JOURNALIST: Ian Macfarlane, welcome again to Breakfast.

IAN MACFARLANE: Good morning, Alison.

JOURNALIST: Ian Macfarlane, the Prime Minister was saying yesterday that this plan isn’t about picking winners; rather it is about playing to our strengths. Some would say that our strengths are also in tourism, education, renewable energy projects. So, you have had to pick and choose. Why are those other sectors being ignored?

IAN MACFARLANE: Well, there are other programmes of course for the Renewable Energy Sector and it is supported to the tune of a $1 billion already by the Australian Renewables Energy Agency (ARENA) and it has the Renewable Energy Target (RET) as well. So, we weren’t trying to say these are the only areas but we said that these are the areas that we want to start in. One of the mistakes that the previous Labor Government made was they had a shotgun approach to this, they picked a whole range of areas that they wanted to support. That basically failed at the beginning before it even got off the ground. Most of that precinct programme never really came to anything. So, what we wanted to do was focus down on five key areas. These won’t be the last areas that we deal with but they will be the first. They are the areas that we have the greatest natural advantage in. They are areas which we see strong demand in export growth in and the greatest opportunity to create employment, as industry in Australia goes through what is the third transition. First thing we had agriculture than we had manufacturing. Now, along with the rest of the world, moving into advanced manufacturing in a service based economy and that is a transition that Australia needs to be part of.

JOURNALIST: Minister, you do mention Labor’s industry innovation precincts. There is a perception this morning that you are simply rebadging Labor’s scheme but with less money and fewer centres?

IAN MACFARLANE: Well, that is simply not the case, of course. As I said their precinct scheme failed right at the beginning. What we have done is rebuild this whole concept from the ground up. We have taken advice from industry; we have taken advice from the likes of Catherine Livingstone and the Business Council of Australia. We have been, I have sent advisers to look at the Catapult Programme in the UK which is arguably the most successful of these programmes. We have trimmed down the size of the boards instead of having 18 or 19 or whoever we wanted on it – we saying these boards will be very focussed. Five people chosen by industry – not government – will be set up as a corporate entity. It will be KPI driven and the goal is that in time these will be self-sustaining. So, this is all about industry taking control.

JOURNALIST: Minister, if we could have a look at one particular aspect of your plan and it is the pilot programme for a schools training scheme. How would it work and how closely involved could industry be in designing specialised school courses?

IAN MACFARLANE: Well, we will be first investigating that with the $500,000 that has been allocated but obviously this is a great opportunity for industry who have complained long and hard that we are not turning out graduates of the type that they want, to be actively involved in the education and training of young people in particular. So, that they are ready for the job that these companies want then to be. Companies convey as active a role as they wish to and they can provide a framework, they can provide a framework plus dollars, they can provide a framework plus dollars plus the incentive of a job when the person graduates. So, this is something that is used elsewhere in the world, it is something the Prime Minister saw when he was in the US and he was very impressed with. It is about industry being part of the whole education chain and in the end; our goal whether it is under this model or under what we are doing in the changes we have introduced in schools and training generally, our entire goal is not about just training people. It has got to be about training people and putting them into a job.

JOURNALIST: The Australian Education Union calls it the corporatisation of schools. It believes that it is inappropriate for companies to have a say in how students are taught or how schools are run. What sort of companies could be involved in the scheme? Presumably, not fast food companies?

IAN MACFARLANE: Well, I mean, that is a typical response from the Education Union which has basically been very much responsible for driving the STEM; the science, technology, engineering and maths out of our education system and producing a cohort of people who aren’t job ready. So, I think they can have their preconceived positions. The reality is the companies that need people who are highly trained, particularly in those STEM areas, are the companies that we would obviously be looking for in terms of being involved in this. So, they need people trained in the skills of science and technology, engineering and maths. Other companies that are saying to us that we need better qualified people – they will be the companies that we will look for. They will be, in the main, multinational companies but there will be some companies in Australia who will obviously be involved as well.

