Interview with Damian Smith, Breakfast, ABC Perth

Damian Smith
Manufacturing capability; National Reconstruction Fund, Square Kilometre Array

DAMIAN SMITH: Now, one of the many unexpected things to happen during the pandemic is that it suddenly became a lot harder to get hold of certain things – important things like vaccines and cars and toilet paper. Well, the new Federal Government says it’s determined to make sure we don’t get caught short again. It wants us to be the kind of country that makes things. So what kind of things do you think we could make, particularly here in WA? Tell me, or you can text in as well. 

Ed Husic is the federal Minister for Industry and Science, and he’s in Perth today. Minister, good morning. 


DAMIAN SMITH: Good to have you here, and welcome to WA. What do you think we learnt from the pandemic? 

ED HUSIC: I think the way that you summed it up just a few moments ago is spot on – the times we needed things the most not being there - that showed us that we needed to have a rethink. We also have in the world today people going, “Well, we’re very dependent on just one or two countries for a lot of the inputs to our products or the finished products themselves.” So when we were in opposition we did have a think about and took on board advice from organisations like the CSIRO who looked at what would be required for recovering resilience and particularly to build stronger economies longer term and address some of the things we just talked about. 

And so we’ve, for example, just introduced legislation in the federal parliament through our National Reconstruction Fund, $15 billion, the largest investment in industrial and manufacturing capability in living memory targeting things like medical sciences, doing more on the value-add and resources so if we mine it here, we make it here. We’ve got the critical minerals and rare earths that we can convert into batteries, and yet we do very little of that and we know we need to have that access to batteries for all the things we want to achieve through to some of the enabling technologies as well - low-emissions technology. And also changing the way with agriculture the type of foods that we make, that they’re sustainable and that we can get the protein needs required that factor in that the climate is changing before our very eyes and changing in the way we grow and harvest food. So we’re thinking longer term across all those type of issues. And it’s a National Reconstruction Fund. So what we’re trying to do is encourage this activity in all corners of the country. 

DAMIAN SMITH: I want to talk more about the National Reconstruction Fund in a moment, but when we put about this question on the ABC Perth Facebook page, it’s funny – 

ED HUSIC: I didn’t get called a knucklehead, did I? 

DAMIAN SMITH: No, you didn’t, I can confirm. One of the most common things, people tend to think of things like cars or they say steel. It’s things they can think of like that. But is it going to be really that sort of thing or is it sort of higher level than that? Is it higher tech sort of stuff? 

ED HUSIC: Well, let me take the steel example is a good one, right, because we are going to need steel in great quantities for a lot of the things that we can’t to do. 

DAMIAN SMITH: And we mine a lot of iron ore in WA. 

ED HUSIC: Correct. It’s a big thing for WA. The sort of thinking now for a lot of the places that make steel is how do we do it with less of a carbon footprint. So this whole concept of green steel where the energy input is driven by hydrogen rather than coal-fired power, and there are a lot places in the country that are thinking long term about how we use that. Recycle steel as much as we can - we can melt it down, re-use it and the way it’s made, too, using alternative energy sources like hydrogen, really important. 

And the other thing, too, is, Damian, you know, some of our power will be generated in different ways. People will think about solar power and hydrogen. But wind energy is a big deal, and so you’re seeing a lot more projects. We as a Federal Government have improved the regulatory framework to get the tick quickly to offshore wind farms, those large turbines that sit out at sea, way bigger and can make a huge contribution to energy generation. They’re going to need a lot of steel and the fabrication. There’s a lot of work that comes with building them, with maintaining them. And also the transmission lines will require material, a lot of it that can be manufactured onshore. 

So you start to think, we’re responding to a climate emergency, but it’s also a jobs opportunity as well, and if we just stop fighting over this issue and start thinking of working as one it can have big benefits for the country. 

DAMIAN SMITH: But the challenge is, I guess, what I always think of is if something isn’t being made here right now presumably it’s because it’s cheaper or it’s easier to make it somewhere else. 

ED HUSIC: Yeah. 

DAMIAN SMITH: Otherwise someone else would be making it here if there was a buck in it. So, I mean, how can you get past that barrier? 

ED HUSIC: Well, I think that’s a fair point, right? And in many cases it has been that someone else has made it cheaper. But also there’s been an instance where we have tended to just go for the offshore product and not value what we are doing onshore. And it might be a cheaper product that’s not made to the same quality. 

And the other thing that’s changing in people’s minds, Damian, is the consideration that the emissions that come out of shipping, those all increasingly have to be factored in. And so being able to do a lot of the heavy stuff onshore will be important. And what we’re talking about, we’ve got a big ambition about doing more here and Australia being a country that makes things. We can’t do everything. So there will be some stuff that gets made offshore. But the things that are important to us, that do drive long-term economic value but are important for our national wellbeing we want to be able to do more of that here and to work with industry, with science, with researchers thinking through clever ways to get things done. And also, for example, reforming the way governments buy goods and products, you know, goods and services. Federal Governments spent about 180 billion [dollars] on goods and services over the last three years off the top of my head. Being able to get bigger bang for the taxpayer dollar by working with local industry, that has huge impacts as well. So there’s a lot of clever ways that we can work in, have this stuff joined up, that can have a big impact on the ground in terms of industry, manufacturing and jobs. 

