RICHARD GLOVER, HOST: According to the Clean Energy Council report published earlier this year, rooftop solar already accounts for over 11% of Australia's total electricity supply. Yet it seems we are far less interested in actually manufacturing the panels themselves. But an upcoming partnership could change that. The Australian company Sundrive Solar has planned a joint venture with the Chinese solar giant Trina Solar, aimed at establishing cutting edge solar manufacturing capabilities right here in Australia. Tim Ayres is the Assistant Minister for Trade and Assistant Minister for a Future Made in Australia, and he's on the line for us here on drive. Tim, good afternoon.
SENATOR TIM AYRES, ASSISTANT MINISTER FOR TRADE AND ASSISTANT MINISTER FOR A FUTURE MADE IN AUSTRALIA: G'day, Richard. Good to be on.
RICHARD GLOVER: Now some people, even people quite senior in Treasury, have always said there's lots of made in Australia. That makes sense. But the solar panels themselves do not make sense. They're so cheaply made of elsewhere. Why do you think this does make sense?
SENATOR AYRES: Well, if I can answer in three quick rationales. Firstly, every single solar panel built in the world has at its heart Australian IP, invented here in Australia, mostly at the University of NSW and the Australian National University. What we've failed to do is to commercialise that technology here in Australia. Secondly, of course, the technology is changing. This new wave of solar technology has at its heart, copper, a significant technological advance. Rather than the old silver that is, of course, very expensive and much harder to find. There are production processes that are much more capital intensive, and this is an opportunity to commercialise and to manufacture the next wave of the most efficient solar technology in the world. Finally, some of that economist criticism is correct, that it's been cheaper to manufacture in one offshore location in particular, but it's not good in energy security terms. There to be just one location that is making the world solar. We have the best solar resources on earth here in Australia. As you say, rooftop solar is absolutely taking off. We've got the highest uptake of rooftop solar. It's really important that Australia is participating at every level of the supply chain.
RICHARD GLOVER: When you say let's not depend on one country, I'm sure you're talking about China, and people would probably agree that you shouldn't concentrate on one country. That Treasury report, though, into Made in Australia, which did approve of lots of parts of the program, they said in terms of solar, there are strong trade, I'm quoting from their documents, “strong trade partnerships with places like the United States and India that can be used to diversify Australia's supply and reduce supply chain risks.” So, in other words, they're saying that manufacturing here is not the only way to get a more diverse supply chain.
SENATOR AYRES: Yes, and we should do all these things. The message from the Australian government to the business community and the investment community on these questions is diversify, build our resilience, build our industrial capability here. So, that does mean, of course, Australia will be open market trading with the world, seeking partners for these kinds of technologies. But also, this is an enormous industrial opportunity for Australia. As 97% of our trading partners shift to this big industrial transformation to net zero, Australia can be a participant and benefit with our technological edge, our comparative advantage, and now a government with the Future Made in Australia agenda determined to incentivise investments here in Australia. You know, up until the election of this government, Richard, solar technology was flowing offshore, Australian solar inventions flying offshore largely, as you say, to China. Now we've got global manufacturers partnering with Australian firms to set up new manufacturing in Western Sydney. This one facility will employ 300 people. I want to see as part of Future Made in Australia more and more and more of these kinds of investments and that's what the framework is designed to deliver.
RICHARD GLOVER: How much taxpayer money will be involved in making this work?
SENATOR AYRES: Well, there's a billion dollars in the Solar Sunshot program. Largely, it is the overall Future Made in Australia agenda. It is the biggest pro-manufacturing package in Australian history. It is largely production tax credits. What that means is it's not grants, or government money given to manufacturers in the hope that they manufacture here in Australia. It is a tax credit, so, it's knocked off their tax bill. Whether it's every solar panel, every kilogram of green hydrogen, every tonne of green iron or critical minerals that are processed here in Australia, it is no regrets measure. That is, it's only paid when manufacturing occurs here in Australia. And it's really in Commonwealth terms, a reduction in Commonwealth revenue for a series of investments that are going to change our industrial capability, change the shape of Australia's economy for the future, lift our national productivity and deliver good jobs in the suburbs and in our big industrial regions. It’s an absolutely essential piece of economic reform. It is very hard for me to understand why it's been blocked at the moment in the Senate by Mr Dutton and the Liberals and Adam Bandt and the Greens on a unity ticket against Future Made in Australia. We are going to pursue this. It's in the national interest, it's important in national interest terms, but it delivers a benefit to people in the suburbs and the regions that need good blue-collar jobs that they can depend on with us.
RICHARD GLOVER: Tim Ayres here, Labor Senator for NSW and Assistant Minister for Trade. He is the boss of the government's Future Made in Australia program. I suppose the question with this particular factory in Western Sydney, is the Australian technology so spectacular that it overcomes our natural problems with things like wage rates, that the wage rates here are higher than they are in India? Is this technology so great that it overcomes that? And still, we can still make a product that is internationally competitive?
