Interview with Gary Hardgrave, 4BC Mornings

GARY HARDGRAVE, HOST: Central Queensland is such a busy place. Obviously the mining is huge, making Brisbane in particular, the biggest coal town in this country, if not the world. But Central Queensland is also at the front line of Australia's next industrial revolution. I know those words get bandied a lot. AI is going to be at the heart of a lot of this. But the Federal Government's $15 billion National Reconstruction Fund is actively hunting for its next big regional breakthrough. And we all know the region can build big things. With cheap power, you can do anything. With good transport connectivity, you can do even more. The next goal of course is high-tech manufacturing. Now that fund has already made a massive statement. It's dropped $75 million into Gladstone's Alpha HPA to build the world-first critical minerals facility. I like the idea of taking what we dig out of the ground, value-adding it, selling it to the world, not buying back from the world. The Federal Minister for Industry and Innovation, Senator Tim Ayres has been on the ground meeting with a lot of people in and around Central Queensland this past few days and he joins us now. Good morning, Minister.

SENATOR TIM AYRES, MINISTER FOR INDUSTRY AND INNOVATION AND MINISTER FOR SCIENCE: Oh Gary, it's good to talk to you and to your listeners all over regional Queensland. Yeah, I couldn't have hoped for a better introduction. Gladstone – I'm a regular visitor there. Central Queensland is the beating heart in energy terms, but also industrial terms. I wanted the National Reconstruction Fund Board there to see what's possible as we make Australia stronger and re industrialise our economy.

HOST: We have to re-industrialise. I'm frankly frustrated. I'm sure you've seen the transcripts about how frustrated I am, about whether it's high electricity prices, whether it's tardy transport links, whatever it happens to be. We seem to be buying too many of the things we should be able to make here, from other countries. Is this what you're trying to do?

AYRES: Yeah, that's exactly what we're trying to do. The Albanese Government's approach here, it's not just the National Reconstruction Fund, that is a big fund, $15 billion there. Ultimately, you know, we're not building new factories in the CBD in Brisbane or in Sydney. New factories get built in our outer suburbs and in these big industrial regions. Whether it's critical minerals to metals projects, or whether it's defence industry projects, new projects, building missiles, all sorts of things that need for our future resilience, new manufacturing. The benefit is in our regions. Overall, we have the biggest pro-manufacturing package of any government in Australian history. Not because I'm sentimental about Australian manufacturing – I am. I absolutely am. I love our blue-collar sector but because it's in the national interest to do it, we need to build national resilience, build national capability and we've gone in the wrong direction on manufacturing over the course of the last 30 or 40 years and we need to rebuild our Australian capability.

HOST: I can't argue with that, Minister. I mean, I'm the son of a toolmaker. My father was a metal machinist. I've been into so many factories to see how things are made. I'm always fascinated by it and it's frustrating. My dad passed away a few months ago, but he was so frustrated watching the sector he was proud to be part of being downgraded by costs and globalisation, saying oh well, you can buy it cheaper out of, well, let's say China than you can do it here. And yet we don't want to have those skills lost to our Australians today and tomorrow.

AYRES: Yeah, I'm sorry to hear about your Dad. I worked with many people like your Dad in my life before I came into Parliament and they were proud of what they did with technology and with their hands. They've contributed an enormous amount to this country and not just in economic terms but in resilience and industrial and dare I say it, making us proud of what we do as Australians in our regions. And rebuilding that industrial capability means you just have to have a laser focus on what needs to be done, to achieve this. Now Gladstone, as you said, it's not like we've just discovered Central Queensland. There's very significant investment into what is going to be the world's largest high-purity alumina manufacturing facility. That is a proud Australian achievement. The Boyne aluminium smelter delivering between the Albanese Government and the Crisafulli Government, a $2 billion investment there that secures that facility well into the 2040s. But underwrites new electricity generation, $7.5 billion worth of it in regional Queensland. Some of that announced over the course of the last 24 hours to mean that we're using these big industrial investments to make sure that we're securing outcomes for the broader economy too. More energy investment, more electricity investment, means long-term downward pressure on prices making the whole economy more competitive.

HOST: Well, it's gotta be. I mean, I know that you spent a long, long time in the Australian Manufacturing Workers Union. So I get why you would understand the sector, and you do sound like you're very passionate about it, which is great. But I mean, are there strings attached to any of this, these things? Because if the National Reconstruction Fund operates like a commercial investor, is part of that conditional, that they join the union, that they use, I guess renewable energy or, or the solar and wind stuff. I mean can't we just use our natural assets that we have in Queensland?

AYRES: Well, think about the assets that we've got. On the union question, Gary, I mean there's not that kind of condition in this.

HOST: Well, that's good.

AYRES: Of course not. But people should be in their union. And I do want to see Australian institutions working together to deliver a stronger manufacturing sector. And the unions and the companies have all got a role to play in that and we're not going to solve these challenges unless we're all in it together. I passionately believe that is important. And you see it in a place like Gladstone where the Gladstone Engineering Alliance, all of the small and medium sized firms are organised and active in an institution together themselves. The unions are active and engaged on these questions. And on the energy side, the most important reform we've announced this year is a decision to reserve Australian gas for Australian industry. We're a massive gas exporter, one of the biggest in the world. We're the only country, the only major gas exporter that doesn't reserve its gas, a portion of its gas, to deliver supply and to drive down prices. So, this gas reservation scheme which will be coming to the Parliament very soon, will reserve Australian gas for Australian industry, drive down prices for heavy industry in particular, making gas part of our future energy competitive equation. It's really important for heavy industry to drive competitiveness in gas. And now my opponents in the Liberals and Nationals and One Nation will have a chance to vote for or against that legislation in just a few months’ time, that will determine how competitive much of our heavy industry is.

