Doorstop: Hume, ACT

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The Hon Melissa Price MP

Minister for Defence Industry

Minister for Science and Technology

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2 July 2020

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DR FIONA KOTVOJS, LIBERAL CANDIDATE FOR EDEN-MONARO: Thank you, everybody, it’s a pleasure to be here again and I would like to thank EOS and Dr Greene for inviting us here in this venue for this announcement today. I'd also like to welcome the Prime Minister, the Minister for Defence Industry, Senator for the ACT as well to today's event. For me, this is all about jobs, and that's the key thing for everybody in Australia at the moment, jobs. And it's been just one of a series of announcements that will result in jobs across Australia and result in jobs in Eden-Monaro and I'm very proud about that and I think it’s a wonderful thing that’s been moved forward in these difficult times. I’d like to invite the Prime Minister, thank you.

PRIME MINISTER: Well, thank you Fiona, Dr Kotvojs. It’s wonderful to be with you once again. Dr Greene, thank you very much for having us here at EOS and as well as your supply chain partners from Queanbeyan and surrounds for the incredible work that you're doing here, which I know Senator Seselja is very excited about. This is part of the industrial hub of this region and it is exciting to see what's taking place here. What is taking place here is something of which Australians should be very, very proud. The sophistication of what is on display in this manufacturing facility and on those that adjoin them as part of the supply chain is world's best. And that's why 95 per cent of what EOS does is exported to the rest of the world. And if you can make those global standards, that means for the Commonwealth, as we're entering into further contracts for incredibly important systems and equipment, many of which I referred to yesterday and the Defence Minister will go into more detail today, then you need partners and a sovereign capability in Australia to do just that. And that means after more than 30 years of EOS operations here, developing its capabilities, developing its people and developing its products and its systems, it means that that capability does this. They’re making things here, they’re making them in Australia and then making them in a way that Australians should be very proud of and they are being made by Australians here with the jobs that are being created.

Earlier, I met Branka, who works in this rather controlled environment under there, under the protection. She used to run a restaurant, she was involved in the hospitality industry. Now she's in the defence industry. I was talking to Peter before, he came out of the construction industry. He was on the tools there, working as a labourer, he had some carpentry skills. And here he is part of the defence industry and couldn't be happier. The jobs that are created by the Government's plan to develop our sovereign capability when it comes to the defence equipment that we need to invest in to defend Australia and to ensure that our interests are protected and that we can engage with our partners around the world, as we achieve the stability that is necessary for peace and prosperity. The jobs that come from that commitment are significant and there are jobs here on this floor. There are jobs at Mechanica. There are jobs at Real Steel and there's a collaboration in meeting the very strong challenges. And so over the course of the last few weeks, as I've moved around the Eden-Monaro electorate with Fiona Kotvojs, our Liberal candidate, we've been on site down in Eden, supporting the timber industry. Prior to the election even being called as a byelection, I was with the Deputy Prime Minister out in Batlow and out in Tumbarumba and seeing the impact there of what was happening in the orcharding industry, and we're investing in that sector as well. We've been out on building sites where the HomeBuilder programme is keeping young people in the construction industry, the home building industry, in work. And the response to that programme has been extraordinary, and I suspect lawn sales have gone up as well after we had our wonderful encounter with our friend out there at Googong.

But here we are again today talking about jobs, because that's what we're focused on. And on Saturday, to vote for jobs, to vote for the economic recovery, to vote for the rebuilding of our communities across the many communities that make up the Eden-Monaro electorate, to vote for the certainty and the stability that has been delivered by my Government, not just in the recovery after the bushfires, not just in how we are working through the COVID-19 pandemic, but more importantly, the rebuilding that comes out of that. To vote for that stability, to vote for that support, to vote for those jobs and for those jobs continuing, then I need you to vote for Fiona Kotvojs, the Liberal candidate for Eden-Monaro. I need Fiona Kotvojs there on the ground ensuring that the Snowy 2.0 jobs and the Snowy 2.0 multipliers go through the local economy. That EOS can continue to do the important work they're doing as we move into new relationships with them and the supply chains they make up. As we help the timber industry get back on its feet. As we help the orcharding industry get back on its feet. The tourism and hospitality sector all across the wonderful, the wonderful reaches of this part of Australia. All of that depends on having someone who can be part of a Government that is getting on with the job of delivering the jobs. And that's why I'm seeking your support for Fiona Kotvojs, the Liberal candidate for Eden-Monaro and I want to thank Fiona for being here again today and, of course, Dr Greene again for the wonderful work that you're doing here.

