National Reconstruction Fund Corporation (Priority Areas) Declaration 2026

The instrument’s central concept is the priority area, which is defined in section 6 through eight subsections. Each subsection identifies a sector of the economy and specifies the activities that count as being involved in that area. The language in each case follows a pattern: manufacturing products in connection with a particular industry or activity; processing a particular class of goods; or building or maintaining facilities that enable such manufacturing or processing. For value‑add in resources (subsection 6(1)), the activities are manufacturing products in connection with the mining industry or processing minerals, or building facilities for those activities. For value‑add in agriculture, forestry and fisheries (subsection 6(2)), the same structure applies but refers to primary industries and produce of a primary industry. Transport (subsection 6(3)) covers manufacturing aircraft, road vehicles, rail vehicles, ships, or products in connection with them. Medical science (subsection 6(4)) covers manufacturing products for therapeutic use. Renewables and low emission technologies (subsection 6(5)) is broader, covering manufacturing products in connection with renewable energy, greenhouse gas reduction, or energy efficiency, as well as recycling, waste reduction, and waste and resource recovery. Defence capability (subsection 6(6)) covers manufacturing products in connection with defence. Enabling capabilities (subsection 6(7)) lists ten categories including advanced manufacturing technologies, artificial intelligence, quantum technologies, autonomous systems, robotics, biotechnologies, and space objects. Industrial manufacturing and critical supply chains (subsection 6(8)) lists specific products (alumina and aluminium, cement, chemicals, food and beverages, iron and steel, glass, pulp and paper, fertilisers) as well as logistics, refining and smelting, waste and resource recovery, and fuel production. The definitions in section 5 are critical. Manufacturing is defined to include not only producing products but also developing, distributing, selling, providing after‑market services, maintaining, installing, storing, and assembling products. This is exceptionally broad and means that a logistics provider, a retailer, or a service centre could potentially fall within a priority area if the underlying products are in scope. Processing is defined to include refining, recycling, treating, preparing, transforming or modifying, which again sweeps widely. The definitions of animal, animal product, plant, plant product, primary industry, and produce of a primary industry track standard agricultural customs but contain no quantitative thresholds. Minerals includes substances dissolved or suspended in water on or within the earth’s crust, which could cover brine‑based lithium extraction or desalination by‑products. Space object includes any object or part that is to go 100 km above mean sea level, including parts that go only part of the way. This definition captures sub‑orbital test vehicles and components. Therapeutic use is broadly defined to cover prevention, diagnosis, cure, alleviation, modification of physiological processes, contraception, and pregnancy testing. The notes emphasise that overlap between priority areas is expected and does not make any area more important. This creates a permissive environment: an activity that qualifies under more than one area is still eligible, but the Corporation may need to decide which mandate applies for reporting or fund allocation purposes, particularly given the Net Zero Fund is limited to two areas.

The primary entity affected is the National Reconstruction Fund Corporation itself. The Corporation must exercise its powers under the Act consistently with the priority areas declared in this instrument. The instrument does not impose duties on private parties, but it creates eligibility gateways for businesses and other entities that seek investment from the Corporation. Any business that can demonstrate it is involved in one or more of the eight declared priority areas may apply for concessional loans, guarantees, equity investments, or other financial products that the Corporation offers under the Act. This includes small and medium enterprises, large corporates, cooperatives, research organisations, and possibly state‑owned enterprises if they meet the statutory criteria. Sectors that fall outside the declared priority areas are not eligible for NRF Corporation investment, which may disadvantage them relative to competitors within priority areas. For example, a manufacturer of conventional furniture products (not falling within any listed category) cannot access NRF funding, while a manufacturer of furniture for defence applications or using advanced materials may qualify. The instrument also affects the Government as the ultimate funder: taxpayer funds are directed toward these areas through concessional terms, which implies a subsidy that may crowd out private investment or alter competitive dynamics. Businesses in the same industry that do not seek or receive NRF investment may face a competitive disadvantage if their rivals receive concessional finance. Taxpayers and the Commonwealth budget are affected because the NRF Corporation’s investments are subject to the risk of default or loss; the priority area declaration influences where those risks are concentrated. The broader economy is affected because the declaration encourages capital and labour to move toward the designated sectors, potentially distorting resource allocation relative to an unsubsidised market. Additionally, foreign investors may be affected if the Corporation’s investments are subject to conditions that favour domestic supply chains or impose local content requirements. The Net Zero Fund limitation in particular means that investments under that fund can only be made in renewables and low emission technologies (subsection 6(5)) and industrial manufacturing and critical supply chains (subsection 6(8)), which may concentrate funding in those two areas while leaving the other six areas funded only from the general NRF allocation. This creates a two‑tier structure of eligibility that affects how the Corporation balances its portfolio.