HOST: Yeah, and look, and great members of Parliament like Colin Boyce who's based obviously everywhere from Bilo to Gladstone, he understands exactly what you're saying about everyone working together. I've had conversations with him. But let's face it, if we can get cheap, reliable baseload power and lots of it, we've got beautiful black stuff in the ground. Coal. It doesn't seem to be a four-letter word that's rarely used in a positive light these days. You've got the potential for nuclear, Minister. I keep saying that the potential, if we could revisit the restrictions. And I must admit, when I was in the Parliament, I voted for it, was all to get the GST through in 1998. I rescind that vote. I'd like to see us having a more of a grown up conversation about all forms of power in the grid to get the price down, to get the manufacturing really going.

AYRES: Gary, I guess the thing here is, and I've seen Dan Tehan and the Liberals and Nationals and One Nation basically reheating Peter Dutton's failed electricity policy. Like, if they want to go to the next election saying the same thing, I expect that Australians will give them the same answer.

HOST: I wouldn't want to put $5 on that, Tim Ayres.

AYRES: I'm sure we, you and I, disagree about this, but just let me explain. From our perspective, what we need in the electricity sector is a focus on the lowest possible prices and investment certainty. And you've seen in Queensland that the Boyne smelter investment has driven a whole lot of new investment in wind and solar, backed up by batteries and gas.

HOST: Backed up by a lot of subsidies as well Tim Ayres. I mean, look, in the end, I think surely we should be agnostic about power. Surely we should be agnostic about it.

AYRES: Well, let’s go to the experts. Rio Tinto are not hippies. They are not environmental activists. They have a firm focus on what needs to be delivered for their bottom line.

HOST: But how can we be the only country in the G20 without nuclear in the mix? Tim Ayres, I mean, that's the point.

AYRES: I guess it's a competitive advantage question. In Australia, wind and solar, backed by gas backed by batteries is the cheapest form of electricity. In other economies it's different. If you're in Finland or Norway or the United Kingdom or France, you have different space, like different geography, different levels of sunshine, different mineral assets and advantages. It's a competitive advantage question. In Australia, we've got limitless space.

HOST: Yeah, and we've also got the world's largest supply of uranium. Anyway, look, Tim, we're not going to be able to win this argument one way or the other here. Look, I just think there's an opportunity there for hundreds of billions of dollars of extra income for Australia and for Queensland at a time of high national debt. But let's just park that for a moment. I guess we'll agree to disagree. Can I just ask one other question? And that is Gladstone was hoping that it could have become the end of the line for the inland rail project. That's gone missing. I just want to put it to you. Let me just tell you this. I've been promoting the concept. Inland rail was geared the wrong way. It should never have been Melbourne to Brisbane or even for that matter, just Melbourne to the great city of Gladstone. It could have also been a Melbourne to Townsville vision done over a generation or two and then everything through those production areas of NSW. You're a Senator for NSW in Queensland. Could be connected to two great ports, mining operations, other things, agricultural operations could actually pivot off that. Isn't that nation-building, Tim Ayres? That would actually encourage private sector investment?

AYRES: Well, of course I don't want to venture a view about a specific way of approaching that project, but just say in the broad, I mean, I agree with you. We need nation-building efforts here. You can see how important infrastructure is. Take that Townsville to Mount Isa, big industrial ecosystem up there.

HOST: Huge

AYRES: The refinery, the smelter that we intervened in, in Mount Isa.

HOST: A lot of uranium.

AYRES: Yeah, I mean Phosphate Hill. Phosphate Hill would be closed today if it wasn't for us announcing the gas reservation scheme, and intervening to protect the Mount Isa smelter. Because it relies upon sulfuric acid from the smelter.

HOST: Exactly.

AYRES: Yes, that smelter employed, 600 or 700 people. Those are important jobs. But the whole industrial system is more than 15,000 blue collar jobs and it's linked with infrastructure, electricity. Gas is so important, this gas reservation strategy, so that firms know that they will be able to access long-term, low-cost, secure gas, which they have not been able to access under the current arrangements. That is so important for heavy industry, for blue-collar jobs, for regional Queensland and regional NSW, and for our industrial heartlands all over the country. So, this gas reservation. You know, it's a tough thing to do. There's sections of the gas industry who probably wish we weren't doing it. But it’s the right thing to do for Australia because it'll deliver Australian gas for Australian industry. And we're acting here in the Australian interest.

HOST: Yeah, well, of course. And look, I think I get your sincerity there. I also understand the restrictions that you're in when I start dragging into other areas of public policy. But great to talk to Tim Ayres.

AYRES: You know, I'm not sure me announcing new projects be would be very popular!

HOST: We’d give you the 4BC Good Bloke Award! You wouldn't get an international one, but we'll give you the Good Bloke Award.

AYRES: If I get invited back that’d be good, that'd be good! But look we are getting on with it, we're not big mouthing about it. I know that there's a lot of politics around these questions. But you've got a Government here that's fighting for Australian manufacturing and putting our money where our mouth is, and working carefully with industry. It's easy to get the social media clicks at the moment. It's harder to actually sit down quietly with industry and work out what needs to be done to deliver jobs.

HOST: All right Tim Ayres, good to talk to you and you are welcome back anytime. Thank you for reaching out.

AYRES: Thanks Gary, good on you.