ABC Upper Hunter with Amelia Bernasconi

03 July 2024


AMELIA BERNASCONI, HOST Well, a pretty big day for the Albanese government as it prepares to introduce its Future Made in Australia bill to Parliament. They budgeted nearly $23 billion in the budget recently for the next decade to get that program up and running. Joining us to talk through what it could mean for the Hunter in particular, and this program at large, Senator Tim Ayres is the Assistant Minister for Trade and Manufacturing. Welcome to ABC Upper Hunter Breakfast.




BERNASCONI: Thanks for your time this morning. I mean, $23 billion you've put aside in the budget. Is this your big election pitch?


AYRES: Well, it's certainly our pitch about the future, the future of the Australian economy. It has been a big week in politics and in policy delivery for the Albanese government. The short-term focus on the here and now; cost of living relief. Every taxpayer gets a tax cut, wage increases, energy bill relief. But we are also focused on the long-term future of the Australian economy, re-industrialising our economy, so that we've got the jobs of the future. That means if we're focused on industrial diversification, that means jobs not in our inner cities and CBD's, but in our outer suburbs and our industrial regions. The Hunter Valley, as you indicated at the beginning, has got a very big part to play in this big economic transformation.


BERNASCONI: We had the Prime Minister visit not so long ago to announce plans for solar manufacturing at the former Liddell site. How else will the Hunter be involved in this? I mean, how much will you look to our region to help establish that facility?


AYRES: Well, this is the biggest pro-manufacturing package in Australian history and you're right, the Prime Minister was there with an early announcement in this package of the Solar Sunshot Program. At the same time as he announced that program, SunDrive Solar announced that at the Liddell facility they will build a manufacturing facility there for Australian solar panels. New generation solar panels, more efficient than anything else in the world and cheaper because they're based on copper technology.


That facility will employ more people than have been employed in living memory at the Liddell power station. The opportunities are there, we've got a set of strategic and economic imperatives that drive us towards a vision for the future of the Australian economy that is big on manufacturing and big on the industrial capability that we need to have, to make our way through the next pretty challenging decades for Australia.


It's the right package from an economic perspective. It's the right package from a strategic perspective. But also, the big benefits are delivered in regional communities, particularly communities that have got the industrial capability that the Hunter already has.


BERNASCONI: I mean, we saw this sort of exodus, I suppose, of manufacturing on Australian shores back in the eighties. Why do you think now is the time to see the resurgence, how we support businesses overcome the huge costs? I mean, just the cost of energy is one example, but there's so much more at play here to see such investment back in manufacturing in Australia.


AYRES: Well, there's three issues in that, Amelia. The first is the why. The reason that we're doing this is because we must if we're to position Australia for the challenges that are coming; in energy terms, in strategic terms and in economic resilience terms. This is the right call. We have diminished our industrial capability over time. We have the lowest manufacturing self-sufficiency in the OECD. We've fallen to 93rd in the Harvard Economic Complexity Index. We have to diversify our economy.


Secondly, we're going to do that by investing in industry as a co-investor through the National Reconstruction Fund, but also in the Future Made in Australia effort. That is the largest part of that $23 billion package is production tax credits. If you manufacture green iron or green steel in Australia, you will get a tax credit. If you manufacture green hydrogen or process critical minerals in Australia (so, going up the value chain, rather than just exporting iron ore or lithium ore or manganese all offshore), if the company is processing that here in our regions, there is a tax credit that is available to them when they manufacture. That is the critical thing. It is payment on delivery. Not grants programs, but payment on delivery. That is a very significant economic reform, and it means that we're competing at the big table with the big economies for the jobs of the future.


Finally, on energy costs, this is all about 97% of our trading partners with net zero targets themselves. The world is not waiting for Australia. We have to invest in the energy systems of the future and make sure that the regions are winning the battle for low-cost energy and the manufacturing jobs that come with that.


BERNASCONI: You speak about competition there. I mean, the US is ramping up its manufacturing and I guess just in that global context, through Covid, we really saw the shock with trade partners shut down. China, we are still mending that relationship. I mean, how do we position Australia? Is it about looking after ourselves or is it about competing at a global scale? And how do we actually do that?


AYRES: Well, it's about three things. One is, yes, looking after ourselves, making sure that we've got the industrial capabilities that we need to make sure that, as we move to the new energy system, we capture those jobs, that we've got economic security and resilience here.


Secondly, of course, it's a competitive response to what is happening around the world. The Inflation Reduction Act, the changing behaviour of our trading partners means we need to maintain our setting as an open market, free trading economy, but we also have to build the industrial capability that we'll need for the future.


Thirdly, and I think most importantly, we live on the edge of the fastest growing region of the world in human history. It is full of challenges, but also opportunities for Australia, and those opportunities, in terms of the manufacturing and services products that we offer the world, the biggest opportunities, if we get it right, are for regional Australia. Now, this is a train that only leaves the station once. We've got a once in a generation opportunity to secure this investment. That is what the Albanese government's Future Made in Australia agenda is about. It's not complacency, not hyper partisanship, engaging in political conflict in Canberra. This is about the regions and the suburbs and the national interest of Australia and securing a manufacturing future for the country.


I don't think anybody sensible or serious thinks that we can make our way through the next few decades in a peaceful and prosperous way if we don't build our industrial capability. We've got a very straightforward plan that puts us at the centre of the region's economic development.


BERNASCONI: Assistant Minister, you've been generous with your time this morning. Just quickly, before I let you go, what's the timeline here? I mean, we've seen some pushback from the Coalition, of course. How quickly do you think that this will go through the motions, through the upper and lower houses?


AYRES: Well, it's been introduced in the House today. We've taken, we've made sure this is rigorously developed with a proper national interest framework, with a framework of community benefits that make sure that communities’ benefit from this in terms of good quality jobs. We will work across the Parliament to secure support for this legislation, but we'll be out there in the regions and suburbs talking about what this means for you and for your listeners over the coming months. We'd like to see it travel through the Parliament quickly, but we'll work with the Parliament to deliver the best outcome possible. This is a centrepiece for the Albanese Government, our Future Made in Australia plan for the long-term future and industrial diversification of the economy, and we're determined to drive it through.


BERNASCONI: Well, we look forward to seeing you in town soon. Thank you so much for your time this morning.


AYRES: Thanks Amelia.