Interview discusses Australia Post, Modern Manufacturing Strategy, COVID-19 vaccine, Queensland state election.

David Speers: Karen Andrews, welcome to the program. Can I just start by asking whether you agree with your colleague Andrew Laming there? Should the heads of the NBN, Snowy Hydro, Australia Post, and so on earn multiple time what a High Court judge earns?

Karen Andrews: Look, there has been extensive debate on remuneration for senior public service officials, heads of statutory authorities. That has been going on for many, many years. We do have a Remuneration Tribunal that deals with many of those issues, but the core of the issue, particularly with where we are at the moment, is that we have seen, over the last couple of days in particular, where there have been instances of things that have happened that have not gone anywhere near passing the pub test. So we’ve got taxation advice and, of course, we’ve got the issues with Australia Post. Now, I don’t think Australians generally have an issue with people being remunerated appropriately. What they do have an issue with is that being taken advantage of. So if you are earning a significant salary, then maybe you can pay for your own hair and make-up, maybe you can do the pretty basic things that everyday Australians do to look after yourself and not constantly look to how you’re going to up your remuneration by cashing in on the public purse.

David Speers: But the remuneration itself, just to be clear, you don’t have a problem with some of the salaries these CEOs are earning?

Karen Andrews: I think that what we’ve got to look at is a couple of issues. Yes, we do want to attract the best and the brightest into the public sector. That’s a very important thing for us to look at. But they do need to be remunerated appropriately, and that is not paying them over the top. And it’s not then looking at ways to supplement their base salary.

David Speers: Okay. What about the idea of a wider inquiry, though, as to how they’re spending money on, you mentioned some of the items there, on hair and makeup and so on? Does there need to be a wider inquiry across these public entities?

Karen Andrews: I think the first step is to start with Australia Post and to discover whether or not this was a one-off issue or whether it is systemic and understand what the breadth of those issues actually are. And from there we can see, well, are there wider issues that we need to look at across the public sector.

David Speers: That wouldn’t tell you what was going on at the NBN or the Future Fund or anything, would it? A four week inquiry at Australia Post?

Karen Andrews: No. But it’s going to give you an insight into what is happening in that one organisation, and that’s the first step. So I think we need to understand what is happening there and then look potentially more broadly, but only on the basis of what we actually find at Australia Post and potentially at ASIC.

David Speers: Now, let’s turn to your portfolio. It’s a few weeks now since you unveiled the manufacturing plan, $1.5 billion to be spent on six chosen sectors. Can you explain how decisions will be made on which businesses will benefit in which electorates?

Karen Andrews: So, what we’re doing is establishing taskforces in each of the six priority areas that have been established under the Modern Manufacturing Strategy. Those taskforces will look at what the opportunities are within each of those areas, whether that be in food and beverage, whether it be in medical products, whether it be in defence, et cetera. So they’ll look at what the key priorities are there. Their work is going to feed into the program guidelines. Now, there is an expanded role for ISA, the Innovation Science Australia Board which is going to have a greater industry focus and will actually become Industry, Innovation and Science Australia. So they will oversee the development of those guidelines. It would then go through a process of opening up the grant funding for that. The assessment, we’re still working through how that is going to be undertaken because this is probably the equivalent of a tender analysis this time, so it’s not a simple grant process.

David Speers: This is what I want to come to. Because if you’ve got a winemaker in WA and a winemaker in South Australia, they both want to upscale, they both want to take their product to the world and they come knocking on your door for a grant. Just in simple terms, who decides who gets the money?

Karen Andrews: So it will be ultimately through the department and myself as the minister responsible, but I will be taking advice from Industry, Innovation and Science Australia and also the CSIRO. So there will be a proper evaluation done. The advice that will come to me will be more than whether or not we’re just going to accept the advice that’s being put to us, we will be doing our own due diligence so that we are verifying that what is being put to us is realistic and achievable.

David Speers: Okay. But just with all due respect, there’s been a lot of cynicism around politicians having anything to do with grant funding recently. Can you give us an assurance that this will be done at arm’s length, that you as a minister and a politician won’t be allocating this funding?

