ABC Newcastle with Paul Culliver

03 July 2024


PAUL CULLIVER, HOST: And to a Future Made in Australia. You'll remember this from, of course, the Federal Budget. This was a big centrepiece of what Jim Chalmers announced, the Treasurer, on budget night. $23 billion spent over the next decade to supercharge our manufacturing here in this country. Today the legislation was introduced into Parliament to enable the Future Made in Australia scheme to happen. Senator Tim Ayres is the Assistant Minister for Trade and Manufacturing and joins you this afternoon. Assistant Minister, good afternoon to you. SENATOR TIM AYRES: G'day Paul, terrific to be on the show. PAUL CULLIVER: Okay. So how's it going to work? SENATOR AYRES: Well this is the biggest pro-manufacturing package in Australian history. It brings together all of the Albanese Government's manufacturing strategy. Central to this, of course, is the $23 billion package that was announced in the Budget. But it sits alongside a range of our other propositions; the $15 billion National Reconstruction Fund. So this is a very significant investment in diversifying the Australian economy, reindustrialising our regions, in particular regions like your listening area in the Hunter Valley, that have so much to gain from a government that's determined to fight for the future of manufacturing.


PAUL CULLIVER: Okay. But what's it for? What are you spending it on? SENATOR AYRES: Well, the areas of focus are going to be those areas that either are big transformation projects in the renewable energy superpower area, you know, that is areas like critical minerals, areas like green iron and green steel and hydrogen. All of these of course are, you know, you don't make these investments in the inner city and the CBDs of our big cities, they are in our outer suburbs and in our

industrial regions. They are where Australia can have a genuine comparative advantage, so making sure that we're building industry for the future and making sure our industry is competitive, and they are also areas where there is an economic or national security, or economic resilience, supply chain resilience imperative here. So this is about our national economic future, it's about making sure that as we, 97 per cent of our trading partners all have net zero targets and will be demanding net zero goods. This is our opportunity, but it's also about setting us up for a more secure economically resilient future.


PAUL CULLIVER: Okay. Is this about the idea that China makes a whole lot of stuff, like solar panels, that we need, but we might not be able to get that stuff from China in the future?


SENATOR AYRES: Well, solar panels are a good example. The first wave of solar panel PV was invented in Australia at the University of New South Wales, the Australian National University, but now 90 per cent of the world solar panels are manufactured in one jurisdiction, China. That is not good for supply chain diversity or supply chain resilience either for the world, or indeed for Australia. We have an opportunity with the second wave of solar PV to make sure that we have manufacturing capability here. That also is invented in Australia. You'll have seen the billion-dollar announcement that the Prime Minister made at the Liddell Power Station just up the road from your studio - a little bit up the road. It is at the same time SunDrive Solar who have invented a new wave of solar technology that is the most efficient in the world, that is produced the most cost effectively. They announced a manufacturing facility at the Liddell Power Station that will employ more people than have been employed at the Liddell Power Station in living memory. That is the kind of investment that this is about. It's about capability that is going to make a difference for our industrial future, it's about good jobs, apprenticeships, engineering cadetships in our regional areas.


PAUL CULLIVER: So you say you want to support industries and ventures that have a comparative advantage to other production overseas. Do you calculate that before or after government support?


SENATOR AYRES: Well, the good thing, the smart thing, one of the smart things about the Future Made in Australia, the most significant measure is the production tax credit, right. It is a tax credit that is applied to - let's take an example, green steel. The company is only eligible for the tax credit when they produce the green steel onshore in Australia. So it is a no regrets approach. If they're not able to commercialise it at scale, tax credit is not available for them. So this is all about a smart, modern way of supporting industry, making Australian industry more competitive. It is smart, it's modern, it sends a message to the investment community and big manufacturers around the world, invest here in Australia. We've got the greatest reserves under the ground; our minerals, our critical minerals in particular, above the ground; a vast continent with the world's best solar and wind resources, and of course our people. What we need is a government that's prepared to fight for the future of manufacturing and prepared to structure the policy framework so that we're directing global investment into manufacturing facilities in Australia. This is a train - you know, there's no room for complacency here. If we do not do this the world will pass Australia by. This is a train that leaves the station only once, a once in a life time opportunity to set Australia up for future decades. That's what the Albanese Government is going to do. We're going to push through some of the sort of negativity and the opposition that's coming from Peter Dutton and Barnaby Joyce and all these characters here in Canberra. We are prepared to stand up for Australia and deliver an outcome that is going to mean future generations live in peace and prosperity with good jobs in regions like the Hunter Valley.


PAUL CULLIVER: Here on ABC Newcastle, you are hearing from Senator for New South Wales, Tim Ayres, Assistant Minister for Trade and Manufacturing, the Future Made in Australia legislation introduced into Parliament today. As you're talking about, tax credits being the main way that companies, that ventures will benefit from this $23 billion. Is there a risk, Tim Ayres, that we'll end up seeing $23 billion spent on ventures that would have gone ahead and been commercial anyway?


