The federal government has begun the formation of its flagship $15 billion manufacturing fund, with legislation introduced to Parliament and discussions with industry to kick off next week.

The National Reconstruction Fund, a key election pledge from Labor, will provide funding to tech areas including medical science, renewables and low-emission technologies, and critical technologies such as fintech, artificial intelligence, robotics and quantum computing.

The bill laying the groundwork for the formation of the $15 billion fund was introduced to the House of Representatives by Industry Minister Ed Husic on Wednesday.

“Around the world, industry policy is being remade to shore up local manufacturing capability,” Husic said.

“Now, Australia can be a bystander or it can be a driver of change. We want to see Australia once more at the forefront of technological innovation and advanced manufacturing to make sure Australians benefit from our homegrown ingenuity.”

Husic also delivered a National Press Club address on Tuesday afternoon, laying out the federal government’s industry policy approach.

He said the National Reconstruction Fund will be governed by an independent board, and will be based on the model of the Clean Energy Finance Corporation.

“The National Reconstruction Fund is one of the largest peacetime investments in our country’s manufacturing capability in living memory,” Husic said at the National Press Club.

“It will help drive economic development in our regions and our suburbs, boosting our sovereign capability, diversify the nation’s economy and, importantly, help create secure jobs.”

Through the fund, the federal government will partner with institutional investors, private equity and venture capital to offer loans, guarantees and equity to Australian companies.

It will achieve a return to cover the Commonwealth’s borrowing costs, and is expected to have a positive underlying cash impact eventually.

In the lead up to the May election, Labor outlined seven priority areas which the fund will be directing its investment: resources, agriculture, forestry and fisheries, transport, medical science, renewables and low-emission technologies, defence and critical technologies.

The government will soon be establishing a reference group to guide the establishment of the fund, featuring leading industry and investment figures. This group will also zero in on the fund’s investment mandate.

Public consultation on the fund has also opened, focusing on further defining the scope of the fund and how it will make investment decisions.

Companies seeking funding through the new initiative will need to have a business plan laying out how they will establish a solid company generating returns and creating secure, well-paid jobs, the Minister said.

“The NRF is the connective tissue between human capital and technological potential that shapes my portfolio,” Husic said. “It is one mechanism through which we will realise our ambition to better connect science and industry, to ensure Australian-made discoveries can be commercialised and scaled in our nation.”

“The Albanese government has faith in Australian know-how; faith in our people; faith in our ability to build things here. The NRF tomorrow is a down payment on that faith, with many more in the years to come.”

Husic said governments should not be afraid to pick winners, and this is what will be done through the $15 billion fund.

“Governments can and should strategically and thoughtfully invest in the industries of the future,” he said.

“When we hail the growth of industries in other parts of the world as an example of what can be done here, just know that governments do act strategically and methodically to nurture and grow those industries. And this is what we intend to achieve through the National Reconstruction Fund.”

The new fund is a significant departure from the previous Coalition government’s industry policy, which was led by a large manufacturing fund that offered cash in the form of grants, and saw the Prime Minister having final sign-off on all of the grants.

The new fund will be partially funded by savings from writing off further cash put aside for the Coalition’s fund.