More than a quarry: Economists back Albanese’s $23 billion gamble

“This exposes Australia to a wide range of economic, social, environmental and geopolitical risks. Meanwhile, powerful corporate interests keep pressuring to extend and expand their extract and export business model.”

Among those to sign the letter are the University of Sydney’s Lynne Chester and Bradon Ellem, Monash University’s Svenja Keele and Nick McGuigan, the University of NSW’s Bronwen Morgan and Elizabeth Thurbon, and Australian National University’s John Falzon.

In the budget, Treasurer Jim Chalmers said the Future Made in Australia package would help the country become an “indispensable” part of the global economy by attracting investment in key industries and making the nation an energy superpower.

The Coalition has attacked the production credits aspect of the package, which offers up to $7 billion of tax support for the processing and refining of critical minerals, describing them as “billions to billionaires”.

Several high-profile economists, including long-time independent analyst Chris Richardson, have raised concerns the program will in effect amount to smoking “$100 notes”.

But one of the organisers of the letter, the chair of discipline for political economy at Sydney University, Gareth Bryant, said it was important to show there was support for a policy that recognised the changed global economic environment.

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“We decided to organise this letter to put on record our support for Australia joining the emerging global consensus around the need for governments to actively drive and steer the green transformation of our economy,” he said.

“We support the Future Made in Australia agenda as an important step in this direction, but we also want to push the government to make sure it is getting a return on its investments for workers, regions, and the environment, rather than handing out a blank cheque to the private sector.”

The economists said Australia had become overly dependent on raw resources that had diverted labour and investment into one small area that led to an overvalued Australian dollar, distorted fiscal policy and added to regional imbalances.

They said Australia, without a policy such as that proposed by the federal government, risked missing a “historic opportunity” to rebuild the economy.

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“We could continue exporting raw minerals (including critical minerals like lithium). But we would squander opportunities to add value to those minerals and develop a more diversified and sustainable industrial mix,” they said.

“We would remain on the losing end of lopsided trade relations, selling unprocessed resources to buy back more expensive value-added products (like transmission equipment, batteries and electric vehicles).