JENNY MARCHANT, HOST: Today, the Assistant Minister for a Future Made in Australia, Senator Tim Ayres, is at the University of Newcastle at a forum of businesses, unions and community groups to look at how it might benefit our region. Senator Ayres is here now. Good morning.
SENATOR TIM AYRES, ASSISTANT MINISTER FOR A FUTURE MADE IN AUSTRALIA AND TRADE: Oh, G'day. Good to be on the show and to be talking to your listeners.
MARCHANT: Thanks. The Hunter is at the heart of the energy transition. Our landscape is changing. What are the possibilities for our region from this fund?
AYRES: Well, the Hunter's Australia's largest regional economy. This Future Made in Australia package is the biggest pro-manufacturing package in Australian history. It is designed to attract the investment of the world's best manufacturers and the benefits, the investment, will disproportionately happen in big industrial regions like the Hunter. That's where the comparative advantage is. That's where the energy and metals processing and manufacturing capability is. And that's where we're driving investment towards. Today's meeting with 100+ local manufacturers and local organizations is about making sure that we're driving the benefits for good, skilled local jobs and training opportunities for young people in the Hunter.
MARCHANT: If the target are these big global players who should come in with private investment, hopefully...what is the role here for our smaller, maybe local businesses?
AYRES: Well, all investment is welcome. The Future Made in Australia is about driving the big transformational nation-building investments in manufacturing capability. I want to make sure, as the Assistant Minister for Future Made in Australia, that as we move this agenda forward, that we're doing it with local industry so that firms in the supply chain benefit. We've got the world's best industrial capability in the Hunter. It grew from being the energy powerhouse of the country with a rich industrial history. But it's modern, it's there now. We've got fantastic young kids at school now who will have opportunities for apprenticeships, for engineering cadetships. Boys and girls who want to participate in this big industrial transformation and opportunity want to make sure that every one of them gets the strongest opportunity possible in an economy, in a regional economy, that's going to be at the center of Australia's industrial and economic future.
MARCHANT: So, just to be clear, you're imagining or foreseeing a future of local businesses supplying to bigger businesses who may also be employing local people in projects like hydrogen, for instance. Are there other projects on your agenda around the Hunter?
AYRES: Well, that's how we drive the big benefits and that's the way that the Hunter Valley economy already works. The big anchor investments industries like Tomago Aluminium, like the power stations, like the big metal manufacturers, like rail manufacturing, they all have a supply chain of smaller firms who've got engineering capability, like Valley Engineering, who I know very well. Those kinds of firms stand to benefit the most. And that's where the big job opportunities are, where the training and also the opportunities for research and development and building new product here locally. Big projects like offshore wind have the potential to drive thousands of jobs in the construction, around 1000 jobs in operations and maintenance, but also to sustain thousands and thousands of jobs because of cheap renewable energy that's reliable and low cost and affordable, driving those opportunities into local firms that are big energy users.
MARCHANT: On that issue of wind, offshore wind power, there is a level of community opposition to that here. What kind of scrutiny will these projects have?
AYRES: That project is very important for the industrial future of the Hunter Valley. It is an enormous opportunity to drive thousands of jobs, good quality engineering and manufacturing jobs and all of the economic spin off benefits that go with that. Of course, these projects have got to be subject to the normal environmental approvals, just like a coal mine is, just like a shopping centre is. They all require all the proper approvals to make sure they fit in with the local environment. But these kind of projects, big battery storage projects, manufacturing projects, they are all going to drive enormous opportunity, billions of dollars’ worth of opportunity for the local economy. And the Albanese government wants to make sure that each of these projects delivers in full for local business investment, for apprenticeships and good jobs.
MARCHANT: Senator Tim Ayres is with me on ABC Newcastle Breakfast. Why use government money to encourage these private industries? Isn't the taxpayer better off letting them grow based on market demand? Let private industries grow with private money?
AYRES: Well, can I give you two sets of reasons why? Firstly, there is a global race for investment. Governments around the world are moving to speed up their industrial transformations. Americans with the US Inflation Reduction Act is just one example of the IMF identified two and a half thousand measures being undertaken by governments around the world to speed up industrial investment. And Australia needs to compete at scale and in a proportionate way, focused on our comparative advantage. That's the first answer. We want to be at the big table, bringing the biggest manufacturers here, bringing their expertise to support Australian manufacturing.
Secondly, it's in our national interest to act in order to secure our future economic resilience and our future comparative advantage to secure the future shape of an Australian economy where we are going to need to be making more things here in Australia. We're going to need to be more resilient and that means rebuilding Australian manufacturing. And that's what a Future Made in Australia is all about. We are in an economic set of circumstances now where the government's got to do two things. One is focus[ing] on the here and now questions of cost of living, putting downward pressure on inflation. That's the here and now question. But there's also the question about the future shape of the Australian economy and making sure that we're safe, that we're resilient and that we've got a prosperous economic future that the region shares in.
MARCHANT: Well, Senator, how then do you make sure that you don't grow industries that aren't strong enough without government support, that money into these industries isn't wasted a couple of decades down the line if they aren't able to stand on their own?
AYRES: You're absolutely right. That is why the National Interest Framework is at the heart of the Future Made in Australia. Legislation to put strong guardrails around government decision making now, but also into the future, so that what we're supporting is industries that are in the national interest and industries that are going to have a future comparative advantage. If we just leave these questions to the market, then Australia will be predominantly a less complex economy where we're just exporting commodities offshore rather than adding value here. If we're a less complex economy, we're less productive and people will be poorer as a result of investment in the future of the country.
MARCHANT: To the question, though, how do you make sure that the industries that come from this are strong enough on their own once government investment ends?
AYRES: Well, it is all about crowding in private sector investment. That is the point here. Predominantly the measures here are Production Tax Credits, which are about foregone future revenue for investments that we are driving into Australia. And those tax credits only become payable when the firm manufactures in Australia. All the issues about future sustainability, future scale and capacity are being driven into the model. Investments will only occur where they are sustainable and where they're going to have future markets and future comparative advantage. That's the point of the Future Made in Australia process. That's why the National Interest Framework is at the heart of it. And that is why the predominant measure is the Production Tax Credits that are no regrets measures backing future investment that will change the shape of the modern Australian economy and mean that there are good jobs in future manufacturing and that we're an economy that makes things and competes at global scale
MARCHANT: Tim Ayres, thank you very much.
AYRES: Thanks very much, Jenny.
MARCHANT: Tim Ayres is the Assistant Minister for a Future Made in Australia.
ENDS.