Now, on that note, I want to hand over to Melissa Price, the Minister responsible for Defence Industry, and she's going to talk a little bit more about what's happening here and then Dr Greene will make a few remarks as well, and then we're happy to take questions. Thank you very much, Mel.

THE HON. MELISSA PRICE MP, MINISTER FOR DEFENCE INDUSTRY: Thank you, Prime Minister, and thank you to Ben and his team and all the staff that we've met today. I think what we've witnessed here today is true advanced manufacturing here in our country. And if there was ever any doubt that manufacturing is alive and well, well, I think we're seeing this on display here today. I think there's nothing like a pandemic to get a nation focused on what is it that we need to be good at? In defence industry, we talk about sovereign capability. But put it simply, what is it that we need to be good at? What is it that we need to be able to produce in our country? And I'm just so thrilled with the work that EOS is doing here for our nation and also for the export opportunities which are creating jobs right here in Australia, not just here in Queanbeyan and in Hume, but right across our country. And I've learnt today that, in fact, they do have employees in my electorate, which was news to me. So it just shows you the spread of EOS. During the COVID-19 period, our Government sat down with defence and talked about what of those projects that we need to bring forward, what are those projects that we need to do to make sure we continue to grow the jobs in defence industry? And today's announcement for the 251 weapon systems that EOS will buildfour out of Bushmaster and Hawkei vehicles is one of those projects. So just thrilled to be here today supporting 200 jobs in Australia, but not just here at EOS, but actually 100 hundred businesses right across the country. And the most important part is that with these weapons systems, 80 percent of that will be built here, right in Australia. It's a really good day for advanced manufacturing in Australia. Thank you, Dr Greene.

DR BEN GREENE, GROUP CEO, EOS: Thank you, Minister, Prime Minister, Dr Kotvojs, Senator Seselja and from the Department of Defence Tony Fraser, welcome. Very, very warm welcome to EOS. Firstly, let me commend the Government on the force structure and strategic documents that were released publicly yesterday. Very, very welcome steps forward for this country and it will help start a very interesting debate as we shape the future of this country's national security. I also would like to thank the Prime Minister and the Minister for the Government's unflinching support over years for defence industry and the jobs that the defence industry generates within the community and the multipliers that high-tech defence industry like us generate throughout this wonderful country. We're very proud of that and I think you should be proud of the role that successive elements of your government have had in sustaining that.

Now, EOS started, I started EOS about 35 years ago as a space company and as happenstance would have it, I was approached in 1992, which is a long time ago, by the US Army to spin off some of our really advanced space technologies within working within the US from our Queanbeyan plant and that subsequently led to a $700 million development programme which we executed for the US Army to develop the first generation weapon stations. What we're looking at here, as you look around you, is the second generation, which were uniquely developed by EOS, largely at our own expense. So rather than have a product which generated $20 billion worth of revenue worldwide in its own lifetime and many companies still trying to sell that product, we have the next generation product here developed in collaboration with the US Government, but not entirely funded by it. As a consequence, EOS this time owns the technology and we have yet to lose a sale anywhere in the world to a competitor. We're clocking about $400 million a year in sales for this product and wherever we sell this product anywhere in the world, we produce more than half of it here. When you take into account there are countries that mandate 50 percent local production, that's a real achievement and we fight tooth and nail in those negotiations around the world to keep those jobs here.
Why do we do that? One of the reasons is that Australia needs a first-class defence capability. We can't afford a defence industry with our own revenue. Notwithstanding the fantastic numbers that were announced yesterday, $270 billion over that span will not support a critical infrastructure of defence. We need exports. In my company, well over 90 per cent or approximately 95 percent of everything we do is exported. They’re exported to tier one markets, as you'd expect. We can't export to most countries. There's only 15 countries in the world we are allowed to export to and we don't begrudge that at all. They're the only ones we want to export. But those exports validate the product before the Commonwealth and the Department of Defence even have to come near to thinking about buying it. So we have a product that's in production at tremendously advantageous prices for the Department of Defence here to access as and when they want to. Because another critical thing is we are not dependent on the Department of Defence or the Government and therefore, normally - and I say normally because I want to come back to this point - we are an entirely sustainable industry in our own right. Look around you now. You will see a $130 million worth of product here that can't leave this plant. COVID-19 has shut down our delivery chains. We have another $50 million with the product stranded between here and customers. So what we have now is an industry which has a temporary, we have decades of performance behind us and we think decades of performance ahead of us. We have a temporary hiatus in our ability to ship and the Government has very, very, I think, intelligently, other would say kindly and others wouldsay far-sighted, brought forward known documented requirements for which contracts were already in place for us to produce in the next 12 months, items which we would have produced at a later period for the Department of Defence and the Commonwealth. And that single act is going to save thousands of jobs, thousands of jobs, and the reason for that is that the multiplier effect on what we do here is very strong in the community. Our jobs are very highly skilled and generally highly paid. I want to thank the Prime Minister and the Government he represents and the Minister for what was a very welcome and much-needed element of support for the industry and for our company. Thank you.

