InnovationAus: Industry Papers Forum Speech

Thank you very much. I'd like to begin, of course, by joining Corrie in acknowledging the traditional custodians of the land, the Gadigal people of the Eora nation, and pay respect to First Nations people in the audience today. I acknowledge the upcoming visit of my parliamentary colleague, Dave Sharma. I really do want to thank Corrie and InnovationAus for the contribution that InnovationAus makes, really with this community of people who believe in our capability as a country to do the things that we need to do to make the future that we need to fight for, for us, in what is going to be a complicated and challenging couple of decades in front of us.

InnovationAus makes a really serious national contribution. It's very welcome from the government's perspective. The quality of the capability papers last year is testament to that, and I look forward to seeing the industry papers as they drip feed out to you, it appears, over the course of the coming weeks and months.

Of course, as a country, Australia has a long and storied history of innovative manufacturing. The first steam locomotive in the southern hemisphere rolled out of the Robertson, Martin and Smith engineering works in Melbourne in 1854 - the year, in fact, that my old trade union, the AMWU, its predecessor organisation was founded here, importantly, in Sydney, not in Melbourne - a message that I always deliver to my Victorian colleagues. In 1967 Australia became just the third country in the world, behind the United States and the Soviet Union to launch its own satellite. We designed, built and launched it at Woomera in just eleven months. Today, we are still making things here, everything from electric trucks to complex medical devices and pharmaceuticals. We're still in the satellite business too. Skycraft is using satellites made in Canberra to lead a project to create a global air traffic management system.

But Australia's manufacturing capability is a pale shadow of what it was post-war. The decline began behind high tariff walls, and it fed off growing complacency about our future place in the world and in the region in which we live. When manufacturing was offshored in the 1980s and 1990s, Australia's ability to make complex things and solve national challenges decline further. The symbolic low point came in 2017 when the previous government forced our automotive industry offshore. Holden closed its Elizabeth factory, ending 69 years of local car manufacturing. In an era of growing demand for electric vehicles and the government working with the battery sector to start battery manufacturing in Australia, imagine what an asset it would have been, could have been, and should have been, to have an automotive industry with all of its capability here, to drive that. Over the past 30 years, we have lost hundreds of thousands of high-quality manufacturing jobs, school leavers who missed trade apprenticeships and engineering cadetships, startups that have shifted overseas and investment opportunities squandered. It's left us more dependent than ever on bulk commodity exports for our national income. It's made us poorer, less equal, and put downward pressure on national productivity.

The world doesn’t owe Australia anything. We must work for it with a sense of determination, optimism and national purpose. As a small, open economy in the fastest growing region of the world in human history, Australia can no longer afford to be complacent about our economic or our strategic future, or indeed about our manufacturing future. Southeast Asia is a region full of opportunity. It is our region. It is beginning two great transitions, first from low- and middle-income economies to middle- and high-income economies. Second, and related, the greatest industrial transformation since the Industrial Revolution, from high emissions economies to net zero emissions economies. Australia, in the region in which we live, stands between two futures. Ninety-seven percent of our trading partners have their own net zero targets. These trading partners need energy, low emissions manufactured products, engineering and clean tech products and the machinery to power their own net zero commitments. This is a once in a lifetime opportunity for Australia to become a manufacturing powerhouse once again, and a renewable energy superpower in the process.

As I said, Australia stands between two alternate futures. There is no middle path. The first, if we look backward and can't shift from our dependence on the current fossil fuel intensive economy, our economic complexity continues to decline, resilience declines, investment in productive manufacturing capability is directed offshore, and incomes decline. The second future, of course, is seizing the opportunity our natural resources, comparative advantage and proximity to the world's fastest growing markets gives us.

Australia has all the resources required to support the industrial and economic transition of our own economy, of our Southeast Asian region, and to contribute to the world's transformation. Below the ground, we are rich in all of the resources required, critical minerals like lithium, cobalt or graphite, iron ore, copper - everything that is required in this enormous industrial transformation. Above the ground, we have a population of smart, skilled and resilient people, the world's best renewable energy resources and a government committed to shaping change in Australia's interest amidst a rapidly shifting world. The only thing that we don't have in abundance is time to waste.

This consequential decade really matters. Australia has already lost a decade under the inertia and unending energy policy chaos of the Abbott, Turnbull and Morrison governments; a decade of disinvestment and squandered opportunity, wasted time that saw disinvestment in energy and manufacturing and left Australia weaker, less capable, less productive and poorer. The world will not wait for Australia any longer. This train is leaving the station, and it requires national leadership and policy coherence to make it happen. The Australian Government's Future Made in Australia package is our chance - our chance to diversify and reindustrialise our economy, to build a more productive, more competitive economy with more good jobs and more opportunity. With countries around the world developing aggressive approaches in this area, we have to compete. We must send a clear market signal to the investment community around the world that Australia is a good place to invest and that we are competitive. That's what drives the Australian Government's Future Made in Australia agenda.

