18Economic Resilience Program

18 Economic Resilience Program

(1) The Corporation shall make available up to $1 billion for investments directed towards supporting manufacturing or logistics businesses to: (a) respond to market disruption; or (b) maintain and build industrial capabilities that contribute to Australia’s national interests, particularly Australia’s strategic or economic resilience.

Note 1: Due to the operation of section 63 of the Act, financial accommodation may only be provided for purposes relating to any of the priority areas of the Australian economy.

Note 2: Under the Economic Resilience Program, the Corporation will make impactful investments which contribute to Australia's strategic or economic resilience, including in sectors where some level of domestic capability is a necessary or efficient way to protect the economic resilience and security of Australia and the private sector will not deliver the necessary investment in the absence of government support. This will likely reduce the Corporation’s ability to crowd in finance under the Economic Resilience Program.

(2) Investments under the Economic Resilience Program must be financial accommodation in the form of a loan with zero per cent interest.

Note: There is no benchmark rate of return for the Economic Resilience Program because investments under the program involve the provision of zero interest loans.

Risk level (3) In relation to investments under the Economic Resilience Program, the Corporation: (a) must undertake appropriate due diligence and credit and investment risk assessment processes; and (b) must seek to develop a portfolio of investments that is diversified and has, in aggregate, an acceptable level of risk, having regard to the terms of the Act and the objectives of the Economic Resilience Program under subsection (1); and (c) may determine that the acceptable level of risk of the investments, including both the aggregate level of risk and the risk of individual investments, is higher than for the General Portfolio.

Note 1: Investments under the Economic Resilience Program may increase the Corporation’s overall exposure to risk.

Note 2: This reflects the different risks of investments made under the Economic Resilience Program compared to those under the General Portfolio, including concentration risks and regulatory risks.

(4) For subsection (3), the level of risk deemed acceptable by the Corporation may be higher than the risk tolerance of commercial banks and private sector investors, if this higher risk tolerance supports the objects of the Act and this instrument. (5) The Corporation must periodically review the Corporation’s investment and operational practices for the purposes of managing the risk of the Economic Resilience Program over time.