Interview on 3AW Drive
29 November 2016
Subject: National Innovation and Science Agenda; creating jobs; Tony Abbott
Joining me on the line now is the Minister for Innovation in our Canberra studio, Greg Hunt. Mr Hunt, good afternoon.
And good afternoon, Tom. As we speak Anthony Albanese is filibustering to allow our interview to go ahead in the House, so if the bells ring I will have to flee.
I understand. Now, your former leader Tony Abbott told Sky News this yesterday. He said it is good we are no longer talking about innovation and agility, because that frankly loses people.
What did you think about Tony Abbott's comment there?
Look, I respect the views. I take a different view. And the reason why this is important is because innovation equals jobs. What's it about?
It's about keeping jobs in existing firms. Firms such as BlueScope, which is making its steel, which is being more efficient, which is then being able to maintain existing jobs, and to in fact bring people on. And it's about creating jobs in new or expanding firms.
That's why it matters. This is something fundamental. And to what you were saying at the start. Does government create jobs?
No it doesn't. It can destroy jobs like the Andrews Government and what it's done in the Latrobe Valley, or it can make it easier for the private sector to invest and easier to employ people. That's what we really do.
And therefore we can make it easier to grow a business and easier to bring people on in employment, which is what's happening.
Okay. So Tony Abbott is wrong when he says people aren't interested in talking about innovation?
Look, I think if you do it the right way and you draw the links between innovation and the fact that it's not just about people in black skivvies in Paddington, no offense to people with black skivvies in Paddington, it's about firms right across the economy.
So for example, I visited Melbourne Garages, which is a small firm despite the name in Hastings. It's tripled its size over the last few years.
It innovated and created a new business model. In other words it did everything.
So if you're somebody like me who might have their issues, you wouldn't want me laying a concrete block, they will do everything from the planning to the concreting to the establishment to the lighting to making sure it's all done.
Just a simple example of innovation which has allowed them to grow their business and create more jobs.
All right. But I mean, I think that firms like that will do that irrespective of what governments do because that's what they do, they get on with business. I know you're releasing a report tomorrow on innovation.
What is your actual policy? As opposed to just statements like innovation is good because it creates jobs.
Sure. I think that's actually a very important question. So the first thing is to make it easier to do business.
So our National Business Simplification Initiative is a big part of innovation, in other words to reduce the time it takes to set up a business from 18 months to less than three months in the case of what we're doing in New South Wales at the moment.
So does that mean you'll cut red tape? Because every time I see a government initiative to cut red tape, it seems to involve yet another layer of legislation that actually creates more red tape than what it gets rid of.
No, one of the things we did in Environment when I was there, we created a one-stop shop that halved the time for assessments and approvals.
It's helped contribute a trillion dollars of investment. It's an extraordinary figure but it's helped contribute and free up a trillion dollars so cutting that red tape is real in that case.
It's all about making sure that you actually help people set up businesses. Another thing we've done is…
Okay, so cut red tape. That's one thing.
Made it easier to invest. There are two big things. We've created a process called the angel investors process. In other words there's a slight tax preferment.
We are now looking at the highest flow of funds for investment in new businesses, sometimes called venture capital, into Australia on record, and the second highest flow of those funds out into the businesses.
That's about creating jobs. What we've seen is 1.4 million jobs created in new businesses.
Yeah but sorry, and that's great. But venture capital flowing in, that's private decisions. I mean, are you claiming credit for venture capital coming into Australia and funding new businesses?
Or is there, I'm trying to grapple, is there something in the policies that you're putting forward that does this?
I think there is a link. Yes. I think there is a link because it's the investors themselves who've said wow, we're taken by the fact that you've got a government which is saying this is the moment.
And then they've set up the policies in terms of what we're doing with angel investors, what we're doing with other ways to invest in start-up businesses which have reduced the tax burden on them.
And then we've created a medical fund which is about allowing investment in medical businesses.
Which has seen interest from around the world in taking ideas from Australian researchers, turning them into jobs and turning them into investment for manufacturing of medical devices in Australia.
I'll give you an example. There's a firm called Saluda. What does Saluda do? It makes little implants that you can put in peoples' backs, which connect with the spinal cord, which manage agonising chronic pain.
There's a massive market globally. They are looking at creating hundreds and hundreds of jobs, but perhaps most importantly, for all of the people in our society who have this chronic pain this is a way forward.
We've made it easier to invest, and that's how you actually create additional jobs.
Okay, but I mean, are you claiming that the Government is partly responsible for, say, this company that helps people alleviate back pain?
I mean, I know that in politics if unemployment goes down you want to say well, this is because of the policies of our Government, and if it goes up it must be someone else's fault. But I mean, what I'm hearing is stuff that is going on in Australia, and that's great, but.
I know, it's a fair question, but the genius of what they've created is absolutely from them. The ability to expand at a faster rate is precisely why they came to see us, to access what's called the Biomedical Fund, but you can think of it as a medical investment fund. So they, themselves, wanted to see us.
They said you can help us expand and create jobs at a much faster rate, but the genius, the creation, the risk, that's all come from the young people and the not-so-young who have come together to create this firm, and that's where you can have an impact.
And remembering this, lower overall tax rates that makes a difference as to where people invest and put jobs. That's one of the things we're trained to do.
Lower overall burdens in the construction sector that has a big impact on where you invest, and whether or not you're trying to create jobs. This is what we're doing.
Okay, so less red tape, lower taxes, government funds that stick money into things. That's what we're doing to promote jobs, to create jobs, to have innovative industries?
Well essentially, lower taxes and less red tape are critical parts, and then in the medium-term you're bringing young people through in science and engineering, because this is where so much of the basis of productivity for firms comes.
Let me give you another example, Dulux. I've been to their R&D centre in Clayton.
Because they're able to do the R&D, which creates new and better paints, they're building a plant with $150 million worth of manufacturing investment in the Northern Suburbs of Melbourne. Construction jobs, and then operating jobs.
They make it absolutely clear that practical things, such as Government's R&D tax incentive, lower taxes, make a real difference as to whether they operate in Australia.
Okay, so if you claim the credit for jobs that Dulux, jobs that the back pain company, you might have heard today that …
No. I mean, I'm careful to say we can make it easier, or you can make it harder in higher electricity prices, higher gas prices, wages that are uncompetitive. These will all make it harder.
But you might have heard today that the very last Holden V6 engine ever has rolled down the production line at Fishermans Bend, and that production line has now been closed. Is that, perhaps, the negative side of what you're talking about?
It's very interesting. Unless you keep changing, unless you keep evolving, then you are going to face challenges.
I actually met with the global heads of Holden and Ford just a few weeks ago, and what they said is that the designers and the engineers in Australia are brilliant.
They think our workers are tremendous, but that frankly the size of our plants and the cost of doing business in our manufacturing, therefore the point that there wasn't enough evolution in what we were doing, weighed heavily.
But they wanted to, because of just the sheer creativity of our designers and engineers, keep the jobs for those people in Australia, and hopefully to create more.
I know Ford was looking at this being one of their three global centres, and you have to keep giving people the opportunity, that's why the workforce does grow.
But if you stop innovating, a firm faces a real risk, and you can see that in many of the areas where government imposes a heavy cost, electricity and gas, and you can see it where you have a situation with firms that are not investing, and if they don't invest then others will catch them and pass them.
And that's why what we're doing is making it easier to invest and easier to employ.
We'll leave it there. Greg Hunt, I know you're very busy, thank you for your time. Mr Hunt is the Minister for Industry and Innovation.