ED HUSIC, MINISTER FOR INDUSTRY AND SCIENCE: Good afternoon, everyone. Thanks for joining us for an important announcement, a key step, next step in the delivery of a very important election commitment by the Albanese government. We are announcing today the board of the National Reconstruction Fund, the $15 billion National Reconstruction Fund. Being one of the largest investments in manufacturing capabilities in living memory, the National Reconstruction Fund is an investment in Australian workers using Australian know-how and resources to ensure that we are a country that makes things right. Here we have put together a terrific board that I will commend to you and read out their names in a few moments. But what we are doing with this board is we are bringing different skills, different experiences, different viewpoints, bringing them together with a unified sense of purpose that the National Reconstruction Fund will be able to invest in not only manufacturing capability, but in jobs and long-term economic prosperity. The board's specialist knowledge spans the NRF's seven priority areas, particularly around value adding in resources, value adding in agriculture, in renewables and low emissions technology, transport, medical sciences, and also in emerging or enabling capabilities, particularly around critical technologies

And the members of the board themselves will be chaired by – and I’ll just run through the names – the chair for the National Reconstruction Board will be Martijn Wilder who brings a range of experiences, not the least of which she was a founding director of the Clean Energy Finance Corporation. We have Ahmed Fahour, who is currently the Chairman of Invest Victoria but brings experience from his time in NAB, Citigroup and Australia Post to name a few. Dr Katherine Giles, a venture partner with Brandon Capital, but also has been involved in the Curtin University Commercialisation Advisory Board. We have the Honourable Kelly O’Dwyer, who is currently Executive Director of Barrenjoey Equity Trustees and HMC Capital but has also obviously served in the parliament in previous federal governments. Daniel Petre, a technology industry entrepreneur and venture capitalist who also was the co-founder of AirTree Ventures. Kathryn Presser who brings significant risk and governance expertise to the NRF, has held and does hold non-executive director positions including for the Australian Energy Market Operator. We have Karen Smith-Pomeroy who is currently the Chair of the Regional Investment Corporation, the National Affordable Housing Consortium and has been a non-executive director of Stanwell Corporation in Queensland Treasury Corp Capital Markets Board. And Daniel Walton who’s a respected director, former senior union official and has been someone who’s represented the interests of workers especially in the manufacturing arena who recently ended his role with the Australian Workers Union in July.

As I said, very strong board, very strong backgrounds. And particularly pleased and grateful to each and every one of them accepting the opportunity to join this board. As I said, the National Reconstruction Fund, a huge investment in our manufacturing capability. We said we could do more here. We said it was important to do so. These weren’t words just to be expressed in the course of the pandemic; they were a guide to our future economic prosperity and job security. And this is an important next step in breathing life into the National Reconstruction Fund and delivering, as I said, on a key election commitment.

Happy to take questions.

JOURNALIST: Minister, Mr Walton when he left the union said he wanted to see Australia take more control over the processing of critical minerals and resources. Is his appointment a signal that you’re intending to sort of head in that direction? Is that an outcome we can expect?

ED HUSIC: We flagged as one of the priority areas value adding in resources. And obviously we have another priority area around renewables and low emissions technology. Clearly critical minerals have a – and rare earths have a pretty important role to play in our transition to a net zero economy. Being able to do more processing onshore, when you look at the various parts of, for instance, the battery manufacture or battery value chain, that will be important for the, you know, making of energy storage systems in this country. And so that will be important and, again, he brings that expertise and know-how to the table of the board of the NRF.

But clearly, we do need – and the NRF will play a very important role as part of the government’s broader ambitions – of marching towards net zero by 2050 and meeting our emission reduction targets. We’re in a global race to reduce emissions, but there’s also great opportunity to increase jobs and being able to value add. And if I can say, you know, we’ve made a lot of money and will continue to make a lot of money out of mining and farming. Next chapter of our economic prosperity will be in value add, deepening our economic complexity as a country, making sure that we can best position ourselves for that longer term prosperity.

The NRF has got a big role to play. And all the other policies we’re trying to join up as well will be important there. So, we’re trying to have breadth of experience, knowledge, know-how sitting right there on the board of the NRF.

