Interview with Tom Connell, Politics Now, News24

TOM CONNELL, HOST: Well, the Labor Government has a 5-year target to build 1.2 million homes. We are 2 years and 2 months in and so far we're running well behind. The current rate will be short by more than 250,000 homes. So, how can that gap be bridged? One part of the solution being touted is modular or prefabricated homes. They are very popular in some parts of the world, including Sweden and Japan, but they've had limited uptake in Australia. The Government is hoping to change that with a $120 million loan to a manufacturing plant. Joining me now is Industry Minister Tim Ayres. Thank you for your time. The fact that a government loan was needed to help get this up and running, is it that private investment is a bit worried or is it that it doesn't have the consumer demand here in Australia compared to some other parts of the world?

SENATOR TIM AYRES, MINISTER FOR INDUSTRY AND INNOVATION AND MINISTER FOR SCIENCE: Well, that's what the National Reconstruction Fund is for, is to drive investment, including driving private investment into Australian manufacturing. And I can think of few better ideas than driving investment in modern methods of construction. It's $120 million from the Albanese Government's National Reconstruction Fund, $100 million of private investment and $20 million of support from the Western Australian Government into a facility that ultimately will employ 150 blue-collar production workers building the equivalent of 2,000 apartments every year. That is additional capacity in Perth in Western Australia that can be rolled out in similar facilities around the country. It'll drive innovation in construction and pick up the pace of building particularly unit construction.

HOST: Two thousand is not a heap but you mentioned more facilities. Japan has about 15% of total houses built by prefab, but also 45% of concrete and wood for homes as prefab as well. How high are your ambitions, how big a part do you think prefab, modular, call it what you will, can be in terms of being a part of Australia's future?

AYRES: Well, think about the innovation that this represents and what it will do in driving innovation in other construction firms and manufacturing in Australia. This will make builds 50% faster and 20% cheaper. So, no on-site concreting, no on-site scaffolding, you know, the whole unit, electronics, all of the walls come in they are clipped together, the facade of the building, the glazing, balconies, balustrades – all prepared in the manufacturing facility ready to lock in on site. That means that construction projects will go faster. They will be cheaper. Drives innovation and it will keep the pace of change. There hasn't been much innovation in construction, if we're honest about it, in Western economies around the world. This is not just leading in Australia, but it's Australia with this technology leading the world. It's a good first investment here in modern methods of construction for the National Reconstruction Fund. It'll create good jobs in Perth suburbs, but it's going to drive innovation in construction. And that's part of the answer - there's no single silver bullet for construction. We're about delivering real change here and this is a part of that.

HOST: No single bullet. So, this is part of it. We'll see how big it is. You know, it might depend on perhaps changing attitudes. What about the workforce? So, building home, such a big focus - affordability. Every poll we do on News24 says it's very important to people. Surely we have to lift the intake of skilled tradies to build houses. And I'll give you this measure the number of skilled migrants, we have about 2.5% of people that can help build houses. That's too low, isn't it?

AYRES: Well, we have to pull every lever – Free TAFE, by encouraging apprenticeships into construction. These are good jobs for young Australians building the homes of the future. We are very focused as a government – not this kind of weird competition that's happening amongst the Liberals and Nationals and One Nation in this kind of disorderly, goodness knows what's happening kind of routine over there. Like that is a circus that even clowns wouldn't want to perform in. We are, as an adult government on the skilled migration front. We’ve delivered falls in overseas migration, we’re focused on outcomes in the national interest – including in skilled migration, we're focused on training young Australians. Training young Australians.

HOST: I understand it, you said training, but we still bring in skilled migrants to the nation. We are still short of tradies. And you stress that that's fine, that's fair enough, but that 2.5%, isn't that too low? And even if it frustrates the unions, don't we need more people via skilled migration to build houses in this country, at least in the short term?

AYRES: Well, I haven't had a single complaint from the trade unions or business about these questions. What they all want to see –

HOST: Well you would know the complaint now from the unions because we barely have any skilled migrants coming in to build houses.

AYRES: I just don't think that's the problem, Tom, here. There's not that kind of contest. We're all focused on the task of building more homes. So, we made big steps this year – tax reform. Like lots of people said this is going to be hard. We've gone ahead and done it because it's the right thing to do to give young Australians a crack. We've got a $47 billion program, so not small, the biggest program that I can [remember] in living memory, in housing. We're building more social and affordable housing. Every day, the figures get bigger and now you see us investing in modern methods of construction, prefabricated modular housing. Now, all of this taken together, it's a giant agenda because we are about delivering real change. You can't build a single home with a nasty social media post. Tradies out there who build homes know, you pick up your toolbox and you get into it. The Government, we have picked up the toolbox. We have been getting into it while there's all this sort of crapping on going on between the Liberals and Nationals and One Nation.

HOST: But could I ask again? Skilled migrants, 2.5% of them –

AYRES: Oh, mate, I think I’ve answered the question.

HOST. So, is that too low? Should that be higher?

AYRES: Well, we've got to keep focusing on every incremental gain that we can make to deliver more.

HOST: But, Minister, that's not actually our question. Is it too low? Do we need that figure higher?

AYRES: Well, Tony Burke, who is the Minister responsible for these questions about the fine details of our skilled migration program? We'll continue to make changes over time. We are focused on the role of skilled migration, we're focused on young Australians entering trades. We're not distracted by the sort of weird contest on the other side of politics here. We're just doing the job.

HOST: Ok, my allusion was to purely the figures that are coming in around skilled migration. Anyway, let me ask you finally about data centres. So, there's a lot of debate about, do you think it's fair to say, if we want to unlock value in data centres, if they're just built in Australia, it doesn't really do much for the economy. Do we need something else? Perhaps a certain percent of each usage, if you like, of a data centre to be given priority access, cheaper access for Australian business. Is that the way we actually make data centres work for our economy?

AYRES: Yeah, I think you're pointing to one of the key elements of the AI Standards legislation that will be coming to the Parliament. There was a good discussion with the Premiers on these questions yesterday. So, yes, absolutely. All the discussion's been about energy making good progress there, water security, to make sure data centres are built in a way that helps push down prices, improves water security. They're built in the right places. But what you're pointing to is a really important issue. Making sure that where data centres are built like large data centres, that there is an overall benefit, in compute terms, for Australian research and development or Australian startups that will need that capacity and will be contributing to that capacity themselves as they build their businesses or do their research and development. I want to see –

HOST: Absolutely, I wouldn't say to put a percent on it. I don't know how, you know, that gets thrashed out, but something like, you build a data centre, this percent of each data centre goes to Australian use at a better rate?

AYRES: So, important for our students, our small businesses, our startups, our research institutions is access to local compute. It's one of the reasons I want to see Australia capturing the investment here and that we spread the benefit. Remember, the language is very deliberate, spreading the benefit right through. So, it's not just in our inner cities, but it's in our suburbs and regions, in all of our universities and all of our businesses. And the other thing that matters here, Tom, is the strategic and resilience value. This is really important for Australia's future, resilience and our strategic capacity. And that is why the Government is so focused on this, delivering it in the interests of Australia, but also in the interests of Australians in suburbs and communities, knowing, having the confidence that the states and their work with this will be a their planning laws in a way that makes these centres land where they should land, delivering a benefit in electricity and water terms, but also, as you say, in local compute. That's a really important point.

HOST: All right, we'll see what gets confirmed there because that has been an interesting part of this debate how we actually create sovereign AI. So, perhaps that's the next step. Minister, I appreciate your time today. Thank you.

AYRES: Thanks.