Karen Andrews: I have been very clear that we need to make sure that we get the proper advice for those decisions. Now, those decisions will come to me, but they will be based on the advice of an advisory board, which is ISA, but with significant input from CSIRO.

David Speers: Okay. Now, you’ve of course announced this as part of a Budget to help get us out of recession. How much of this $1.5 billion will be spent, though, in the first year?

Karen Andrews: Overall it’s going to be about $40 million that will be spent before the end of this current financial year. And then there will be progressive rollouts of that. So before the end of this year we’ll be opening funding for the second round of the Manufacturing Modernisation Fund, so that will be open and assessments made as soon as we possibly can with a view to that money rolling out before ...

David Speers: [Interrupts] So just to be clear only $40 million this financial year will be spent. So the vast bulk of this will be hopefully when we’re out of recession?

Karen Andrews: Well, I think you’ve got to put this into the perspective that the most significant funding program that is part of this strategy is the collaboration stream. Now, that is worth around about $800 million, but the expectation is that there will probably only be around 10 projects that are supported, so this is $70-80 million of government funding going into building the scale that we need in our key manufacturing sectors. That is actually going to take time to make sure we get it right and I’m not going to be pushed into making a quick decision without that due diligence being done.

David Speers: And that’s important but there are a lot of manufacturers who probably would like some support right now. Just this week two big global pharmaceutical companies, Pfizer and GSK have announced they are shutting down manufacturing plants in Australia. The Pfizer plant in Perth, the GSK plant in Melbourne, several hundred jobs will be lost in each. Isn’t this the sort of manufacturing you should be trying to support right now?

Karen Andrews: Well, let me go back a step. Because there is already a lot of support that is able to flow and is already flowing to all industry, but specifically into manufacturing. So there’s money in skills, close to $7 billion is being rolled out. There’s the instant asset write-off...

David Speers: [Interrupts] Why are these two shutting down, do you think? These two pharmaceutical manufacturers, why are they shutting down plants?

Karen Andrews: Those decisions were made based on global decisions by those businesses. And look, without a doubt, it is disappointing...

David Speers: [Interrupts] That it’s not worth doing business in Australia.

Karen Andrews: No, there’s been a realignment of what the priorities are going to be. And let’s be clear that manufacturing is not immune from the shocks that have happened around the world with COVID-19. So we’re going to see that there is some impact. So it’s not going to be plain sailing from here. It is going to be a bumpy ride. Yes, Pfizer and GSK are making some changes and, yes, I would love nothing more than for them to be staying here, but the reality is those decisions were made globally. I’m very much focused on the future. Medical products is a key priority for us, and we have had many approaches from industry that are looking to establish or to ramp up, scale up their facilities here in Australia...

David Speers: [Interrupts] Again, sorry to interrupt Minister, but if it is such a priority, medical technology and manufacturing, why can’t you get more of this $1.5 billion out the door right now to keep these plants going, to keep this pharmaceutical manufacturing in Australia, to keep these jobs when we’re in the depths of a recession?

Karen Andrews: Well, there is money, as I’ve said, that is already flowing. And you can’t separate out all of the money and say: well, this is only what’s allocated to manufacturing. Because it builds on a very strong base. Now, Greg Hunt, as the Health Minister, and Prime Minister have made announcements about significant amounts of money that will go to support the manufacture of a vaccine here in Australia. So that sort of work is already happening. Support is going to the likes of CSL. Support went to many businesses during the height of COVID, particularly the likes of ResMed. We had Grey Innovation that were supported to look at developing and producing ventilators here in Australia. So that money is already flowing and has flowed. So this is, the money that I’m talking about with the $40 million, that needs to go through a proper process because I’m not going to set something up that’s likely to be criticised because it was done on the run and money was just dispersed in a willy-nilly manner.

David Speers: Just on the vaccines, as you mentioned, the idea is if a vaccine is proven safe and effective, it will be manufactured at CSL in Australia and rolled out here that way. There are some concerns, though about whether CSL does have the skills, the equipment, the super cooling and so on that might be necessary for a quick-run production line of a new vaccine, a new novel coronavirus vaccine. Can you give us an assurance that that capacity is there, the skills and the equipment to make this happen?

