HOST, SABRA LANE: The Federal government's chalked up a win with a key plank of its Future Made in Australia policy passing the Senate last night. This allows for nearly $14 billion in tax breaks for companies to produce green hydrogen and critical minerals here. Their capabilities, the Albanese government argues, are essential if Australia is to support local industry as we transition to renewable energy. The law did not have bipartisan support. The coalition has criticised the package as billions for billionaires. Tim Ayres is the Assistant Trade Minister and Assistant Minister for a Future Made in Australia. Tim Ayres, thanks for joining AM.
SENATOR TIM AYRES: G'day Sabra , good to be talking with you.
HOST: This bill is aimed at creating new capabilities for Australia. How long will it be before we see the full benefit of this package?
AYRES: Well, this is a key part of the Future Made in Australia range of measures which taken together is the largest pro-manufacturing package in Australian history. It provides for production tax credits, that is effectively reduced tax per tonne or per kilogram of material manufactured here in Australia in eligible production categories.
It is a core part of diversifying the Australian economy, moving Australian production up the value chain, particularly in the mining sector, supporting our miners in Central Queensland, the Hunter Valley and Western Australia in particular. But it also has application right across the country in regional Victoria and Northern Tasmania as well.
These tax credits will only apply not in the hope that production happens in Australia, but will only apply after production happens in Australia. So, it's a smart measure. It's going to drag through tens of billions of dollars of private investment and re-industrialise our regions and suburbs. So, there will be immediate support for eligible production processes at the commencement of the scheme. But it's really targeted at future manufacturing.
HOST: This bill can't protect Australia right now from Mr. Trump's threatened tariffs that are supposed to come in from today and the fallout from a global trade war.
AYRES: Australia relies upon open markets and a rules based global trading system that has clearly been under some pressure, whether it's a war in Europe, impediments in key markets, increasing protectionism around the world, or overcapacity. The government's approach has been firstly, to act calmly and consistently in these key trading relationships and put effort in to at all levels, from the Prime Minister down to making sure that we've got access to these markets. Secondly, it's about diversifying Australia's economy and diversifying the markets that we sell into. So, diversifying the products that we sell and the markets that we sell into to make Australia more resilient.
HOST: PM has got a phone call scheduled with the US President today and I'm convinced that probably a good chunk of it's going to be on this new 25% tariff on steel and aluminium. How powerful is the precedent set by former PM Malcolm Turnbull in stopping tariffs during this term?
AYRES: Yeah, this is the Prime Minister's second phone call with President Trump and of course there's been the full suite of diplomatic activity. The Deputy Prime Minister was in the United States last weekend, the Foreign Minister was at the inauguration just a few weeks ago and you know, they are our closest strategic partner.
HOST: They are. But as Democratic Congressman Joe Courtney points out today, he's just said in Congress that this is almost an insult to the people of Australia. We've just made an $800 million down payment on AUKUS as of Friday and this is how we're being rewarded. Is he wrong?
AYRES: Well, it's not a surprise that this announcement that was made, you know, yesterday, but there's a long way to go to understand the parameters of what this announcement that was, you know, reported from a conversation on an aeroplane yesterday. There is a, there is a long way to go advocating for Australia's interest in a calm and effective way and you cite the precedent of the, the last time this occurred. I mean, I think that is a useful, that, is a useful precedent. It took a significant amount of time. It took coordination across government engagement at Ministerial and official ambassadorial level, you know, it took 12 months to work those issues through with our American partners.
We are going to approach this in a calm and consistent way focused on the national interest, not megaphone diplomacy, not responding to every development or commentating on every development, but really in a disciplined way focused on the Australian interest. I think that's what Australians have come to expect from the Albanese government on these trade questions. And that's the approach that the Prime Minister will take today and that that Trade Minister Don Farrell will take and everybody else engaged in this work will take. We won't be taking, you know, potshots in domestic politics. We'll be focused on the national interest.
HOST: Tim Ayres, thanks for joining AM this morning.
AYRES: Thanks, Sabra.
