies through the NRF directly aligns with the Australian Government’s Australian
Civil Space Strategy which aims to diversify the economy, triple the size of Australia’s space sector and grow an additional 20,000 jobs by 2030.
Critical to the enabling of cross sector technologies is the ability to facilitate digital capability.
WA offers many advantages for data centre operations and investment, including a safe location with large expanses of land, international fibre optic connectivity, access to competitive energy, plus renewable energy capacity.

4.5. Capabilities needed to support priority areas
Central to economic growth and diversification is the development of key enabling activities that can improve value and productivity across multiple sectors of the economy. A range of enabling activities are identified in key WA Government strategic documents, including
Diversify WA, and comprise:
 developing resilient local supply chains,
 boosting advanced manufacturing capability,
 investing in science, innovation, technology, research and development,
 upholding robust ESG frameworks,
 developing key infrastructure and project-ready land,
 a skilled and productive workforce,
 enhancing policy and regulatory frameworks, and
 building and maintaining a thriving investment and trade ecosystem.
Within the context of the NRF, each of these enablers have the potential to also deliver optimal conditions that support the NRF’s priority areas. In particular, the enabling activities
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and barriers to development discussed in further detail below are considered to be particularly critical to fully unlock the opportunities available across the priority areas.

Advanced manufacturing capability
Across all of the NRF’s priority areas, advanced manufacturing capability is essential.
Innovative manufacturing techniques will ensure industry remains competitive, which will support Australia to secure its position in the global supply chains of established and emerging industries. While Australia already possesses a level of advanced manufacturing capability, work is needed to scale-up existing advanced manufacturing capabilities and to focus efforts on areas of strategic and comparative advantage and where there is significant global demand, for example in battery manufacturing. The NRF co-investment plans should foster the ecosystem that will transition a product or process from prototype stage to full commercial operations.

Science, Innovation and Technology
Leveraging Australia’s existing technological, innovation and scientific expertise and capability is key to improving the competitiveness of opportunities across the NRF’s priority areas. Investments in R&D and the commercialisation of transferable technologies supports the development of new products to grow Australia’s export opportunities and supply chain participation.
While investments in science, innovation and technology have the potential to benefit all of the NRF’s priority areas, the most readily apparent areas where the greatest value could be unlocked include: renewables and low emissions technologies; value-adding in agriculture, forestry and fisheries; medical sciences; value-adding in resources; and enabling capabilities such as remote operations, AI, robotics, and quantum.

ESG frameworks
Customers, suppliers, investors and communities around the world are demanding ESG commitments that deliver positive outcomes for the community and environment. To attract investment in emerging industries and value-add opportunities, it is critical to develop, invest in, and actively promote ESG initiatives that support Australia’s value proposition as a desirable investment location. This is particularly critical in key international markets, where countries are rapidly transitioning towards net zero and ESG credentials are increasingly being factored into investor decision-making.
In the context of the NRF’s priority areas, there are significant opportunities to achieve and promote positive ESG outcomes, including:
 Value-add in resources, renewables and low-emission technologies, which have
potential to deliver environmental benefits, including support for net zero transition,
 Medical sciences, which can deliver social outcomes relating to good health and well-
being through the development and production of medicines, vaccines, and other
medical devices and supplies,

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 Value-add in agriculture, forestry and fisheries, which have potential to achieve both
social and environmental outcomes ranging from minimising waste and securing food
supplies, to contributing to conservation endeavours and carbon sequestration.

