PRIME MINISTER:
The thoughts of Australians are with people in Central Queensland and in the Northern Territory right now as both those regions are threatened by major cyclones. My thoughts and prayers are with the people of Rockhampton and Gladstone particularly because these are the areas that are currently being most impacted. Obviously, at a time like this, it’s important for Australians to listen to emergency warnings.
I’ve been in contact with the Queensland Premier’s office just before coming here to let her know that the Commonwealth stands ready to offer all possible assistance to the emergency services in Queensland and that the standard Natural Disaster Recovery Arrangements will be in place. We are used to difficult and dangerous summers in this country. It’s good that we’ve managed to get through this summer so far without too many major incidents, but this is a very serious storm and let’s hope that we can get through it without too much damage and certainly without any loss of life.
I’m here with my friend and colleague, Matt Williams, to celebrate a South Australian success story. Pak Fresh is a marvellous small business which is expanding all the time on the basis of the fine products here in South Australia, which are increasingly in demand right around the world but especially in our region.
We are a great people and a great country, we have so much to offer the world and all the time there are new opportunities opening up for us. I said on election night that I was determined that Australia would be not just under new management but open for business as well and the success of a operation like Pak Fresh demonstrates just how increasingly open for business Australia and South Australia is.
Obviously, there are a range of general economic factors that help a company like Pak Fresh: we’ve got low and stable interest rates, we’ve got a much more competitive Australian dollar and fuel costs are down. These are general economic conditions which will operate in the favour of our exports.
As well, this Government has abolished the carbon tax which has certainly reduced the power bills of a company like Pak Fresh by well over $1,000 a month.
We are increasingly opening ourselves up to international trade. We’ve got the three free trade agreements, with Korea, with Japan and with China. So many of the products that are going through Pak Fresh are going to be so much more competitive as a result of these free trade deals. All of our seafood exports to Korea, to Japan, to China will be duty free under these arrangements. Our lamb and beef exports to Korea and to China are duty free under these arrangements. Our beef exports to Japan will have vastly lower tariffs under these new arrangements.
It’s not just good news for our exporters, it’s not just good news for businesses like Pak Fresh; already, consumers are starting to see the benefits of these free trade agreements with the price of a Mazda 3 down about $2,000 and the price of a typical flat screen TV down about $250, because of these measures that this Coalition Government has put in place to make it better for workers, better for businesses and better for consumers.
I’m really pleased and proud with the work that’s been done and I’m delighted to see good people here in South Australia taking advantage of it.
Now, Matt Williams is the local Member. He’s very proud of this business. It’s always good when a local Member comes out to talk to people at a place like this because there are all sorts of issues that you find out about and the job of the local Member is to be a trouble shooter on behalf of his or her constituents and I know that Matt’s picked up a whole lot of practical things that he can now go to our regulatory authorities to talk about so that the businesses involved here will do even better in the near future than they have in the recent past. I’ll just ask Matt to say a few words.
MATT WILLIAMS:
Thanks, Prime Minister, and thanks everyone for coming out. In addition to Pak Fresh, we’ve got Thomas Foods and Ferguson Australia here too that provide great meats, great seafood to markets all around the world, and they’re very optimistic about the free trade agreements.
I was speaking to a company that supplies the wine industry in Edwardstown in my electorate just the other week and they’re also very upbeat about the free trade agreements as are the Winemakers’ Federation and rightly so because of the new markets and the new opportunities and we should be very optimistic about the growing middle-class in Asia that brings great opportunities.
The transport companies I’ll mention too. Obviously, infrastructure is very important and the Prime Minister’s made a huge commitment to infrastructure investment around Australia, including South Australia, with $1 billion for South Road. That’s something that I’ve fought very hard for. These products need to get to market, they need to get to the airport by road and so, in that respect, those transporters are very upbeat about the $1 billion commitment to South Road and the improvement in infrastructure in South Australia.
PRIME MINISTER:
Ok, do we have any questions?
