Interview with Patricia Karvelas, ABC Afternoon Briefing

PATRICIA KARVELAS, HOST: Industry and Science Minister Tim Ayres is our guest this afternoon. Minister, welcome to the program. This is your third smelter bailout this year following Tomago in New South Wales and Boyne in Queensland. Are taxpayers going to keep footing the bill for facilities that are not economically viable anymore?

SENATOR TIM AYRES, MINISTER FOR INDUSTRY AND INNOVATION AND MINISTER FOR SCIENCE: Well, it's our third in relation to the aluminium sector. Of course, there have been other strategic interventions that the Albanese Government has made here. Think of the Phosphate Hill fertiliser manufacturing facility where we've intervened to secure phosphate fertiliser manufacturing onshore in Australia, right at the time of the Strait of Hormuz conflict. Nothing more important than securing our food security and the security of our agriculture sector. Aluminium is just as important in the modern global economy for Australia's industrial and strategic resilience. Having our end-to-end aluminium capability from bauxite, all the way through to aluminium and alumina refining, and smelting, and then through to advanced manufacturing, defence, medical equipment, all sorts of products where aluminium is absolutely essential. It's just one of the minerals that Australia has where our future competitive advantage will be in producing these with low emissions, low-cost electricity, and because of our gas reservation plan, low-cost gas too. 

HOST: So, are you prepared to bail out more facilities? Does this provide a template, for basically what you will keep doing? 

AYRES: Well, we're an unashamedly pro-manufacturing Government. We see a need to re-industrialise the Australian economy. That's what Future Made in Australia is all about. Building new factories, new manufacturing capability in our outer suburbs and our industrial regions to make the economy stronger, to make Australia more resilient, and to deliver good quality blue-collar jobs in areas like Bell Bay. It's one of the most, it's a beautiful part of the world, but it's got this kind of deep, residual industrial capability. The Hunter Valley, Central Queensland. I mean these places are the beating heart of industrial Australia.

HOST: I totally get it. But is it only kind of, blue-collar jobs that you intervene to save? I mean AI is about to wipe out lots of white-collar jobs. Will you be intervening there as well? I think that's the disconnect, or the explanation that people are entitled to ask for?

AYRES: Well in this case, critical minerals and metals smelting, is an important foundational industrial capability. And you're right to point to critical technologies like artificial intelligence and quantum, where the Government does have a plan, and does have a strategy that is backing that in. There'll be more announcements to come in areas like quantum, backing that in, because it's going to determine our future competitiveness, it's going to shape the lives and working lives of Australians, but also be important and foundational for our future industrial competitiveness. Artificial Intelligence, whether it's in industrial production processes, or it's embedded in the products and services that we sell to the world, like agricultural, robotics, drones, all these sorts of things is absolutely crucial for the blue-collar economy. I don't see these things, Patricia, as pitted against each other. My experience in manufacturing is that the blue-collar jobs on the shop floor are just as important as the production laboratory technicians who work in the laboratories, the draftspeople and the people who provide engineering support. White-collar workers with really strong technical backgrounds. I don't want to pull Australians here. Everybody together.

HOST: I get that – but Australians wake up and keep hearing about blue-collar jobs being intervened to be saved. I mean that's the narrative of the Government. So, I think it's a reasonable question. What binding commitments have you secured from Rio, in return for this, financial support that taxpayers are footing?

AYRES: Well, the first thing of course, it's a matter of detail here, but it's important because it's public money, is that the level of support declines as the aluminium price rises. So, it's a sensible package that makes sure that where the company is making large profits. Because aluminium is a sought-after product in the global economy. That the support from the Albanese Government, the Tasmanian Government, declines as you would expect it to. I was there today and looked at the ingot casting machine, massive, massive piece of equipment. It is the most modern in the world, installed into this facility. Rio Tinto is continuing with their approach of high-quality maintenance and investment in new pot line technology, refreshing their 500 or so pots in their 3 pot lines. There is no lack of commitment to continuing to invest in the facility. It looks like an old facility from outside – 70 years old – it's been running off Tas Hydro, hydro power, for 70 years in the Tasmanian economy. But inside it's modern technology. Really smart, hard-working production workers and engineers, and a really resilient team there from the management, all the way through, and all of the contractors who work with them. This is a place that they're working their butts off to make that place competitive. They're working so hard every day, they needed a government that's prepared to back them and the Albanese Government's done just that.

HOST: Let me take you to AI. You are the senior Minister responsible. Donald Trump says AI giants should police themselves. Why should Australians trust that will work?

AYRES: Well, the approach of the Albanese Government is to legislate mandatory Artificial Intelligence Standards. We've established the AI Safety Institute that was working very closely with the other 8 AI Safety Institutes around the world, to test frontier models, to make sure that we're working across government to build awareness and capability, working with the intelligence community, particularly ASD, on the cybersecurity aspects of this. Working to secure investment in AI training here in Australia. So all of those steps – 

HOST: I understand we’re doing all that work – but Minister, I mean, it's the US and China that have the power. They have all the frontier technology. And the President of the United States says, “you police yourself, and let's hope their morals will look after it.” Do you trust that the morality of the AI giants will sort it out?

