HOST, RICHARD KING: What we're going to delve more into now is the, the Future Made in Australia. There was a, a major piece of legislation that passed the Senate last night. And joining me now with more on that, our Assistant Trade Minister and also the Assistant Minister for a Future Made in Australia. Tim Ayres joins me now. Good morning, Tim.

SENATOR TIM AYRES : Oh, G'day, Richard. Good to be on the show and good to talk to your listeners.

HOST: Yeah, likewise. Good to talk to you. All right, the new economic plan a Future Made in Australia. This production tax credit bill passed the Senate last night. Why is this such a good thing? Tim, can you just explain what this is all about?

AYRES: Yes, of course. This sits as part of the Albanese Government's a Future Made in Australia approach, which includes the $2 billion production supports that the Albanese government announced a fortnight ago for the aluminium sector. So, remember, we were out there at Tomago Aluminium with the PM announcing that package. This is a series of tax credits that apply to in particular critical minerals production. So, for every tonne of critical minerals that are refined and manufactured here in Australia, creating good new regional blue collar manufacturing jobs, a tax credit will be applied to those production processes. This is a very significant move by the Albanese Government to back local manufacturing. We've seen the Australian economy become less diverse, more focused on commodities and right now at a time where we need to have a more diverse economy, more value adding to protect Australia's interests in the long term, particularly our economic resilience and good jobs in regional communities.

HOST: Right, so it's for mining and also the construction of renewables, isn't it as well? Is there tax credits there?

AYRES: No, not for the construction of renewable generation or transmission. There are a series of other programs to make sure that that rollout happens as speedily and efficiently as possible. To make sure that we've got low cost generation and low cost transmission and we've got reliable power. So, that's a different set of programs. This goes to critical minerals production and hydrogen production. Hydrogen, to support where firms, where they are producing hydrogen, green hydrogen here in Australia to support production processes. There is a tax credit available for that.

I just want to make one point about our approach that's completely different to what previous governments have done. Previous governments have just provided grants or support. Precious little, I have to say, from the last government, which is one of the reasons why manufacturing declined in Australia. These are production tax credits that only apply after production has occurred. That is, we're rewarding firms, not in the hope that they produce here, but only when they produce here. So, it's a smart approach that drags through investment not just in those businesses, Richard, but in their supply chain. So, it creates thousands and thousands of good blue collar jobs in areas like the Hunter, in Central Queensland and the Pilbara, where there's value add to our mining sector.

HOST: Well, just on that, there doesn't seem to be a great deal of appetite from private industry to get into the production of green hydrogen. I noticed this one over in South Australia at Whyalla, which is about a $600 million hydrogen power plant that seems to have gone by the wayside, Tim.

AYRES: Well, we will be out there rewarding production when it occurs. That's the first point. So, this is not in the hope that something happens, but following on from the investment and the production activity.

HOST: Okay, so it's not a handout.

AYRES: It's not a handout, it's a tax subsidy. So, lower tax for investment in Australian manufacturing. The second point, Richard, is well, of course hydrogen is a new technological frontier. It is not a linear process where everything's easy. If it was easy, then it would just have happened already. There are very significant investments in hydrogen production. I was recently at Hysata in the Illawarra which is producing the world's most efficient hydrogen wafers. You know, the cells that produce hydrogen with clean electricity in Central Queensland at Fortescue's production processes there that are producing hydrogen wafers and hydrogen for industry there right now. So, this is not just a future technology, it's a now technology. It's viewed as really important by those sectors of the economy that have got an eye to cleaning up their production processes so that they can export low or zero emissions products to the world. So, in aluminium, for example, a bit off the hydrogen topic, but for Tomago aluminium, they are moving to clean electricity, to zero emissions electricity, because that's what their customers demand. It's not that Rio Tinto are, you know, environmental activists, although they have a strong record of focusing on environmental sustainability, they are making a commercial decision. It's not up for debate whether they are moving to zero emissions technology. The real debate is that is investment going to happen in Australia and are those production processes going to happen in Australia. Now the Albanese government, we say we're backing industry with the biggest pro-manufacturing support package in Australian history. Our opponents are ruling that out and are saying they will tear all that production tax credit support down if they are elected, which creates an enormous sovereign risk for investment in Australia. The biggest challenge for Australian manufacturing at the moment is the potential election of a Peter Dutton government over the course of this year.

HOST: Well, and also big impact and if it does come about that there's this blanket 25% tariff on all steel and aluminium imports into the United States and we're not excluded, could that have a big impact on Australian industry, Tim?

AYRES: Well, can I maybe just say two things about that, Richard? The first thing is there is none of this is a surprise to the Australian Government. You know, it has been very clear that a new administration in the United States will have a new approach on trade questions, and President Trump has, you know, been clear about these issues over the course of the campaign and before.

So, the Australian Government has been preparing for this. You'll know that the Prime Minister and President Trump are scheduled for their second telephone discussion today and there's the full suite of diplomatic activity with our close strategic partners in the United States has been on foot for a long time and will continue intensively so that we make sure that we understand the parameters of where the Americans are going, but also make sure that we're putting Australia's interests first.

The second thing is, you know, stepping back a little bit from this announcement a day or so ago. Australia relies upon an open trading system and a rules based approach to trade and you'd have to say around the world that is becoming tougher for Australia to navigate. Trade challenges, increasing protectionism around the world, War in Europe that has changed global trading flows. Our job as a government is to, in the short-term act in Australia's interests to secure Australia's position in key markets. In the medium to long term, it is to diversify Australia's markets, but also have our products go up the value chain and improve Australia's economic resilience. Now Peter Dutton, the Liberals act as if none of this is going on. It's just the same old, same old. No support for industry, no support for new manufacturing and then you've got Peter Dutton and David Littleproud and all these characters politicking about these issues and actually undermining the Australian team.

HOST: Right.

AYRES: We actually have, this is a moment, a very consequential decade for Australia.

HOST: Yeah, well, I heard somebody, dealing with Donald Trump is a bit like dealing with a spinning top. You just don't know where it's going to go next, which I thought was rather appropriate. Really appreciate your time this morning, Tim. Thank you. Thank you very much for that and have a great Tuesday.