JOURNALIST: Just following on from my question, does that mean it’s on the government’s agenda at the moment to consider taxing unprocessed crude and minerals exports?

ED HUSIC: No – you know, what we are announcing today is about the National Reconstruction Fund. It’s about investing in capability. Any specific questions you might have in different areas I’d encourage you to take those up either with the Treasurer or the Minister for Resources. But in terms of this, working across government we think there’s a great opportunity to deepen what we do in those priority areas. Those priority areas informed by people such as or bodies such as the CSIRO that said the longer-term prosperity of the country will be to get our act together in some of these priority areas. And that’s what we are trying to do with the NRF.

JOURNALIST: Could I just ask some basics on timing. So when would you expect to see a CEO in place? When would you expect to see an investment mandate complete? And when do you expect to see some money, Minister?

ED HUSIC: You know I’m the most impatient person in government – yesterday, yesterday, yesterday. In all seriousness, though, I think we’re very keen to get moving on that, James. We now obviously want to acknowledge we’ve got some great people who have stepped forward and agreed to serve on the board. They’ll go through the process of finding the CEO and the senior leadership team in the coming months, we expect. And we want a board, if I may say here – and I think we do have a board – that’s got the assurance and confidence to make investments decisions quickly or as quickly as they possibly can. We don’t want rushed decisions; we want right decisions. We don’t want decisions in political interests; we want them in the national interest. We’ve deliberately set up to have an independent board guided by an investment mandate to make these calls.

We also thought it was important, if I can stress, that we make a break from the way that investment decisions were made in times past. The former Coalition government put a lot of store in grants. Why? Because they could use colour-coded spreadsheets that dictated big calls of grants that suited them in their political interests. We heard the Australian public’s desire to not have that continue, and that’s why we’ve shaped the board this way, guided by our experience with similar boards like the Clean Energy Finance Corporation.

And the other thing if I just may stress this point: it’s a National Reconstruction Fund. We’re trying to draw from different corners of the country. But, importantly, from different viewpoints. There will be some people that will look at some of the names on the board and look at them from the perspective of [indistinct] political party [indistinct] in terms of Kelly O’Dwyer. We’ve said to the Coalition all along we want to be able to work with them on this. We think this is an important part of national – our national architecture to deepen the complexity, the economic complexity, of the nation. They refused on a number of occasions to take up that invitation.

But we are very keen to bring people with different viewpoints on board, and we want this to be something like the CFC that manages to continue through different political administrations because its job is very important. And if I can say in terms of Kelly O’Dwyer my deep gratitude for her agreeing to step up and be a member of this board. We have different political viewpoints, but we do share the same ambition, as all those members do – ambition and energy to see our economy grow in strength and deepening complexity and be there for the longer term providing for the things that the nation needs.

JOURNALIST: Minister, just on housing, are you concerned how the supply will not keep up with migration levels? And does the increase in net overseas migration following the pandemic create a sense of urgency for the state and federal governments to increase supply?

ED HUSIC: If you don’t mind, can I just take questions first on the NRF, and then I can come back to that? Is that okay?

JOURNALIST: Sounds good.

ED HUSIC: Okay, terrific.

JOURNALIST: I was just wondering which of the board members, if any of them, were initially recommendations from either your office or Minister Gallagher’s office as opposed to coming through the executive recruitment process?

ED HUSIC: So, we took on board advice from departments. We also as a government – because this is a key election priority for us – we also made some calls in terms of the total shape of the board. We wanted different perspectives and experiences to be there. So clearly you get guided by departmental advice, but as a government we’re making a broader calls as well about a board that we think will be important to independently make investment decisions in the national interest. And we think we’ve got an extremely talented group of people here that will provide leadership for the National Reconstruction Fund Corporation.

JOURNALIST: Minister, the headline figure of the fund, the great virtue of the CFC obviously was it drew in capital from the private sector.

ED HUSIC: Yes.

JOURNALIST: I’m guessing the aim is operative here. Are you confident you’re going to expand that figure or supplement it with private sector funds as it goes forward?