This instrument creates no duties on private parties and confers no private rights of action. The duties it imposes fall solely on the National Reconstruction Fund Corporation, which must ensure that any investment it makes under the Act is in an area of the Australian economy that has been declared a priority area under section 6 of the Act. The declaration is exhaustive: the Corporation cannot invest in an economic area that is not listed in this instrument. The instrument therefore functions as a constraint on the Corporation’s discretion. The Corporation also has a duty to respect the Net Zero Fund limitation referred to in the notes, although that limitation arises from the separate Investment Mandate Direction, not from this instrument directly. The instrument does not state that the Corporation must invest evenly across all priority areas, or that it must invest in every area at all. It allows the Corporation to choose where within the declared areas to deploy capital, subject to its broader investment mandate under the Act.

For private parties, the instrument creates a right to seek investment from the Corporation if their economic activity falls within one of the defined priority areas. This right is conditional: it does not guarantee funding, does not create an entitlement to any particular financial product, and does not override the Corporation’s usual due diligence, credit assessment, and risk management processes. A business that is involved in a priority area has no legal right to sue the Corporation for refusing an application, unless the refusal is based on an unlawful or ultra vires interpretation of the instrument. The expansive definitions of manufacturing and products mean that many downstream activities, such as distribution, retail, installation, and after‑market service, are included. This effectively gives a wide class of commercial actors eligibility, but it does not give them any right to a particular outcome. The overlap note (Note 2) is significant: it says an area appearing in more than one priority area does not indicate it is more important or in greater need of investment. This does not create a right for an applicant to demand that the Corporation consider its application under multiple areas; it merely clarifies that overlap is permissible and does not automatically attract additional funding. The instrument does not create procedural rights such as a right to reasons for a declined application or a right to appeal within the Corporation. Those rights, if any, would arise under the Act or general administrative law principles.

This instrument does not prescribe any penalties. It is a declaratory instrument that defines the scope of the NRF Corporation’s investment powers, not a regulatory instrument that imposes obligations on the public. Enforcement mechanisms that might indirectly relate to the instrument are found in the parent Act and in general law. If the Corporation invests in an area that falls outside the declared priority areas, that investment may be ultra vires and could be challenged by a Senate committee, the Auditor‑General, or a person with standing under the Administrative Decisions (Judicial Review) Act 1977 (Cth) or the common law. The Corporation’s board and officers could face scrutiny under the Public Governance, Performance and Accountability Act 2013 (Cth) for improper use of Commonwealth resources. False or misleading statements made by an applicant to the Corporation about whether their activity falls within a priority area could attract penalties under the Criminal Code Act 1995 (Cth), particularly if the applicant seeks and obtains an investment on the basis of a misrepresentation. There is no specific offence in this instrument for misrepresenting priority area involvement, but general fraud and false statement provisions would apply. The instrument could also be material in enforcement actions by the Australian Securities and Investments Commission if the Corporation or its investees make misleading statements in financial reports or prospectuses about the priority area classification. The Net Zero Fund limitation, noted but not imposed by this instrument, is enforced through the Investment Mandate Direction; non‑compliance with that direction could result in ministerial direction or other governance consequences. Because the instrument is a legislative instrument, it is subject to disallowance by either House of Parliament within the usual 15‑sitting‑day period after tabling. That is a political enforcement mechanism rather than a legal penalty. The instrument may also be considered in any public inquiry by the Productivity Commission or a parliamentary committee reviewing the NRF’s performance. In summary, while the instrument itself is penalty‑free, its effect is to create boundaries that, if crossed, can trigger legal and accountability measures under other statutes.

