ABC North and West Port Pirie, Breakfast with Tom Mann

15 May 2024



Tom Mann, Host: Tim Ayres is Assistant Minister for Trade and Manufacturing. Good morning.



Senator Tim Ayres, Assistant Minister for Trade and Manufacturing: G'day, Tom. Good to talk to you and to your listeners.



Tom: Now, what more can we reveal at this time about the Future Made in Australia plan?



Senator Ayres: Well, this is a strategy that is all about positioning Australia for the future that we're in. This transition to Net Zero, 97% of our trading partners have their own Net Zero commitments, so the world is moving fast. This is all about making sure that it's a future that we make for ourselves, position Australians, particularly regional Australians, for the global economy, so that we grab our share of the big technology and the big manufacturing opportunities. The alternative, of course, is just that we continue on the path that Australia has been on for the last decade, that we sit on our hands, let investment goes somewhere else, that jobs and new companies and new factories are built in other economies. We have an enormous opportunity in Australia with our vast mineral resources below the ground and our vast solar and wind resources and the resources of our people above the ground. But what we need is a government that's determined to grab that opportunity for Australians, and regional Australians in particular. And that's what the Albanese government's Future Made in Australia strategy is all about.



Tom: Now, one of the areas of this that people in this region have been following quite closely is hydrogen. How key is the national hydrogen strategy to the overall plan?



Senator Ayres: Well, it's absolutely vital. Firstly, one of the things about hydrogen and the steel industry is what you can see in your part of the world is the state government and the Federal Government working together to deliver a hydrogen strategy that will be of immense benefit for South Australia's industrial capability in the future. If we get hydrogen right, if we attract hydrogen investment into South Australia and the steel industry in particular, that means that South Australia will have the capability there at Whyalla to export green steel around the world. And that is an enormous competitive advantage. It strengthens our comparative advantage, and it builds in the national interest, more steelmaking capability in Australia. So, we're not just exporting iron ore around the world, but we're exporting high value steel products around the world. That's what the strategy is directed towards. The hydrogen investments can happen in Australia, or they can be directed overseas. And the Albanese government is in this Future Made in Australia strategy, saying, we are in the race, we are going to fight for investment in hydrogen, in steel making and in the green steel of the future.



Tom: Tim Ayres is with me, Assistant Minister for Trade and Manufacturing, reacting to last night's federal budget. And why does this plan kick in from 2027, given the relative urgency, as you said, to invest in these industries and see them introduced as quickly as possible for the future of trade in Australia?



Senator Ayres: Well, this is a smart strategy. A significant part of the strategy is about production tax incentives, which only become due when a company actually manufactures in Australia, when product rolls off their production line. So, it is designed to reward production in Australia. There is some capacity, through the National Reconstruction Fund, the industry growth programme, to support companies as they commercialise their product. But the bulk of this $22.7 billion package is all about production tax incentives that drive production onshore. And, of course, the nature of these long-term investments is they take some years to establish. We're sending a message to boardrooms and investment houses and energy and manufacturing companies around the world that Australia is open for business. And I can tell you, having just been in Denmark for a very short 20-hour visit, I can tell you, Tom, it was a brief visit, but the interest from the investment community around the world in the Future Made in Australia strategy is very strong. It's turning heads in boardrooms right around the world and directing their attention towards investment in Australia.



Tom: And another element of this plan that you touched upon, $566 million over ten years for Geoscience Australia to create a detailed map of critical minerals. Can you explain what the importance of a map like this will be?



Senator Ayres: Well, it's going to mean that we've done the work, the detailed work, and not relying upon just the ad hoc work that goes on in the private sector to identify opportunities in critical minerals, but a systematic piece of work that sets Australia up for the future, so that we know where our critical minerals reserves are, we know what our water reserves are, where there are water assets, what topographical features mean for our capacity to generate solar electricity. So, it's a systematic approach to mapping Australia's comparative advantage. Of course, where we end up with all of this, Tom, is that the investments, whether it's in critical minerals processing, battery manufacturing for the electric vehicles of the future, whether it's the steel industry, these aren't jobs that are generated in our big cities, in the CBD's of our big cities. These are jobs that are generated in our outer suburbs and in our regional communities. That's where new factories, critical minerals processing, steel jobs are all located. So, this is about, yes, maximising Australia's comparative advantage, building our future in the national interest, but the benefits flow overwhelmingly to regional communities.



Tom: Now, one announcement that is set to have a bit of a hit to regional communities is the announcement of the live export ban from 2028. Are you concerned about the impacts that live sheep exports, the ban on this could have on farmers and the industry more broadly?



Senator Ayres: Well, there's a $107 million package there that Murray Watt has announced, the Agriculture Minister, has announced for the live sheep export sector, which is principally located in Western Australia. This is an industry that has collapsed in terms of its export earnings over the course of the last decade. The previous government presided over it declining by many hundreds of millions of dollars. Its value is less than $100 million today. We went to not just the last election, but the election before it, responding to community demand that this industry has, despite efforts from successive governments, lost its social license. And we are delivering on that commitment, but we are delivering on it in a way that means that there will be investment there for value-added meat, more value-added meat processing in Australia. That's where the regional jobs are. Now, I understand that there are some anxieties amongst sheep meat producers in Western Australia. We are working with those. I think Murray Watt has met with representatives of that sector more than a dozen times over the course of the last 18 months. We will keep doing that work, but we're a government that does what it says it was going to do, delivers on our commitments.



Tom: And finally, one of the headline concerns going into this budget, and one of the things that many people are talking about following the speech last night from Treasurer Jim Chalmers, is the support to cost-of-living measures. And there are modest increases, as I mentioned in the introduction, the $300 energy rebate to some households. But are you satisfied with the amount of support offered to those who are doing it the toughest who, a lot of social services experts are saying, these will barely hit the sides?



Senator Ayres: Well, this is a budget that is about managing the demands and pressures of here and now with the issues that we've spent most of this interview talking about, of course, building the Australian industrial capability that we're going to need for the future. The budget has a tax cut for every single Australian taxpayer, 13.6 million taxpayers. It provides assistance on energy costs, which we know, even though our opponents in the federal opposition voted against energy price relief, we know that it slowed the growth in electricity bills in particular and put downward pressure on inflation. And the Australian Bureau of Statistics has demonstrated that our measures last year put downward pressure on inflation because they held energy prices down. These measures will provide a modest but significant rebate that will have, again, further downward pressure on inflation. The battle against inflation is not over. We've made significant progress. The budget contains a series of measures to help renters, to help households, to deliver tax relief to every Australian. And it is a responsible budget that itself, in fiscal terms, is designed to keep downward pressure on inflation and through that, of course, downward pressure on interest rates. So, we've, in my view, got the balance right. We're focused on the here and now, dealing with the cost of living and inflation pressures, but also building the Australian economy that we need with deeper industrial capability as we navigate what's going to be a challenging few decades in front of us.



Tom: Assistant Minister, thank you for your time this morning.



Senator Ayres: Good on you Tom. Good to talk to you and your listeners.