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Interview – ABC Victoria Statewide Drive with Matt Tribe

4 May 2020

Matt Tribe

Subject: Australian manufacturing, coronavirus vaccine


Matt Tribe: This might sound like a contradiction in terms. The declining manufacturing industry is about to get a reboot and it's thanks to COVID-19. Almost every industry has felt the financial pressure in the last few weeks, with manufacturing a central pillar on that list, particularly in regard to the shortage of medical supplies like personal protective equipment, PPE. This has, as we've seen, rattled governments around the world, highlighted our reliance globally, and here in Australia, on China as a manufacturing hub. And the Federal Government now in partnership with the local manufacturing sector – we’ll hear from one Australian-owned manufacturer of PPE in a few moments – they're hoping to ramp up our manufacturing capabilities. What does that mean at this point of unsurety? There is considerable hyperbole being thrown around about what the future of industry looks like in Australia. Well, to answer these questions, Karen Andrews is my guest, Federal Minister for Industry, Science and Technology. Hello.

Karen Andrews: Hi Matt. How are you?

Matt Tribe: Very well. So, to borrow a phrase that's been used by your office, you're looking at, quote, ‘resetting our manufacturing industry’. So, starting with the biggest word, the J word, will this mean more jobs, Minister?

Karen Andrews: That's what the plan is and we are on track to start that happening. So I'm actually quite confident in our manufacturing sector. I started work last year, looking at what manufacturing is going to look like in the future for Australia. We knew that it was very difficult for us to compete on price. We are a high wage nation, and mass produced, low cost production goods are probably not where we're going to be in the future. We were looking at, well, the high tech, the niche manufacturing that I believed, industry believed, was where we had great strength. So that work was already underway. And then, of course, we've had the issues with COVID, where the focus changed very quickly to how do we secure the personal protective equipment, the PPE, that we needed here, and when you looked around Australia, there was at the time only one manufacturer, for example, of surgical masks. So it’s highlighted a number of different issues that we need to be looking at. So that's what the focus is going to be: building manufacturing and making sure that we have sovereign capability to produce the things that we need in a crisis.

Matt Tribe: You're initiating programs, specific programs, to assist local manufacturers’ ramp up their operations. So what will these programs actually look like, Minister?

Karen Andrews: So, we announced about a year ago now, not quite a year ago, the Manufacturing Modernisation Fund and that was designed to help our small and medium enterprises effectively look at new technology, that new equipment, to raise the capacity that they have for manufacturing, improve their productivity and to train staff. So, that fund went through its selection process, we've started to announce what those projects are. So it's 200 projects worth about $215 million in total that we're supporting through the Manufacturing Modernisation Fund. And Victoria actually is a very big winner. There were 74 projects in Victoria alone out of the 200 across Australia and they’re worth about $100 million and should produce an additional thousand-plus jobs.

Matt Tribe: The manufacturing industry has been on the decline for years now. With your government at the helm for the last seven years and I've heard you say now that this crisis, this COVID-19 crisis, has been able to highlight those areas which most need support. Why has it taken a pandemic, Minister, to reignite the Australian manufacturing industry in this way?

Karen Andrews: Because businesses, consumers were happy to buy on price, which meant that they were looking for where the cheapest price would be and on mass produced items and a lot of that being the PPE equipment that is needed in large quantities. The purchasing power made with the very large supply chains coming out of China and there was a lot purchasing on price. Now, I understand that many people want to and need to purchase on cost. What I'm saying to them is that I actually would like you and need you to now look at Australian manufacturing jobs and to look at the quality and the value of the products that you're buying.

Matt Tribe: The Andrews State Labor Government announced the old Ford factory in Geelong has been converted to manufacturing wind turbines. That happened early last year. So, again, why has it taken so long for the Federal Government to catch up?