ED HUSIC: Absolutely. The desire is for us to have this as a co-investment fund. We want to be able to – for instance, as a country we possess one of the largest national savings pools on the planet in superannuation. We have venture capital and private equity operating in our market, and being able to team up where we can to – it’s not just 15 billion, it could be potentially more than that if we work with others like superannuation, venture capital, private equity to make that happen. We’ve got a big job to do. We want to be able to deepen the economic complexity of the country. We want to be able to secure jobs for the longer term. We want to be a country that makes things. That will take a lot of resources. And where we can work with others together it will be really important to do so, and we’ll eagerly pursue that as an objective for this fund.

JOURNALIST: Would you expect Daniel Petre to step aside from his role at AirTree VC given the conflicts of interest there? He will have access to deals that no-one else would have access to. And secondly, given that the NRF is supposed to be patient capital, what’s Daniel Petre doing on the board?

ED HUSIC: Okay. So, a number of things. If you look at Daniel’s background, he’s got experience in digital and tech that’s been built up over many years. And I think it’s important to have someone of that calibre and expertise being able to provide those insights to a board. You’ll also know that most modern boards have ways in which to deal with perceived conflict, and I don’t imagine this will be any different to that. They’ll have to manage those things.

But, again, when I look at someone, it’s not just in terms of what he’s done in his time at AirTree and more broadly within the sector, but he’s an adjunct professor at UNSW and a member of the UNSW Centre for Social Impact. He’s on their advisory council there. He brings a range of experiences, James, that, again, I make the point, these people that have agreed to serve on the NRF are driven by a sense of national purpose about what this will do for Australian manufacturing, the economy and jobs. It is terrific to be able to have these people agree to serve in that way. And I’m very grateful for what they’ve agreed to do.

JOURNALIST: How much of a focus do you expect hydrogen to be for the fund going forward?

ED HUSIC: In the renewables and low emissions priority area this will – hydrogen will form one part of that. Where we can team up with other specialist investment vehicles like CFC it will be very good to do. As a government under Minister Bowen, we’ve got obviously the establishment of the Hydrogen Head Start Program, $2 million there as well. We’re trying to mobilise different forms of capital to be able to assist.

I obviously highlighted a priority area that says that these investments can be made. But I come back to the point that it won’t be me as a minister telling the board how they can make investment decisions. The type of companies that step forward for this type of growth capital, they have to be able to show how they can also deliver a rate of return based on what we deliver to them. The National Reconstruction Fund is made up of loans, guarantees, equity, and they’ll make those calls about looking at the business plans and what’s being sought. Say, for example, if they’re working within the hydrogen space, the rate of return that they can deliver and how it satisfies the investment mandate as well. So, it is an area that will be in focus. But, again, the independent board will be making those calls, and these are the members that will be part of that board.

JOURNALIST: When would you expect to announce details of the industry growth program? Against the backdrop of $440 million that was cut from the manufacturing initiative this week, there’s been that industry growth program that was budgeted for May and here we are in August with no detail. And that’s supposed to be – that’s supposed to be the feeder fund for the NRF.

ED HUSIC: I’d like to just bring some autotune focus to answer your question, if you don’t mind, or sharpen it, and just give a bit of guidance there. So, we’ve gone – going through an industry consultation phase. There’s not been no detail as was just characterised. We’ve talked about that program since we announced it that we wanted to do that in the budget, and we wanted to be consultative and collaborative and we’ve gone through a consultation process that involved the consultation paper that provided I would say a fairly substantive amount of detail. We didn’t want to be dictating the outcome; we want to work with industry so it’s a successful fund.

The second part, you’ve merged two things in the one question – one about industry growth and then you suggested that we cut funding. If you’re referring to the modern manufacturing initiative and that program that was set under the Coalition, this is a study of contrasts, I might say. Here we are talking about a National Reconstruction Fund with an independent board making decisions in the national interest. The modern manufacturing initiative, that program announced in October 2020, $1.5 billion which then – the details of that were announced 85 per cent of that spending announced in weeks leading into the election. One part of that, the collaboration stream.

There were a number of firms in there that applied. They were announced that they would get funding, and as is the natural course, you announce the funding then you negotiate and settle a contract to fulfil what has been announced. Through the course of that with grant guidelines set up by a previous administration that we have to follow, decisions had to be made. And if companies – and in the collaboration streams, it’s not one company; it’s a number of companies that say they’ll team up to deliver – if there’s differences of opinion or there’s variations that are put forward after the announcement, we have to be able to deliver across or against grant guidelines. And in that 400 million that we announced, there were companies that could not deliver along the lines that they had first suggested.

