HOST, SARAH FERGUSON: As Laura just mentioned, the government also wants to pass its centerpiece budget legislation, its industry policy called a Future Made in Australia. It’s a package of reforms and incentives to develop industries in the green energy transition. The $22.7 billion policy is heavily focused on the regions and is Australia’s response to the global competition of this new economy, including enormous subsidies committed by the US and other countries to power their own energy transitions. Senator Tim Ayres is the Assistant Minister for a Future Made in Australia. Senator Ayres, welcome to 7:30.

SENATOR TIM AYRES: G'day, Sarah. Good to be on the show.

HOST: Now, just a question about the argument over the motions today as we saw the coalition refuse to back the government's motion because it included peace and security for Palestine as well as for Israel. Did the government give any consideration to put a motion forward focused purely on the aggression against Israel?

AYRES: Well, I know that there were discussions between the Prime Minister and the Leader of the Opposition over the course of the weekend and early this week. Bipartisanship isn't just something that you seek to achieve because it sounds good, you do it because it matters. I've spoken to Jewish Australians and to people in the Muslim community. We all have. This is a deeply distressing set of circumstances overseas. October 7 was the most reprehensible, appalling overseas incident that I have ever seen. The distress that has been in the Jewish Australian community, the distress in the events following it, tens of thousands of people losing their lives.

Australia deserves an opposition that worked with the government to achieve bipartisanship. That is the government and the parliament speaking with one voice. Peter Dutton never rises to these occasions. He's always looking for an argument, never looking for a solution, particularly when the country needs the parliament to come together. That's what happened today. It's deeply disappointing.

HOST: If that's the case, then what was the nature of their discussions over the weekend?

AYRES: Well, I'm not a part of those discussions, of course, Sarah. I just know that there were efforts to try and encourage a bipartisan approach. When we were in opposition, we worked hard on foreign policy questions, particularly foreign policy questions that went to national security, Australia's interests overseas and social cohesion here. That is what the government has been focused on when it went to those issues, when we're in opposition, we rose to the occasion and supported propositions in the parliament that brought the country together. Remember the COVID crisis? It required that kind of bipartisanship. It's completely missing for Peter Dutton. When there is a moment where the country needs the parliament to come together, Peter Dutton's always looking for an argument and never delivers.

HOST: Let's talk about this policy that you want to get passed this week. One of the key concerns about it is that the money being provided for new projects won't be scrutinised with enough rigorous. Who's going to make the final decisions? Will it essentially be cabinet with a blank cheque?

AYRES: Well, this is the biggest pro manufacturing package in Australian history. It is there designed to meet the big two challenges that Australia faces as a country in these consequential decades. We must eliminate complacency here. We are facing a region and a world where Australia's interests aren't assured and we must make sure that in an economic security context, Australia has the industrial capability that it needs to make our way through the next challenging decades. Our partners and competitors are engaging in the biggest industrial transformation since the industrial revolution, and that contains great risk and great opportunity for Australia. A Future Made in Australia is all about making sure we win the race for investment and jobs that sets Australia up for the future.

HOST: Let me just come back to that question then. I mean, the stakes are extremely high. So, who's going to make the final decisions? That's my question. Will those decisions be made in cabinet?

AYRES: The supports that are offered in the legislation, production tax credits that are no regrets measures only firms that manufactures in Australia will receive a tax subsidy. So, that they pay less tax. Ultimately, those decisions will be based on sector assessments done by Treasury and then decisions made by government and by cabinet about the shape of supports. Largely, as I said, production tax credits, no regrets measures that only provide support, not in the hope of manufacturing happening in Australia, but when manufacturing occurs in Australia. And this legislation puts the rigor and the framework around those decisions.

HOST. So, will there be a dollar-by-dollar breakdown of where the money is spent once those decisions get made?

AYRES: Well, these are decisions about providing support for projects that will manufacturer the future. So, a production tax credit, the certain number of dollars, for example, for hydrogen production, sends a clear message for investment that will reach final investment decision and production in the years ahead. Of course, Treasury does that rigorous economic analysis to support the decisions that government makes You know, I expect that these are going to be the subject of a lot of debate and a lot of focus, but we must get started if we're going to meet the challenge.

It does what it says on the box, a Future Made in Australia is all about making sure that we rebuild Australia's industrial capability, and the benefits flow overwhelmingly to the outer suburbs and the regions that have deindustrialised over the course of the last three or four decades.

HOST: Let me ask you a specific question. Green hydrogen is an important part, an important component of this policy. What do the recent commercial decisions made by Origin and also by Fortescue, in one case to abandon, in the other to pause their green hydrogen ventures? What does that mean now for a future made in Australia as it relates to green hydrogen?

AYRES: Well, can I say two things about it? Firstly, I think it endorses the government's approach here. Production tax credits are no regrets measures. So, it's not offering funding in the hope that manufacturing will occur in this case, that green hydrogen production. Manufacturing will occur in a particular location from a particular company. It is only when that company manufactures in Australia that it receives a tax credit. So, it's the right approach and there will be projects that fail, projects that make it halfway through the final investment decision process. The Albanese government's plan is to reward those companies that manufacture here in Australia. It's not this sterile old debate about picking winners. It's supporting firms that win and produce here in Australia.

HOST: When do you think, when do you anticipate, do you anticipate that green hydrogen will become commercially viable?

AYRES: Well, it depends upon the context. There is green hydrogen that is being produced in small amounts for industrial processes right now. There is green hydrogen that is anticipated in the context of steel production processes, green iron production processes to provide energy in vehicles. It will meet the timetable that the technology and the economics determine. The Albanese government's a Future Made in Australia package will support those projects that succeed, and it sends a very clear investment signal around the world. We want the world's investment community and the best manufacturers right around the globe to be turning their sights to investing in Gladstone in Central Queensland, in the Hunter Valley, in La Trobe, in the Pilbara, in Collie, in Western Australia, in the Upper Spencer Gulf in South Australia, to deliver good jobs and the industrial investment that Australia needs to lift our productivity, to lift our competitiveness and create good jobs that will sustain regional communities for the future.

HOST: Let me bring it back to the debate in the Senate this week, because the Greens have said they don't want gas projects to be funded by Future Made in Australia money. Have you given them an undertaking that that prohibition will apply?

AYRES: Well, the Future Made in Australia is not about funding gas or coal projects.

HOST: Those projects, but it depends on an enormous amount of energy to make all the projects fly.

AYRES: Let me make this point, getting to green hydrogen in Australia and take it, for example, in green iron production, that must engage gas as we move towards 100% green hydrogen production. The truth in technological and economic terms, is that that it is going to be required if we're going to achieve this great national objective of adding value to our iron ore exports sent overseas, to our partners in Japan and Korea and right around the world, that is going to involve some engagement with gas. I think, as I understand it, what is being asked by the Greens is that funding not be directed towards gas and coal projects. That is not the intention of a Future Made in Australia. It's off beam. We are focused on manufacturing, adding value in Australia, creating good jobs and setting Australia up for the future.

HOST: The beginning of a long and fascinating debate. Senator Ayres, thank you very much indeed for joining us this evening.

AYRES: Thanks, Sarah.

ENDS.