The federal government's signature Future Made in Australia plan would inject more than $22 billion over the next decade to boost sovereign capability in emerging industries and safeguard national resources.
While a government-led inquiry on Friday recommended laws setting up the scheme be passed by parliament, the coalition and Greens have come out against the proposal.
Liberal Senator Andrew Bragg has called the plan "flawed, incoherent and ineffective". (Mick Tsikas/AAP PHOTOS)
In a report into the laws, Liberal senators Andrew Bragg and Dean Smith warned the proposal would lead to increased influence of unions in manufacturing sectors, and urged the plan be blocked.
"(The laws are) a highly flawed, incoherent and ineffective policy proposal, which risks entrenching union involvement in government-funded projects and businesses," the senators said in the report.
"Putting such vague principles in primary legislation will have the effect of establishing government-funded and mandated compulsory unionism by stealth."
Labor would need the support of either the coalition or the Greens to get the manufacturing plan through the Senate.
The Greens said the shape of the economy was unclear under the manufacturing strategy.
Greens senator Nick McKim laid out nine recommendations for the proposal, which included guarantees the laws would not be used for coal and gas projects, as well as prioritising the electrification of homes and businesses.
Greens senators Nick McKim said the plan "can not be a future for coal, oil and gas". (Mick Tsikas/AAP PHOTOS)
"It is non-negotiable: a future made in Australia cannot be a future for coal, oil and gas," Senator McKim said.
"The government's dangerous future gas strategy can be delivered through this future made in Australia and hasten the expansion of fossil fuels which in turn will accelerate the collapse of our climate system."
The Greens had previously said it would reserve its final position on the manufacturing plan until the inquiry report was released and the laws came before the Senate.
The minor party had been locked in negotiations with the government on the issue.
Labor senator and inquiry chair Jess Walsh said projects funded as part of future made in Australia would need to demonstrate they were safe and secure workplaces, as well as working closely with nearby communities.
"(Community principles) will ensure that the public benefit of the future made in Australia agenda is genuinely felt in the community and the economy," she said.
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