So, there’s an important thing here about balance and fairness. If you change the terms and conditions of what was announced so much that you then have unsuccessful applicants going, “Well, hang on a second, if you could change it that way, we could have done it that way and provided,” you can see where problems would emerge. The Coalition put a program together that was announced at the last minute in their political interests. We are trying to do the right thing on that. It was not a cut; we could not proceed in good faith with the taxpayer or the other applicants of the program to fundamentally change what had been announced by the Coalition leading into the election. And I believe we did the right thing by the taxpayer and the broader public in the decisions that the department made. I cannot make –

JOURNALIST: [Indistinct] in a few months -

ED HUSIC: I’ll just end on this point, because I’m grateful you gave me a bit of time to explain this. I cannot make those decisions as minister. Based on the departmental advice, they made the final decisions, hence that is an important point as well to make.

JOURNALIST: Do you think 15 months is reasonable to make that decision? Like, each of those companies have subcontracting companies. Like, how many of those would have gone out of business that 15 months?

ED HUSIC: Bear in mind, too, I’m going to be very careful about delving too much into individual propositions because you could appreciate fully that some of those firms would like us to, you know, retain a degree of privacy about how they had to make decisions, which were very valid. Just because we didn’t go ahead with a project didn’t mean it’s invalid; it just didn’t conform with the grant guidelines and satisfy those.

So, 15 months, it was not that they were in a vacuum. These were negotiations being done with those firms. The time that in many instances that was asked for by the same firms so they could structure themselves to conform based on some of the things that they were dealing with. So, it wasn’t 15 months of a vacuum; there were negotiations being done with those firms and some cases requested by those firms and in those cases where they were comfortable for that more extended time frame.

JOURNALIST: Do you currently have any plans for the 442 million, where to reallocate that money?

ED HUSIC: The rules, the way it operates, that money goes back into consolidated revenue.

JOURNALIST: Just on economic diversification, Minister, you touched on that, I think there were economic tables out that showed that Australia was actually going backwards on this measure. Should we have any –

ED HUSIC: Thank you for reminding. Closed captioning my pain.

JOURNALIST: Yes. Should we have any hope that we can arrest this trend, at least arrest this slump or even actually reverse it? Can we do anything about it? What’s the cause for optimism on this?

ED HUSIC: I actually – as difficult as that question is, and the difficulty is, you know, that that complexity is really important for our longer-term success. I think it’s not just a hope; it should be an active ambition, not just of us but all parliamentarians, all levels of government, to deepen our economic complexity. As I said a few moments ago, we make a lot of money off mining and farming, but we can make a lot more through value add. And that value add will be a key to that economic complexity.

We hope that the NRF plays a part in just that, in deepening that economic complexity. You asked me a question earlier about critical minerals. Like, there is a lot of demand, understandably, for our huge reserves of critical minerals. But we can do a lot more – processing, manufacturing and putting those products to good use right here in this country. And there’s no real form of energy storage system for batteries to be used by our homes, our commercial enterprises, industry, for grid stabilisation as well. And that will be huge to get that done onshore. And that provides so much more economic and commercial opportunity for the country, particularly as we transition to net zero. So that’s one example of many.

Medical science is another priority area of the National Reconstruction Fund. We’re recognised as a great place for clinical trials world over, but we should take the next step of making our own – in terms of making our own medicines which, again, we identified through the course of the pandemic were – our reliance on critical or broken supply chains, having the things that we needed at the time we needed them most not available. And we should be able to draw off our know-how to do a lot more of that.

And you can see examples of that here in the Australian space – companies like Brisbane-based Vaxxas that are developing new ways to deliver vaccination through what they have come up with, you know, and many other examples that could be cited, again, deepening our economic complexity. Will it be easy to turn around? No, it will not. This is hard work and it’s going to be patient work to deepen our economic complexity. But we’ve got to start somewhere. And if you are going to start somewhere, the National Reconstruction Fund is an ideal place to do so.