DAMIAN SMITH: Ed Husic is my guest in the studio, the Minister for Industry and Science at the federal level. A lot of text messages coming in with suggestions on the sorts of things we should be making here, Minister. So a lot saying steel, which we’ve talked about. Steven in Stratton says we should be making lithium batteries and battery storage systems. 


DAMIAN SMITH: That’s a big one for WA. 

ED HUSIC: Yes, Steven’s on the money. Good on you, Steven. 

DAMIAN SMITH: This one says, “We’ve got heaps of uranium. Why don’t we make a few nuclear power stations.” Don’t think that’s going to be happening based on what the Prime Minister said yesterday. 

ED HUSIC: Yeah. 

DAMIAN SMITH: And this one from Sam I think really goes to a point that a lot of texters have brought up – he says Australians are highly capable of producing anything. He says, “The only problem is we’ve priced ourselves out of the free market with wages. Nobody’s going to buy products they can get cheaper from China.” How are you going to address that issue? 

ED HUSIC: So the game is really about the complex manufactures, the type of stuff that requires a lot of skill in development that will make a big difference. And that’s why I said before about we’re not going to do everything; we’re going to do the important things. But, for instance, let’s take medicines, we’ve entered into an agreement with Moderna to build onshore mRNA capability that’s going to happen in Victoria. The building that they make there will be one and a half times the size of the MCG. It’s going to involve a lot of industry and, in particular, university and smart people thinking this isn’t mRNA just for Covid; an mRNA can be used in a range of different applications. We’ve got very talented people here and that will be important for our long-term wellbeing. 

You referenced Steven from Stratton who talked about lithium. There are a lot of other inputs as well – graphene. I visited a place up in Brisbane; they’re making batteries out of graphene. Your phone has a recharge life of 500 recharges. They’re building batteries than can have 3,000, like, up to 3,000 [recharges] using graphene instead of lithium ion as the main source. And also zinc bromide, which is being done by Gelion in Western Sydney, which is a much more stable battery, right? 

Now, if taking on board the other point that Sam made, when you look at battery, and there’s a great CRC – Cooperative Research Centre – based here in Perth, the Future Battery CRC. And they did a lot of thinking around this. And they said, “You know, Australia can actually extract more out of the battery value chain because we’ve got high skilled people, we have capital and the combination with automation means that we can do a lot of battery manufacture potentially onshore.” And, in actual fact, wages is not what’s holding us up. Construction costs is a bit of a difference maker, and that’s got to be dealt with. But we are going to be as a Federal Government developing a national battery plan. There’s a lot of work that’s being of interest here in WA teaming up with other parts of the country. That if we build our own batteries, put them in as energy storage systems for residential, commercial and industrial, that will create a lot of jobs, reduce emissions and help us do a lot of great things in the meantime. 

DAMIAN SMITH: And I do want to in the time we have remaining talk about the National Reconstruction Fund. As you mentioned, $15 billion. A lot of money. The enabling legislation has just been introduced and you’re doing some consultation around the priority areas and what sort of projects and investments should be invested in. But in terms of who decides where that money goes and how much every person gets, is that going to be your decision as Minister? Is this going to be a subsidy to prop up an ailing industry? 

ED HUSIC: Okay. Not a colour-coded spreadsheet in sight. Assurance number one. Two, it will be an independent board – no politicians. These will be people with industry and investment capability that can make the calls on these investments. They’re not going to be grants. They’ll be effectively loans, guarantee, equity injections, you know, buying shares in companies for instance, that can help give them access to that capital at a time they need it most. We’re going through a period – and your news report talked about interest rates going up and it is harder for businesses to find the type of money they need to expand. We don’t want people feeling like that the country has turned their back on their ideas and the only way they can survive is go offshore. We need to see this activity here and we need to have the ambition to pursue it.

So that’s the way that the Reconstruction Fund will largely work. And we want a return on the taxpayer dollar. And there’s some good common sense involved in that because if we do get that return we replenish, refill the fund and we can go on and support others. And it’s not designed to compete with private capital. We want superannuation, venture capital, private equity to join with us, because that will deliver a bigger bang for the buck and to see us be able to use our smarts to get ahead. And the type of smarts, if I can quickly – I know you’ve got to wrap up – but the other great reason why I’m in WA – it’s always a great reason to visit this great state – 

DAMIAN SMITH: Well covered, yes. 

ED HUSIC: But I was up in Murchison earlier yesterday. We did the soil-turning on the largest radio telescope in the planet. Australia has a great history in astronomy and the world turns to us for our skill. And we turn to WA to make this a reality – 131,000 radio telescopes will be laid out there. They look like Christmas trees. Hopefully Santa won’t mistake this place. But it will help us unlock the secrets of the universe. Australian smarts and know-how has helped deliver his massive project, and it's the type of smarts and know-how we want to back through the reconstruction fund. 

DAMIAN SMITH: It’s certainly a really exciting project that WA is really at the heart of. And we’ll keep an eye on the National Reconstruction Fund, too, as you progress that. Thank you very much for coming into the studio. 

ED HUSIC: My great pleasure. Thank you for having me and thanks for the questions. 

DAMIAN SMITH: Ed Husic, the federal Minister for Industry and Science with you on ABC Radio Perth and WA.