QUESTION:
Prime Minister, when will South Australians get some certainty about the future of submarines and whether they’ll be built here?
PRIME MINISTER:
I’ll deal with free trade issues and the issues that I’m here to talk about specifically first and then we can get on to those sorts of questions.
QUESTION:
Prime Minister, what about food coming the other way? Are Australian consumers adequately protected given the berry scare this week?
PRIME MINISTER:
Look, I know that a lot of people are very concerned about it – very understandably and quite rightly concerned. There are a number of things that Government is doing. We’ve stood up a National Health Incident Room. We’ve got the National Health Protection Committee which has met to consider the Hepatitis ramifications of this particular difficulty. We are looking, through Food Standards Australia New Zealand at what additional screening might be necessary for these types of products.
With this particular business which has been the source of the outbreak, there is now 100 per cent screening taking place and the point I want to stress is, sure, government has an important role, but in the end it is the responsibility of businesses not to poison their customers and it’s absolutely in the interests of every business to ensure that customers have a good experience from that particular good or service. I think we can be confident that the businesses in question are absolutely on this job, because the last thing they want to do is jeopardise their future by continuing to hurt their customers.
QUESTION:
Can we go back to the announcement that Kevin Andrews has just made in Melbourne about the international deal?
PRIME MINISTER:
It’s very important that we get the best possible submarines, at the best possible price, maximising Australian involvement in their construction and maintenance. That’s what we want, that’s what we’ve always wanted and what the Minister and the military chiefs have just announced in Melbourne is a process that will be a competitive process and which will give us three options from which to choose. The criteria that we will be attempting to best satisfy, again – very simple, very clear – the best possible sub, the best possible price with maximal Australian involvement in the production and maintenance.
QUESTION:
Can you tell us more about this international deal, because at the moment I believe Kevin Andrews said he’d ruled out the full design and full build being in Australia wholly, that it could be that some jobs will be here, some jobs will be overseas? What does that mean?
PRIME MINISTER:
That’s correct, because we have never designed and built a submarine from scratch here in Australia. Yesterday in Canberra, we had the Australian Submarine Corporation giving evidence to a Senate hearing and ASC quite properly made the point that they can’t design and build submarines from scratch here in South Australia. But, what we want to do is work with these three international partners – the Japanese, the Germans and the French. Obviously, they will be talking to potential partners here in Australia to see how much of this work might usefully be done in South Australia. The bottom line for all of this, though, is that there will be more submarine jobs here in Adelaide. That is the bottom line. Under any possible scenario, there are going to be more submarine jobs here in Adelaide. What we’ve got today is a clear and defensible process for coming up with some options – some good options – between which we can then choose by the end of the year.
QUESTION:
So you can actually guarantee that there will be more jobs? The people that are at ASC now, will they definitely hold on to their jobs, because what Mr Andrews alluded to was that there’s highly skilled jobs that are going to be brought here to South Australia as part of this process but there wasn’t really any clarity around the future of ship building itself?
PRIME MINISTER:
What ASC made crystal clear before the Senate yesterday is that they have about 20 years of work on submarine sustainment. So, ASC has a long and bright future looking after the Collins Class submarines that will be in service for the best part of two decades and they will be sustained in the future, as they have in the past, by the Australian Submarine Corporation. Then, of course, there’s another part of the Australian Submarine Corporation business which is working on the Air Warfare Destroyer and that’s involved in the surface ship building sector. So, there is a long and bright future for the ASC ahead of it and, obviously, there are now additional prospects for partnership work with established submarine manufacturers in Japan, in Germany and France.
QUESTION:
Why have you ruled out Sweden at such an early stage?
PRIME MINISTER:
The last Australian submarine came off the production line in about 2001. As I understand it, the last Swedish submarine came off the production line in about 1996. So it’s almost two decades since Sweden has built a submarine.
