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Interview – FIVEaa Mornings

14 April 2020

Leon Byner

Subject: Australian manufacturing capability and supply chains


Minister for Industry, Science and Technology Karen Andrews was interviewed on FIVEaa mornings.

Leon Byner: Now, my next guest is the Minister for Industry, Science and Technology. She is suggesting that we need investment in manufacturing because of what we’ve seen this pandemic has done, that we can’t rely on other countries who export because they’re more interested in looking after themselves, and secondly, some of the stuff they export is of very dubious quality.

Let’s talk to Federal Industry Minister, Karen Andrews. Karen, thanks for joining us.

Karen Andrews: Good morning, Leon.

Leon Byner: Now, what are the kinds of industries that you're looking at reinventing in Australia?

Karen Andrews: So, we did a lot of work last year, I worked with many of our manufacturing stakeholders, and we split it into two parts. One is the businesses and industries that we already have now that we have historical strengths in, and that’s predominantly agriculture and mining and resources. Now, we want to continue to be strong and grow those sectors, and I'm happy to talk about mining particularly in a bit more detail. We then looked at what some of the emerging industry sectors were that we could potentially increase the work that we're doing here and build on our successes. There is advanced manufacturing and I think it's important that we understand that we can't be all things to all people. So, this should not be a broad brush approach, this should be very targeted and very specific with what we're doing. So, defence provides us with some opportunities, space provides us with some opportunities to specialise and provide a great export opportunity for us as well as meeting our own internal needs. And of course, now that we’re going through the COVID crisis, we've also been able to demonstrate that med tech, medical technologies, is certainly an area where we have great expertise and we need to look at where our niche is that we can start playing a real part in the global market for medical devices and medical technologies.

Leon Byner: Now, we know that approximately 90 per cent of our pharmaceuticals are imported and this is not a good look. We used to make them onshore - is there a will for us to recommence doing that?

Karen Andrews: There is a will. We're not going to be able to, nor would we want to, manufacture every single medicine here in Australia. What we need to do is make sure that we're maintaining stockpiles, and they currently sit at around about a six-month supply which is good. So, maintain our stockpiles, look at what we need to do to make sure that we are in a position to deal with the crisis in the future, and that’s very difficult given that we don't know exactly what that crisis may be. So, importantly we’ve got to be able to make sure that our pharmaceutical industry can pivot and make other medicines as and when required which means that we'll have to work with the TGA and deal with other regulations to do that. So, it’s developing our core capacity here, developing to meet our needs, and then looking at what we can do if we're required to pivot some of that pharmaceutical manufacturing into other drugs and medicines.

Leon Byner: Minister, I think what's happened over time is that many of these industries that we did have were lost because it was figured out by those who capitalise all these industries and businesses, that tend to be global companies, they can pay [indistinct] wages offshore, and they'll argue, well, Australian wages are too high. And yet you look at Germany and their wages are very good, they don't have this problem, do they?

Karen Andrews: No - well, they don't have it certainly to the extent that we experience it. And that's because Germany has a very strong reputation for quality and people are prepared to pay for quality products. We know that. That's why we need to make sure that we're not trying to compete on cost in the future, that we are trying to compete on value and that we add value to what we're doing and the value we add is of a high quality.

Leon Byner: You know, unfortunately there are people on both sides of the Parliament who don't want this, they say, oh, it’ll put tariffs back on all these things. But of course you will remember that, whilst a lot of countries we deal with don't have tariffs, they have other means of making our goods more expensive so they're less competitive overseas. That is a reality, isn't it?

Karen Andrews: Yes, they do. And I also have responsibility in Australia for anti-dumping. So, I deal with, on a daily basis, products that are coming into this country that are effectively being dumped here. And I'm a very strong supporter of our anti-dumping system because I think that there needs to be as level a playing field as possible, and as far as I'm concerned, other countries are not going to dump their products here in Australia and disadvantage our own manufacturers, so I'm very strong on anti-dumping. I think it’s really important that we look at what has happened in manufacturing and what the opportunities are for us in the future. We are a high wage nation; no one wants to change that. So, where are the opportunities for us to develop a strong market presence and to meet our own needs? So yes, free trade is still going to exist but I'm saying that we need to make sure that we can look after our own needs. Now, I think it's fair to say that we can't manufacture to all our wants but we need to manufacture our needs.

Leon Byner: Karen Andrews, thank you for joining us today. That's the Federal Industry Minister.