This instrument operates as a subordinate legislative instrument under the National Reconstruction Fund Corporation Act 2023, specifically by fulfilling the requirement in section 6 of that Act to declare priority areas. The Act itself sets out the NRF Corporation’s functions, investment powers, borrowing capacity, reporting requirements, and governance. The declaration does not override any provision of the Act; it fills in the content needed for the Act to operate. The National Reconstruction Fund Corporation (Investment Mandate) Direction 2026 is a separate legislative instrument that contains additional investment rules, including the Net Zero Fund limitation mentioned in the notes to this declaration. The relationship is hierarchical: the Act is the primary law, this declaration defines the priority areas, and the Investment Mandate Direction imposes further restrictions on how the Corporation may invest within those areas. Together, these instruments form the NRF’s investment framework. The declaration may also interact with competition and consumer law. If NRF investments give recipients a substantial competitive advantage, the Competition and Consumer Act 2010 (Cth) may apply to address anti‑competitive conduct, but the mere fact of receiving NRF funding does not create a breach of competition rules. State and territory subsidies to businesses in priority areas may need to be assessed under the Competition and Consumer Act’s national competition policy principles or under intergovernmental agreements on industry assistance. The instrument could also interact with foreign investment review: if an NRF investment involves a foreign entity or a target that is a foreign‑owned business, the Foreign Acquisitions and Takeovers Act 1975 (Cth) may require separate approval. The broad definitions, particularly for minerals, space objects, and defence, may trigger national security filters under the foreign investment regime. The Customs Act 1901 (Cth) and Defence Trade Controls Act 2012 (Cth) may be relevant if products manufactured with NRF support are exported or involve controlled technology. The instrument does not affect the operation of the Fair Work Act 2009 (Cth) or workplace health and safety laws, but investment agreements may include conditions that influence labour practices. Interaction with the Clean Energy Regulator or the Safeguard Mechanism under the National Greenhouse and Energy Reporting Act 2007 (Cth) is indirect: investments in renewables and low emission technologies (subsection 6(5)) may align with or complement those regulatory schemes. The instrument does not pre‑empt or substitute for environmental approvals under the Environment Protection and Biodiversity Conservation Act 1999 (Cth). The overlap note (Note 2) recognises that the same activity could fall under multiple regulatory regimes and that the instrument does not resolve any regulatory overlap.

The instrument is the National Reconstruction Fund Corporation (Priority Areas) Declaration 2026. According to the commencement table in section 2, the whole instrument commences the day after it is registered on the Federal Register of Legislation. The source text provided shows no amendments, schedules altering other instruments, or retrospective operation. It is an original instrument as made. The instrument’s parent Act, the National Reconstruction Fund Corporation Act 2023, was enacted by the Parliament and received Royal Assent on 23 June 2023. The Act provided for the declaration to be made within a certain time frame. This declaration appears to be the first such declaration under section 6 of the Act. There is no evidence in the source of any earlier priority area declaration being superseded. The instrument does not amend or repeal any existing legislative instrument; section 4 and the schedules are present but the text does not include any schedules, so the instrument is purely declaratory. Future amendments to this declaration could be made by further legislative instruments under section 6 of the Act. The Minister could revoke or vary the declaration at any time, subject to the usual disallowance and tabling requirements for legislative instruments under the Legislation Act 2003 (Cth). If the Government wishes to add new priority areas, remove existing ones, or refine definitions, it would need to make a new declaration or amend this one. The instrument does not contain a sunset clause, so it continues in force until repealed. Because the declaration is a key component of the NRF investment framework, any amendment could have significant effects on the Corporation’s pipeline of potential investments and on businesses that have already applied or entered into agreements relying on the current priority areas. Transitional provisions could be included in a future amending instrument to protect existing investments or applications, but none are in the current instrument. Practitioners should monitor the Federal Register of Legislation for any subsequent declarations or amendments, particularly if a change of government or a change in economic policy occurs. The instrument’s citation in legal documents should refer to it by name and year, and any future version will carry a compilation date.

The source text for this instrument contains no references to any litigation. The instrument was made in 2026, and as an original declaration, there is no case law interpreting its provisions. However, the potential for litigation exists. The most likely avenue for challenge would be judicial review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) or the original jurisdiction of the High Court under section 75(v) of the Constitution. A litigant would need standing, which could be a business that was excluded from a priority area or a competitor that claims the Corporation exceeded its powers by investing in an area that does not fall within the declaration’s terms. The broadness of the definitions , manufacturing includes selling, distributing, and after‑market services; products includes software and technologies , could give rise to interpretive disputes. For example, does a company that merely installs solar panels on commercial roofs fall within subsection 6(5)(a)(i) (manufacturing products in connection with renewable energy generation) if it does not itself make the panels? The definition of manufacturing includes installing products, so installation of a product is itself manufacturing. This could be challenged as an unnatural reading or as exceeding the scope of the parent Act. The space object definition is another area of potential dispute: does a component that is part of a satellite that never leaves the Earth’s atmosphere during testing constitute a space object? The definition includes parts that go only some of the way towards or back from an area beyond 100 km above mean sea level, which arguably includes test articles. The minerals definition includes substances dissolved or suspended in water on or within the earth’s crust, which could cover water itself in some contexts, but probably not. The courts would apply ordinary principles of statutory interpretation, including the legislative purpose and the context of the Act. Litigation could also arise if the Corporation refuses an application and the applicant argues that the Corporation misinterpreted the priority area. The note about overlap (Note 2) could be argued to impose a duty on the Corporation not to treat one priority area as more important, but it is framed as a clarification rather than a binding rule. Any successful challenge would likely result in a declaration that the Corporation acted ultra vires, or that certain parts of the instrument are invalid for exceeding the power in section 6 of the Act. No such cases have been reported as of the date of this instrument.