PRIME MINISTER: Thank you, Dr Greene. Well, a thing I love about when you come to places like this is people are passionate about making things and that's why they can make things and that's why they always punch through any challenges or impediments that come their way. And COVID-19 has obviously been a big challenge, not just for this business here, but right around the country and right across the Eden-Monaro electorate and that's why it's so important that we have the stability. And I'd say all of the three things you just referred to, to describe the Government's approach here. But it is that farsightedness. It is the practical nature of how our Government works and that's why I need someone exactly like Fiona. That's why I need Fiona Kotvojs on the ground here as part of these many communities to ensure that our programmes continue to hit the mark. Happy to take questions.

JOURNALIST: Prime Minister, are there any local manufacturing quotas included in this defence plan?

PRIME MINISTER: Like with all of our defence industry contracts, there are clear plans to ensure that we maximise local content. You've just heard just how much local content is maximised through this operation here.

JOURNALIST: PM, with your speech yesterday, you made repeated references to the 1930s and the 1940s. There’s a couple of elements to that. One is that Australia was very ill-equipped for the start of World War II. But are you concerned also that maybe Beijing will see a comparison that you might be suggesting between China and fascist Germany or China and Imperialist Japan?

PRIME MINISTER: That would be a misreading of my remarks. What I talked about was the conflation of economic uncertainty and global instability. Now, there are different reasons for global instability back at that time and today's time. But when you get the combination of these two forces at any time in our history, regardless of their causes, then that should give us reason to make the announcements we made yesterday and to understand the changing times. There are similarities, but there are other parts of the analogy which are different. But the impact is similar, and that is to recognise that Australia, over the last few years, like the rest of the world, like the rest of the region, is facing a very different environment than we were even quite recently. And that is why we have made the changes that we have made.

JOURNALIST: Prime Minister, on Eden-Monaro, John Barilaro this morning was dancing around, not denying reports that he and his supporters have suggested voters preference Labor rather than the Liberal candidate. How helpful is that just days out from the by-election?

PRIME MINISTER: You must have seen a completely different interview to me because I heard both John Barilaro and the Nationals candidate for Eden-Monaro say that under their ‘how to vote’ card, they say vote 1 National, vote 2 Liberal. That's exactly what the Deputy Premier said and that's exactly what the Nationals candidate said. So I can only refer you to their absolute statement of support for their ‘how to vote’ instructions and but what I would suggest is that you vote 1 Liberal for Fiona Kotvojs and that is the nature of this contest. We have a very strong Coalition and I know that whether you're a Liberal voter oror you’re a National voter, what you don't want to see is you don't want to see the instability and the chaos that is taking over, or rather, I should say, has never really left the Labor Party. And a vote for Labor is a vote for uncertainty. It's a vote for chaos. It's a vote for the disunity that we're seeing right across the Labor ranks. The chaos we're seeing with all sorts of, I mean, there's a corruption enquiry into Labor currently. That's not my words. That is the words of the Labor Member for Holt. And so to reward that this weekend, I'm sure even Labor voters are very disappointed with what they're seeing from their own party. They need to sort themselves out. Our Government is very focused on the job of jobs and particularly here in Eden-Monaro. And that's why I'm urging people to vote Liberal for Fiona Kotvojs, the Liberal candidate for Eden-Monaro.

