A boost to Australia’s manufacturing sector should not be the “main logical and rational” response to the United States’ Inflation Reduction Act, according to outgoing Productivity Commission chair Michael Brennan, who called for a “hyper rational assessment” of industry policy.
Mr Brennan also urged industry policymakers to conceptualise the economy not just in fiscal dollar terms but as a bundle of resources, including people, technology, know-how, capital, and materials.
“If you say you want more of something, you want to create a new industry… you’ve got to remember, that, for example, the people who are going to work in that sector, they’re already doing something else and you’ve got to be absolutely sure that this is a higher value use of their labour than whatever they were doing,” Mr Brennan said.
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