The instrument contains several traps that practitioners and businesses should watch carefully. First, the definition of manufacturing in section 5 is exceptionally broad. It explicitly covers not only production but also developing, distributing, selling, providing after‑market services, maintaining, installing, storing, and assembling products. A business that merely distributes or installs a product may unknowingly fall within a priority area, but conversely, a business that thinks it is manufacturing in the ordinary sense may need to ensure its activities are not limited to a narrower definition. For example, a software company that sells its product and provides ongoing maintenance qualifies as manufacturing under this instrument, even if it does not produce physical goods. Second, the definition of products includes equipment, components, software, and technologies. This means that digital products, intangible technologies, and intellectual property are treated as products for the purposes of the priority area tests. A firm that develops artificial intelligence algorithms may qualify under subsection 6(7)(a)(ii) as manufacturing artificial intelligence technologies. Third, the space object definition is unusually broad. It includes any object or part that is to go into or come back from an area beyond 100 km above mean sea level, and includes parts that go only some of the way. A company that manufactures a component for a rocket that will be tested at sub‑orbital altitudes may qualify under subsection 6(7)(a)(ix). Fourth, the minerals definition includes substances dissolved or suspended in water that is on or within the earth’s crust. This could capture brine‑based lithium, geothermal fluids, or minerals extracted through solution mining. Fifth, the overlap note (Note 2) states that overlap does not indicate relative importance, but it does not resolve which priority area takes precedence for the purposes of the Net Zero Fund limitation. A project that falls under both subsection 6(5) (renewables and low emission technologies) and subsection 6(8) (industrial manufacturing) could be funded from either the general NRF allocation or the Net Zero Fund, but the Corporation must decide. The note does not prevent the Corporation from applying its own weightings or from favouring one area over another. Sixth, the definition of processing includes recycling, which is also explicitly mentioned in subsection 6(5)(b) as a separate activity. This creates potential double‑counting and may confuse applicants about whether their recycling activity is captured under multiple heads. Seventh, the instrument does not set any minimum thresholds for the scale of manufacturing activity. A very small business that occasionally installs solar panels could be said to be involved in the renewables priority area, which dilutes the significance of the declaration but also expands eligibility for investment. Eighth, there is no grandfathering provision if the declaration is later amended. A business that receives investment based on the current priority areas could find that its area is removed or narrowed in a future declaration, creating uncertainty about follow‑on investments or compliance with the original investment terms.

Compliance with this instrument is primarily the responsibility of the National Reconstruction Fund Corporation. The Corporation must ensure that any investment it makes is within one or more of the eight declared priority areas. Practically, this means the Corporation’s investment committee and staff must assess each application against the exact wording of section 6 and the definitions in section 5. They should document the reasoning that connects a proposed investment to a specific paragraph of subsection 6(1) to (8). For investments that span multiple priority areas, the Corporation should note the overlap and record which area (or areas) is the primary basis for eligibility, especially if the investment is to be funded from the Net Zero Fund, because that fund is limited to the areas in subsections 6(5) and 6(8). For businesses applying for investment, the first step is to identify all the activities they are engaged in and to map those activities against the defined terms. They should examine the definitions of manufacturing, processing, products, and any industry‑specific terms such as mining industry, primary industry, therapeutic use, and space object. Because the definitions are broad, a business should not assume it is not covered simply because it performs services rather than making physical goods. For example, a marketing company that specialises in promoting Australian food and beverage products could argue it is engaged in manufacturing by distributing and selling products under subsection 6(8)(a)(iv), provided the products are food and beverages. A logistics firm could qualify under subsection 6(8)(c) (logistics) or under a broader manufacturing definition if it stores or distributes products. Businesses should prepare a written analysis of how their activities satisfy the priority area test, and include supporting evidence such as contracts, invoices, and product lists. They should also be aware of the Net Zero Fund limitation: if their project falls within subsections 6(5) or 6(8), it may be eligible for a dedicated pool of funding, but the Corporation may require additional environmental or emissions reduction criteria. Businesses that are not in any priority area cannot apply, but they could restructure or expand into a related activity that brings them within scope. Compliance also extends to ongoing obligations: if a business receives NRF investment and later changes its activities so that it no longer falls within the declared priority area, it may breach the terms of the investment agreement. Businesses should therefore monitor the instrument for any future amendments that could affect their eligibility. Finally, because the instrument is a legislative instrument, it is advisable for both the Corporation and applicants to keep a record of the version in force at the time of any decision or application, in case of subsequent changes.