Minister for Defence - Doorstop interview, CEA Technologies, Canberra

Monday 29 February 2016

Subjects: CEA Technology, Defence White Paper, ABCC, tax reform

DEFENCE MINISTER:

Good morning ladies and gentleman. It is fabulous to be here at CEA in Canberra with the Prime Minister and my Senate colleague, Senator Zed Seselja, and may I thank Merv Davis and Ian Croser very much for having us here again. In fact for me and for Zed, it is having us back because we had an opportunity to visit CEA just recently when we opened one of their new buildings. The opening of that new building is an indication of the extraordinary growth and business that this operation here is doing. CEA lives and breathes what the Defence Industry Policy Statement is all about. It was started by three guys who were serving in the Navy together, served together and two left, one stayed, and they recruited the third on to their team. It is the most extraordinary example of Australian ingenuity, of Australian innovation, of Australian creativity that I have seen in a long time.

To actually have it here in Zed’s constituency is pretty impressive. What we have seen here today is the sort of operation which is currently being fitted to our Anzac class frigates in their upgrade. I saw the Parramatta on the hard-stand in Perth just recently having her upgrade work done. It is an absolute testament to what we are capable of here in Australia, but more importantly, what it says about what we are able to do through the Defence Industry Policy Statement, which we released last week with the Defence White Paper. Particularly in relation to next generation technologies, particularly in relation to science and technology more broadly and I’m very, very pleased to have had the chance to be here this morning and really pleased to have been able to bring the Prime Minister with me.

PRIME MINISTER:

Well Marise, Zed, thank you so much for bringing me here. Ian and Merv congratulations. What an exciting place this is. Here, right here, in Canberra, here you have the best radar arrays being built in the world today. In the most competitive industry in defence, competing with the fastest, smartest companies in the world, these Australian innovators have created the best most technologically sophisticated radars in the world. It is their example of innovation that should inspire us. It has inspired us as we put together the Defence White Paper and the investment plan, every page of which is focused on innovation. We recognise that for our Defence forces to be successful in defending Australia in the 21^st century, they have to be at the cutting edge of technology. So the Defence White Paper is a paper about innovation. It is a plan for innovation and technology. We set out how we are going to encourage the new CEOs, the start-ups, the successors to this company that will be coming up with the new ideas of the future. We want to harness that Australian ingenuity. You see for us to succeed in the 21^st century, we have to transition from an economy that has built around a mining-construction boom, to a new economy. That is an economy based on innovation, on technology, on opening markets. It is a technology that is agile enough and an economy that is nimble enough to take advantage of these enormous opportunities. That’s the goal. So every aspect of our policy - defence, economy, innovation, every aspect of it, has to be focused on this. Will it drive innovation? Will it promote investment? Will it promote jobs? Will it promote our direction towards the new economy that secures our future? So I am thrilled to be here at CEA. This is 21^st century Australia. This is our future.

JOURNALIST:

Committing to doing future submarines in Australia will go a long way towards all of those things you were describing. How inspired are you to make sure that happens?

PRIME MINISTER:

I am always inspired by the ingenuity of Australians and here at CEA is such a great example. As you know we have a very strong commitment to a stronger, more technologically advanced Australian defence industry. As for the submarines as you know, there is a competitive evaluation process underway and that will come to a conclusion later in the year.

JOURNALIST:

What do you make of former Army Chief Peter Leahy’s calls to send Special Forces soldiers into ISIL strongholds in the Middle East so that they can destroy terrorists before they launch attacks?

PRIME MINISTER:

Well, there are SAS special services personnel in Iraq at the moment and they are working there, training and supporting the Iraqi forces. Indeed, when I was in Baghdad only the other day the Prime Minister of Iraq thanked me for the support in which - the critical role the Australian Special Forces had played in supporting the retaking of Ramadi which, as you know, has been a very big victory for the Government and a huge confidence booster for the Iraqi government.

But you also have to bear in mind, and I’m sure the General’s familiar with this, that we operate in Iraq as guests of the Iraqi government and the Iraqi government - it’s view, is that Western forces such as ours should operate in support role behind the wire as it were and we will continue to do that. But we work very closely at the request, at the invitation of our host the Iraqi government, supporting them, and we’re guided by their views as to how our forces can be deployed. It is, after all, their country.

JOURNALIST:

Prime Minister, this morning Christopher Pyne said that if the Senate refuses to pass the Government’s legislation then it makes it hard not to call an early election - so if the Senate again rejects your bid to bring back the ABCC, wouldn’t you call a double dissolution?

