Sky News on the Hour with Lei Cheng

10 May 2024


LEI CHENG, HOST: Food company Kellogg's is celebrating one hundred years in Australia. Joining me live from their factory in Port Botany is Assistant Trade and Manufacturing Minister Tim Ayres. So, hi there, Tim.


ASSISTANT MINISTER, TIM AYRES: G’day Lei, really happy to be on the show today.


LEI CHENG: Have you been eating cereal at the factory?


ASSISTANT MINISTER: I have been eating cereal this morning. It's an incredible thing, one hundred years of manufacturing history in Australia. It's been terrific to be here to talk with the management and the staff about their plans for investment. They've done a lot of work here, offsetting their energy demands, their use of electricity and gas with solar. Very significant investments in that, but also their investment plans for the future. And talking to them about the government's Future Made in Australia strategy.


LEI CHENG: But looking more broadly at the manufacturing industry, it's very tough to scale up in a very small market, also because of the scale, you know, the size of the country, given transportation costs, it's hard to be cost competitive and international. We're so far away. Your thoughts?


ASSISTANT MINISTER: That's the challenge. Kellogg's has been in a great position because the size of the Australian cereal market and the dominant role that they play has meant that they've got the scale. For, Australia, the Future Made in Australia strategy looks at two things. Firstly, our comparative advantages and making sure that we are investing in the future. We've got the world's greatest solar reserves, the world's best wind reserves, all of the critical minerals that are required in the transition to net zero, that 97% of our trading partners are undergoing. That's an enormous opportunity.


LEI CHENG: Well, what are our comparative advantages when our costs are so high?


ASSISTANT MINISTER: Let me just say our comparative advantages, in part, are the ones I just spoke about. Great solar reserves.


LEI CHENG: They haven't been realised yet.


ASSISTANT MINISTER: That's right. That's what the Future Made in Australia strategy is all about, Lei. It's also about our people. Investing in our people. Building a partnership between the private sector and government to bring forward investment to make sure that Australia builds prosperity and builds good jobs, particularly in our outer suburbs and regions. This is a very challenging period, but it's also a period of enormous opportunity. The only thing that we know for certain is that if we do nothing, we won't be in the race for the jobs of the future. It requires a government that's determined to step up to the plate and invest in the future. That is what the Future Made in Australia strategy is all about, and we'll see the details of that, of course, unveiled in more detail on, Tuesday night.


LEI CHENG: How hard was it to prioritise investments for the future when we've got an election coming up and people have a cost-of-living crisis and they're looking at the budget for what money they can get now?


ASSISTANT MINISTER: Well, I think you'll see in the budget that the government's priorities, that's really what a budget tells you about a government. It tells you about what its priorities are. You'll see a focus on the cost of living, making sure that the budget itself is putting downward pressure on inflation, downward pressure on interest rates, and that we're doing measures in the budget that support people, like the measures that we've already undertaken, putting downward pressure on energy prices for households in particular. Secondly, it'll be about the Future Made in Australia, about investing in the future of Australian manufacturing. We've seen over the last three- or four-decades Australian manufacturing retreat offshore. The Albanese government is going to make sure that Australia has got the manufacturing capability and jobs that we need for the future. And thirdly, of course, further focus on Medicare and the kinds of issues that Australians have come to expect from the Labor government.


LEI CHENG: So, Tim, when I speak to small and medium sized companies, they say it's ok to get revenues up in this landscape, but profits are very, very slim, and just declining. How do we reduce our costs more for our businesses in manufacturing?


ASSISTANT MINISTER: Well, Lei, you're right. The big changes in the competitive landscape around the world are here now, and they are intensifying for Australia. That means that we have to focus on, as I say, our areas of comparative advantage, particularly in energy, particularly in renewables, the renewable energy superpower vision, and moving up the value chain in areas like critical minerals and the metals and commodity sectors. Those are the big opportunities and you've seen some announcements from the government about that. We've got to continue investing in our people. That's what the jobs and skills agenda is all about.


LEI CHENG: I'm afraid that is all we have time for. Sorry Tim, to interrupt.


ASSISTANT MINISTER: No worries, Lei, good to speak with you.


LEI CHENG: Tim Ayres, Assistant Trade and Manufacturing Minister from the Kellogg's factory.