Since the 1980s and early 1990s, there have been few constructive developments towards a comprehensive and coherent productivity-enhancing agenda. Labor governments have often provided rhetorical support but have fought over whether industry policy represents a new protectionism or market-enhancing development policy. The Coalition in opposition and in office has generally opposed the idea of industry policy, but has continued to support ad hoc and costly policy interventions. Australia's 20 years without a recession has disguised the need to reconsider industry policy and questions of economic diversity. This article argues that dealing with problems of economic structure - particularly resource dependence and climate change adaptation - requires a revitalisation of the industry policy debate. It tracks the theory and practice of industry policy in Australia and concludes that advocates for industry policy must formulate new policy ideas outside the framework of the traditional divide between intervention and free markets.