4.6. Strategic priorities for supply chains/enabling inputs
In 2021, the WA Government released the Diversify WA: Supply Chain Development Plan
2021-22 (the Plan) to support the growth of local industry capability in the existing and new supply chains that underpin the WA Government’s economic diversification agenda.
Importantly, it recognises the role that government can play to help shape private sector investment, procurement, and expansion through its policy, planning, regulation, infrastructure and spending. These decisions range from direct actions such as regulation or funding to stimulate a market, to collaborative approaches such as building awareness of an opportunity or sharing knowledge and data.
Six key enablers are highlighted as part of the Plan:

 investment attraction,
 workforce and skills,
 infrastructure access,
 innovation,
 digital connectivity,
 science and technology.
These are critical to unlocking new supply chain opportunities across the economy and are useful considerations for the supply chains that support each of the NRF’s priority areas.
These enablers constitute the basis of the WA Government’s supply chain actions and aim to help deliver improved local content outcomes. A snapshot of each supply chain development enabler is provided below.
Investment attraction
Private investment is required to drive the growth of targeted supply chain activities in the
NRF’s priority areas. While WA has historically benefited from positive net investment, with the majority of this investment in the resources sector, investment into the state’s mining industry has not always fostered local participation in the supply chains of major mining projects or supported the development of other industry sectors.
The WA Government’s current investment attraction approach is underpinned by Invest and
Trade WA, which provides a ‘front door’ for investors and customers interested in doing business with WA. A number of mechanisms have been established to support Invest and
Trade WA to secure investment and trade opportunities for WA, including:
 a range of financial and non-financial investment attraction incentives,
 industry development strategies and plans that signal to investors the WA
Government’s economic diversification agenda,

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 an agile network of international offices led by WA’s Investment and Trade
Commissioners that foster relationships with investors in key markets,
 a Lead Agency Framework that facilitates project assistance for investors,
 Streamline WA, which makes it easier for investors to do business in WA.
The WA Government aims to leverage these mechanisms to attract further domestic, interstate and international investment into targeted supply chain opportunities that diversify local industry, increase demand for local goods and services and secure trade in new sectors and with new markets. A focus on regional comparative advantage, renewable energy, primary industries and development of circular economies will enhance supply chain efficiency.
Workforce and skills
Specialised skill sets are required to grow local capability in targeted opportunities and workforce mobility across supply chains. Businesses are increasingly looking for highly trained workers, with skill sets and the flexibility to move between trades and sectors.
Investing in local workforce capability has been accelerated due to COVID-19 driven constraints on interstate and international workforce mobility, which has also increased competition for labour. Promoting upskilling, re-specialisation and skills transfer can help meet the workforce needs of the nation’s supply chains, particularly for new and emerging activities in each of the NRF’s priority areas.
The WA Government will continue to invest in the development of general and specialised skills, and an agile labour market to meet the workforce needs of supply chain development priority areas.
Infrastructure access
The availability of project-ready land and access to key infrastructure, including power, water and gas services, and freight, road, rail and port connections, is critical to attract investment and de-risk new projects. This is also critical for unlocking a number of supply chain opportunities for small and medium sized enterprises.
The WA Government is focused on supporting the infrastructure needs of new and emerging industries by de-constraining land, developing multiuser facilities and facilitating access to infrastructure and utilities.
Innovation
Innovation is key to Australian businesses capturing new supply chain activities, through improving processes, developing new products, forming start-ups and accessing new markets. Importantly, innovation in one segment of a given supply chain can benefit the competitiveness of the whole supply chain and transfer to other supply chains. It can also help overcome key challenges faced by industry in Australia, such as labour costs, skills and infrastructure constraints, and remoteness.
Government has an important role to play in enabling innovation through reducing risks and costs for local innovators, and supporting commercialisation. This will be critical to maximise the impact of the NRF’s investments.