As announced in the 24-25 budget, the government will invest $22.7 billion over the next decade through our Future Made in Australia package. There has been some commentary I noticed on the plane on the way here about the Productivity Commission report into that package. I do want to make a couple of observations about that. I say, first, that despite some of the commentary about that report, it actually fits in perfectly with the government's thinking about how we approach this challenge. But there is a requirement for rigorous, careful policy making around these questions, so that we achieve our national objectives here in a coherent and the fastest and most efficient way possible. That's why the National Interest Framework that we will legislate provides the kind of rigour and clarity to the market and to the public service about how this is going to be administered, how the national interest is going to be constructed, and provides, in my view, the most thorough going analysis of how a program like this should be executed.

I have to say there is a lot more work, a lot more rigour around our National Interest Framework than what has been applied to the Coalition's atomic energy for Muswellbrook strategy, a lot more. You wouldn't have to do much to provide more. I listened to the Peter Dutton and Barnaby Joyce show in Muswellbrook for a few minutes the other day, and I didn't persist with the whole thing.

The Productivity Commission is an important voice behind the ear of government on these questions. I don't diminish their work at all. It is interesting to see, though, the determination of our opponents and some of the opponents of national action in this area to leap upon every bit of contradictory and countervailing evidence that there is, in order to make the case for no action. My view, the government's view, is that there are a set of urgent national tasks in front of us, vital national interests that are engaged. Delay means disinvestment. Uncertainty, or a repeat of the policy chaos that we saw over the course of the last decade, means big manufacturers and the investment community go somewhere else to achieve these objectives. The purpose of the Future Made in Australia package – thoughtful, careful, well-constructed – is also to have a head-turning effect in boardrooms and amongst decision makers around the world – and it has done that work already. The amount of investment interest in Australian manufacturing has palpably lifted.

Production tax credits, which form a very significant part of the package, are no regrets measures. No regrets measures that only become eligible for participation in the tax credit scheme when you manufacture here in Australia. You know, while grants are important and form part of the government's package, it is not grants and tax credits in hope that something will change, it is only provided when it changes. And the kind of defeatism that comes from our opponents in the Federal Coalition, I think, is something that that this community, the innovation community, needs to pay careful attention to. These are the same people who, when confronted with the task of ship building and building Australia's submarines before the nuclear powered, conventionally armed submarine project was on foot, when we were talking about diesel submarines, said; Australians couldn't build a canoe. These are the people who said Australia can't build trains. They're the people who forced the automotive industry offshore. There's a complacency and a lack of a sense of urgency that underpins that kind of thinking, putting the partisan interest ahead of the national interest. That is the problem, and Australians deserve better, and Australian industry and innovators deserve better. I’m not asking for blind faith, but I'm asking for a bit of self-belief, a bit of commitment to innovation and ingenuity and a bit of commitment to what are very significant national projects and national interest requirements. There is, I think, something sad about a political party who believes that if Australia loses, that they might be able to construct a political win out of that. We deserve, I think, much better than that.

The Future Made in Australia package, in essence, is about maximizing the economic and industrial benefits of the move to net zero and securing Australia's place in a changing and challenging global economic and strategic landscape. The $15 billion National Reconstruction Fund is also now operational. It will drive public and private investment in areas considered critical for the net zero transition, as well as underwriting key sectors that boost economic security and resilience. A billion dollars in the National Reconstruction Fund is allocated to advanced manufacturing, including things like additive manufacturing, advanced composite materials and semiconductors. The government is determined to drive investment in these advanced manufacturing areas to make Australia more capable and grow the size and capability of advanced manufacturing SMEs to strengthen Australian manufacturing. That's why we've established the $392 million industry growth program for innovative enterprises who are looking to commercialise product processes and services to enable growth with specialised and sector-specific support.

Let me give you an example. We invented solar PV just down the road. The University of Sydney sponsored this event [today] but I suppose I can mention their competitors around the corner, at the University of New South Wales and at the Australian National University. Over the decades, we have failed to capture the commercialisation advantages here and the first generation of solar PV, invented in Australia, of course, now largely made in one country overseas, approaching 90% of the global market for solar PV, made in China. That is not a good outcome. Not a good outcome in terms of jobs and industrial capability here, of course, but it's a poor outcome in terms of supply chain security and energy security. The Prime Minister and Energy Minister recently announced the Solar Sunshot program, a billion dollars to make sure that Australia captures the opportunities of the next generation of solar technology. This industrial capability, once again, invented here that we should commercialize here in Australia. When that was announced, at the same time, SunDrive solar, one of our solar manufacturers, an inventor of a new, efficient, copper-based solar technology, announced its plan to build a facility at the Liddell power station. It has the potential to employ more people than the Liddell power station has employed in recent memory, and you've got two visions for that region.

