SALLY SARA, HOST: As the war in the Middle East continues and the Strait of Hormuz remains effectively closed, the Federal Government is today announcing that it's secured the first vessel in what's known as its Maritime Strategic Fleet, which it says will reduce Australia's reliance on international shipping in times of global challenges.

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

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

HOST: The Government says this ship can be requisitioned in response to supply chain disruptions. Can you explain in practice how this could assist in times of need?

AYRES: Well, it's a step along the way. Our Australian maritime fleet has diminished over time, I think driven over the last few decades by a sense of complacency and confidence in the global supply chains. Of course, it was a commitment that we took to the 2025 election, pre dating the crisis in the Middle East.

But this is an important step forward. There's still a long way to go, but it's an important practical step forward in rebuilding Australia's maritime and commercial maritime capability.

HOST: One vessel doesn't make a fleet. How many ships does the Government hope to secure and by what date?

AYRES: Well, I can't give you a timetable or a commitment to your listeners now about what progress will be made over what amount of time. This is a big step forward today. It does require the Commonwealth intervening here in a way that is in the national interest, and previous governments have not done, so it's a big step forward. It's an improvement in our sovereignty and our economic resilience, but of course, there's lots more work to do.

HOST: The Government missed its own deadline to announce the first three ships early last year. Why the delay?

AYRES: Well, this is hard work. It is hard work, and Catherine King, the Minister here, has been leading that effort. It's really a U turn in [Australia’s] approach here over time to rebuild Australian sovereignty and Australian capability, and my own work, that's focused on our industrial resilience and our economic resilience in terms of what we make here, making more things in Australia. And Catherine King's work, of course, transport resilience, not just in the maritime domain, but transport resilience is a really important component of that.

HOST: So, let's bring you back to the question. Why the delay?

AYRES: Well, I'm not into the detail of this question. I know that it's been very hard –

HOST: What do you mean by that?

AYRES: Well, I'm not the Minister who's engaged in this work on a day-to-day basis. I just say to you, it has been an enormous effort here for the Government. It represents a really significant shift in Australia's approach on these questions, a focus on building our capability in that maritime domain.

It's not just a defence-related question. You've seen what the Defence Minister and the Defence Industry Minister have been doing in this area. It's also about our supply chains, and this is an important step along the way, but of course, there's much more work to do.

HOST: Is the issue here, particularly in this war environment, is it a lack of ships or is it more focused on trying to actually get oil and fertiliser and things that go in ships? This is a container ship as well, isn't it?

AYRES: Yeah.

HOST: It can't bring oil or fertiliser.

AYRES: This is a resilience is complex, there is no one answer, not one vessel, not one industrial smelter, not one new technological capability. Resilience is a complex and large question, and this is a Government that has, on energy resilience, whether it's in fuel or our electricity system, on transport resilience, on our industrial resilience, on making our economy stronger – like all of this effort broadly in Future Made in Australia has been undertaken and we're a Government that - it didn't take a war in the Middle East for us to begin moving on these questions. Anthony Albanese has been leading that Future Made in Australia agenda ever since we were elected.

HOST: On Radio National Breakfast, I'm speaking with the Minister for Industry and Innovation, Tim Ayres. To the debate over the changes to Capital Gains Tax discount and the treatment of small businesses, yesterday the Prime Minister said, while the Government is engaging with different interest groups, "People should not expect big changes". What's the point of consultation if the Government's ruled out any significant concessions?

AYRES: Well, that's entirely consistent with the approach that the Treasurer outlined on Budget Night, and we've been consistent about ever since.

The challenge in a lot of the – or the problem for our political opponents is they've lost sight of the people who are the subject of these changes. They're all about the politics of what's going on. The people who will substantially benefit from this are young Australians who have had the property market tilted against them and are finding it very hard to get their first, you know, to get on that first rung of the property ladder, the first home for them to buy.

Now for small business, in particular, all of the pre existing arrangements, you know, all of that generous treatment for small business, that is still in place. There are substantial benefits in the Budget for small business, making arrangements like loss carry back, Instant Asset Write Offs permanent, big changes to Research and Development Tax Incentive.  