SENATOR AYRES: Yeah. The short answer is yes and it's really important that we don't talk our capability down. It's a good thing that our wages are high. They support family incomes, support household incomes, deliver people jobs that they can count on. Our workers are highly skilled, highly adaptable, our industrial capabilities very, very strong, and we have strong comparative advantage in this area. We have the technology, the world's best solar resources. We have a growing solar market, and we've got a government that's prepared to stand with manufacturing on the side of western suburbs families, and regional families to deliver good quality jobs for young school leavers who, you know, Richard, young people want to be part of firms that are delivering good social and economic and environmental outcomes.
RICHARD GLOVER: Yeah, no, a lot of employers say that actually with this new generation is a good thing too, that they ask you about the wage rate. Of course they do. They ask you about the holidays and the sick pay or whatever, and then they ask you, what's the point of this organisation? Is it doing good in the world?
SENATOR AYRES: Yeah, there are kids who are going to be starting the HSC, I think, tomorrow. My last HSC kid finished last year, so I’m never quite sure of these dates. School holidays are now a thing that doesn't have any impact on it.
RICHARD GLOVER: I was wondering why your hair was white.
SENATOR AYRES: Now, I’m very relaxed. I'm very relaxed. But to kids doing HSC tomorrow, Future Made in Australia means for them that there will be opportunities in the sciences, in engineering, apprenticeships, that build our industrial future and have a nation building capacity. And that means for kids who are in the western suburbs or in the great industrial regions, in some of your listening area, or be working in the Hunter or in the Illawarra. That means good jobs in those communities, decarbonising the steel industry and producing green steel for our partners overseas in the mining sector, processing our minerals, adding value here in Australia, rather than just sending raw lithium or nickel ore offshore. Customers demand and it's going to reshape the economy for the future.
RICHARD GLOVER: Just finally, timetable. There will be people, people listening to this and thinking, you know, is this a job my son could get, my daughter could get. So, they've signed the memory memorandum of understanding right now between the Chinese company and the Australian company who has got the technology. When do you think it might actually happen?
SENATOR AYRES: Well, of course, all these things do take time, and I'm glad you pointed out, because it's important your listeners understand, reaching final investment decisions on these kinds of projects, getting facilities built, recruiting staff, commissioning technology, all takes time, but you've got to start at one end of the process in order to get to the other. What we've seen is, in Western Sydney and the industrial regions, factories closing down and going offshore, this government is determined to be part of delivering the investments in new plant and equipment and new factories that provide good quality jobs into the future. Approach this with confidence. But not every proposal gets through to the end, of course, and that's why our Future Made in Australia process works. It only rewards those companies that get through to the end and start manufacturing here in Australia and create good jobs, create good apprenticeship opportunities and engineering cadetship opportunities this investment and the whole program. We've got to get started, we're absolutely determined to deliver this in the interests of a strong and prosperous and peaceful Australia for the future.
RICHARD GLOVER: If you can get it through the Senate.
SENATOR AYRES: Well, these measures, just to be clear, were in the budget. The bill that is in the Senate is the first stage of legislation. What it does is apply a framework and rigour to the future government decision making. These program that we've had funded in the budget are going to be delivered in full. But there's more legislation to come, including this legislation, and I absolutely don't understand why. We've got a Liberal and National opposition that is voting against future manufacturing investment in Australia. It's very difficult to understand.
RICHARD GLOVER: Well, I guess so. The traditional argument has been a nervousness about the government trying to pick winners, hasn't it? That's been the traditional argument about this, is that when we have tried to pick winners in the past, I'm not talking about the past for the last few months, I'm talking about the past of the last few decades, sometimes they haven't gone very well at it.
SENATOR AYRES: That's the traditional argument that worked in the 1970s and the 1980s, I suppose, but we're in a new world with a new competitive environment and the idea that Australia can make its way through the coming decades in a less certain region, in geopolitical terms, where the world doesn't owe us a living, in economic terms, it's pretty hard to imagine that we can make our way through those challenges without rebuilding the industrial capability that we need for the future. That old sterile argument about picking winners, that doesn't really apply here. What the government is doing is supporting those firms that win and manufacture here in Australia with effectively tax credits, not handouts.
RICHARD GLOVER: Tax credits, yeah. Only of utility if you, if you only win, essentially.
SENATOR AYRES: That's right. We're not picking winner; we're backing them and we're backing them in a way that backs Australian manufacturing and it's just more competitive for the future. It means a lot, of course it means a lot in employment terms and industrial capability terms, but it's part of the answer to lifting productivity and to dealing with some of these big national challenges, like removing emissions from some of our industrial processes and making them more competitive for overseas markets. It's absolutely, absolutely what a good government should be doing. I'm very proud of the government's work in this area.
RICHARD GLOVER: Senator, thanks for your time this afternoon.
SENATOR AYRES: Thanks, Richard.
RICHARD GLOVER: Tim Ayres, who's a Labor Senator for this state, for NSW, and also the Assistant Minister for a Future made in Australia, ABC Radio City.
ENDS.
