Media Release - LABOR’S NET ZERO ADMISSION: NRF OFFICIALLY A LOSS-MAKING MACHINE - 4 Feb 26

The Hon Alex Hawke MP
Shadow Minister for Industry and Innovation
Manager of Opposition Business in the House

The Albanese Labor Government has officially admitted its green energy fantasy is commercially unviable, rewriting the $15 billion National Reconstruction Fund’s (NRF) Investment Mandate to lock in guaranteed losses for Australian taxpayers.

In a stunning reversal, the Government will slash the mega fund’s return target for the new $5 billion Net Zero Fund to significantly below the government’s own cost of borrowing.

This decision confirms that Labor’s signature industrial policy has been transformed into a loss-making enterprise designed to bail out green projects that the private sector has deemed too risky.

The changes shatter the original promise made to Australians in November 2023 that the NRF would generate a return for taxpayers: the fund’s original Investment Mandate required the NRF to achieve a return of 2-3 per cent above the government bond rate.

Under the new Net Zero mandate, the target has been slashed to the bond rate minus 1 per cent.

Shadow Minister for Industry and Innovation, Alex Hawke, said the rewrite was proof that the Government’s Net Zero agenda was not commercially viable.

“Labor is now explicitly directing the NRF to back ‘losers’. By setting a return target below the bond rate, they are admitting these green projects cannot stand on their own two feet,” Mr Hawke said.

“Labor is borrowing money at roughly 4.3 per cent interest to invest in projects targeting a return of just 3.3 per cent. That is a guaranteed, structural loss on every dollar spent.

“The claim that the NRF would make a profit for taxpayers was based on a false premise from day one. Now that the spin has collided with reality, Labor is rewriting the rules to hide their failure.

“This is reckless, inflationary spending. Instead of driving productivity, this decision by Labor is using money we don’t have to gamble on investments that won’t make a return.

“You don’t fix a productivity crisis by subsidising failure. You fix it by getting the fundamentals right—something this government has proven they are unable to do.”

The NRF has recently been plagued with problems and questionable investments. These include:

  • Pumping taxpayer money into several foreign-owned companies, including Arnott’s Group and Patties Food Group, producers of Tim Tams and meat pies.
  • Spending over $1 billion of taxpayer money, as at December 2025, to have created only 850 “potential jobs”.
  • Having no finalised financial, impact or investment strategies in place, as uncovered by the Auditor-General.
  • The Secretary of the Department of Industry, Science and Resources conceded that the appointment process for board member Mr Glenn Thompson involved a serious “misstep.”

At a time when Australia is suffering from a productivity crisis and rising inflation, Labor’s decision to pump billions into unviable industries will only make the situation worse.

ENDS