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Interview – Radio National Breakfast with Patricia Karvelas

8 August 2019

Patricia Karvelas

Subject: Australia-China relationship, technology roundtable, research and development tax incentives, Global Talent program


Minister for Industry, Science and Technology Karen Andrews was interviewed by Patricia Karvelas on Radio National Breakfast.

Patricia Karvelas: Karen Andrews is the Minister for Industry, Science and Technology. She’ll be sitting down with the tech bosses in Sydney later today and she joins us in the RN Breakfast studio. Welcome.

Karen Andrews: Good morning.

Patricia Karvelas: Now, I want to talk about this almost exclusively, but I have to ask you about a breaking story and that’s this warning from a key government MP about China. Andrew Hastie, the chairman of the Parliamentary Joint Committee on Intelligence and Security, says this country is facing an unprecedented economic and security test, likening the world’s approach to containing China to the catastrophic failure to prevent the rise of Nazi Germany. What do you make of his warnings? Is he right?

Karen Andrews: Well I think we need to be really clear about a couple of things. And the first is that the United States is a key ally to Australia. We have a lot of things in common. We need to maintain that relationship, and we are maintaining that relationship. China is a key economic partner for Australia as well. They’re a significant nation for our trade and we need to continue to work with them. We recognise their significance and their importance in the region. For Australia it’s maintaining the relationship with the United States and also with China. So look, these are matters that I know will be explored in more detail – much more detail – today with the Prime Minister, and they’re matters for the Foreign Minister. I’m very confident that Australia is on the right pathway to making sure it maintains relationships with both the United States and China. We will always act in the best interests of Australia.

Patricia Karvelas: Just on this comment, though, which has really been the one people are talking about – catastrophic failure to prevent the rise of Nazi Germany, that’s the comparison. Is that a fair comparison? Or has he gone too far in your view?

Karen Andrews: I don’t really want to get into that. They’re Andrew Hastie’s views. My views …

Patricia Karvelas: Is that your view? Can you compare it to Nazi Germany?

Karen Andrews: Oh look, I’m not even prepared to go down that path at all. They’re his views, they’re views that he has put. My views and the Government’s views are that the United States is our most important ally and we have a very strong relationship with China, and we intend to maintain both of those.

Patricia Karvelas: Do you accept that comparison, though, will alarm China?

Karen Andrews: Look, I think there’s a range of things that we need to be very conscious of as we’re dealing with our global partners, whether that be the United States, China or with other countries as well. I’m in favour of de-escalating tensions wherever possible, whether that be in the foreign affairs area or whether that be in my own portfolio, and that’s why I’m having the roundtables. 

Patricia Karvelas: Okay. I like the way you segued back there. You’ve already flagged you’re willing to re-examine some of the changes, the research and development tax incentive for instance. What changes are you prepared to make?

Karen Andrews: Okay, so the R&D legislation actually sits with Treasury, for the legislation. My interest and where I’m headed is to look at how that legislation is operationalised and how it’s implemented. And there may well be that there are some disconnects between tech organisations, AusIndustry and how that is managed from an operational point of view. This isn’t legislative issues. This is how the department operates and how we engage with the tech sectors. So I’m very happy to explore that and I already have had some early discussions with my own department to see what we can do to try and streamline the processes, so that there is a level of surety for the tech companies and those in particular who are using software, who are engaged in research and development that involves software so that there’s a level of certainty for them.

That’s where my focus is going to be. That’s what I’m hearing is important from the tech companies. They’re looking for certainty. Now earlier this year, I did release some guidelines that set out a little bit more clearly, I believe, what those processes should be and what the tech companies should be doing to stay within the guidelines. I’m happy to take feedback on that. I may well get some feedback on it later today when I have the tech roundtable, but that’s where I’m focused.

Patricia Karvelas: Did the Morrison Government get it wrong to crack down on these incentives given business investment is so weak?

Karen Andrews: No, I don’t think that any level of scrutiny is wrong when we’re looking at taxpayer dollars. So I think that as a Government, it’s our responsibility to make sure that where there is taxpayer money involved and where there’s policy decisions involved that impact on the taxpayer, we make sure that there’s an appropriate level of scrutiny.
Patricia Karvelas: We know Malcolm Turnbull’s so-called ideas boom fell flat with voters, clearly any innovation agenda you’re now pursuing is going to be more under the radar. But given the Ai Group, which represents firms in more traditional industries, also wants an end to the R&D incentive cuts- its chief Innes Willox says Government needs to provide stronger visionary leadership to drive investment in new technology. How committed is the Morrison Government to driving innovation in Australia?