Karen Andrews: Well, this is particularly looking at personal protective equipment, not wind turbines, because there’s been a lot of work done and the space sector has been one that we've been working on now for a couple of years. And quite frankly, there's already over 10,000 jobs in the space sector and that's well on the way to tripling by 2030. But for personal protective equipment, I think all the states would admit that a lot of work needs to be done to lock in those supply chains. The one manufacturer of surgical masks was based in Shepparton. There was no other facility anywhere else in Australia, so state and territory governments were purchasing their supplies from overseas themselves. So, it's not just a wake-up call for the Federal Government, it's a wake-up call for every government to look at making sure that we lock in some Australian supply.

Matt Tribe: We’ll be joined in a few moments by the CEO of Med-Con in Shepparton, Australian owned and operated manufacturer of those medical supplies. But are you aware of China price-gouging raw materials in the last few weeks that go into the creation of these PPE?

Karen Andrews: There has been enormous increases in supplies of raw materials. So, we are very much aware of that. We have been working alongside the states and territories to secure the best prices that we can for input materials. We've looked at what we can produce in Australia ourselves, and in fact we've got CSIRO working on some of the filter materials that are likely to be used by Med-Con in the manufacture of their masks. So yes, there are huge increases in raw materials, and huge increases in freight. Freight is very difficult to be able to lock in. There’s limited flights. But, yes, there’s significant price increases.

Matt Tribe: Would you like to see our supply chains become more nationalist in structure?

Karen Andrews: What I would like to see is us in a much better place to be able to manufacture the things that we need in a crisis. So, we know that PPE is one of those things. So, it's not just surgical masks, it's also gowns and gloves, and that's where we're working now. Another manufacturer has come into the market for masks. That's great. There’s lots of interest in developing ventilators, and in fact we now have multiple manufacturers of invasive ventilators coming onto the market here in Australia now. So, we’ve actually done really well and I think that the point that we need to remember is that from almost just standing start in some cases, we've actually done a very good job in ramping up our manufacturing capability, but we can't be complacent now. We have to make sure we lock that in.

Matt Tribe: As Federal Minister for Industry, Science and Technology, Karen Andrews, today you've been outspoken regarding the CSIRO and when there may be a coronavirus vaccine ready. What's your understanding of the timeline on that?

Karen Andrews: Okay, I believe that we will have a vaccine ready in the next 10 to 15 months. I work very closely with CSIRO. They're one of my agencies, they're currently testing two vaccines at the moment now. One is from the UK, the other is from the United States. There's other work happening at other research institutions across Australia. We believe that there will be a positive breakthrough, but there's about 100 vaccines that are being trialled right across the world. What we need to do is make sure that we are engaged globally, and that when a vaccine is proven - and hopefully that will be an Australian one - that we are in a position to then start manufacturing that vaccine here. So, that’s the next stage of my work, and that's already begun to ramp up our capacity to produce the vaccine here in Australia.

Matt Tribe: As exciting as that is, it is tempered by our uncertainty about what life is going to look like between then and now. Ten to 15 months is a long time, especially when a year ago we had no idea what coronavirus even was. Do you know what life is going to look like then in the next year, the next 10 to 15 months then, if that's how long we know it will take the CSIRO to develop a vaccine?

Karen Andrews: Well, it’s clearly going to be very different to what it was six months ago. So, restrictions are easing on a state by state basis, but we are a long way from having all restrictions eased at the moment. And as I’ve said many times, this needs to be baby steps, because if we ease the restrictions too quickly, we face the risk that there will be a second wave. And in our case, given the level of success that we've had so far in flattening the curve and keeping the number of COVID positive tests - people who’ve tested positive down - it’s likely that a second wave may well be worse. We don't want that to happen, and that's why it's so important that whilst restrictions are being eased, people do keep socially distancing, they do keep washing their hands, and they don't flout the rules.

Matt Tribe: Minister, thanks for your time.

Karen Andrews: It's a pleasure. Take care.

Matt Tribe: That is Karen Andrews, Minister for Industry, Science and Technology.