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The WA Government also continues to improve supply chain productivity, efficiency and competitiveness through ongoing investment in the development of a thriving innovation ecosystem in the state. Recognising the importance of innovation to the economy and society, the WA Government released a new Innovation Strategy in December 2022 that outlines goals and priority action areas to support the WA Government’s vision to be a renowned global hub of invention, investment, innovation and impact. The strategy articulates WA’s commitment to work with the Australian Government and other key partners to deliver innovation outcomes in the national interest.
Digital connectivity
Access to adequate data speed is required to progress the digitalisation and automation of a number of supply chain operations across the NRF’s priority areas. Currently, however, there remains significant gaps in access to, and the quantity and quality of, telecommunications services provided to businesses and individuals across Australia, which can impede the development of supply chain activities in the regions.
The WA Government is committed to accelerating the state’s digital transformation to support a more secure, sustainable and inclusive digital future.
Improvements in digital infrastructure and information and communication technology (ICT) capabilities are critical to enable industries such as mining, renewable energy, defence and agriculture to develop and deploy more advanced technologies, particularly in the regions.
Science and technology
Many existing and emerging industries rely heavily on science to thrive. Research plays a critical role in generating new technology and knowledge that not only allow Australia’s existing sectors to be more productive, efficient and competitive, but also feeds the innovation pipeline with new products and services.
The growth of science and technology, including autonomous, robotics and remote operations, is critical to support supply chain activities through new product development and improvements in processes and productivity. These enablers can benefit the competitiveness of the whole supply chain and can be transferred between sectors to achieve sector-wide benefits.
Leveraging WA’s strong innovative and technological capabilities, the WA Government is working with industry to support the accelerated adoption of digitisation and automation, robotics and remote operations to improve the state’s supply chain productivity, efficiency and competitiveness.

4.7. Gaps and barriers to private sector investment
To create an environment that is more conducive to attracting investment into the NRF’s priority areas, it is critical to address and alleviate common barriers to growth and development. Key barriers to private sector investment include access to infrastructure and project-ready land, a skilled and productive workforce, policy and regulatory frameworks, and a thriving investment and trade ecosystem.
Key infrastructure and project-ready land
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Access to activated industrial land and associated infrastructure can deliver extensive cross- sector benefits by attracting new industry investment and de-risking new projects. To ensure that the nation is globally competitive across the priority areas in attracting investment and proponents to establish their operations in Australia, there needs to be:
 land that is connected to port, rail, road and other major services such as power, gas,
water and telecommunications,
 timely land allocation processes to ensure streamlined and efficient access to
industrial land.
NRF support for projects that foster the development of precincts will accelerate private sector investment. Most proponents seeking access to industrial land are considering investment decisions for large and complex projects. These proponents often require a timely resolution of land allocation to expedite project decision-making. Timely access to industrial land is vital to encourage proponents to establish operations in Australia and to attract investment in value-add activities and the NRF’s priority areas, including:
 renewables and low-emissions technologies, such as renewable hydrogen, batteries,
critical minerals, renewable component manufacturing, and natural gas
decommissioning industries,
 value-add activities in resources, such as minerals processing, mining sciences, and
mining equipment, technology and services.
A lack of project-ready industrial land is a significant impediment to seizing the opportunities that these diversified industries offer. The urgency regarding access to project-ready land is increasing as competing jurisdictions across the globe are aggressively pursuing the same opportunities.
