Federal Government action to help Australian manufacturers win resource contracts

CURTIS: Are the unions or some of your backbenchers right? Is manufacturing – local manufacturing missing out when it comes to resource and infrastructure projects?

CARR: There’s no doubt we’d like to see a lot higher levels of local content in the resources projects that are being undertaken. We’d also like to see a lot more local content in many other aspects of our economic development at the moment. But it’s not true to say that the government is doing nothing. It’s not true to say that local manufacturers do not get anything out of the current arrangements. We have to work collectively to do better.

CURTIS: How do you do that then? Do you go down the path of the things that the unions and some backbenchers are suggesting, of what they call participation plans to increase local content? Can you force an increase in local content?

CARR: We have already introduced those, and it was this government that introduced the Australian Industry Participation Plans and, as a result, there is billions of dollars of work flowing to local manufacturers, local industry that otherwise would not have happened. We do that with government contracts now. That never used to happen. Fifty per cent of the NBN is being built by Australians using local content; 50 per cent is local content. Now, that’s a very, very substantial investment in the local manufacturing and local industry development.

So it’s just not true to say that we aren’t doing these things.

Now, people will then go on and say, well, you could do more. Well, of course we can always do more. We can always find ways to improve the delivery of government programs, and that’s exactly what we’re in the business of doing.

CURTIS: What do you think then of reports suggesting that Australian companies, local companies are missing out when it comes to tendering for work for some of the resource projects, that they’re not even getting a look in.

CARR: There’s a range of factors associated with that. Where there is specific evidence, detailed evidence of people being locked out of local tendering arrangements, then we want to know about it. We will investigate that and we’ll take that matter up directly with the proponents of the major projects.

CURTIS: When then can you do about it? If …

CARR: Well, it depends what it is, depends what it is. If it is a question of a company that’s applied for a Tariff Concession Order, that is it’s looking for money from the government to support the project, and has tried to lock out local firms from participating in the project, there’s a lot we can do about it. And where there is no direct government funding involved, we can still provide the public with information which companies won’t necessarily want to see made public.

CURTIS: So, naming and shaming.

CARR: We can do that. We can provide the public with information about the way in which major international firms treat Australian companies. We can also take action under the various programs that the government has in place. The difficulty is demonstrating that these events have actually occurred. And we are looking for people to come to us with specific evidence and to ensure that we can investigate those claims.

CURTIS: So it’s up to the unions and the industry to be proactive about it, rather than wait for the government to step in and help them.

CARR: That’s – we always want to see people look after themselves. We want to back people who are prepared to back themselves. But we also want to see that Australian companies are in a position to tender and that they are capable of tendering. There’s a two-way street here. We have to expect international companies, particularly the companies that are looking to develop our major resources projects, to want to work with Australian industry. But we also have to ensure that Australian industry is up to the mark in terms of having the capabilities to fulfil the contracts.

CURTIS: You say you are already doing things, but couldn’t those workers who will lose their jobs in BlueScope say you haven’t done enough?

CARR: That’s always the case that people can say that you haven’t done enough. We have spent..

CURTIS: But will it look to them like you haven’t done enough because they’re losing jobs?

CARR: I do understand the people’s pain. I do understand how difficult this is for individual families. And that’s why we’ve developed a series of measures so that we work with individuals about what’s actually going on in their lives. That’s why we’re working with families, that’s why we’re working with regions, that’s why we’re working with companies. But it also should be appreciated that we’re spending $9.4 billion per annum on innovation, science and research programs. There’s been a 43 per cent increase in the level of support this government has given to science, innovation and research programs in the time that we’ve actually been in office.

CURTIS: Union leader Paul Howes has also [indistinct] the Reserve Bank, saying now is not the time to put up rates, and flagged he wants a review of the make-up of the bank if it doesn’t cut rates. Lower rates – lower interest rates would bring the dollar down and deal with some of the problem being faced by manufacturing, wouldn’t it?

CARR: The whole question of the interest rates is a matter that is obviously quite complex. We do have an independent Reserve Bank in this country, and the government is not moving away from that fundamental premise of the way in which our policies are organised.

CURTIS: But setting interest rates for the whole of the economy, effectively looking at the mining sector which may be pushing up inflation and trying to slow that growth, means that the slower speeds of the multi-speed economy are being hit much harder.

CARR: That’s all true. And what of course is equally true is that we are out of kilter with many industrialised countries around the world where interest rates are much, much lower. We have quite a lot of speculation going on with the Australian dollar. There is enormous change occurring within the international community. These are global questions. It’s not something that I, as Minister for Innovation, can reach into my bag of magic tricks and produce the wand and pretend it’s not happening.

CURTIS: Would you like to see a lower dollar?

CARR: Of course we would. We know that there is a serious problem with the effects of the rapid escalation in the Australian currency; a 45 per cent increase in the rate of the Australian currency – the real rate – in the better part of two years. This is a very serious challenge for Australian manufacturing, for Australian industries that are trade-exposed, whether it be for our education services, whether it be for tourism. We do want to see, however, our companies able to compete, and we want to work with our companies to deal with this situation. But it’s no good me pretending that there is a magic solution here, that there is a simple way of saying the world should go away. It won’t. We have to deal with real world problems as they are, not as the world is that we would like it to be.

CURTIS: Kim Carr, thank you very much for your time.

See full transcript here.