JOURNALIST: Do you think he has been helpful though? Because yesterday he said your assertions that aren't any cuts to the ABC is disingenuous. So he's contradicting what the Government is arguing.

PRIME MINISTER: The Deputy Premier is known for his wide-ranging comments. What I know is that ABC funds are greater next year, the year after, under the three-year funding program, and I'm sure that's a position that many media organisations and communications organisations would love to be in. And in addition to that, there was over $40 million in additional support we gave to the ABC to support their regional activities in recognition of the important work that the ABC does in regional areas. The Government has always understood that and we provided additional funds for that.

JOURNALIST: PM, the report out yesterday by the New South Wales Government says Australia’s economy is too dependent on economically damaging taxes like company tax, personal income tax, property stamp duty, not utilising more efficient taxes like GST land taxes. Do you believe Australia's tax system overall could be made more growth friendly? And what leadership role is the Federal Government prepared to play in that? Or is it just a matter for the states to go about this themselves?

PRIME MINISTER: Well, the Government is cutting taxes. I mean, yesterday, if you're a business with a turnover of less than $50 million, your tax rate fell from 27-and-a-half percent to 26-percent. The instant asset write off that you get access to is $150,000 for immediate write off of equipment that you invest in. That program started off at $20,000 when we first introduced it and I've increased that to $150,000 and that will go till the end of this year as an important part of the measures that we put in place to see the economy grow out of the COVID-19 recession. We have legislated tax cuts, which means right now, if you have an income up to $90,000, then you can get a rebate on your tax of up to just over $1,000 and that will extend with rebates continuing up to an income of about $124,000. That came in and is repeated from last year. So I'd urge you to get your tax return in. That's in a few days time, just over a week, five million Australians will receive a $750 payment if they’re a welfare beneficiary, just like they did back in April, which will be a much-needed boost into our economies, including here in Eden-Monaro. There are many beneficiaries here in Eden-Monaro. In just over 10 days time, they will all be getting a $750 payment, just like they did back in April and that'll be important for the local economies right across the Eden-Monaro. So we are taking action. We have legislated to abolish - to abolish - entirely the 37-cent tax rate and to reduce the 32.5-cent tax rate down to 30. That's what we've done to lead when it comes to income tax reform in this country and company tax reform and to increase the incentives. Now, I note the report that has been commissioned by the Treasurer's board, which is all the Treasurers of the states and territories. I note that they've received that report. I note the New South Wales view on that. I note that South Australia has the complete opposite view. So I think it's important before the States start advancing any proposals that they have. We have provided a forum for that to happen under the reforms that I announced for the National Cabinet, the National Federation Reform Council. We tasked the Council of Federal Financial Relations, which is all those state and territory Treasurers, to work through those issues.

And so we've set up the process. But in the first instance, I think there needs to be a greater consensus amongst the states that clearly doesn't exist at present.

JOURNALIST: On Hong Kong Prime Minister are you disturbed in what you're seeing and would you consider offering safe haven for Hong Kongers who do find themselves in great trouble there, similar to what Boris Johnson is doing?

PRIME MINISTER: The answer to both questions is yes and yes. In the first instance, we do find these events very concerning and we have been very clear about our statements to that in concert with many other nations. This is not a position Australia has commented on in isolation. We have done so with many other like-minded countries about these events. The basic law and the safeguards that were put in place with the handover, we would expect to be upheld. I think that's a very reasonable position and a very consistent position for the Government. We are considering very actively the proposals that I asked to be brought forward several weeks ago and the final touches would be put on those and they'll soon be considered by Cabinet to provide similar opportunities and we think that's important and very consistent with who we are as a people and very consistent practically with the views that we have expressed.