JOURNALIST: You have mentioned the need to teach more kids science and technology, engineering and maths. You will be spending $12 million on these subjects in Australian schools. Isn’t that a little at odds with the money that you have cut from the CSIRO? You are putting $12 million in but you have taken $111 million out in the Budget from CSIRO.

IAN MACFARLANE: Well, Alison, no interview with the ABC would be complete without the ABC making that point which as I have repeatedly pointed out to the ABC and to your listeners, is completely incorrect. There was a number taken out of $111 million but as I say in the same Budget we put $66 million back in to the RV Investigator, we put $32 million back…

JOURNALIST: That is a boat. You put $66 million into a boat.

IAN MACFARLANE: It happens to be a boat that is owned by the CSIRO, Alison. The reality is that if we look at the science budget and we look at the CSIRO budget over the forward four years the science budget actually went up. So, I will not take this constant harp that we have cut the CSIRO. I was with the CEO of the CSIRO last night can I tell you they are absolutely enthusiastic about the task sitting in front of them.

JOURNALIST: So, you have taken $111 million out of the CSIRO over four years?

IAN MACFARLANE: And I have put $66 million back for a boat, $32 million back in to the reactor, $26 million back in to look after nuclear fuel as well as promoting science to the tune of $28 million. The reality is that the CSIRO is in a very sound fiscal state and if I put money into a boat that belongs to CSIRO, I reckon that is putting money into CSIRO. So, the number you keep quoting is simply not correct.

JOURNALIST: Well, the focus in this plan is in science to a degree. You will be establishing a new Commonwealth Science Council as the preeminent body for advice on science and technology. Wouldn’t it be better if we just had a dedicated science minister which the Government doesn’t have?

IAN MACFARLANE: Well, we could have the alternative which Labor had which is a constant rotation of science ministers or you could have the third most experienced Cabinet Minister, the son of a scientist, the grandson of a scientist as the science minister. Someone who is…

JOURNALIST: That’s you?

IAN MACFARLANE: That’s me and I am absolutely committed to the science fraternity. As I say, I spend as much time in the science portfolio as I probably do in the rest of the portfolio put together. It is an area which I think is critical to industry policy. As the Prime Minster and I both said yesterday it is at the centre of industry policy under the Abbott Government. We see it as critical in improving the competitiveness of industry. I think the reaction, as I say; that I am getting from the science fraternity is that they are excited about that prospect.

JOURNALIST: Minister, if we could just finish up on the submarines. The policy that you announced yesterday, to an extent, does mark the end of the era of industry protection in this country. Can we take that as another sign that the Government is prepared to break its pre-election commitment to build the Navy’s new fleet of submarines in Adelaide?

IAN MACFARLANE: What we are prepared to do is ensure that we have a viable submarine that is able to do the job that we need to do and lots more of them in terms of the numbers that we have. We will choose the submarine that best suits Australia’s needs. No decisions has been made but whatever the outcome, Alison, I can promise you this – there will be more jobs in South Australia as a result of whatever submarine we buy. The reality is we haven’t built a submarine in South Australia for almost 15 years. Whatever we do, there will be more jobs for South Australians as a result of Australia upgrading its submarine fleet.

JOURNALIST: How can there be more jobs for South Australians if we buy submarines off the shelf from another country?

IAN MACFARLANE: Because in any scenario, because we are going to have almost double the number of submarines, there will be more jobs in maintaining them, there will be more jobs in terms of completing the submarines. Wherever it is built it will have to have the final electronics fitted in Australia. There is absolutely no option on that. So, there will be extra jobs both in the construction phase and in the maintenance phase. If you have got almost twice as many subs you have got almost twice as many jobs in terms of looking after them. The real jobs are in the long-term sustaining of the fleet.

JOURNALIST: Minister, we will have to leave it there. Thank you for your time.

IAN MACFARLANE: Thanks Alison.

Media contact: Mr Macfarlane's office 02 6277 7070