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Interview - ABC RN Breakfast with Fran Kelly

18 June 2019

Interviewer: 
Fran Kelly

Subject: Building industry, Australian National Outlook report 2019, R&D, Artificial intelligence

E&OE

Minister for Industry, Science and Technology Karen Andrews was interviewed on ABC RN Breakfast by Fran Kelly.

Fran Kelly: Residents of Sydney’s evacuated Mascot Towers will have to foot the bill for emergency accommodation after building management informed them an insurance claim had been declined. Hundreds have been homeless since last Friday when the ten-storey complex was evacuated after cracks were discovered in the building’s beams. This is the second mass evacuation from a Sydney high-rise in six months. And while building standards remain the responsibility of states and territories, the Federal Government is being urged to act to ensure the safety of apartment dwellers.

Bronwyn Weir: There’s a lot the Federal Government can do and the industry called very strongly for more harmonised regulation across the country. And if states and territories are looking at major reform, they should be doing it in a harmonised way and I think the Commonwealth could lead on that and could provide assistance in more ways than one.

Fran Kelly: That’s Bronwyn Weir speaking to us here on Breakfast yesterday. She’s the co-author with Peter Shergold of the Building Confidence Report commissioned by state and territory building ministers’ forum after Britain’s Grenfell disaster two years ago. The state and territory ministers meet again next month with their federal counterpart [Industry, Science and Technology Minister] Karen Andrews. Minister, welcome to RN Breakfast.

Karen Andrews: Good morning, Fran. Lovely to be here.

Fran Kelly: And Minister, can I just ask you first on the issue of residents displaced from their homes at Mascot Towers, in this instance, being forced to pay for their own emergency accommodation. Do you think that’s right?

Karen Andrews: Well, this is an appalling outcome for residents who quite frankly are wearing the consequences of compliance and enforcement issues with the building sector. Now, this is an issue that has been known for quite some time. You referred to earlier the Shergold-Weir report that made it very clear that there were enforcement and compliance issues that states and territories needed to look at. And again, we’re in a situation where there’s another problem in New South Wales and there have been problems in Victoria.

Fran Kelly: So can you have any, bring any force to bear here to make sure that there’s better consumer protections? We’ve heard earlier that the insurances weren’t up to date, the warranties run out after six years. Basically, those people who own those apartments have no protections. Is there something you can lead on that?

Karen Andrews: Look, there’s a couple of issues with what’s happened in Sydney with that building. But it’s really a symptom of a broader issue of compliance and enforcement with the relevant building codes. So the role of the Federal Government – and I need to be clear that we don’t have the constitutional power to regulate buildings, that sits with the states – and that’s not me passing the buck, that’s a statement of fact that the states have responsibility for building regulation. What the Commonwealth has is the National Construction Code, which is what states and territories take their regulations from. So I chair the Building Ministers’ Forum, it most recently met in Tasmania in February of this year and we spoke about the Shergold-Weir report, not in as much detail this time as I think, in hindsight, we needed too. But one of the things that I put on the table was that we would fund a taskforce to assist states and territories with the implementation of the recommendation of the Shergold-Weir report. Now, the states and territories declined that offer and in fact, the Queensland Minister, Minister De Brenni was probably the strongest even though he wasn’t present, he put some correspondence in making it very clear that Queensland was not going to abrogate its responsibilities. So they are taking responsibility for implementing the report. The unfortunate thing is that the jurisdictions, states and territories do have the responsibility to implement the regulations, there’s nothing to prevent them at this point in time in harmonising, but there is no willingness to do that.

Fran Kelly: Okay. But let me, I understand that constitutionally, each state and territory is their own boss in this but as you just said, the National Construction Code is where they take their building regulations from. What can you do and change and strengthen in that Code in terms of, you know, ensuring independence of surveyors and certifiers, for instance, that would force the states and territories to take the lead from there, or if not force them, show forcefully the way? And are you committed to doing that?

Karen Andrews: I’m very committed to working with the states and territories to resolve the issues in the building sector because what’s happening now is undermining confidence in the sector as a whole, and that’s an unfortunate scenario given that there are some very good participants in the sectors and very good builders. But there are some that clearly should review their practices and that’s what the Shergold-Weir report found. Now, what I’m going to do at the next Building Ministers’ Forum in about a months’ time is put back on the table the prospect of a taskforce that the Federal Government would fund to establish, to bring the states together, to harmonise as much as possible and to make sure that there is progress on the implementation. Now at the last BMF, I got the states to commit to publishing what their progress was on implementation. It's patchy at best.

Fran Kelly: Oh, it’s very patchy. I mean New South Wales is getting close to legislation; it seems to be way ahead of the most. Some, as I understand, haven’t done anything yet.

Karen Andrews: Yeah. Well, I would – yes. And I would call on each state and territory to come to the table in a month’s time with some solutions. How are they going to resolve this, how are they going to work together? And let’s work positively and cooperatively, let’s put in our back pocket the politics and worry about the people who have been terribly affected by this lack of compliance and lack of enforcement that has been there for years.

Fran Kelly: There’s a number of recommendations and I’m wondering as Federal Minister if you’re going to call them out specifically at this meeting next month? Because Bronwyn Weir, who’s co-author of this report, told us Australians can’t have confidence in current building standards. First off, do you agree with that?

Karen Andrews: I think there is a crisis of confidence in the building sector at the moment and that needs to be addressed.

Fran Kelly: But she pointed out, for instance, that currently there’s ... builders who build non-residential commercial buildings – aged care homes for instance – don’t have to be certified. I mean, as the Federal Minister do you think that’s good enough?