Where appropriate, the co-location of businesses and the development of common-user or shared infrastructure should be encouraged. This is critical for enabling proponents to access efficient infrastructure at a competitive price by allowing resources to be pooled, thereby improving project economics. Agglomeration can also promote knowledge transfer and innovation, boosting industry competitiveness.
The WA Government provides land assembly and project facilitation support, as well as assistance with approval processes, for strategic projects in the state’s 13 Strategic
Industrial Areas (SIAs). These large-scale industrial precincts, designed for investment in downstream processing and other heavy or strategic industrial uses, provide a unique opportunity to develop synergies and share key infrastructure.
In January 2023, the WA Government announced land allocations in the Ashburton North and Boodarie SIAs for ammonia, methanol, green iron ore, hydrogen and lithium sulphate monohydrate production. This follows the allocation of land to six proponents in the Oakajee
SIA in October 2022 for hydrogen projects, progressing the SIA’s transition from a greenfield site into a globally competitive, multi-product renewable hydrogen industrial precinct.
Skilled and productive workforce
While a skilled and productive workforce has the potential to unlock opportunities across the
NRF’s priority areas, current economic and labour market conditions are creating significant
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challenges and barriers. The unemployment rate is at historic lows and a tight labour market has seen acute skills shortages across a vast range of occupations and industries. These challenges are compounded by other factors, including high inflation, rising interest rates, changing geopolitical conditions and global economic uncertainty.
It is critical to address the current challenges to support private sector investment across the
NRF’s priority areas. In particular, a skilled and productive workforce supports industry growth and enhances Australia’s value proposition as a desirable investment location. A well-skilled, agile and highly productive workforce reduces the risk of skills shortages, alleviates high labour costs, and enables the transferability of labour to meet the needs of new and emerging industries. Further, higher productivity and workforce participation can also combat the risks posed by an ageing population and support broader economic growth.
Policy and regulatory frameworks
Australia is a low sovereign risk jurisdiction that is supported by well-practiced regulatory frameworks and efficient, coordinated and strong public institutions. However, proponents doing business in Australia often encounter multiple layers of regulation, which may be duplicative, ineffective, time consuming or may lack transparency. This can increase the costs and difficulties for the private sector to do business.
Developing and implementing strong and effective policy and regulatory frameworks will encourage investment in the NRF’s priority areas by making it easier to do business and fostering private sector confidence. At the same time, strong policy and regulatory settings will also:
 support new and emerging industries to establish and develop,
 remove barriers to the uptake and commercialisation of new innovations and
technologies, and foster procurement opportunities,
 contribute to a whole-of-economy commitment to good governance and the
achievement of positive ESG outcomes.
To attract investment and support the priority areas, it will be critical to ensure that jurisdictions develop and apply strong and effective regulation. This will ensure that the private sector is able to understand regulatory requirements, decisions are made in a consistent and timely manner, and duplication is minimised.
Investment attraction / Investment and trade ecosystem
Across the globe, jurisdictions are competing to attract investment into new and emerging industries. For the NRF’s priority areas, competition is intense for the majority of the identified activities and sectors. This is particularly the case where there is strong market demand, including in renewables and low-emission technologies and value-add in resources.
To fully unlock investment opportunities presented by the NRF’s priority areas, it is vital to leverage and expand investment attraction mechanisms. In particular, a number of levers can be used to achieve successful investment attraction outcomes, including:
 financial and non-financial investment attraction incentives,

