Weekly Reports | Apr 19 2024
Beneficiaries of the Future Made in Australia Act; rising excesses for general insurers; plus impacts of grocery market inquiry.
-Companies benefiting from the Future Made in Australia Act
-A watching brief on rising excesses for general insurers
-Impacts of Senate Select Inquiry upon the grocery market
By Mark Woodruff
Companies benefiting from the Future Made in Australia Act
The Federal Government’s Future Made in Australia Act will look to leverage Australia's competitive strength in natural resources, explains Macquarie, and aim to accelerate momentum in advanced manufacturing and clean energy projects domestically.
As part of the ongoing reworking of global supply chains, there will be a focus on greater sovereignty over Australia's resources and critical minerals. Domestic investment to build and fast-track new infrastructure will be incentivised, new technologies will be enabled, and training will be implemented for a clean energy workforce.
The Act will focus on building critical green industries, like green metals (e.g. rare earths mining and processing), green hydrogen, and advanced renewable manufacturing, such as battery and solar.
New initiatives will be launched and several existing initiatives will be consolidated under one umbrella.
One existing initiative is the $15bn National Reconstruction Fund which aims to support projects that create secure well-paid jobs, drive regional development, and invest in Australia’s national sovereign capability.
From these existing initiatives, Origin Energy ((ORG)) and Orica ((ORI)) are potential beneficiaries, notes Macquarie, via their joint investment in the Hunter Valley Hydrogen Hub with possible support from the $2bn Hydrogen Headstart project.
AGL Energy ((AGL)) is also vying for a share of the $1bn Solar Sunshot manufacturing program, explains the broker.
AGL and SunDrive (an Australian solar company) have recently partnered up to explore the possibility of establishing a solar manufacturing facility at the former Liddell coal plant’s site in New South Wales’ Hunter Region.
The Solar Sunshot program is attempting to build a pathway to the commercialisation of local solar photovoltaic innovation.
The analyst also expects the critical minerals resources sector will benefit from a $2bn expansion of the Critical Minerals Facility.
The challenge for Australia when considering domestic advanced manufacturing, explains Macquarie, is competing against the cheaper offshore alternative, particularly given higher capital and labour costs in Australia.
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