Guardrails for modern industry policy

Released 21 / 10 / 2025

Industry policy objectives in Australia and internationally have become broader than traditional industry protection. Many interventions now aim to strengthen economic resilience and security, encourage domestic emissions abatement, and position industry to benefit from the transition to a global net zero economy.

However, industry policy interventions require strong guardrails to ensure they deliver value for taxpayers' money. These guardrails should include:

•    economic frameworks
•    transparent and contestable decision-making processes
•    clear methods for measuring performance
•    defined plans for ending policies that fail to perform.

This paper sets out a framework to help policy makers determine whether an industry sector does or doesn't warrant support in pursuit of the broader objectives of net zero and economic resilience and security. The framework also helps identify appropriate policy responses in either case.