15 March 2023

Aaron Stevens, Host: Good morning. Boodles Big Breakfast and you've probably heard a bit about the National Reconstruction Fund. If not, then no doubt you're going to hear a lot more about it over the next few weeks as it's debated in the Upper House. The LNP can see the benefits for a region like Central Queensland. I spoke to Colin Boyce, Member for Flynn, earlier this morning, but they still have their questions. So, let's find out more about it and how it can benefit a region like ours. I'm joined by Tim Ayres, the Assistant Manufacturing Minister. Thanks for your time.

Tim Ayres, Assistant Minister for Trade and Assistant Minister for Manufacturing: Really good to be on the show, Aaron.

Aaron Stevens: So just give us an overview of the National Reconstruction Fund.

Assistant Minister: Well, can I describe the problem for Australia first? The problem that the Albanese Government is dealing with here is that manufacturing has declined as a share of our economy. We're down to less than 7 per cent of GDP in manufacturing. Our exports to the world are becoming less and less complex and that means good jobs are flooding out of the regions, in particular. So, it's having an impact on good blue-collar jobs in the region. It means that we're losing the industrial capability to be able to do the things that we need to do, not just for our economic future, but to make sure that Australia is prosperous and safe in the region of the world that we live in. So that's what this is directed towards. The fund itself - $15 billion for manufacturing - is the largest peacetime offering in Australian history to re-industrialise the economy. It is that serious. Our ambition is to be building factories, commercial opportunities for technology that's developed in Australia, to be manufactured onshore, to be building factories in our outer suburbs and in our regions. It's a very big endeavour and we're absolutely committed to doing it.

Aaron Stevens: It's interesting, isn't it? Because if there's one thing we learnt during COVID it was the fact that we needed to return manufacturing to a local level.

Assistant Minister: Absolutely. So, the lesson that we've learnt – COVID, the challenging geopolitics of the region that we live in, Russia's illegal invasion of Ukraine, and the impact that that's had on energy prices, not just for households, but for Australian manufacturers - all these have made it absolutely clear, if you didn't know already, Australia needs to be a country that makes things and we committed to this great proposal to bring back manufacturing 18 months out from the election. It will be - it's a fund that we took to the election. It will be $15 billion, that is not there for grants, it's not there for handouts to industry. It is there to co-invest, to provide loans, to provide guarantees. So, it will work with private sector investors to invest in the industrial capability of the future.

That means that there will be a return to the fund. So instead of just throwing a grant at a firm, this will provide a loan that will provide a return, like the Clean Energy Finance Corporation or the Northern Australia Infrastructure Fund. And that means that this fund will grow over time and be a perpetual capability that we will hand down to future generations so that we continue to invest in advanced manufacturing opportunities and in the heavy manufacturing opportunities into the future. This will create blue collar jobs. You don't build factories in the inner suburbs of Brisbane or Sydney or Melbourne. You build factories in the outer suburbs and in the great industrial regions like the region that your listeners are in now. This is a huge opportunity for regional Australia.

Aaron Stevens: So, are there any particular types of industries that are being targeted?

Assistant Minister: Yeah, we're focussed on a set of seven industry sectors that really matter for the future of our national economy. So, mining and mining technology for the region that you are in, agriculture and food are two of the sectors that we're focused on. So, if you think about agriculture and mining, it's not just about mining and exporting the raw product, the commodity overseas. What we need to be able to do as a country is to go up the value chain, because that's where the big jobs dividend is.

So, the Prime Minister talks about lithium; we export lithium ore all around the world. We don't really process lithium in Australia, let alone make the lithium-ion batteries that the world is going to need for as the demand for electric vehicles explodes. Now, we need to be in the business of making lithium-ion batteries, and that's going to require new industrial capability. In food, we export raw agricultural products all around the world. Australia has to be in agriculture terms - yes, we need to expand market access and one of my jobs as the Assistant Minister for Trade is to fight for Australian market access right around the world for our agricultural products. But we need to be exporting complex food products to the world as well.

Our capacity in canning fruit, in producing meals, in turning wheat into flour, into biscuits into more complex food products - that has declined rather than increased. Some of your listeners will remember all of the factory capabilities that we used to have in food in Australian country towns.

Aaron Stevens: Absolutely.

Assistant Minister: That has all gone. And we are going to need to get back into that. We are going to need to get back into agricultural technology and manufacturing some of the great technology that's produced in Australia, and that is where the good jobs are.

So, this fund is very ambitious, but it's targeted at building the future that Australia needs, and also one of the things I'm passionate about, Aaron, is rebuilding the future of country towns. That's where I came from, was a country town. I care about good jobs in country towns and we're determined to - we're determined to rebuild that. The only question, of course, and it's a partisan point, is why on earth is Peter Dutton and David Littleproud and the National Party of the LNP, where your listeners are, why are they voting against this fund? It's hyper-partisanship. The whole Parliament should be voting for and supporting this really important national endeavour.

Aaron Stevens: Well, you've definitely pricked up some ears in Central Queensland, of course, talking mining, but also agriculture with the Rookwood Weir; we are well on our way to becoming the food bowl of Queensland. So, some good points there. How do people find out more about the fund - those budding entrepreneurs that have pricked up their ears - how do they find out more?

Assistant Minister: Well, if you've got firms out there that are developing, they've got their research and development processes, they're moving along what the boffins call the “technology readiness level”, from an invention at a university, Central Queensland University, or one of the research institutions that they might be working with, to something that is ready for production, get in touch with the Department of Industry because there will be opportunities there. Now we have to steer this piece of legislation through the Parliament.

It has cleared the House of Representatives - it's going to be my job and my Labor colleagues' job to make sure that it gets now crossbench support, because the Nationals aren't voting for it, the Liberals aren't voting for it. So, we're going to make sure it clears the Senate and then it's our intention that this fund be up and ready to go in the middle of the year and that we're building a pipeline of potential investments ready for the fund to assess.

This won't be run by politicians, this fund, it will be an independent fund, chaired by an independent director that will make assessments based on the merit and whether or not a particular investment fits what Australia needs for our industrial future. And we're keen to be out there with new factories and new industrial capability. I'm really proud of this initiative. I want to make sure that it delivers for regional Australia and for country towns, in particular.

Aaron Stevens: Rebuilding our regions - that's what it's all about. Tim Ayres, Assistant Manufacturing Minister. Thank you, and hopefully plenty of Central Queenslanders are first in line when that all goes through. I appreciate your time this morning.

Assistant Minister: Thanks, Aaron.