JOURNALIST: Would that be permanent settlement?

PRIME MINISTER: When we have made a final decision on those arrangements then I'll make the announcements, but if you asking are we prepared to step up and provide support? The answer is yes.

JOURNALIST: [Inaudible]

PRIME MINISTER: Sorry, I couldn't quite hear.

JOURNALIST: What have you heard from China since you announced the defence strategy?

PRIME MINISTER: I haven't heard anything directly. I've been a bit taken up with many meetings, but I've been pleased to receive a lot of support and encouragement for the positions we've taken from our partners in the region and our allies more broadly. Because what we're about is we’re about peace, stability and prosperity in the Indo-Pacific. And to achieve that, we want to see everybody working closely together. As the Defence Minister will say today, we work with everybody we can in the region to promote peace, stability and prosperity. If people are on that page, then we're with them and that's what yesterday was all about.

JOURNALIST: Prime Minister, on the Victorian outbreak, 77 new cases announced today. There were reports that hotel quarantine breaches included security contractors sleeping with guests and breachings of social distancing. How concerned are you by how this has been handled in Victoria?

PRIME MINISTER: Well, I'm obviously concerned about the outbreak and I'm pleased that the Premier has taken the action that he has taken, both in putting place the lockdown for the outbreak in those suburbs in western Melbourne. That was the appropriate response and they have our full support in implementing it and whatever additional resources they seek, whether that's from the Defence Force or the Commonwealth Public Service, we are currently and have been putting in place now for several days, hundreds and hundreds of Commonwealth public servants to support the programs that have been put in place by the Victorian Premier. The testing regimes are being supported in other states. Other health officers from other states are assisting with the tracing capabilities. So we're very focused on the fixing, on the containing, on the practical challenges of this. Obviously, what has happened with the quarantine, I think the Premier has been pretty upfront about that and pretty honest about where the weaknesses have been and he shared those weaknesses with his colleagues so similar things don't occur in other jurisdictions. There will be international flights now going to other parts of the country that would otherwise go to Melbourne and so that means we wouldn't want to see, you know, those same experiences happen, whether it's here in the ACT or in Brisbane or Adelaide or other places. So I think it's important to learn the lessons and I think Premier Andrews has been, I think, quite upfront about that. So he has my support to continue to put these measures in place and get on top of this outbreak and we've got to focus on the problem. That's what we're doing. That's what people expect us to do, as leaders, to work together to focus on fixing the problem, to give greater assurance around the country. Those numbers, as I'm sure as the Premier would concur, we've seen some levelling, although they remain at elevated levels, and that is of concern. And that means as the lockdown now is in place, we would hope to see those numbers fall again. But we take nothing for granted since yesterday.

JOURNALIST: Back on defence, doesn’t yesterday’s purchases risk driving further arms purchases in the region and therefore further destabilising it?


JOURNALIST: PM, tens of billions of dollars is being withdrawn from super early, and yet we now know from the AFP that it might have been a honeypot for fraudsters with lots of bank accounts seized and frozen. What measures are you taking to make sure that some of those billions haven't gone to fraud?

PRIME MINISTER: Well, the very reason you know about this is because of the enforcement actions that have been undertaken by the AFP with the support of the Government. So what that is a demonstration of is that the AFP is doing their job to protect people in exactly the way that you suggest. The scale, though, I've got to say, of integrity challenges that we've had with the many measures we have in place are quite small compared to the volume of the payments that we're seeing. I mean, to date there's been about $50 billion - now, that doesn't include the super drawdowns - $50 billion that have gone out through various schemes, particularly in JobKeeper. And there's about $8 billion of that, which is in higher JobSeeker payments and that's just till now and there's many more months left to run on that. And then, of course, as I flagged very clearly, there are further phases beyond that. When it comes to super drawdowns, that has been quite effective and the banks have told us this very clearly, in a lot of cases, it's being used by people to shore up their mortgages and that is a sensible, that is a sensible act. It's up to people to decide what to do with their own money and where they're making those decisions to better protect their mortgages and put themselves in a more resilient position that greatly assists them, not just for now, but for the long term as well. And I think Australians have been making their choices about this very carefully and very responsibly. Of course, there'll be some instances where that hasn't occurred, but I'm pleased to say that's in the minority of cases.

