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Interview – Sky News First Edition

15 April 2020

Peter Stefanovic

Subject: Australian manufacturing capability, supply chains and contact tracing app


Minister for Industry, Science and Technology Karen Andrews was interviewed on Sky News First Edition.

Peter Stefanovic: The Federal Government is working on bolstering the manufacturing sector after admitting the coronavirus pandemic has exposed Australia’s reliance on overseas supply chains. The Industry Minister says we need to be self-sufficient in making essential medical supplies like face masks and ventilators. But raw ingredients are in short supply.

Well joining me now is Karen Andrews. Minister, good morning to you. Thanks so much for joining us.

Karen Andrews: Good Morning.

Peter Stefanovic: So manufacturing spending used to be about 13 per cent of GDP, if I’m right. It’s now been reduced to six. So how much are you going to increase that?

Karen Andrews: Well that's a good opening line, isn't it? Let's actually talk about what Australia's needs are and that is to make sure that we do build a very strong manufacturing sector. And quite frankly, that work was well underway last year to look at what the future of manufacturing was going to be in this country. Since then we’ve obviously experienced the issues with the coronavirus, COVID-19. So we will re-look again at what the options are for us. But let's understand that we actually need to bring businesses with us. We need to bring consumers with us and they need to get behind the push for a stronger manufacturing sector in Australia.

Obviously, Government will do its part. We're certainly looking at how we can stimulate through procurement ourselves; that work is underway. But let me be clear, we can't be all things to all people. So we're not going to be able to manufacture everything that we want. What we want to do is be in a position that we are in a good place to manufacture what we need and that means establishing the right supply chains.

Peter Stefanovic: Well the problem with local manufacturing has become, you know, our high wages in Australia. So how do you battle that? How do you offset that? Are subsidies or tax incentives on the table?

Karen Andrews: Well our discussions last year, and they are continuing now, were clearly along the lines that it's very difficult for us as a high wage nation to compete on cost so we need to be looking at how we can compete on value; where our strengths are, how do we capitalise on those? We looked specifically at our core strengths of mining and agriculture where we are world leading, but we also looked at new and emerging industries. And of course, now, coming off the back of COVID-19, we actually have to look at issues such as sovereign capability; what are the things that we actually have to manufacture here in Australia and establish good supply chains for.

Peter Stefanovic: For masks, gowns, medical supplies, ventilators.

Karen Andrews: Yes. Absolutely. So let me talk about masks. We had one manufacturer in Australia, Med-Con based in Shepparton. They had a capacity or were producing about seven million masks per year. They’ve ramped up, their capacity is now over 50 million masks per year. We've had Detmold enter into contracts with the South Australian Government and also with the Federal Government for supply. Their machines are on their way through now. So they'll be set up and operating in South Australia. Ventilators, we have entered into an agreement with Grey Innovation and the consortium that they've put together for the supply of ventilators. So we need to address the current needs and we are doing that.

Peter Stefanovic: Increasing output, particularly when it comes to medical supplies by- do you believe that there will be another pandemic?

Karen Andrews: Well I think that history will show that we have had issues with MERS, with SARS, now with coronavirus. So we should at least be very open and realistic about the possibility that there will be more to come.

Peter Stefanovic: Yeah, I mean- and in the short space of time, there's been, you know, a couple in the last 15 years. So it stands to reason there will be more. So at the moment, do we have enough to be ready for that or is that what your plan is now? To be ready for the next one, whenever that happens?

Karen Andrews: Well it's a bit of both, quite frankly. We were actually as well prepared as we could have been at the time. The important thing was that we ramped up very quickly. So our reaction times were good. We've been able to demonstrate that we do have Australian manufacturing capacity. Yes, there's been some gaps which we've been able to work on. As part of coming out of this crisis, we need to start looking at our preparedness for the future and that's one of the things that we're already undertaking. So what's the state of our medical technology sector - med tech - it's actually quite good. It currently employs about 17,000 people across Australia and it is strong. But where are the gaps in there? If we're talking about mask manufacturing; what do we actually need for the future? What's our ongoing requirement going to be? And obviously, we’re in a peak now. We're not going to need that on a day to day basis, but if we do approach another crisis or experience another crisis, we're going to have to have the capacity to ramp up here in Australia.

Peter Stefanovic: Minister, just some other- before you go, some other science and technology news. I'm really interested in this app that is going to track carriers of the virus. Is this a go in Australia?

Karen Andrews: Look, there's been a lot of work done on that. We have looked at models overseas and the Singapore example is one that we certainly have looked at. Yes, it will be something that we will take most seriously, particularly as we start to come out of the current crisis. So yes, contact tracing is very important and we will look at using any tool that's available to us.

Peter Stefanovic: So when you say we will look at it; does that mean it is going to happen?

Karen Andrews: The work's already underway. So we're progressing towards that but it's still a work in progress at this point. So let’s make sure we get it right.

Peter Stefanovic: [Interrupts] Sure. So do you have a time frame? Do you have a timeframe?

Karen Andrews: Look we're working on it as quickly as we can and I say that in the context that the Government is very, very focused on making sure that we come out of this in a very timely manner. Obviously we need to listen and hear the medical advice but we want to be in a good position so that we can ramp up our economy, get people back to work as soon as we possibly can.

Peter Stefanovic: The issue that that some people are going to have is that a lot of the data can be collected. So what would governments eventually do with that data? So how can you assure that people's privacy will be protected?

Karen Andrews: Look, I understand people's concerns about privacy. So that's clearly one of the issues that we're looking at. As I've said, it is a work in progress. It's well advanced but it is a work in progress. We will continue to look at that. I mean, we want to reassure the people of Australia that the data that we collect will be used appropriately and they should have little to no concerns about what will happen to that data. And that will be a clear part of what our strategy is going to be. But I think the Australian people also understand that we need to look at ways to come out of this crisis as quickly as they can. And I believe that there will be an openness to look at how we can get people back to work, how we can get businesses up and running as quick as we possibly can. And I'll be encouraging people to be open to the various ways that are available for them and for us to do that.

Peter Stefanovic: Yep sure. Worth noting too that this app has been used to some success in Singapore so far and may well happen here. Karen Andrews, appreciate your time. Thanks so much for joining us this morning.

Karen Andrews: Pleasure.