Transcript of Joint Doorstop Interview
SUN 17 FEBRUARY 2013
Subject(s): Industry and Innovation statement; Australian Industry Participation Authority; Anti-dumping laws; Automotive Supplier Advocate; Prime Minister's Manufacturing Taskforce; Senator Xenophon; Geert Wilders
PM: I'm pleased to be here at Boeing with Minister Combet to launch a plan for Australian jobs and I'd like to think Ian and the team at Boeing for hosting us today.
Today, we are launching a plan for Australian jobs, a plan for the future. Our economy is under some stress and strain as a result of the economic conditions of our times.
The aftermath of the global financial crisis where we are continuing to see problems in the global economy and particularly stresses and strains in the American economy and the economy of Europe.
At the same time we, as a nation, pulled together during the worst of the global financial crisis and unlike other countries around the world, we have emerged with low unemployment, low inflation, low interest rates, strong public finances, triple-A rated by all major credit ratings agencies and with an economy that's growing.
But there are still challenges and amongst the challenges for the Australian economy is the strength of the Australian dollar.
Our dollar is so strong in part because of the weakness of the global economy compared with our economy.
Our dollar is so strong because we are yet to see the peak of the investment phase in the mining boom, which means money is coming into our country to invest in mining.
Our dollar is so strong too because many increasingly view Australia as a safe haven.
But the strength of that Australian dollar does have implications for businesses seeking to export around the world.
It literally means that the goods they take to market are more expensive than they were before, so if you were selling something for 500 euros, now you would be selling it for 750 euros.
In this environment, there are some who say slash workers’ wages and conditions and try and be a low wage, low cost economy.
As Prime Minister, I specifically reject that as a plan for Australia's future.
As a Labor Prime Minister, my vision for working Australians is of a high skill, high wage future.
I want modern Australia to be a place where there are great blue collar jobs; secure jobs, high wage jobs, secure jobs, high wage jobs, high skill jobs.
The plan for Australian jobs we announced today has three components.
It's about making sure that we win more of the work available here in Australia.
It's about supporting our businesses so they can seize more of the work in our region of the world, more exports, more opportunities and consequently more jobs.
And it's about supporting small businesses to grow.
Key to all of this is innovation. It's doing things differently, it's doing them better.
We are here at Boeing, which has the work to make the flaps for the Dreamliner aircraft, because it's doing it differently and doing it better.
A new material, a lighter material which means this place is doing something not done anywhere else in the world.
That kind of innovation leads to jobs and prosperity.
Minister Combet will announce the details of these three approaches and then we will be happy to take your questions.
MINISTER COMBET: Thanks very much Prime Minister.
As the Prime Minister has indicated, there are three key components to the $1 billion plan for Australian jobs that the Government is releasing today, the first of which is to support Australian firms win more work at home and therefore create more jobs.
And in particular, the specific part of that policy, the main part of it, is that projects worth more than $500 million will be obliged by the Australian Jobs Act that will be introduced to parliament in the near future, to do Australian industry participation plans.
This is not to mandate the use of local firms in large projects but it is to oblige the major project proponents at the earliest point that is feasible in the development of a project to make clear what opportunities for contracted goods and services there will be in that particular project.
The legislation will also establish an Australian Industry Participation Authority that will oversight these opportunities and these industry participation plans and also help facilitate the relationships between Australian firms and the large major project proponents.
The advice to the Government is that this will add somewhere between $1.6 billion to $6.4 billion of economic activity per year.
So a significant measure that we anticipate will lead to a significant increase in jobs as the policy is taken up and is implemented.
The Government has also announced a set of reforms to anti-dumping arrangements in Australia to ensure that there is a fair and level playing field, that Australian manufacturers are not unfairly disadvantaged by dumped products into our market.
And $24.4 million has been allocated to the establishment of a new anti-dumping authority and a number of improvements in the way in which the Customs will go about applying the anti-dumping arrangements.
We have established an Automotive Supplier Advocate whose one job, amongst others, will be to try and lift the level of participation of Australian made vehicles in Government fleets.
