16 April 2023


Michael Clarke, Host: Well, there's been disappointment in recent years, or even over the last decade or so, as we've seen less and less things being made here in Australia, and do you find that there's sometimes a wait on stuff; it could be a great deal of variety in the stuff that we wait for these days. Since the pandemic, it might affect the new car you want to buy; housing supplies for your new house or your extension, or even just general food and household items. We've often told there is a delay, there are things that are happening because of what's going on in factories overseas, and that focus often seems to be overseas, and you might wonder, well, could we not make more things here in Australia?  


Well, the Federal Government has just had its bill to reintroduce more manufacturing passed in the House of Representatives last week. What's it going to mean for things here in North Queensland, what potential impacts and job creation could we see in the region? Senator Tim Ayres is the Assistant Minister for Trade and Manufacturing, and joins us now. Senator, thank you for your time this morning. How significant is this bill in your opinion? 


Tim Ayres, Assistant Minister for Trade and Assistant Minister for Manufacturing: Well, this is the biggest peacetime industry policy in Australia's history. You know, this is $15 billion in a fund that will be not an old‑fashioned, you know, grants fund where grants are handed out by a government to businesses, but a co‑investment and loans facility, which means that there will be a return to the fund, and a capacity to continue to invest in the manufacturing capability of the future. You know, we have ‑ the problem we are trying to solve, Michael, is that Australian manufacturing has declined to less than 7 per cent of GDP.


Michael Clarke: Yes. And I was going to say, is that an admission in a way that both, you know, Labor and Coalition Governments over many, many years have seen that fall in, you know, supporting manufacturing here in Australia? 


Assistant Minister: Well, there's certainly been a sustained fall. The position improved for a period under the Rudd and Gillard governments, but the combination of energy policy uncertainty, a lack of application to manufacturing policy over the course of the last decade, and of course, memorably, the decision of the Abbott government to force the auto industry offshore, 40,000 jobs lost, it didn't have an impact directly in your listening areas, but what it did was shock investors around the world and send the message to the investment community around the world, Australia's not interested in manufacturing. It dented their confidence, and it means that those investments that should have been happening in manufacturing, in clean energy capability, you know, in rebuilding our industrial capability, haven't happened over the last decade, and this $15 billion fund is all about kick starting investment in new technology, commercialising new ideas and making sure that we're doing it onshore, you know, that we're building Australia's manufacturing capability rather than commercialising Australian IP overseas.


Michael Clarke: You mentioned there new technology. So does that mean that we would never see a return of the auto industry to Australia, that we wouldn't be making cars here? 


Assistant Minister: Well, there's a revolution going on in automotive manufacturing around the world. The shift to electric vehicles, where some of our major car producers around the world are only going to be producing electric vehicles, and you know, the battery capacity keeps improving year after year, means that in an area like lithium, let's just take that example, a component of the lithium-ion battery, at the moment what Australia does is exports lithium ore overseas, and other countries, and other firms add value and derive the real economic value of the lithium. All we do is dig it up and send it overseas.


It's our ambition, using this fund and our national action plan around batteries to make sure that Australia is in a position to be building the lithium-ion batteries of the future that will go into electric vehicles. That creates high‑quality, good‑quality, blue collar jobs in regional areas, but it also means we start to rebuild our capacity to get into the automotive manufacturing supply chain.


Michael Clarke: And it's interesting, Senator, that you mentioned there that issue of batteries. I mean there's been a lot of discussion here. In North Queensland we have the Lansdown Eco‑Industrial Precinct where there's been a lot of talk about some of the minerals being mined from the northwest being processed right here in North Queensland. Is that something that you're talking about? Will this bill seek to increase that type of work? 


Assistant Minister: That's exactly right, Michael. There are seven priority sectors that this bill will target. That includes mining and resources; it includes agriculture and food, it includes low‑emissions technology. Now, those three areas are areas of real strength for regional Queensland.


When we're building factories, whether it's for batteries or, you know, new food factories, as we shift Australian agriculture up the value chain, I mean these factories are not built in the inner cities of Brisbane or Sydney or Melbourne, but they are built in our outer suburbs and in our regional areas.


This is all about, yes, fixing our industrial capability, but it's also about rebuilding good‑quality, blue collar jobs in country towns and regional areas. That's where this investment will go.


It is a mystery to me, I have to say, why ‑ and it's a partisan point, I suppose ‑ about why on earth is the National Party and the LNP voting against this? You know, they turn their backs on blue collar workers in country towns and regional centres in particular, who, you know, need the opportunity for decent work, need new investment in Australian manufacturing capability, and it’s overwhelmingly in our national interest that we have the capability, the industrial capability to solve the challenges of the future, particularly in, you know, the region that we live in. It's full of opportunities and full of challenges. We actually need Australian industrial capability that meets the challenge of the 21st Century.


Michael Clarke: How badly were we spooked by the pandemic, and as I mentioned there at the introduction, people still having those flow‑on impacts with, you know, new car deliveries, whether they're talking about housing supplies, all of these things have been held up because of what we've seen happening globally. If we were making more things here in Australia, would we not see a problem with those supply lines quite as significant? 


Assistant Minister: Well, certainly we got the message during the COVID period, both in terms of medical supplies, but also, as you pointed out, in supply chains more broadly. Russia's illegal invasion of Ukraine has underscored the point as well. Impact on some supply chains, particularly impacts because of rising energy prices.


They all underscore what has been absolutely clear for some time now, that Australia's position as a manufacturing country has continued to decline. You know, we are stone‑cold last in the OECD when it comes to manufacturing self‑sufficiency. We're less than 7 per cent of GDP.


Our position in the Harvard Economic Complexity Index, which measures how sophisticated our economy is, has continued to decline, so that now we are 91st in the world. You know, we should be in the top 20, but we're 91st, and that means our capacity to solve the big challenges, whether it's the climate and energy challenge, whether it's the challenge of building our military capability and the capability of our firms to go into those global supply chains, whether it's the challenge of lifting Australian mining and resources up the value chain so that we can compete using our strengths in those great industries to complete in global supply chains and lift our products up the value chain.


You know, these are enormous challenges for Australia, and without a coherent industry policy over the last decade, we've continued to go backwards. So this is in the national interest, but it's also in the interests of, you know, people who live in regional Australia and in country towns. That's where I grew up. You know, I've watched the decline of manufacturing in regional Australia. I can see how much it's damaged the social fabric, as well as our industrial capability, and the government is determined to address this. That's why we're putting the fund up. You know, it's something that the whole Parliament should stand behind, not just the Labor side. We're going to steer this through the Senate, and I'm confident that we'll get the support of the crossbench in the Senate, but really, Peter Dutton and David Littleproud should be backing this, not pouring scorn on it.


Michael Clarke: And we will see what happens as that goes through the Senate. Senator, thank you so much for being with us to talk about that issue this morning.


Assistant Minister: Terrific, Michael, any time.


Michael Clarke: Looking at the issue of manufacturing and potential jobs here in North Queensland, Senator Tim Ayres, the Trade and Manufacturing Minister, Assistant Minister, joining us today talking about the National Reconstruction Fund and that bill going through Parliament at the moment.