SENATOR AYRES: Well, this is - let's go through that a step at a time. First of all, it's not money that is being spent. It is a tax credit that is available for industry that would not have been invested in in Australia --


PAUL CULLIVER: Okay, but it's $23 billion of revenue that you won't collect otherwise, so it's $23 billion less going into the coffers, sure.


SENATOR AYRES: Absolutely. We have to absolutely be focused on rigour here. You know, this is a government that's just delivered two surpluses. There haven't been surpluses, back-to-back surpluses for nearly 20 years.


PAUL CULLIVER: Right, sure. I take your point about --




PAUL CULLIVER: You're not spending money, it's less money that you're taking.


SENATOR AYRES: That's right, we are - yeah, exactly --


PAUL CULLIVER: But to the point, is there a risk that you're going to be giving these tax credits out to projects that would have been commercial without the tax credits?


SENATOR AYRES: No, it's a hypothetical, you know, unlikely scenario, isn't it? Are we going to develop green steel in Australia without a government support package to make sure that it's there, or lithium ore processing or hydrogen processing? The truth is other jurisdictions have adopted production tax credits and other measures and, you know, look at the United States, they are very successfully coaxing global investment to the United States for, you know, Biden's plan to rebuild American manufacturing. We have areas where we have comparative advantage. We have, as I said, vast reserves under the ground, the best solar and wind, a giant continent, an adaptive and resilient and smart people. We live on the edge of the fastest growing region of the world in human history. These are all our comparative advantage. We need to make sure a Future Made in Australia agenda delivers this, that we have got the competitive settings right. And that does mean production tax credits, it does mean unashamedly supporting Australian manufacturing and investment in jobs in the regions. We have a responsibility to make the Australian economy more complex. We have a responsibility to diversify, not just in terms of the markets that Australia exports to, but the products and services that we offer the world, and this agenda means that our outer suburbs and our regions will play a big part in Australia's economic future.


PAUL CULLIVER: The criticism, of course, that comes from the Opposition is that this kind of policy will simply line the pockets of billionaires with the likes of Andrew Forrest, is that true?


SENATOR AYRES: Well, it's certainly the case that we are seeking investments for projects that require private investment that is in the tens of billions of dollars. It's certainly true that we will require tens of billions of dollars of private sector investment to deliver good jobs in manufacturing areas. Now the truth is, if you're at the big table, putting Australia at the big table, talking with multinational - you know, the highest quality multinational manufacturers and with the investment community to secure billions of dollars’ worth of investment, it does mean you have to engage with multinational companies. That's a good thing for Australia. That's what the government should be doing. In this case the risk is all on them. They only get access to the tax credits if they are manufacturing here in Australia. That's the outcome that Australia needs and that's the outcome that working people in regions like the Hunter Valley need.


PAUL CULLIVER: All right. If I could just ask you a few political questions.


SENATOR AYRES: Of course, of course, Paul


PAUL CULLIVER: The state of play in the Parliament today, as you'd always expect. Of course the ongoing speculation about what WA Senator Fatima Payman might do. She's of course been suspended from the Labor Caucus. The Prime Minister, Anthony Albanese in Question Time making sort of a curious suggestion that an announcement is incoming in the next few days. Do you know what that announcement might be?


SENATOR AYRES: Well, I've seen the public speculation about what Senator Payman may have or may not do over the coming days. I just say this: the ball is firmly in Senator Payman's court. We as the Labor Caucus, you know, her decision to vote - to declare that she will vote against the Labor position, and indeed to pull out of activity in the Senate this week so that Labor is one vote down in the Senate, that does put her outside of the Labor Caucus. That's just the truth of it. But she is welcome back. She is welcome back if she accepts the collective discipline that we all have. Now the Caucus is to a man and woman absolutely united across the more than a hundred Labor MPs and Senators, including from your region, in focusing on what is in the interests of Australians, and it's been a week of contrasts. The beginning of the week all about the here and now, cost-of-living issues, a tax cut for every single Australian, PAYG --


PAUL CULLIVER: Okay, yeah, I don't necessarily want to get into all of --


SENATOR AYRES: All of those cost-of-living measures --




SENATOR AYRES: And then at the end of the week it's about the long-term and setting up the Australian economy and Australian manufacturing's future. That's what we're focused on. Senator Payman can make her own decisions. We're just getting on with it.


PAUL CULLIVER: Okay, sure. Just finally, Peter Dutton is reported in his Party Room yesterday told MPs they should be ready for an early election. Are you ready for an early election?


SENATOR AYRES: Well, that's not what - that's not the biggest thing that happened in that Party Room meeting. There's always election speculation. The Prime Minister's indicated that he believes that Australians want to see elections run their full term. That means an election that's in the first half of 2025. What really happened in that Party Room is that their supermarket policy designed by the Greens and the National Party essentially was dead on arrival. Their second policy - first policy, uncosted, expensive nuclear power; second policy, a supermarkets policy that even

their own Caucus won't agree with. I mean this is policy dysfunction, and a lack of seriousness about developing good policy that's in the national interest.


PAUL CULLIVER: All right. You've done well at slipping a few different topics in there, Tim Ayres. Appreciate your time today, thank you so much.


SENATOR AYRES: Good on you.