Building a submarine is a very complex business. It is one of the most complex and sophisticated design and manufacturing operations imaginable – it really is. It’s not all that different from building a space probe, it really is that difficult and that sophisticated. The countries that do this are the United States and the United Kingdom but they only build nuclear submarines, there’s Germany and France that are involved in a wider range of submarines and Japan which builds the best large conventional submarine in the world. Then of course there’s Russia and China but for various reasons we don’t normally choose to partner with Russia or China for defence equipment.
So, we are working with the three countries that have continuous, relevant submarine experience because in the end – I’ve said it before let me say it again – this is about the best possible sub at the best possible price, as well as maximising Australian involvement in the participation and the maintenance.
QUESTION:
What kind of Australian involvement are you talking about? Is there going to be some kind of expectation in the contract that a certain proportion will need to be built at ASC?
PRIME MINISTER:
We want to maximise Australian involvement…
QUESTION:
So, how much? What percentage of the submarine being built will be built here or would it just be maintenance? Because that was the concern of ASC in the beginning – was that if Japan is awarded the contract that perhaps they would just be doing ongoing maintenance and that it would be reducing numbers here.
PRIME MINISTER:
Let’s give you some idea of the scale of all of this. Now, we’re talking about a $50 billion – or thereabouts – order. Obviously we’re not putting a final figure on it because we can’t put a final figure on it until we’ve explored the various costs and that’s what this process will be all about, trying to work out exactly what these costs will be, but we are talking about something in the order of $50 billion over the life of the construction and the sustainment of these submarines for some 30 years. Now, typically about two thirds of the cost of a submarine contract is the post-production sustainment. So, we’re talking about $30 billion or thereabouts that will be spent here in South Australia on the sustainment and then there’s the potential for more to be spent here in South Australia in terms of the actual production process, depending upon the kind of options that are put to us by either the Japanese or the Germans or the French.
QUESTION:
So would you need the numbers that you’ve currently got at ASC or would jobs go? Can they have a guarantee that everyone who’s employed at ASC at the moment will keep their jobs as a result of this tender process?
PRIME MINISTER:
I just refer you to the statement by the Australian Submarine Corporation yesterday in the Senate – they have a bright future under their existing work. Under their existing sustainment arrangements for the Collins they’ve got 20 years of work. Now, sustainment alone on the basis of an eight submarine as opposed to a 12 submarine fleet will produce an ongoing 500 additional jobs. So, one way or another, there is going to be more submarine jobs here in South Australia.
QUESTION:
With respect, Prime Minister, it gives the impression that you’re setting up an announcement that they won’t be made in South Australia?
PRIME MINISTER:
The ASC has already said that they cannot design and build a submarine from scratch in South Australia, and you might remember that the Collins Class submarine was not designed and built from scratch in South Australia, it was a partnership with a Swedish company – a company which is no longer in the same business that it was. Sweden has not built a submarine since the late 1990s; we actually have more recent submarine construction experience than Sweden. That’s why we are proposing to partner with the three countries currently in the business of conventional submarine manufacture; the Japanese, the Germans and the French.
QUESTION:
[inaudible] about how many of those would you expect to be in South Australia?
PRIME MINISTER:
There will be at least 500 new jobs in South Australia in submarine sustainment. So, this is the minimal – the minimal – number of new jobs that South Australia can expect in submarines in the years ahead.
QUESTION:
And they’re new jobs on top of what we have now?
PRIME MINISTER:
That’s correct.
QUESTION:
Ok, and then how many jobs would then go if there’s no – if you’re only doing ongoing maintenance, the concerns have always been with ASC that they need more work to sustain the shipbuilders that they’ve got at the moment. Are you prepared to guarantee those people that they will have a job?