JOURNALIST: PM, on fiscal policy, beyond the emergency measures that are currently in place, some economists are suggesting there's going to have to be some serious fiscal heavy lifting beyond the end of this year well into next year. Grattan says $70 billion and $90 billion, another former Treasury economist says $30 billion to $50 billion. Is the Federal Government prepared to do some serious fiscal lifting beyond September? Because these are huge numbers people are talking about still.

PRIME MINISTER: Well, what I've noticed with economists in recent months is they want us to spend nothing and they want us to spend everything. And so the truth is going to be somewhere in the middle. And that's the path that we have responsibly taken. In terms of fiscal heavy lifting, I would say that $50 billion in just two and a half months represents a pretty big lift and we've demonstrated our willingness to provide the fiscal support that is necessary to support people's incomes, to support people's jobs, to support people's livelihoods. Whether it's the cash flow injection we put into small and medium-sized businesses, whether it's the direct payments we've made to welfare beneficiaries, whether it's the JobKeeper programme, which has been a stand out model around the world for one of the most, if not the most, successful programmes to support people during these initial phases of the corona recession, and indeed the expanded safety net, an effective doubling of the payment with an $8 billion extra in in payments made just till now. That's what I'd call fiscal heavy lifting. So my answer is that our record demonstrates that we're prepared to do what's necessary, but we're also prepared to do what's responsible. What we want to see happen is the economy continue to lift and for businesses to free themselves of restraints, whether that be the restrictions that have been put on their businesses by state governments, or it's indeed getting themselves away from the income supports that have been in place and so they can go on and sustainably support the jobs and their businesses. I mean, the future of the Australian economy is not to remain in ICU. The future of the Australian economy is to become strong and independent and sovereign and able to grow jobs and have its own momentum. In the meantime, the government will continue to do what is necessary to support us to get to that stage. But we've got to be very careful about two particular things. We can't let our supports hold businesses back. We can't let that happen. That will cost jobs and livelihoods and create dependency, which will not mean that Australian businesses will be world-beating in the future and job generators in the future, as EOS has been right here. The other thing is that we've been incredibly careful not to lock in government spending into the decades into the future. That's how you swamp the Australian taxpayer unfairly. It is not fair to enter into long-range programmes of that type of fiscal stimulus. We saw the problems of that last time under Labor. We have been targeted. We have been careful. We have used existing systems. These measures have been temporary and well-timed and they will continue to be because that's the responsible thing to do and they are the issues that the Government is working through carefully. Again, this afternoon, the Treasurer and I and the Finance Minister and others will be meeting over these issues. The Cabinet met at length again yesterday, poring over these issues again. We're getting further data coming through. What the world will look like three months from now, we hope certainly in the domestic economy will be even better. But at this stage, it's very hard to say because the global economic environment will remain very subdued. But right here, right now, it's about jobs and jobs here in Eden-Monaro. It's about the jobs we're creating through Snowy 2.0. It's about the jobs we’re going to create in the timber industry, the construction industry, the tourism in the hospitality industry, primary producers, orchardists. We have all of their backs as a Government. And I need someone here on the ground in Fiona Kotvojs, the Liberal candidate for Eden-Monaro, who will fight for those jobs and will storm into my office and say the primary producers need this now, boss, or the timber millers need this or the defence contractors and the jobs that are supporting on that, this local content needs to be delivered. And she'll know because she'll be all over it. And that's what Eden-Monaro needs. They need Fiona Kotvojs’ and her experience, her commitment, her passion, and to be part of a Government over the next two years before we go to the next general election to make sure we can continue to rebuild and recover. That is the best, the best decision for Eden-Monaro, and I want to thank Dr Kotvojs for putting herself forward. I'm so proud to have her as part of my Liberal team. And on Saturday, I hope she can form part of my Government, because I think that will be what's best for Eden-Monaro. And wish the electors of Eden-Monaro all the best with their decision. But your best choice, bar none, is Fiona Kotvojs. Thank you very much. Thank you.


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