PAUL CULLIVER, HOST: The Prime Minister Anthony Albanese in town today along with a few other Ministers too. Tim Ayres, Senator for NSW and Assistant Minister for Future Made in Australia, is in town as well making a big announcement for green aluminium. Senator Tim Ayres, good morning to you.
SENATOR TIM AYRES, ASSISTANT MINISTER FOR A FUTURE MADE IN AUSTRALIA AND ASSISTANT MINISTER FOR TRADE: G'day, Paul, and good morning to your listeners.
CULLIVER: Let's talk through this. What are you announcing today?
AYRES: It’s a $2 billion package for Australian aluminium manufacturing, as you said, production credits. So, that is credits for every tonne of aluminium that's manufactured here in Australia. It's part of our overall Future Made in Australia package, which is the biggest pro-manufacturing package in Australian history about re-industrialising our economy, bringing manufacturing back particularly to regional economies like the Hunter.
CULLIVER: Why do you need to incentivise this with $2 billion?
AYRES: Well, it is a competitive global market out there. Economies around the world are moving to protect and ensure that investment in critical industries like aluminium processing occur in their countries. This is all about Australia acting and ensuring that two things happen. Firstly, that we've got a competitive platform for Australian aluminium manufacturing. Thousands of jobs, almost 3,000 direct and indirect jobs in the Hunter Valley from the Tomago aluminium production facility. It's a very, very significant employer and it has a big – it has an outsized impact – on in the economy because the way that it engages through its supply chain with small and medium enterprises in engineering and service provision right through the economy. We've also got in Australia, from top to bottom, from the bottom of the value chain, mining bauxite here in Australia, all the way through to finished aluminium products. Maintaining the aluminium sector in Australia is absolutely central to our national interest. Secondly, 98% of our trading partners will be demanding green or very low emissions metal products from their trading partners around the world. This supports the sector moving through to zero emissions or near zero emissions electricity. The core competitive issue in aluminium around the world is access to reliable and low-cost electricity. And this supports them to make the changes that they need to make to guarantee their future competitiveness and viability, and it guarantees thousands of jobs in the process.
CULLIVER. So, I know many aluminium producers are already moving towards this. For example, I've interviewed managers for decarbonisation with Rio Tinto previously they've gone out to market to get a bunch of new clean energy generation into the market or more specifically for their plants. When interviewing them I've said why are you doing this? And they've said because it's the right thing to do. So, if you've got big companies like Rio Tinto and the like already decarbonising, why does the government and why does the taxpayer have to spend $2 billion to make it happen?
AYRES: You're certainly right that all of those companies are well and truly on the pathway to zero emissions electricity. It's a process that they have been working on with this government and with the State government for year after year after year. You wouldn't think so if you listen to what Peter Dutton and Barnaby Joyce and these other characters say.
CULLIVER: Ok, but to the point, if they're already doing it, why incentivise it further?
AYRES: But the companies are engaged, they need to remain competitive while they do it. And this is about ensuring that they are in a platform for future competitiveness all the way through that process. It's not an endless subsidy. It is a time limited subsidy that ensures that they are competitive in global terms while they make that transition. That's what they've said to government they require in order to make this happen. And today you'll be hearing from the industry making it very plain this is exactly the support that they require, and it guarantees thousands of future jobs in the Hunter Valley. That's the core of this. It's about standing unequivocally for Australian manufacturing and blue collar and engineering regional jobs. That's what this package is all about from the Albanese government. There is a very different approach from Peter Dutton and the federal opposition. In their nuclear reactor plan they make it very clear that aluminium goes offshore under their plan.
CULLIVER: Okay, understood. And as we're talking about this is largely about the electricity produced and the cleanness of that electricity that just then allows for the aluminium smelting. Given that, why not spend just $2 billion cleaning up the electricity generation in Australia rather than giving it to the aluminium producers.
AYRES: Firstly, this goes to all of the competitive challenges and supports the industry through that process. Secondly, the government is absolutely engaged with building a modern low cost and reliable electricity system. Wind, solar, storage, peaking capacity from gas. As the Albanese government, we've done what we were elected to do. What Australians said they wanted in the last election was predictability and certainty and an effective approach to building a new electricity system. There is significant support there from the government for new generation capability. We brought new generation capability into the system. Hand over fist. The last government took four gigawatts out of the system and brought only 2 gigawatts in, we have generated more than 14 gigawatts of new generation capability and there is capacity coming online all of the time. We're in the middle of this process of rebuilding a modern electricity system after a decade of torpor and neglect. But we want to make sure as we are doing that, we're backing Australian manufacturing and making sure that future generations have got to a manufacturing sector.
CULLIVER: Okay, but I want to be clear about this. So, if you're an aluminium smelter, the only way that you can decarbonise, the only way that you can make your aluminium green is to use green electricity, renewable energy electricity. Are you effectively saying here's $2 billion to the sector through production credits? To be fair, you want to see them then invest in that renewable energy. And why is that more efficient than going to market with $2 billion and just creating more renewable energy?
AYRES: We’re doing both. We're doing both. You're right. Ultimately delivering a sustainable future for the aluminium sector is all about electricity. That's why the Tomago facility is in the place that it's in, because when it was established, it had access to cheap, reliable electricity. The government has got two jobs to do here. One is we are working with the sector and with the generation and distribution sector to deliver that electricity. But secondly, we're unapologetic about backing Australian manufacturing. This is the package that it is clear that the industry requires to exist for the future, not just for the next two or three years, but to make sure they bridge that gap to get into producing green aluminium for their trading partners overseas. All of that value-add opportunity. So, we're backing the sector to do that work. As you say, it is production credits, which are a no regrets measure. You only get the support when you manufacture the products here in Australia. It's not a grant that, you know, we provide support to a company and hope that they follow through on their commitment. These production credits are only available once the outcome has been achieved. That is aluminium manufactured here in Australia. So, it's the right package, it's a smart package, but it's very substantial.
CULLIVER: All right, Senator, I appreciate it.
AYRES And it will back the industry for the future. And the counterpoint here is from Peter Dutton whose plan is about closing the aluminium sector.
CULLIVER: Ok, we've heard that, Senator. Appreciate your time today, and thanks for visiting the region.
AYRES: Good on you, Paul. See you again soon.
CULLIVER: Senator for NSW, Tim Ayres, Assistant Minister for Trade and Future Made in Australia here on ABC Newcastle.
ENDS.