PRIME MINISTER:
Again, I’m surprised that you’re so pessimistic because I’m here in South Australia for a good news story, a good news story which involves the exports from this state going up and up and up all the time. And again, when it comes to ASC I refer you to the statements that the ASC made before the Senate yesterday – they have submarine work under their existing contracts for some two decades. They are maintaining our existing Collins Class fleet for some two decades. As well, they are involved in the air warfare destroyer project and what I am hoping to do over time is put the surface fleet on a sustainable, built in Australia basis. That’s what I’m hoping to do because what we had under the former government was six years of sitting on its hands for submarines and a constant stop start process when it came to surface ships. So typically this Government is cleaning up Labor’s mess, attempting to do it on the optimal, most sustainable basis.
QUESTION:
The Productivity Commission’s report – the proposals that have been made – which aspects do you think are likely for the budget or workable?
PRIME MINISTER:
It’s a very useful report – the Productivity Commission report into childcare – and we’ve been saying for years now that if we want to give Australian families a fair go, we’ve got to give mothers in particular a real choice to have a family and be in the workforce and that means a better childcare system. So, we’ve been looking at the interim report of the Productivity Commission; we’ve now got the final report. We think it’s important to foster community debate that the final report is out there and in a matter of weeks we will have a comprehensive response to that report. We will have a new families package which will very much focus on childcare because we want to unlock the potential of our people. We want to give the families of Australia, the women of Australia, a real choice and the work of the Productivity Commission certainly gives us a very strong foundation.
QUESTION:
Do you think that a family where a couple earns $200,000 or $250,000 a year is rich?
PRIME MINISTER:
Certainly under the existing system you get more support through childcare benefit if you’re low income and then of course at any income you get the childcare rebate. So, we already have a differential system and that’s what the Productivity Commission is recommending continues but on a less complex more rational basis.
QUESTION:
And do you agree with that? Do you agree that it should be simplified and means tested?
PRIME MINISTER:
We’re not talking about means testing here because we’re not talking about taking away, the Productivity Commission is not talking about taking away the childcare assistance from anyone, it’s talking about properly targeting childcare assistance so that those on low incomes get relatively more; those on higher incomes get relatively less, but it is going to be a universal system under the Productivity Commission’s recommendations.
QUESTION:
[inaudible] should be subsidised for spending money on nannies and au pairs rather than driving down childcare costs even further for those on low incomes?
PRIME MINISTER:
It’s important to try to ensure that childcare is as affordable as possible. Consistent with a quality product, we want it to be as affordable as possible and yes, the Productivity Commission thinks that provided it’s a quality childcare service, it doesn’t matter the environment in which it’s provided. The important thing is that it is a quality service and that it is appropriately funded by government so that the economic and social benefits are maximised to the wider Australian community.
Look, this is a very good report. As always with the Productivity Commission, it does high quality work. The Government will be carefully reflecting on the recommendations of the Productivity Commission and we’ll be responding in just a few weeks. But again, the point I want to stress is that this is a Government which is determined to unlock the creativity of the Australian people. And whether it’s by getting rid of the carbon tax, getting rid of the mining tax, the Free Trade Agreements, which are going to make it so much easier for our exporters and for our consumers or indeed a better a childcare system. We are trying to ensure the best possible deal for the people of Australia with more opportunity and more chance to show our potential and that’s what government should do.
QUESTION:
Have you spoken to the President of Indonesia again?
PRIME MINISTER:
I don’t want to go into the details of who has said what to whom. I just want to assure everyone that we will not rest until we have done everything we humanly can to stop these executions from going ahead. The point I keep making publicly and privately is that it is not in Indonesia’s best interests and it is not in accordance with Indonesia’s best values for these executions to go ahead. Yes, these two have committed a terrible crime for which they deserve a very, very long prison sentence, but they are it seems fully reformed, fully rehabilitated. They are working in the Bali jail with drug offenders to try to rehabilitate and reform them. I know Indonesia has a terrible drug problem, I know that, I absolutely know that their drug problem is if anything worse than ours and I can understand their desire to crack down in the toughest possible way on drug crime. But these two Australians are now a weapon against drugs, that’s what they are, they’re a weapon against drugs and why would you deny yourself access to that at a difficult time for your country.
[ends]