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 implementing industry development strategies and plans that signal to investors, the
government’s commitment to industry, specific opportunities, strengths, and
advantages,
 agile investment and trade networks that foster and support relationships with
investors across key markets.
Furthermore, increasing the promotion of Australia’s competitive advantages, strengths and industry capability can help to strengthen the value proposition for businesses to invest in
Australia. Limited awareness of this key information presents a barrier to unlocking private sector investment. Growing federal, state and territory government investment and trade promotion activities can help to overcome this information gap.
Limited access to venture capital (VC) funding is also a substantial barrier in WA’s investment and trade ecosystem, particularly for investment in science, medical science, innovation and technology activities. Developing a strong and active early stage funding market is essential to assist with the evolution of robust ideas into successful businesses.
The WA Government is looking to support or partner with VC firms to increase early stage funding available to both local scale-ups and start-ups. Run by Deloitte, the market sounding process will determine how the WA Government can best encourage greater VC investment.
Boosting investment in science, innovation and technology, including early stage funding for local start-ups and scale-ups, is essential to the growth and diversification of WA's economy and the creation of jobs across sectors.

4.8. Investment pathway development
In Australia, the federal, state and territory governments (including the WA Government) have facilitated innovation and commercialisation through support for innovation precincts and hubs, research and innovation partnerships and collaboration networks, and industry events and training programs. Funding programs across jurisdictions have focused on support and access to capital for researchers, start-ups and small to medium enterprises
(SMEs) to collaborate with publicly funded research organisations, as well as investment in new products and services that are at a minimum viable product stage or beyond.
As the priority sectors in each Australian jurisdiction are similar, investing in a complementary and coordinated way with state and territory initiatives will help to create beneficial reinforcing outcomes and ensure the additionality of the NRF. In considering its investment mandate, the NRF should be broadly cognisant of other federal, state and territory government initiatives aimed at supporting Australian innovation, including areas of
R&D funding, existing investment funds, investment attraction activities and collaborative partnerships within priority areas.
NRF funding should seek to encourage private investment through reducing financial risk, particularly for projects where there is a degree of market uncertainty or high technology risk, and assist with the scaling up and development of export capacity. Flexibility could be maintained by not requiring ‘innovative’ activities to be at the ‘cutting edge’ of

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R&D8.Crowding-in of private investment could be supported through assisting business with demonstrating demand for new or innovative products and processes, as well as decreasing financial risk for individual projects.
Clarity and ensuring high visibility funding activities, would assist in ensuring both business and private investors are aware of opportunities to attract NRF funding.

4.9. Government policy priorities
Consideration of the government’s policy priorities should be an objective of the NRF’s investment function. However, those priorities should be set with broad parameters, leaving the NRF free to determine how best to achieve them through its investment function.
To ensure the NRF’s investment function remains aligned with Government policy priorities and public interest over the long run, the NRF’s investment framework should be subject to periodic reviews. As part of the review process, the NRF should be assessed on long-run returns compared to market benchmarks, such as the 10-year Commonwealth government bond rate. When making this calculation full benefits and costs to society should be considered (i.e. benefits such as lower prices from efficiency improvements, as well as costs such as subsidies, tax breaks: as mentioned in the medical science section, and grants).
The NRF’s mandate should also ensure overlaps with funding provided by existing
Corporate Commonwealth Entities such as the Clean Energy Finance Corporation and
Australian Renewable Energy Agency foster cooperation, not competition, preventing duplication and unnecessary costs.

5. Investment mandate
5.1. Benchmark rate of return
The benchmark rate of return needs to be set with some degree of flexibility to allow support to businesses to ensure success over the long term.
Potentially a lower rate of return should be required on investments that have WA
Government support to enable specific objectives with the priority areas i.e. – lower rate of return on green energy transition projects that are co-funded or supported by federal, state and territory government through policy directions. Also projects identified as providing strategic sovereign capability or supporting strategic objectives, such as projects that enhance the Australian ESG position and projects that offer catalyst skills or long term job creation outcomes could potentially have a lower benchmark rate of return.

5.2. Investment limits
The NRF will need to have some degree of flexibility so that limits can be altered in accordance with sovereign needs or in response to specific events. Custom-built contracts
8
Nous Group, Policy directions to increase business investment in innovation, 18 September 2019, available at:
https://www.industry.gov.au/sites/default/files/2020-02/policy-directions-to-increase-business-investment-in-
innovation.pdf

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that build a sense of partnership between industry and government and factor in the non- financial returns of the investment will deliver research and innovation benefits to all
Australians.

5.3. Returns, financial instruments and other investors
Considerations to inform the portfolio rate of return
Given the objective of the NRF is to catalyse developing industries and crowd-in funding from private sector investors for priority areas of the economy, the rates of return targeted should be below typical market returns for similar investments. It is also expected a fund like this would have fairly high risks and generate volatile returns, given that it will support early stage R&D as well as commercialisation. The targeted portfolio rate of return should be cognisant of this and be set over a sufficiently long period of time.
Adopting a rigid portfolio rate of return target may be sub-optimal for achieving the objectives of the NRF, as it may prohibit the NRF from investing in projects that have the potential to negatively impact on the ability of the NRF to meet its return target at a point in time, but which otherwise have a strong business case for investment. Conversely, investments that are not actually required to support industry development, but have a higher return, may be made to assist in meeting the target.