In Victoria, in this state, and South Australia and at a Commonwealth level, more than 70 per cent of the vehicles in those fleets are Australian made.
In other states and territories, there is a long way to go and we estimate that possibly a further 8,000 Australian made motor vehicles could be added to fleets in the future with a greater consciousness, I think, by state and territory governments to purchase Australian made vehicles and there's no reason why they shouldn't be.
The second key part of the policy announced by the Prime Minister is to establish up to 10 Industry Innovation Precincts.
These will bring the best minds in Australian research, in universities and organisations like the CSIRO together with businesses that are keen to expand, that are keen to lift their export market opportunities.
We have worked over this policy in close consultation with the manufacturing industry in particular over the last 12 months. It is a policy change that manufacturers in particular have sought and argued for.
It was a recommendation in the Prime Minister's Manufacturing Taskforce.
We can perform much better in our economy at bringing research to being commercialised.
We don't perform the best amongst all of the advanced economies in that respect and we can certainly make some significant improvements.
That will be the key in future years to accessing growing markets in the Asia Pacific region.
The Government has released the Australia in the Asian Century White Paper a short time ago.
One of the opportunities identified in that paper is the opportunity to expand in the markets in food sales and food manufacturing in the Asia Pacific region.
Yet we have an industry and food manufacturing that is under a great degree of pressure in this country and that is highly disaggregated.
These precincts will enable manufacturers in the food sector to come together with researchers, identify the market opportunities that exist, the technologies that may be applied, the innovation that is necessary to take up those export opportunities and to do them at larger scale.
We would expect large international firms along with their supply chains to be working with the universities in the establishment of these precincts and they will be industry led.
We have had close co-operation with the CSIRO and the universities in the development of that policy as well.
The third part of the policy is to support mall and medium size enterprises in particular.
They are often times the engine of job gross and innovation.
One of the difficult things for many SMEs with great ideas in our economy is to get access to venture capital, to help them commercialise new products and ideas.
The Government will invest a further $350 million in an industry investment fund that will expect to partner with the private industry to add another $350 million so that we can deepen the venture capital market in this country.
There are also changes to venture capital tax arrangements. And we will be establishing a greater range of services from Enterprise Connect to help small businesses improve their businesses improve their business management systems.
Many SMEs, we expect, would work through the industry and innovation precincts that will be established.
There will also be a new $27.7 million enterprise solutions program to help SMEs provide solutions to Government for the contracted goods and services that Government is seeking.
Oftentimes it's difficult for smaller businesses to be able to commercialise and develop solutions the Government is seeking and this program will assist.
Finally, as the Prime Minister indicated earlier, the Government intends finding a saving to finance these measures.
We will make some changes therefore to the R&D tax incentive.
That incentive will no longer be available to companies which have a turnover in excess of $20 billion within the Australian economy.
We expect that that will affect less than 20 companies in our economy and probably in the region of 15 companies.
This is a clear prioritisation the Government is making to try and stimulate more jobs, more Australian jobs through the support of firms to get into the major projects and to support export opportunities and more Australian jobs through the establishment of industry innovation precincts.
We think it's a prudent saving that targets the resources that are available in the most effective way to achieve jobs growth.
PM: We are happy to take your questions.
PM: Minister Combet has given you some statistics about the extra work we believe will flow from the Australian Industry Participation Plans - $1.6 billion a year - so that's important.
But in combination we believe that this will make a long-term difference to jobs.
We are here as an economy that has got comparative strengths now but we do need to be focused on jobs and growth for the future.
We have gone from the fifteenth largest economy to the twelfth largest economy.
We are in the region of the world where we can make the best of the opportunities to come.
So it's about seizing all of that and doing the best with all of that. We can't just drift into that future.
So you can't just instantaneously go how many jobs here and how many jobs there, but I can certainly tell you this.
The result of this plan will be a more prosperous future with more jobs.
PM: I will get Minister Combet to specifically address that question, but I do want to say something about the saving and make a point about the Government's budget.
We have and continue to be in a period where the global financial crisis and its aftermath have hit government revenues by $160 billion.
