A new report from the James Martin Institute for Public Policy highlights the pivotal role public financing can play in shaping a more resilient, competitive NSW economy. The report was written by Simon Rowell as part of a public service Policy Fellowship at JMI while on leave from The Cabinet Office. It focuses on big economic challenges such as housing, the Net Zero transition, local manufacturing, and innovation, outlining policy opportunities for public investments that could drive long-term economic growth.

The Commonwealth Government, through the Future Made in Australia Act, aims to strengthen critical industries and ensure economic security, while the NSW Government has outlined plans to boost local manufacturing, increase housing supply and accelerate innovation. However, realising these ambitious goals will require substantial investment, which public finance could help to unlock.  =

The report underscores that while private investors may be hesitant due to risk perceptions and longer-term returns, public financing can serve as a catalyst, attracting private capital to spur market growth. The NSW Government, with its existing expertise and networks, is in a strong position to direct these funds to high-impact projects that can drive the state’s economic transformation.

“Public financing isn’t just about filling a gap. It’s about leveraging the state’s assets to catalyse innovation and foster growth in critical industries,” Rowell said. “Through a mission-oriented approach to public investment, NSW can lead the way in shaping a more sustainable, resilient economy.”

The report outlines a vision where NSW can create economic development ripe for sustainable growth, bolstered by smart public investments that can better attract private capital. Key opportunities for public financing highlighted in the report include local manufacturing venture capital funds, technology adoption programs for small-to-medium-sized enterprises (SMEs), institutional investment platforms and a NSW public investment fund that can support both economic growth and industries needed to support the Net Zero transition. These initiatives not only promise to create jobs but also help establish long-term industry resilience and domestic capability.

“Public finance is a powerful tool that can drive innovation, support local industries and ensure that NSW remains competitive on a global scale,” said Professor Libby Hackett, CEO of JMI. “We’re at a critical moment where bold, strategic investments can help support these shared objectives.”

JMI Policy Fellows pursue an independent, research-driven policy development project with strong potential to generate public value and impact. Fellows analyse a significant policy challenge, outlining bold and pragmatic policy options backed by evidence. New public service fellowships are due to commence in 2025.