Factors and considerations to inform the setting of acceptable risk across the priority areas
Risk needs to be weighed up against the potential benefits of the project and the nature of the risks. Overall, the NRF needs to undertake detailed due diligence on projects to ensure that the projects have a strong probability of being delivered.
The NRF should be willing to accept relatively high levels of risk to assist in catalysing industries in the priority areas. It should also be willing to accept risk associated with technologies that have not been fully tested.
However, as an Australian Government entity, the NRF should have a very low risk tolerance for probity, governance and reputational risk. If these risks eventuate it could materially undermine the NRF’s goals.

Preferred concessional offerings
Different offerings should be considered based on the nature and cashflows of the project.
A list of questions/criteria should be developed to determine the most appropriate type of investment.
For projects with low and uncertain initial cash flows, equity investments are likely to be more suitable (or deferred payment loans). However, the requirements with equity investments for ongoing oversight to limit reputational risks will be higher than for other forms of investment. It may be challenging to be able to identify suitable people to be appointed to the boards for equity investments in projects to provide that ongoing oversight. There may also be conflicts of interest in NRF representatives being appointed to boards.

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Debt investments will be more passive and will come with a clearer delineation of the expectations of the NRF, and how default events will be managed. However, standard debt investments require stable cash flows, which is not likely to be the case for start-up investments.
Strategically identified projects that align with Diversify WA objectives should be given concessions including a higher level of risk tolerance and a lower rate of return.

Mechanisms and types of finance to attract co-investment from the private sector
The best way to attract co-investment will be to fill the gap between the market required return and the estimated return. Also, as mentioned above, the type of investment will be dependent on the nature of the project. Minor, non-voting equity investments (e.g., up to 20 per cent) could attract co-investment in start-ups. Another option could be through concessional loans, which would reduce investment hurdle rates through lowering the cost of finance or by improving cash-flow.
The NRF could also invite expressions of interest for each of the priority areas. The invitations would detail criteria and response requirements for which parties would need to submit proposals that can then be assessed against the relevant criteria. After the assessment process, projects would either progress, be rejected or seek further information.
This could be a standing invitation to the market, so entities are able to submit proposals at any time.

Suggested investment options:
Partnership Models
 The NRF should invest in strategic innovation priorities established for industries in
existing federal and state and territory strategies and policies,
 Shared investment or co-investment models with industry, such as the New Zealand
joint venture between government and industry, that invests in long-term innovation
programmes to increase the market success,
 Other Investors, partnering with shared impact with combined funds.
Grant Programs
 Investment across the business maturity curve, including concept inception through
to maturity. With varied support across the maturity curve.
Equity Investment
 Invest in scalable start-up businesses that will enable a greater rate of return with a
high investment premium to allow the Fund to support ongoing activities.
Guarantees
 Investment security guarantee, loan guarantee, risk sharing guarantee.
Low-Cost Loans
 Low-cost loans to projects with outcomes that align to state and territory objectives,
such as low-cost loans for the purchase of capital equipment.

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6. Complementary reforms
6.1. Non-financial barriers
Government has a key role to play in unlocking opportunities for value-add, growth and diversification across the economy by removing financial and non-financial barriers. Key non-financial barriers currently facing Australian industry include:
 timely access to key infrastructure and project-ready land, including shared or
common-user facilities/infrastructure,
 access to skilled workers,
 limited advanced manufacturing capability,
 inefficient regulatory frameworks and practices, creating long lead times for
businesses to establish operations,
 regulatory barriers limiting the commercialisation and uptake of new innovations and
technologies,
 procurement pathway impediments,
 limited awareness in some markets about Australia’s competitive advantages,
strengths and industry capability, including positive ESG credential,

6.2. Non-financial mechanisms of support
 Improving the effectiveness of government policy and processes that affect
commercialisation, such as procurement and intellectual property policies, and
removing barriers to trade and investment, such as permitting and compliance
processes, will support the objectives of the NRF,
 Policy and regulatory settings in priority areas should also be examined to identify
gaps and ease regulatory burdens.