Karen Andrews: So, I was asking very similar questions myself, David, when we were discussing this. So what I did to assure myself of CSL’s capability was I involved CSIRO, and I got them to send their senior technical people into CSL to work with CSL to determine whether or not the capability was there. Now, in fairness, some of that capability is going to have to be developed...

David Speers: [Interrupts] And is it?

Karen Andrews: Look, CSL is an outstanding organisation. And yes we need to look at what support we give them, and we have already agreed to give support to them, so that they can ramp up their capability, they can look at the technical upgrades...

David Speers: [Interrupts] Okay, but what did CSIRO tell you after they went in and had a look? The answer here is, can they do it?

Karen Andrews: CSIRO advised me that they were confident that CSL would be able to get itself into a position where it could deliver, which means that it has to look at the technical upgrades, but that work is already under way.

David Speers: And how long will that take? Is that months away? What sort of time frame are we looking at?

Karen Andrews: Well, we’re obviously going to work on that as quickly as we can. So I would think that once the work...

David Speers: [Interrupts] So you don’t know right now? If a vaccine’s found this year, how quickly until they can produce it and roll it out?

Karen Andrews: We will do everything that we can to make sure that that happens. Now, understanding that CSL is already producing vaccines, so if what is approved is a protein-based vaccine, CSL will be in a position to start manufacturing that straightaway, so there’s no issue at all with that. The issue that comes into...

David Speers: [Interrupts] But if it’s not the protein-based?

Karen Andrews: We’re actually doing quite separate work. We have conducted an audit of what our manufacturing facilities are that could be used, whether we would need to look at a new site to be able to produce that, particularly if it’s an mRNA-based vaccine, we would need to do a lot of work, as would the rest of the world. But what can I assure you...

David Speers: [Interrupts] What’s a lot of work? Is that a year? I’m just trying to get a time frame here, because everyone’s sweating on this vaccine. Would it take six months or a year to get the production line up and running?

Karen Andrews: Well, if we’re talking about a protein vaccine, it’s there now. If it’s an mRNA then that’s going to take significantly longer to do, but the work is underway.

David Speers: A year, is that what we’re talking about?

Karen Andrews: I would hope that we would be able to do it in about the 9 month to 12 month time frame. But I think we need to be really conscious that with a vaccine there are a lot of variables in there, so we don’t have the vaccine proven at this point in time, we don’t know what the base for that vaccine is going to be. So we’re trying to prepare across a wide range. And I know, David, that you want me to say categorically this is what the time frame is going to be, but I don’t believe that there is anyone that can answer that question. The best that we can do...

David Speers: [Interrupts] No, I appreciate that. There are a lot of doubts around it, but I do appreciate you giving some time frame there about 9 to 12 months based on the type of vaccine it is.

Finally, the Queensland election coming up Saturday, the LNP has this week announced a plan for a curfew for children, only in the state’s north. Parents will be fined if their kids are out after 8:00pm. Are you worried that this is going to particularly target Indigenous kids, or are you comfortable with this?

Karen Andrews: I think that there is an issue in North Queensland. I actually grew up in Townsville myself. There is an issue and that’s what Deb Frecklington as the leader was trying to address. Now, I think that most parents would say that if your child’s out on the streets after 8:00pm at night, they should be supervised, particularly if they’re under 14. So I think that it is a significant proposal that Deb Frecklington has announced. It is an election commitment. She’s...

David Speers: [Interrupts] Do you support it?

Karen Andrews: I think that kids under 14 should be well-supervised at night when they’re out, absolutely.

 David Speers: Do you support a curfew?

Karen Andrews: Do I support- yeah, I understand once again you’re trying to pin me down on that...

David Speers: [Interrupts] Well, I’m just asking you a question. You do support the policy?

Karen Andrews: Yeah, I just said I’m absolutely supportive.

David Speers: Okay, terrific. Industry Minister Karen Andrews, thanks very much for joining us this morning.

Karen Andrews: Take care.