HOST, NICK RHEINBERGER: Tim Ayres is Labor Senator and Assistant Minister for Trade and Assistant Minister for Future Made in Australia and joins us now here at ABC llawarra, Tim Ayres. G'day.

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

HOST: Let's talk about the tax cuts. Certainly, surprising many people. A lot of people will say thank you, but others might quiver with a handout when we are in structural deficit now and in the future. What's the justification for more tax cuts now?

AYRES: Well, we've always said that we'll do what we can in a budget context to support Australians where they need support. We want people to earn more and keep more of what they earn. You referred to the first movements to wages for many people in decades, people in aged care, very significant wage increases under this Government, wage increases right across the economy.

When we were elected, there'd been five quarters of real wages, going backwards and in the last five quarters we've seen wages moving ahead. So, we want people to earn more. We are also determined to work through the tax system to support people. That means if you're on an average ordinary full-time salary, earning around about $100,000 a year the tax cuts, that we'll deliver for every single taxpayer, will be an amount to about just a bit over $2,200 a year.

The cumulative effect of what we've announced for the forwards means that next year people on that rate can expect a bit more than $2,500. Following the second tax cut, we've announced a tax cut of around about $2,800 to $2,790. So, it's a modest improvement on the tax cuts that we had already announced but its cumulative effect means that people get a fair shake out of the tax system.

HOST: Now, there's another reform that's interesting that some economists have described as being very important. The banning of non-compete clauses. How does that work and how would that improve productivity?

AYRES: Well, I think many of your listeners wouldn't have heard of, of these things or would think that non-compete clauses only apply to high income workers where in fact, there's about 3 million workers in the Australian Labor market who are affected by these. Hairdressers, fast food workers, workers in hospitality, people working in sales where their contract of employment basically says you can't go and work in an adjoining business that does the same thing.

So, if I give you an example without naming them, the world's largest fast-food retailer often says that if you're working for them in a particular store, you can't go and apply for a job with a higher wage at one of their competing franchises and what that does is it holds back people from being able to move from one job to a better paying job.

HOST: You're talking about non-compete causes in McDonald's?

AYRES: Well, as I said, Nick, I wasn't keen to name.

HOST: Well, you know, I think we need too, because it's a lot of people in those jobs, including a lot of teenagers.

AYRES: I'm talking about my personal experience, Nick, and I just assume it applies to all of these franchises. There are many people working for big firms and small ones. Where this applies and what it does is it holds back movement in the labour market. It stops people at a practical level from say, being able to move to a firm that's closer to their home, that offers them a better outcome or offers them a promotion. It's holding back ordinary Australians in the labour market.

We are abolishing those provisions for people who earn under $180,000 a year. So, that if there are people who have non-compete causes who are earning many hundreds of thousands of dollars a year and that's a matter between them and the firm who engages them. But for young people in particular, we want them to be able to aspire to getting a better job. We want to see more movement in the labour market. The modelling shows that similar reforms mean that wages move by about 2% across the economy. This reform, there's modelling from the Productivity Commission and others that indicates that it will have an effect of about 4%.

HOST: But because there's effectively more competition between employers.

AYRES: Yeah, but often competition is used to push workers wages down. We are removing anti-competitive behaviour that means that workers can have effectively, firms competing for the best workers and giving people a fair shake. It’s a reform that no previous government has done or contemplated. It's going to make a big difference and it's going to make a difference to people who are starting out in the labour market, starting out with their first job or their second job and that's going to make a real difference.

HOST: Ok, let's talk about more global issues. I mean, after all, you are Assistant Minister for Trade and a Future Made in Australia. As there's so much uncertainty coming from a country which used to be our good friend and with whom we've signed a free trade agreement, where are the other opportunities around the world? For Australian manufacturing, besides the U.S.

AYRES: There is two parts of our response, Nick. The first is, of course, we'll be focused on the bilateral relationship with the United States and you've seen what the Albanese government did in terms of stabilising the trading relationship with China. For example, over the course of the last three years, instead of yahooing on the domestic stage and using megaphone diplomacy, what we've engaged in is effectively acting in the national interest.

We'll continue to do that at the bilateral level with the Americans, but also look for new markets and new market access around the world. Working with our partners, you can expect that we will continue to provide effective advocacy for Australia. Australia is at the top table now instead of isolated, which it was under the Morrison government. Australia's engaging effectively in our region and around the world in a way that's focused on the national interest.

The second part of this, which is just as important, is it's, yes, about diversifying the markets that we sell into, but it's also about diversifying the Australian economy and rebuilding our manufacturing capability, to make sure that we are selling more diverse products and services into the world. That has the effect, of course, in areas like the one that you're broadcasting into, of rebuilding manufacturing capability in Australia and creating good jobs in the regions and outer suburbs. So, two parts of our agenda, okay, there's diversification of trade, but unashamedly, we're the most pro-manufacturing government in Australian history.

HOST: Mr. Ayers, just give me one moment. I do have some traffic information. Just have to announce there's a crash on Mount Ousley around the stand. We believe it's heading south down the hill. We don't have any more info on live traffic yet, but just be aware of that one heading into Wollongong. In the meantime, I've got Tim Ayres, Assistant Minister for Trade at the moment. Let's talk about green hydrogen. This was supposed to be one of the big areas in Australia where old jobs would transfer to green jobs. The market enthusiasm for it is evaporating. Is there anything in the budget last night which directly addresses the future of green hydrogen?

AYRES: Well, there's certainly in our Future Made in Australia package, which was in the budget last time around and was legislated just a few months ago support for hydrogen production in Australia. There are tax credits, which doesn't provide for grants in advance of production. It's about rewarding for manufacturing here in Australia. An incentive that applies after you've manufactured.

There's a lot of your listeners will hear from our opponents in politics who just want everything to fail. So, if there's a firm that decides that they're not going to proceed with a particular hydrogen technology, Peter Dutton and Angus Taylor will be celebrating it like it's Christmas. Because for them, they are trying to talk the capability down. I know a firm close to where you're broadcasting from, Hysata, for example, in Wollongong is creating good jobs now, building some of the world's most efficient hydrogen electrolysers to sell into supply chains where steel is being manufactured, where iron is being manufactured, or it's being used in other production processes. So, everybody's working very hard.

It's not, linear progress in terms of hydrogen but we do know that there's enormous research effort, there's enormous product development. The choice for Australia is will manufacturing happen in Australia or is it going to happen offshore?

It's a key technology for the future of our iron and steel industries, for the future of our critical minerals processing sector, which is one of the areas in the Future Made in Australia bracket of manufacturing that we are determined to make sure that it uses its comparative advantage to build a manufacturing future for Australia. So, hydrogen's got its place, but we’ve also got our Future Made in Australia agenda more broadly supporting critical minerals processing in Australia, iron and steel manufacturing in Australia. Of course we've backed that in with our $2 billion package for the aluminium sector and our multi-billion dollar intervention to secure the future of Australian steelmaking in Whyalla. And of course, our local content announcements to make sure that big projects are using Australian steel.

HOST: All right, Tim Ayres, thanks for joining us this morning.

AYRES: Good on you, Nick.

ENDS.