AYRES: Well, it's never been the Australian approach to leave it to somebody else. I mean, that is not how we build our future security, our future safety and build our economy and make it more resilient and stronger for the future. That's why we are acting to deliver investment in Artificial Intelligence training here onshore, because that will strengthen our capacity to shape the development of these models. That's why we're moving to lift Australian capability and spread the benefits of artificial intelligence through the community, so that more Australian firms have a stronger competitive advantage. We're building productivity in the economy and that's why we've been strengthening our cybersecurity approach, delivering the AI Safety Institute, so that we're strengthening and hardening our capability to deal with a technology that is changing rapidly.

HOST: But you would prefer a different approach from the United States, that would assist us with our position, wouldn't it?

AYRES: Well, what I can take care of, Patricia, is the Australian approach. I mean, the Prime Minister was in the United States last week, led and signed off on a communique with a group of countries determined to continue to work together to shape the technology, to make sure that humans are in charge of this technology. We've got to act at every level and we have been. This is a steady implementation of an approach that will mean that Australia captures the benefits of the technology, spreads them through the community, keeps Australians safe, and that we use it to shape the technology, so that the technology isn't just shaping us. That's about Australian agency, Australian independence and sovereignty, and that's what acting in the best interests of Australia looks like.

HOST: The Reserve Bank today, in its Financial Stability Review, warned about the risks of a possible collapse of the AI boom, due to the high valuations in global debt, they were vulnerable to a disorderly correction. That's their words. Are you worried that the AI boom is a bubble that could burst?

AYRES: We're going to focus on developments of the real economy, Patricia. What are the investments here that move the dial for Australian productivity, for Australian growth, for making sure that we have the technology landing in the right places, with the right constraints? That's what the AI Standards are about. There is, of course, a lot of interest in the investment community in artificial intelligence –

HOST: Does it worry you though, that the bubble might burst, Minister?

AYRES: Well, my focus is on making sure that we capture the Future Made in Australia advantages here, whether it's in critical minerals in the artificial intelligence stack. See, there I go, using the same language as the sector, “the stack”, from the bottom, critical minerals to critical metals, through to capabilities that we have like advanced chip packaging here. Building Australian models, based on our data ourselves, in particular areas where we have real competitive advantage, like mining and resources, or agriculture, where artificial intelligence is going to be absolutely crucial for our future competitiveness. And of course in our health and defence sectors, where this will be vital. So, I'm focused on what's going on in the real economy and I'll leave the commentary to others –

HOST: I get it, but it's the role of the Government to be worried if it looks like a bubble will burst, that will have an implication on our own economy?

AYRES: Well, can I just say, I mean the 2 issues that we've traversed, my job here is the same – whether it's in the industrial side, or the critical technology side – lifting investment, so that we improve not just our growth and improve good jobs, deliver good jobs in the suburbs and the regions, but it's also crucial for lifting Australian productivity whether it's in industry or in the technology side. All of this works to deliver a more resilient and capable and stronger Australian economy for the future. And that's what I'm focused on in my work.

HOST: Your Government is reviewing the OpenAI incident. Can you compel OpenAI to hand over the full records of what occurred?

AYRES: Well, I think since the Prime Minister's discussion with Mr Altman and those developments, OpenAI has been cooperating extensively with our agencies and working through those issues. Let's see how that process works through. But Australia's approach again here and artificial intelligence has been a world leading approach. Governments around the world are now, of course, engaged with the frontier models themselves, to get on top of what's happened here. It's Australia that led the way in this question, because the Prime Minister front-footed it.

HOST: Do you support a legal mechanism to ensure companies report serious incidents within a shorter timeframe, immediately?

AYRES: Well, what would make that stronger? And we're looking at all of these issues broadly. The paper that we released, as we consult around the standards legislation, goes to some of these issues. What would make a difference here, of course, is having frontier models onshore here in Australia, where that kind of regulation, that kind of cooperation and collaboration would be much easier to achieve, with the technology being developed here onshore in Australia. Australia has an opportunity to do this that no other country or few other countries on earth really have. We're going to work hard to shape that advantage for Australia, but also in every other part of the Artificial Intelligence world, we're going to try and work hard to deliver mandatory standards, an investment framework, and a capability-led approach that makes Australia stronger and means we're dealing adequately with the safety issues, including internationally, but we're capturing the opportunities, particularly my area of work in Australian industry.

HOST: Just finally, Minister, it's not in your portfolio, but it's certainly important for Australians, I think. Penny Wong has just confirmed 2 Australians were actually on that Flydubai flight to Israel, and that they are safe. Clearly the Government must be relieved given what could have transpired there. And clearly it still was very shocking for the people who went through it.

AYRES: So I understand, Patricia. Two Australians on that flight, Department of Foreign Affairs and Trade officials have, as I understand it, engaged with them. This is at one level an utterly shocking story, I suppose the story will be told ultimately about how this happened, but also of heroism of the pilot, who I understand is in a stable condition. Indian national who acted courageously here in circumstances that you or I, or the viewers would find it very difficult to imagine, and passengers on the plane who acted decisively and looked after each other. I'm sure there are plenty more details to come, but two Australians safe, the plane safely landed in extraordinary circumstances. A pilot who's really acted with great courage to deal with this situation and land the plane. And it's a hell of a story and I'm very glad, and the Government's very glad that the two Australians are safe too.

HOST: Thank you so much for joining us, Minister.

AYRES: Thanks, Patricia.