6.3. Complementary reforms
Given that the NRF’s priority areas are generally aligned to federal, state and territory government priority industries, the NRF could assist in delivering Australian Government priorities by:
 Providing technical expertise or sharing research / information regarding priority area
development opportunities, as well as advice on financing, implementing and
prioritising reforms,
 Potentially supporting and funding state and territory priority projects in the relevant
areas, or projects that are ancillary to priority projects, and
 Supporting efforts to attract private investment into projects that are also capable of
supporting related Australian Government priorities, such as decarbonisation.
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6.4. Potential other levers
The NRF can support the delivery of a range of short and long-term economic outcomes through strategic and informed investment that leverages the nation’s competitive advantages and capitalises on global trends.
For WA, Commonwealth investment in the below areas would deliver significant cross- sector benefits, improving value and productivity across the economy and increasing industry competitiveness:
 Optimising visa processing and ensuring the nation’s migration system complements
the skills and capabilities of workers,
 Investing in infrastructure and land development, including through strategic
initiatives such as hydrogen hubs, to enhance opportunities to rebuild Australia’s
industrial base,
 Increasing research and development investment closer to 3 per cent of GDP and
supporting the development of critical technologies and commercialisation enablers,
 Enhancing opportunities for trade, investment, global partnerships, and talent
acquisition, including by harnessing key international partnerships such as the
Quadrilateral Security Dialogue, Artemis Accord, Square Kilometre Array and
AUKUS.
WA considers the continual development of strong and diverse investment and trade networks and geopolitical relationships as being particularly critical to support the objectives of the NRF (in addition to the key enablers for economic growth detailed above).
International investment and trade has long been the lifeblood of the Australian economy, providing the capital and scale of demand needed to sustainably develop new industries and improve the productivity of existing ones.
Foreign investment and trade also promotes stronger connections with overseas markets and provides access to the skills, new ideas and innovative technologies needed to help
Australian industries remain internationally competitive.
As the world’s supply lines are being redrawn in the wake of the COVID-19 pandemic to safeguard against future supply shocks, Australian industries have a unique opportunity to increase their participation in more diversified global supply chains. This highlights the need to continue to deepen and expand the nation’s investment and trade networks to capture this generational opportunity.
To this end, the WA Government is significantly investing in its network of overseas investment and trade offices, establishing a presence in Frankfurt, Kuala Lumpur, Ho Chi
Minh City and Manila. These new locations will complement the WA Government’s existing offices in Jakarta, Singapore, Shanghai, Mumbai, Dubai, Tokyo, Seoul, London and Perth.
The WA Government’s international engagement activities through this expanded office network are guided by a biannual WA Investment and Trade Plan. It provides a whole-of- government plan reflecting a strategic, cross-agency approach to investment and trade.
Importantly, the plan demonstrates how the WA Government is focusing on activities where
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government action is required to unlock diverse investment and trade opportunities to generate renewed and sustained economic activity and local jobs.
The WA Government values its close working relationship with the Australian Government’s
Department of Foreign Affairs and Trade and welcomes further opportunities to collaborate to enable the diversification and long-term prosperity of the national economy.

6.5. Driving the ecosystems for sustainable industry growth
Well-designed economic policies will create an environment that is favourable to innovation, creation of new industries and improving the adaptability of existing businesses. To ensure the right ecosystems for sustainable industry growth are in place, a national dialogue should be promoted and the NRF should be permitted to inform the state and territory governments about regulations that hinder Australia’s high value market opportunities. Also, the fostering of the right ecosystems for sustainable industry growth signals stability to the market and will encourage investment.

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