Now sometimes in the public debate, it is pretended that that didn't happen. It did happen; $160 billion of revenue write-downs over five years.
Now if you had wanted to cut government expenditure to match that degree of revenue write-down, you would have had to have done something as big as stopping paying the aged pension to older Australians.
And of course, a responsible government would not do that.
Now, having seen those revenue write-downs and having them still impact on the Government's budget, we are determined to be offsetting new expenditure with savings. We have done that since 2009 and we are continuing to do it.
So to finance a $1 billion plan for Australian jobs, some tough choices did need to be made and we have decided that some of the biggest businesses in our nation can forego an extra research and development tax credit in order to fund this package.
On the specific issue you raise, I will turn to you Minister Combet.
MINISTER COMBET: Thank you Prime Minister. The short answer is no.
This is an assessment of what our key priority is and we’re going to get the greatest economic dividend from the arrangements we have in place.
I made the comment earlier that we expect this change to affect less than 20 companies, something probably more in the order of 15 companies at the moment.
And it's also important to emphasise that R&D expenditure by those companies in any event, with a turnover of greater than $20 billion a year in the Australian economy, that's a large company indeed, that those companies will have ordinary tax deductibility for their R&D expenditure.
MINISTER COMBET: It's a bit in excess of that.
MINISTER COMBET: Yes, that change to the R&D tax incentive will finance this policy initiative, that's correct.
MINISTER COMBET: We will be doing so, they will be listening closely to the announcement but there has been a lot of discussion with many firms about the R&D tax incentive over a period of time and including the development of this policy provision and many of those larger firms I think would be very supportive of not necessarily the R&D change but certainly the initiatives that we’ve announced.
JOURNALIST: Prime Minister, can you give us an idea of your take on manufacturing in Australia? Many governments have been impaled on this issue. What’s your view about the role of manufacturing and the role of government in manufacturing?
PM: I believe in Australian manufacturing and I believe it's important to our long-term future.
If you think of our economy on a time sequence, we have taken the hit from the global financial crisis and it continues to have its aftershocks.
We have seen the peak or we are about to reach the peak of the investment phase of the mining boom. We won't hit the production peak for some period of time.
But it's at the investment phase that you see the peak jobs in mining.
And so as we move from the investment phase to the production phase, we need to make sure that our economy is creating jobs in other areas and that our economy has many sources of strength.
It is impossible to imagine the Australian economy for the long term without manufacturing as one of those sources of strength.
It's important to our skills development. It's important to providing employment to Australians. It's important to our future.
And thinking again about that time sequence, as the region of the world we live in continues to grow and to be home to more middle class consumers in their billions, they will want high value manufactured goods in their lifestyles, the same way we do.
They will want to get a trip on one of the planes that is being built here.
They will want to come to Australia on tourism holidays.
Many of the things that we can have a comparative advantage in making, they will want.
So as a government, we have done things like support the car industry.
It's important to Australian manufacturing overall that the car industry is there, feeding skills and development.
I mentioned to Ian as we walked around, last time I came to Boeing, one of the key takeout impressions I had, was how many of the workers I talked to got their start in car making and had the skills to come and work here because of the car industry.
So manufacturing is going to be part of our future. Blue collar jobs, great blue collar jobs are going to be a big part of our future and that's why we have announced our plan for Australian jobs today.
JOURNALIST: Prime Minister, Senator Xenophon arrived back in Melbourne today. (Inaudible)
PM: Yes, we will. Yes, we will. I was surprised and disappointed to see the treatment of Senator Xenophon yesterday and as the Foreign Minister has dealt with publicly, we made immediate and strenuous representations on his behalf, not only in relation to him being detained, but into him being allowed to be in Malaysia.
Clearly we didn't succeed in getting the agreement of the Malaysian Government for him to remain in Malaysia.
I'm glad that he is back safe and well, but we will continue to pursue this issue with the Malaysian Government.
JOURNALIST: Prime Minister, do you have a view on the Dutch MP Geert Wilders coming and speaking in Australia this week?
PM: I think my ministers have made clear the Government's abhorrence and my abhorrence for his views.
Okay, thanks very much.