SALLY SARA, HOST: Australia's defence industry got a major boost yesterday with the Albanese Government announcing a $12 billion investment in a WA Defence precinct to bolster the country's naval shipbuilding and submarine capabilities.

The Henderson Defence site in Perth will cost $25 billion over 10 years, and will be used to build surface vessels, and also to dry dock submarines for maintenance, including those delivered under the AUKUS agreement.

Senator Tim Ayres is the Minister for Science, Industry and Innovation and joins me now. Minister, welcome back to Breakfast.

SENATOR TIM AYRES, MINISTER FOR INDUSTRY AND INNOVATION AND MINISTER FOR SCIENCE: G'day Sally, it's good to be on the show.

SARA: Is there any explicit guarantee in the AUKUS agreement that Australia will receive submarines?

AYRES: Well, that's absolutely the objective of this wide-ranging agreement. It's about submarines, but it's also about the broader technology transfer between Australia and our UK and United States partners.

This project that you've just been discussing will deliver 10,000 jobs over the decade in Western Australia around the Henderson precinct; that's good quality, blue collar and engineering jobs for Western Australians that will contribute to Australia's defence and national security.

SARA: But just to go back to the question, we're spending billions. There is no guarantee that we'll receive subs, is there?

AYRES: Well, there is absolutely the guarantee that submarines will be delivered for Australia to use. There will be the sharing of technologies as well. This is what this    

SARA: But there are caveats, here, aren't there?  

AYRES:  - this is what this AUKUS    

SARA: There caveats here that if the US believes it's not in their national interests, we won't get those submarines; they're not guaranteed?

AYRES: Well, I'm very confident that this agreement between Australia and the United States and the United Kingdom will be delivered upon in full, and it is already well and truly underway.

The arrangements between us and the United States on the submarines in particular is deep, it's already engaged with staff and personnel from the Australian Navy engaged with the Navy of the United States in training, in engagements around submarines. We are well on the pathway. There is a long way to go, but this is an important step for our national security, and we're following it through diligently in the national interest.

SARA: So, you're confident it will be delivered in full, but there's no guarantee we'll get these submarines, nor will we get our money back?

AYRES: Well, it's an agreement between two nations to deliver submarines, Sally. That's what's going to happen. Australia can't deliver these submarines and this capability by ourselves, we do it with partners, and that's how this agreement will proceed.

We've been steadily locking in all of the arrangements around personnel. There's a lot here for Australia to do. We have an enormous job in front of us in terms of training all the engineers and personnel for submarines. Many of those people are already engaged, working on American submarines, working across the defence sector. We've got a lot of work to do.

This step forward at the Henderson precinct, $12 billion over 10 years, is just another important step forward in this vital national defence journey for Australia.

SARA: The government plans to increase defence spending to 2.33 per cent of GDP by 2033, around meanwhile the Defence Minister says current defence spending is at 2.8 per cent of GDP based on the calculation method used by NATO. Why is the government using this new figure?

AYRES: Well, I think there's all sorts of different ways of assessing a country's national contribution to defence. The key difference here between us and our predecessors is we're focused on defence spending on particular capabilities that shift the dial and make Australia more secure; not arbitrary, you know, trying to meet an arbitrary target, or indeed doing what the previous government did, which was to make announcements that weren't delivered up.

You know, press releases is no way to structure a national defence plan. If the Morrison Government could have blocked [Australia’s] naval approaches with press releases, perhaps that might have been a successful approach. But what they did was issue press releases, press conferences, lots of TV cameras, and then failed to deliver on capability. We're focused on delivering capability that actually matters.

SARA: The White House has expressed the desire for Australia to significantly increase its defence spending. Are you trying to do that or simply using different calculation methods to get there?

AYRES: Well, I think the point is that there's all sorts of different ways of assessing what components of national spending are considered in different environments part of the GDP contribution.

I mean that's an interesting discussion, but it's not the discussion that we're focused upon. The point here is spending on defence is increasing, at this stage $70 billion additional spending over the next 10 years. That's Australia's response in our national interest to an evolving geopolitical and regional strategic environment that's changing, and we're moving to increase defence spending in our national interest.

It's an interesting discussion, you know, what proportion of GDP is engaged here, but it's not what's driving the government's thinking.

SARA: You're listening to Radio National Breakfast and my guest is Minister for Industry, Senator Tim Ayres.

Minister, the Government is preparing to announce its emissions reduction target for 2035. What conversations have been having with industry to get them on board for that transition?

AYRES: Well, whether it's me, but led by the Climate Change Minister, Chris Bowen, of course there are broad ranging conversations with industry about how we deliver upon, in practical ways, each sector’s emissions reduction targets, but also making sure that is also building Australian industrial capability at the same time, from the electrification of industry in my area of portfolio responsibility, as industry around the world is moving from fossil fuels to electrification, working with industry to make sure that they can deliver upon those objectives, and that it's done in a way which secures future investment in Australian industrial capability, let alone action to make sure that in Australia we secure the possibilities and potential of the global shift to net zero and what that could mean in new jobs and new industry for Australia.

SARA: Will we be getting the new target announcement this week; is that likely?

AYRES: Well, we'll be getting it soon. The government will work through a careful process, it's a cabinet-style government, the Minister will receive the advice, we'll work through that in a careful way and we'll make a decision that's in the national interest.

We're clear about our obligations as a government. We're clear about our obligations as a government. We're clear about the science, we accept the science of climate change, we accept that Australia is uniquely positioned both in terms of the risks for Australia are greater than many country as if climate change continues to proceed in the way that it does in terms of, you know, all of the devastating impacts that it can have upon our continent and our standard of living, but we're also seized of the uniqueness of our position in terms of the opportunity as the sunniest and windiest continent on Earth with vast mineral sources.

This is an opportunity for us to capture an Australian advantage in industrial terms that leads to new jobs in minerals processes, iron and steel processing, regional manufacturing, all in Australia's outer suburbs and industrial regions.

SARA: Minister, thank you for your time this morning.