JOURNALIST: Can I just ask a question on the process of the appointments. So, the department would have provided you with a list of recommended names? I was just curious if these eight names that have been appointed, were they the only eight names that were recommended by the department, or was it a broader list that you narrowed down to eight?

ED HUSIC: There are elements of this that are subject of cabinet process, so if you can appreciate, I can give you so much information. But let me put it to you this way: it wouldn’t just be eight names. There were a wide range of people. And we were determined to make sure we had a board – it’s a National Reconstruction Fund – we want people from different corners of the country. And, you know, in making those decisions we want to make sure we’ve got candidates from different backgrounds and different parts of the nation.

And, you know, going through that, we want to be able to say to you that we’ve got a board of those different perspectives and experiences, and that’s what you’ve got right here. Again, a National Reconstruction Fund should call on as wide a range of talent as possible and have those ambitions at the table of the board as well. And I think that’s what we’ve got right here.

Okay, we come now to housing. Can you just repeat your question, but I am afraid I may not necessarily be able to deliver the depth of detail that you’re pursuing and you may need to go to my colleague Minister Collins, but please feel free to ask the question.

JOURNALIST: Thank you. Are you concerned about housing, that housing supply will not keep up with migration levels? And does the increase in net overseas migration following the pandemic create a sense of urgency for state and federal governments to increase supply?

ED HUSIC: Well, we are wanting to increase supply in one very critical way – through the HAFF – as you know, providing more social and affordable housing. And injecting that increased supply will be important in taking pressure out of a market where a lot of people are wanting to buy homes and some people feel like they’ve been priced out of the market. So that’s really important.

Obviously, there’s a desire to provide a wide range of housing stock as well, not just to meet, you know – there are people that will be coming into the nation but also attend to some of the skills shortages that are putting pressure on the economy and previously. And skills shortages still remain an issue in the concerns of some businesses in terms of getting their job done. So, we do need to get that balance right. We’ll – there’s some more detail your question triggers or requires that again, if you don’t mind, I think you’d be best placed to talk to Minister Collins. But we certainly could get a lot more supply if the Greens broke out of that very unholy alliance that they got with the Coalition. The Coalition are driven by craven political interests here. They’re not interested in increasing housing supply. Why the Greens would want to team up with the Coalition to deny people who are after social and affordable housing to get that will understandably cause great concern to a number of average Australians who can’t work out if you’re all for increasing housing supply why would you block one of the measures to deliver just that.

JOURNALIST: And just a quick one on that gas, if that’s okay?

ED HUSIC: Sure.

JOURNALIST: So, you were very tough on the gas companies for increasing their profits on the back of the war in Ukraine. What do you make of the government – the Commonwealth Bank [indistinct] a $10 billion profit on the back of rising interest rates?

ED HUSIC: Well, I think you’re just trying to draw a few things together there. I think in terms of coming in as the Industry Minister there were sort of three issues I thought deeply about. One was skills shortages, which I mentioned a few moments ago. The second is the impact of supply chains, which we’re trying to deal with through the NRF, and we’ve seen some easing of those pressures over time. The other one was impact – the impact of high energy prices. And Australians rightly expect that a resource that is in plentiful supply for us will be charged at Australian prices.

The store that we have, be it critical minerals or other resources, confers on this great nation of ours great economic opportunity and I would say strength relative to others. And we should ensure that we get Australian prices for an Australian resource that is used very much by Australian manufacturing. We want to revitalise manufacturing. We’ve got to bring the prices down.

If I can say, if you look at the stats, you know, the job that we did through the energy price relief plan, our performance is compelling. Second quarter last year, electricity prices in last quarter of the Coalition government went up 60 per cent. Fast forward the same quarter this year, predicted to go up 33 per cent. The actual performance went down 1.5 per cent. Big takeout of that is our energy price relief plan shielded manufacturers from the worst of the price spikes. That’s why I spoke up there.

And you’re going to have issues of profitability come up from time to time. They are a legitimate focus in the public square and people will make comments on them. But if I may say, the action we took on prices I think is in line with the expectations of the Australian public also designed to deliver vital cost of living relief and also to help our industries grow in the face of some fairly tough conditions.

And with that, my friends, I’ll wind it up. Thanks for your time.

ENDS