Karen Andrews: I think we have to, absolutely, look at consistent certification for all buildings that we have in Australia. And we need to look at consistent processes for determining who is going to be qualified to certify those buildings. It’s patchy, it’s not good enough and it doesn’t lead to any confidence whatsoever in the building sector. Now, the other thing that I’m planning to do at the Building Ministers Forum is to invite Bronwyn Weir and Peter Shergold to come and address an industry meeting that will be happening prior to the BMF, but also to address the Ministers at the BMF and get them to go over the crisis that they believe that we’re facing and try and instil in the state and territory ministers a sense of urgency. Now, we’re coming to the crunch with professional indemnity insurance and the states have known about this for some time. We’re coming to crunch time, so at the end of this financial year – about two weeks away – and that’s a critical time for the sector. Now, the states and territories, some of them – for example, Queensland – need to look at changes to their regulations if they’re going to have some carve outs for professional indemnity insurance so that buildings that have cladding, or will have cladding, or are high rise can be excluded for insurance purposes. But they need to act fairly quickly. And what we see is a lot of tardiness and a lot of blame shifting.

Fran Kelly: Okay. It’s 13 past eight. Our guest is Karen Andrews, she’s the Federal Minister for Industry, Science and Technology. You mention cladding there, perhaps the government, you know, constitutionally can’t just wave a big stick and make the states and territories implement, say, the 24 recommendations of the Weir-Shergold Report. But you can perhaps wave a big carrot and if we look at what Britain has done, the UK has done in terms of cladding – the British Government has just recently committed to ... paying for the cost of replacing all this ... combustible cladding. Now the audits of the buildings are going on, the states and territories are doing that. Why not do as suggestion from SCA Australia – which is the peak body for strata managers? Why not just commit $500 million and say the Federal Government will pay for this, get on and do it?

Karen Andrews: Because we have quite a different scenario here in Australia to what the UK does. We have federation issues here, so we have states and territories with responsibility-

Fran Kelly: But if you put up the money, don’t you think they’d go and do it?

Karen Andrews: Well I’m sure that the states are trying to argue for a bail out from the Commonwealth Government again. But this is an issue of their own making because the National Construction Code is very clear, that combustible cladding is restricted in its use on high rise buildings. So where it has been installed inappropriately, it is a compliance and an enforcement issue and that is for the states -

Fran Kelly: I understand that Minister, I understand the compliance rules will be different now too. But it’s not about coming for a hand out, this is about the Federal Government taking a lead and saying this is a national emergency, it was unforeseen, its $500 million, people’s lives are at risk, we’ll lead here.

Karen Andrews: Well, at this stage the states and territories need to stump up the money themselves quite frankly, because they’ve created this mess. I will try and coordinate a national response, but a national response is not the Commonwealth taking responsibility on every error that a state or territory has made. Now, if they want to take –they need to take a little bit of responsibility on this. They’re not just going to blame shift and buck pass to the Commonwealth Government.

Fran Kelly: Okay. On another issue Minister, the CSIRO has released today its annual Australian National Outlook Report. We spoke about it earlier with the Chair of the CSIRO, David Thodey. It warns Australia is heading into a slow decline if we don’t tackle some key challenges, amongst them the challenge of take up of technology and investing more in education. Some of this falls into your remit. Earlier this month the Productivity Commission warned there’s been a marked slow down of investment by business in technology. What will you and the government do to encourage firms to invest more in technology?

Karen Andrews: Yeah look, very good question. Can I also say with the Australian National Outlook, which I have read and gone through in some detail, now, it has a couple of scenarios – and they are scenarios, not predictions – one does look at the slow outlook, the other one looks at a positive outlook vision for this country. Technology is clearly one of the issues that we are facing. Now we’ve recognised that. I’ve recently just come back from the G20 Digital Economy Ministers’ meeting in Japan and the issues that we’re facing, for example, with artificial intelligence are consistent with what is being faced globally. What we need to look at with technology is that we need to bring people with us so that they understand the significance of the technology so that our young people at school understand the need to study science and maths at school. And we as a government have put a lot of resources into STEM education. Now, I’ve released the AI Ethics Plan. It’s a discussion paper, it looks at how we’re going to implement strategies but deal with ethics issues associated with artificial intelligence.

Fran Kelly: Sure. But just, the take up of technology is one thing. The innovation around it is another. During the election campaign we spoke with scientist Emma Johnston, she’s the President of a body that represents 70,000 Australian scientists and technologists, and she pointed out Australia, currently under this government, spends only 1.9 per cent of GDP on research and development, that’s down from two and a quarter per cent seven years ago and it’s below the global average. Will you commit to higher spending on R&D? Is that a good place to start?

Karen Andrews: Two things that I would say to that. Firstly, I understand that Labor and the Greens looked at commitments that would take the spend to 3 per cent and 4 per cent of GDP.

Fran Kelly: That’s right.

Karen Andrews: Yep. To take it to 3 per cent of GDP is in excess of $30 billion more than what is currently spent. Now, neither Labor or the Greens have set out a pathway to do that.

Fran Kelly: Well, we’re not in an election campaign and I’m only asking what your government - do you have a plan to lift the investment in R&D, just briefly?

Karen Andrews: Yes, our focus will be on engaging our researchers with industry to stimulate the spend of the business sector on R&D. And that’s one of the things that is focused on in the Australian National Outlook, that there needs to be a strong engagement between researchers and industry if we’re going to lift innovation and lift productivity. That’s where our focus is going to be, so I’ll be looking at strategies not just for big businesses to engage with the researchers because that’s well underway. So I’ve already had some discussions with Larry Marshall, the CEO of CSIRO, about how we can improve the engagement between researchers and small and medium enterprises because that’s where our majority of gains will come from.

Fran Kelly: Karen Andrews, thank you very much for joining us.

Karen Andrews: It’s a pleasure, Fran.

Fran Kelly: Karen Andrews is the Federal Minister for Industry, Science and Technology.