One hand, advanced manufacturing, all the off-take agreements, all the certainty required for that investment to occur on one hand, and on the other hand, a potential party of government who says; whether you like it or not, in this region, we are going to build a nuclear reactor that will make electricity more expensive, cause disinvestment over the coming two decades, let alone the improbability of building on time and on budget, a nuclear power station in an economy that doesn't have the capability to do that at the moment, let alone that improbability. And, in addition, they say, as the leader of the National Party has said, we should continue to sweat our coal assets for just a bit longer. I mean, you would only say that if you had never been to Lake Liddell’s power station, there's not an ounce more, it is crumbling industrial architecture at best. It has squeezed every bit of productivity out of that particular facility. So, the improbability and the cost contrasted with an actual plan that will deliver jobs now. That's the kind of advanced manufacturing for Australia only captured if we get things right with the Future Made in Australia agenda.

We stand at the beginning of an epoch of industrialization that will fundamentally reshape our future economy. The industry policy settings in the Future Made in Australia Act will drive billions of dollars of public and private investment in all of the industry capability that Australia needs for the future here and to shape a more resilient, fairer and wealthier region, which is also in Australia's national interest. The Future Made in Australia Act, the National Reconstruction Fund and all of the Albanese government's pro-manufacturing package, which is the largest pro-manufacturing package in the nation's history, form part of our economic statecraft designed to increase resilience, deliver energy security, grow the economy and grow opportunity in our uncertain world.

None of this is old school protectionism. As a middle-sized economy on the edge of Southeast Asia, Australia can't afford the higher prices, lost opportunity and isolationism that protectionism will create. We must strengthen our industrial capabilities. And the benefits, the good jobs, the investment opportunities, the innovation and economic spillovers of doing so would accrue largely to regional and outer suburban Australia, not in our CBDs, where economic growth and economic opportunity has been concentrated. It will result in good blue-collar jobs, trades jobs, engineering jobs, apprenticeships and engineering cadetships for school leavers. The uplift in productivity and innovation that only manufacturing can deliver. Of course, we are going to have to work for it. And the appeal that I want to make to you is this: it is a national endeavour that we should all be engaged in. We are going to have to work for it. And ultimately, at next year's election, we are going to have to vote for it.

Working for it means all of us; business, government, research institutions, trade unions, the investment community – together in the national interest. That means all of us, you in the audience too. You understand how badly needed a new approach to manufacturing is and how the country will never get it from the Liberal and National parties. We need you to engage all of your talents to explain to advocate for our pro-industrial package and the jobs and innovation and opportunities and technology that will flow from it. Because despite the urgency, Peter Dutton and the Liberals and Nationals have opposed this ambition and the Future Made in Australia every step of the way.

On one hand, we have a turn towards the past, towards energy policy chaos, the offshoring of good jobs and talking Australian manufacturing down. Or this government, fighting for a Future Made in Australia, not wandering around the community, looking for an argument, but working across industry, across our communities, looking for opportunities to collaborate. And, importantly (he says at the end of a 15-minute speech) here to listen and to learn as well.

I just want to touch on just a couple of the technology areas. In April, the Australian and Queensland governments announced an investment of almost $1 billion in PsiQuantum. The investment inside PsiQuantum, a tech company, co-founded by two Australian researchers, will build the world's first fault-tolerant computer here in Australia. Quantum computing will turbocharge our ability to innovate across renewable energy, mining, metals and other industries.

Those industries will contribute to the net zero transformation, bolster national security and enhance the resilience of Australia's economy. There will be more opportunity for quantum and engagement with the quantum research community year after year as we proceed through this very challenging decade. We have a strong track record in cutting edge research and development, spanning material science, nanofabrication, semiconductor design and space technology. To ensure we stay at the forefront, the Australian government has committed in [20]23-24 $12.6 billion to research and development. The potential for productivity improvements in manufacturing is enormous. The technology-led opportunities in these advanced manufacturing areas, including artificial intelligence, are so significant, so significant for us, if we just take them. We have, as a government, sought to be bold in this area. We've listened carefully to the research community, to manufacturers who thought deeply about what is in the national interest. We have constructed the boldest, biggest, most rigorous industry policy package in Australian history - now it's our job to deliver it.

Thanks very much, really love the opportunity. Thank you.

ENDS.