Karen Andrews: Absolutely committed. Absolutely committed.
Patricia Karvelas: And are you prepared to change policy settings to get there?
Karen Andrews: I’m certainly prepared to look at what the policy settings should be so that we ensure that innovation is a key part of our policies going forward. But I’m also very determined to make sure that we take all of Australia with us because what has happened previously is that there has been a lot of concern from Australians that innovation, advances in technology is going to lead to job losses, when in fact I want people to see technology as an enabler. I want them to be able to see that technology benefits them every single day of their lives. And quite frankly, we’ve moved a long way from the Refidex to Google Maps. Now most people would say that that’s really helpful for them on a daily basis. So I’m keen to work with the tech sector, look at the positive examples and make sure that we bring all Australians with us on this tech journey.

Patricia Karvelas: The tech sector has long been unhappy about the Government’s changes to 457 visas. It wants to import more skilled workers. The argument is that Australia doesn’t yet have a pipeline of more experienced skilled workers in this field, do you accept that argument?

Karen Andrews: It’s clear that we do have some shortages in some key areas and we do have to look overseas to bring that talent in. I’m happy to talk to tech sector about some specific examples. Where there have been problems, absolutely happy to take them up.

Patricia Karvelas: So you are willing to change 457 visa arrangements to try and make sure that those shortages are addressed?

Karen Andrews: What I said is I’m prepared to take up the issues where there are specific circumstances, I’m happy to pursue those. Now there has been an announcement in relation to the Global Talent Scheme, that’s now moved past the pilot stage, so the announcement’s been made that that is going to continue. I believe that that’s a positive step. I may well raise that with the tech companies that are at the roundtable today depending on what the priority issues are that we need to look at. I may well raise that but I think that the Global Talent Scheme is a real positive, and it enables the tech companies some opportunities to bring in the talent that they need.

However, we do have to recognise that there are some key skill shortages here in Australia. That problem is not going to be solved by Government alone. So I will be calling on tech businesses and also the broader industry to step up as well too – what are they doing to help create the pipeline of talent that we need? Are they engaging young people? Are they supporting them through their training and development? Are they out there promoting what the jobs of the future are so that they can excite young people into the tech sector and more broadly into industry? This is not a problem that the Government is able to fix without significant engagement from industry and from the researchers.

Patricia Karvelas: So today’s another conversation, a roundtable. When can we expect meat on the bones, if you like, tangible outcomes from these conversations?
Karen Andrews: Well it’s clearly going to be a work in progress, so I’m not going to set a timeline as to say, you know, in however many months there’s going to be a direct tangible outcome. I think from the roundtable last week, there already have been some positive outcomes that the tech sector and those that I’ve spoken to really over the last few months at least, are very keen to be engaged with Government. They’re understanding how to engage with Government because many of these tech businesses are quite new, they’re not used to Government engagement, they don’t necessarily understand how Government works. We’re opening up those channels of communication and that’s already been seen as a very positive move.

And while some people might say well that’s pretty light on, I don’t believe that you can achieve much if you don’t have those open communications between Government and industry. So that’s a very important first step. Once we develop that, develop the relationship, we’ll hear more from the tech sector. They’ll be more open about how they can positively engage and one of the things that came out of the roundtable last week is that these tech companies are really keen to be part of the solution. They want to work in the start-up sector, but they also want to work with existing businesses, they want to engage with the research sector, they want to be seen as drivers of the Australian economy. That’s where they should be, that’s where they need to be, that’s where I want them to be.

Patricia Karvelas: How ambitious are you for this sector? Do you expect us or can you commit us to be a Silicon Valley or like Israel in relation to the tech sector?

Karen Andrews: I don’t necessarily see us as another Silicon Valley because we’re quite different, but I see us as world leading in technology in some pretty key areas. And we need to define what those areas are going to be, where we have traditionally done well – so where are our core strengths – and how do we look at balancing that with emerging industries. Technology is going to drive our economy so I want to make sure that we get it absolutely right, we engage with the right people and that we make it very clear to Australians that technology is an enabler, it is going to enable them to do things faster, better, more efficiently.

Patricia Karvelas: Karen Andrews, thanks for coming in.

Karen Andrews: Pleasure.

Patricia Karvelas: And that’s the Minister for Industry, Science and Technology, Karen Andrews.