PRIME MINISTER:

The ABCC legislation, the legislation to reinstate the Australian Building and Construction Commission is critically important to securing our prosperity, our continued economic growth, investment and jobs in the future. We need to ensure that the construction sector which employs about one million Australians is governed by law.

As we know, as we saw in the Heyden Royal Commission, this has been, in many respects, a lawless zone. Returning, restoring the Building and Construction Commission would bring back the rule of law in the construction sector. It is a vital part of economic reform. It is a vital part of securing our prosperity and that is why we encourage all of the Senators to support the Bill, which is now being presented, as you know, for the second time.

JOURNALIST:

Prime Minister, just a negative gearing and housing affordability. Do you have a message to young people who don't have parents who can act as a guarantor on a mortgage, who can't afford a deposit of say, $100,000, and probably face the prospect of renting for the rest of their lives? And only ever seeing housing going up and up in the capital cities? Do you have a recommendation for what those young people can do?

PRIME MINISTER:

Look, let me just say this to you. The Labor Party's policy on negative gearing and capital gains tax are calculated to lower the value of Australians' homes. They are proposing a massive shock to the market, pulling out 30 per cent of the buyers for established residential property. It is designed to lower the value of Australian homes. It would be a very significant negative shock to the market. And, you know, turning to…

JOURNALIST:

But, young people can't afford homes?

PRIME MINISTER:

…Turning to capital gains tax, let's just consider this, what is our central challenge? What is a central challenge to transition to a 21st-century economy? To assure young people the jobs of the future? To ensure that they will have jobs? How do we do that? We do that by promoting investment and innovation. That is why are innovation statement sets out real incentives for people to invest in the CEAs of the future. If there were some naval officers leaving a naval vessel, retiring from the Navy today to start up a competitor to CEA or an emulator of CEA. Under our plan they would have, there are real incentives under our innovation policy, there are real incentives for people to invest with them. What does Labour propose? Labour is proposing to increase capital gains tax by 50 per cent. So, what Labour are saying to investors is, if you invest in any project, any business, any asset, we will increase the tax on any gain you may realise by 50 per cent. They are setting out to reduce investment, to discourage investment. Now, we believe the future of our economy, the future of our security, the key objective of our economic growth has got to be around innovation, technology, opening up markets, investment and employment.

That is what we mean by growth, we mean by growth, growing our opportunities. And, a key part of that is investment. So, we are in favour of investment, we are encouraging investment, labor is increasing the tax on investment by 50 per cent and that can do only one thing, result in less investment, less growth, fewer jobs.

JOURNALIST:

One of your colleagues has been quoted in the paper today saying that you are waffling too much in Parliament and you need to give a clear message on tax. What you say to that? And do you need to lay out the specifics of what you are planning on tax?

PRIME MINISTER:

Well, I think the Labor Party's latest tax announcement is a good reminder of the dangers of making policy on the run, and setting out changes to, for example, tax without full and proper consideration and analysis. And, we make no apology for taking the economic security of Australia seriously. We make no apology for considering tax and changes to the tax system very very carefully, and analysing it carefully. And, we are doing that, we are undertaking that work and when it is concluded we will then present the policy to the public for their approval.

And, let me say to you, the central issue this year, this election year is going to be who is best able to lead Australia in this transition from the mining construction boom to the new economy? Who is best able to ensure that we promote investment, secure jobs, encourage technology and promote innovation? Who is best able to ensure that the success of this company, CEA, will be followed by the success of many others? Who is best able to open up the markets for our exports in every industry?

That's the challenge. And every measure we are setting out, whether it is restoring law to the construction sector, whether it is promoting innovation, whether it is securing our defence and doing so in a way which relies upon and encourages Australian innovation. Right across the board, every lever of policy is being pulled in the direction of investment, of growth, of innovation, of jobs. Because that, as I have been saying for years, I have been giving this speech for many years, this is the future. This is how we secure our future, growth, investment, innovation, open markets. That is the future for us to be secure in the 21^st century.

JOURNALIST:

That sounds like a very sharp election pitch there - the question about the ABCC, you said it was vital for Australia, the question is, is it so vital that if it is not passed by the Senate you will dissolve both houses of Parliament and go to an election?

PRIME MINISTER:

Well, Mark, I understand the perennial fascination with election dates. I am just urging the Senators to pass the legislation, naturally, and I just say to you that while all constitutional options remain open, my expectation is, and my assumption is, that the election will be held in the normal way, at the normal time, which is August and September or October this year.

Thanks very much.

Ends