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Interview – Sky News, Sunday Agenda

18 October 2020

Kieran Gilbert

Subject: NZ election, Victorian COVID restrictions, Modern Manufacturing Strategy, Gladys Berejiklian


Kieran Gilbert: Let’s go live now to the Gold Coast. I’m joined by Karen Andrews, Minister for Industry, Science and Technology. Minister, thanks very much for your time. A resounding win for Jacinda Ardern. Does it show yet again that at this time of crisis and pandemic is it time for competent incumbents and that they will be rewarded if they’re seen as competent?

Karen Andrews: Well good morning, Kieran, and welcome to all the viewers from the Gold Coast here. Look, it’s been a resounding victory for Jacinda Ardern, without a doubt, so congratulations to her. The New Zealand people have re-elected her and have chosen her as their leader to lead them through the post-COVID recovery. In fairness, Jacinda Ardern, though, was popular pre-COVID, so I think that she’s been rewarded for the leadership that she has shown over a longer period of time than just COVID.

Kieran Gilbert: If we look to leadership at home now and, as my colleague Andrew Clennell mentioned, Greg Hunt, the Health Minister, is calling for a COVID-safe reopening of hospitality, movement, family reunions in Victoria. Is the Federal Government optimistic that we will see an easing of restrictions like those in Victoria today?

Karen Andrews: Well, we hope that Daniel Andrews shows the leadership that is needed in Victoria. I mean, our hearts go out to all Victorians. They’ve done it tough, they’ve been locked up for months, it’s had a devastating impact in that state. And there’s a lot of evidence to support what I’ve just said. It’s had significant impacts on businesses, it’s had significant impacts on employment, it’s had significant impacts on mental health.

Federally, we’ve been saying for a long time now that we need to live and work in the COVID environment in which we find ourselves. Daniel Andrews actually has shown himself to be a lockdown leader, we actually want that to change. We want businesses to be able to reopen, we want people back in jobs. Obviously that needs to be done in a safe manner, but let’s look for opportunities to reopen rather than take every single opportunity to shut things down.

Kieran Gilbert: And we’ve seen the impact on jobs. Just this week the jobless rate looked like there’d been some jobs growth elsewhere, all except Victoria which remains amid this lockdown. Another reminder of the economic toll, let alone the mental health toll. Has the Victorian Government simply been captured by those within the health bureaucracy that are too cautious?

Karen Andrews: I think that they seem to be frozen and, quite frankly, they need to look at the options they can put in place to reopen and to do that as quickly but as sensibly as they possibly can. We need, as a nation, for Victoria to actually start getting back to business, to reopening. We need people in Victoria to be able to get back to running their lives the way that they want to run their lives, rather than being told they need to stay indoors, that there are massive restrictions on their lives. I’m pretty clear and the Government is pretty clear that we need to make sure that we live and work in the COVID environment and that cannot be taking every opportunity by a state government to lock down, to close borders, to make it difficult, if not impossible, for people to get back to work.

Kieran Gilbert: Let’s move to your area of responsibility, speaking of getting back to work and the Government’s efforts to drive an economic recovery. One of the criticisms of the manufacturing plan, a couple of billion in funding, is that it won’t be enough to move the needle, so to speak, to drive the next generation of manufacturing in this country, new tech and so on, to diversify our exports. Will it be enough to move the needle, Minister?

Karen Andrews: It will move the needle, and I’m very clear that we have to make sure that we look at manufacturing as part of a system. So we have set a very strong base. There is support for skills. There’s almost $7 billion going into developing the skills that we need now and for the future. There’s work being done in terms of tax cuts which have been implemented. There’s work that’s being done with the instant asset tax write-off. All of these things are very important for manufacturing. So the headline figure in manufacturing is not the only amount. And you mention technology, there have been changes to the R & D tax incentive to the tune of about $2 billion. So there is significant money that is underpinning and supporting and enabling the manufacturing policy. But we’ve been very clear that the manufacturing policy is going to create significantly more jobs over the next few years. But this is a policy that is based on making sure that our manufacturing businesses become competitive, that we build the resilience that we need, and importantly we build scale. And a large part of the manufacturing is designed to build the scale that we need in the national priority areas that we have designated. And I should say, Kieran, that the work that went into developing those national manufacturing priorities was extensive. So that the six sectors that we have said are our priority areas have been chosen on the basis of their comparative or competitive strengths or their strategic importance to this nation.

Kieran Gilbert: One of the areas you talk about, building scale, but I guess diversifying is also important into that tech space. Should there be, with the R & D tax incentive, should you expand access for things like software development?