There is a narrow question which is for those start up businesses who start with a small - a very small investment sometimes, and if they are successful make very, very large profits, then how do these changes land for them, and that is what is the subject of the consultation process at the moment. And we're legislating to deliver the package that was outlined in the Budget to give those young Australians security and to make sure that in the property market there's real clarity about what's going on there, and we're working through in a careful way, in a way that's led by the Treasurer on the impact of those changes on that narrow sector.

HOST: Yesterday, Treasury senior official Jenny Wilkinson spoke about the proposed tax changes, saying that revenue has to come from somewhere, and she also suggested that the proposed reforms will not necessarily increase housing supply, but rather it's more about changing the distribution of ownership. Is she right?

AYRES: Well, Jenny's right. This, in terms of the housing part of this package, which is the heart of it, it is about making sure that young Australians trying to get into the housing market have a fairer crack. It's not the only measure. The bulk of the Commonwealth's effort here is in housing supply, tens of billion dollars in those various packages –  

HOST: So, this measure is not a supply measure, it actually takes supply back –  

AYRES: This is –

HOST: –  it's a measure on its own, correct?

AYRES: It's an intergenerational equity measure that's saying to young Australians who feel locked out of the housing market, just like our support for young Australians with housing deposits, that's been very successful, saying to them, this is –

HOST: It's pushed up housing prices [indistinct]?

AYRES: Well, what we're saying to them is, this is giving you a crack at the housing market. Now there's lots of arguments from lots of vested interests in the housing industry who don't want to see these changes for young people. We have moved on housing supply. That's been opposed by the Liberals and Nationals every step of the way. We've moved on giving Australians, young Australians in particular, a fair crack at the housing market, opposed by the Liberals and Nationals every step of the way.

There is not one single measure in the housing market that by itself delivers fairness and equity and access and new supply, but taken together, this is an intergenerational package that is the largest home building and equity package, really, since the war.

HOST: We know that young people are now a much larger group than Baby Boomers. Given it's such a large group, will 17,500 people out of that group hopefully getting into homes, is that really going to make a difference?

AYRES: Well, this isn't a –

HOST: In a year?

AYRES: –  this isn't a political measure. The easiest thing in political terms would have been just to leave that unfairness there. We are taking steps here to recast the tax system in a way that benefits and reshapes the housing market in the interests of young Australians, and as I indicated before, there isn't one single measure by itself that delivers that, but overall the package being led by Clare O'Neil, the Housing Minister, driving new supply, the work in the Budget announced by the Treasurer, Jim Chalmers, to deliver more intergenerational equity, taken together, this is a very big housing package that puts young Australians in a much stronger position.

HOST: The Prime Minister – and I think I misspoke as well, I was talking about 17,500 a year, it's 7,500 to get to the 75,000. The PM told Parliament yesterday the Government's proposed legislation, which includes the changes to CGT and negative gearing as well as tax cuts, are aimed at enhancing aspiration rather than entrenching privilege. Do the current CGT settings entrench privilege for small businesses?

AYRES: Well, no, there are existing arrangements and new arrangements there that support the small business community. Like we're actually for small businesses, we want to see Australians investing and working hard, and they do. There's a set of narrow questions here about that start up sector. Jim said on Budget Night that we will embark upon a thorough consultation process with that group.

HOST: Beyond start ups into other small businesses?

AYRES: Well, if you're in small business, there is a lot in the Budget that supports your work.

HOST: But not this?

AYRES: The new tax measures in loss carry back, Instant Asset Write Offs being made permanent so that it's not being hung over the small business community every year, and the Capital Gains Tax arrangements, replacing one [discount] arrangement or one set of arrangements with another that is more closely related to the gains that people make, will have advantages for very many small businesses, and what we're seeing is the normal business as usual political reaction from our opponents who have lost their way on these questions –  

HOST: And the sector?

AYRES: –  'cause they can't see   they can't see the people who are involved here. They have –  

HOST: The sector's also pushed back. Do you take those criticisms and concerns on board?

AYRES: Yeah, of course, we're engaged with the sector broadly, and as the Treasurer said on those questions with the start-up community in particular, we'll keep doing that work. There's a body of work; we've brought legislation into the Parliament that has the key measures in the Budget. We want to get certainty around those. This is a package that delivers in particular for young Australians, and we're determined to deliver it through the Parliament.

HOST: Tim Ayres, thank you for coming in this morning.

AYRES: Thanks.

HOST: Thank you. Tim Ayres is the Federal Minister for Science, Innovation and Industry.