Karen Andrews: So a lot of work actually has been done with software. So I understand the concerns. Businesses, start-ups in particular, want some clarity about whether or not their claim is going to be successful. I’ve made it very clear to my own department that they need to support businesses, that they need to provide as clear advice as possible. Now, sometimes that’s difficult because they’re trying to make a determination on work that has not yet been undertaken. But we are working hard to provide that level of clarity, of transparency, so the businesses have a very clear understanding of whether or not their claim is likely to be successful when it’s made. Now, it is self-assessment so there are some cases that we know of where businesses have been advised that their claim is likely to be unsuccessful but they’ve still lodged it anyway. And of course when they’ve been audited they’ve had to repay the money.

So the important thing is that technology is a clear enabler for businesses, for our manufacturing sector. We have made some significant changes with the R & D tax incentive to support businesses. We want to kickstart research and development. We need businesses to be putting their money into their own businesses and supporting their own research and development. Software, tech are key drivers of that and I’m absolutely committed to working with the sector.

Kieran Gilbert: The Federal Government has reversed $1.8 billion in cuts when it comes to research and development. Did you have to fight hard internally to ensure that those cuts didn’t proceed, given the context we find ourselves in in this recession?

Karen Andrews: Kieran, to be perfectly frank with you, it was one of the first things I raised when I was appointed to this portfolio just over two years ago now. So I have worked with the sector, I’ve worked with the Treasurer, I’ve worked with my Cabinet colleagues to demonstrate how important research and development is to this country. So I’m delighted with the outcome. I think it’s actually a very good outcome for all of industry and particularly for our tech sector.

Kieran Gilbert: You mention those six priority areas. Labor says that its 2012 Prime Ministerial manufacturing taskforce had those six areas as priority areas back in 2012. What do you say to that criticism that the Government should have acted sooner, that these areas have been known for a number of years?

Karen Andrews: Well, I suppose that means that Labor’s going to jump on board then and say that these are in fact the right sectors, and I believe that they have said that and supported it. So that’s good that they’ve actually endorsed what our announcement has been. But look, there are some things that are really important to note. One is that there shouldn’t have been surprises because we needed to rely on the evidence to determine, again, categorically what our strengths were. So some of those are incredibly obvious. We do have significant strengths already in resource technology. We do have significant strengths in food and beverage. We’ve been growing medtech for a number of years now and, of course, during COVID it became enormously apparent that medical technology was something that Australia was already doing well at and we had some significant opportunities to grow.

Defence and space, we need for strategic and significant growth opportunities. We know that when governments get behind and they put money into sectors that they signal to the private sector that there is a strong interest in growing one particular part of the sector like space, then a lot of money starts to flow in as support. It opens up access to capital, which is a significant issue for many businesses. So I’m very confident now that we have publicly stated these are the areas that we have designed our manufacturing policy to support, we’ll see significant growth.

Kieran Gilbert: Given Australia’s record through the CSIRO and other areas has been brilliant when it comes to research and breakthroughs, why have we not been so good in commercialising that tech success, that research success into commercialised products?

Karen Andrews: A lot of it comes from the way that promotions, quite frankly, are organised within the university sector, which means that our researchers, to access promotions and work their way through the universities sector, need to publish. Of course when you publish you’ve damaged your risk of securing the IP that you need and so then it’s very difficult to go to commercialisation. One of the things, though, that we need to realise is that that’s not necessarily the strength of our universities. And so that’s why under this policy we’re looking to partner universities with CSIRO and industry, so there will be three parties that are leading the manufacturing strategy. Fantastic researchers at university, let’s get them working with CSIRO and industry so that we can do that commercialisation.

Kieran Gilbert: Okay. And finally, before you go, I have to ask you about the big story of the last week in terms of politics and the New South Wales Premier. The Labor Opposition is calling for her to resign given the news out of ICAC and the revelations of the week. Do they have a case on that?

Karen Andrews: Gladys Berejiklian has made extensive statements on the public record either during the ICAC period when she was a witness, but also she has made statements publicly since. The Gladys Berejiklian that I have seen has shown the gold standard of leadership through COVID-19. I think that a lot of the commentary has focused on her personal life. I’m not at all interested in commenting on that. I think we need to look at the leadership that she has shown of New South Wales pre-COVID and during COVID. I think she has been a very strong leader. She really has set the gold standard for how to manage COVID and we need to be giving her credit for that.

Kieran Gilbert: Karen Andrews, Minister for Industry, Science and Technology, thanks for joining us live from the Gold Coast, appreciate it.

Karen Andrews: It’s a pleasure, take care.