Today in a Budget Estimates hearing, Abigail pressed the Minister for Industry about Labor's fixation on bolstering weapons manufacturing here in NSW. Read the exchange below.
Ms ABIGAIL BOYD: Good morning, Minister, and to all of the officials. I was listening when you were talking about New South Wales' reliance on coal as an export and what you are doing to try to change that mix. Given the announcement of a new missiles manufacturer opening up in Newcastle, is the intention to turn Newcastle into an exporter of weapons to replace the coal export industry?
Mr ANOULACK CHANTHIVONG: The Newcastle economy, as it transitions away from coal, has gone through, I would say, quite a successful journey. The biggest employers in Newcastle, as I recall, are in education and health. We can see that in its workforce. Certainly, those regions, in particular those coal-dependent regions, have a very strong manufacturing skill set base which can be applied across all different sectors.
Ms ABIGAIL BOYD: There seems to be growing awareness of a competition for skills and labour across the renewable green energy sector and the growing weapons manufacture sector in New South Wales. Does that concern you? Does the Government have plans to redirect people into green energy as a preference over weapons manufacture?
Mr ANOULACK CHANTHIVONG: As you rightly say and as I've said earlier this morning, diversification of our economy keeps our economy resilient. It's agile and provides employment and income opportunities, in particular for our regional communities. The journey of urbanisation, those who have studied it, has seen a lot of our regional communities not perhaps benefit as much from the economic transition. That's why, I suppose, differences in what were old coalmining communities, like the Illawarra and like Newcastle, have really transferred into the services sector, like health and education. But also, they have such a strong physical manufacturing skill set base which can be used in areas like clean energy, which the Government is totally committed to as one of our strategic priorities and in which we'll be certainly encouraging greater investment and greater opportunities for people.
Ms ABIGAIL BOYD: We're looking to the Government to go, "What is the ideal industry mix here?" What percentage are you anticipating we're going to have in 10 years time in weapons manufacture versus green energy?
Mr ANOULACK CHANTHIVONG: Concentration risk in any economy is very risky because it means your economy is unable to absorb or adjust to shocks that are beyond your control. So what you need to do is grow as many sectors as you can. Things like medtech are very significant in New South Wales.
Ms ABIGAIL BOYD: What about when they're in competition with each other? We have the urgent need to get renewables online as quickly as possible. We have a certain set of skills coming out of the fossil fuel industry, particularly the coal industry, that could be deployed readily into green technology, or they could get siphoned off by the big weapons manufacturers. What are you doing to ensure that we're prioritising renewable energy over weapons manufacture?
Mr ANOULACK CHANTHIVONG: The Government has made no secret that renewable energy and the transition to net zero is an important strategic objective, not only environmentally but also economically. I think it's important to acknowledge and recognise that skill sets are not specific to any particular industry. When we talk about manufacturing, it's actually not a sector; it's actually a skill set which can be easily transferrable between different—
Ms ABIGAIL BOYD: And deployed into different industries.
Mr ANOULACK CHANTHIVONG: That's why investing in our skill set—I know my colleague Minister Whan is making significant policy reform and investment in TAFE free education. Our TAFEs—
Ms ABIGAIL BOYD: With respect, Minister, the question was what percentage of industry mix do you think should be renewables and how much do you think should be weapons manufacture in South New Wales?
Mr ANOULACK CHANTHIVONG: I would say the ultimate goal in any economic restructuring is to ensure that we don't have concentration risk. Industries will emerge and also be disrupted, but it is important that we have the greatest spread we can to keep our economic base resilient.
Ms ABIGAIL BOYD: I will put it another way, then. How much weapons manufacture is too much weapons manufacture in New South Wales?
Mr ANOULACK CHANTHIVONG: I understand that you, personally, obviously have some thoughts about the defence industry, but I can also say 40 per cent of Australia's defence and space industry does happen in New South Wales.
Ms ABIGAIL BOYD: I think when people talk about defence, people think of our Defence Force and protecting Australia—and then we have weapons manufacture. At the moment, most of that gets exported to other countries and used potentially against civilians, as we've seen recently. Given the agreements that have been made with these really large weapons manufacturers around Western Sydney airport, given the news about a missile factory now around Newcastle Airport, is there a plan by this Government to replace coal export with weapons export?
Mr ANOULACK CHANTHIVONG: We want to replace coal. Everybody knows the trajectory of fossil fuels and we want to replace it with as many different sectors as possible.
Ms ABIGAIL BOYD: Okay. But, weapons?
Mr ANOULACK CHANTHIVONG: As I said, defence manufacturing has already existed in New South Wales for quite a long time. It is part of the broader mix of our economy. Things like medtech are significant. Agritech is also significant.
Ms ABIGAIL BOYD: Given the ethical concerns with a lot of that weapons manufacture, what limits has New South Wales put on the type of weapons that could be manufactured in New South Wales? Are we going to be seeing more drone technology coming out of here? Are we going to see AI being used to selectively target more civilians in order to shoot them down? At what point does the Government say, "This type of weapons manufacture is perhaps not ethical"? Are there rules in place? Are you setting up restrictions?
Mr ANOULACK CHANTHIVONG: My job as the Minister for Industry and Trade is to try to encourage new and emerging industries to replace—
Ms ABIGAIL BOYD: Regardless of the ethics?
Mr ANOULACK CHANTHIVONG: —the coal industry to ensure that we have a diversified economy and a very strong skill set base that is easily transferrable from one sector to the other.
Ms ABIGAIL BOYD: Minister, you've met with a concerning number of weapons manufacturing companies since you were appointed, from the very large ones to the companies that are involved in producing the technical aspects of other people's weapons. There is a whole bunch of different manufacturers. You have met with a really huge number of those and not very many energy sector companies. Is it your focus as Minister for Industry and Trade to effectively make New South Wales' economy reliant on the manufacture of weapons?
Mr ANOULACK CHANTHIVONG: No. As I said, I will meet with anyone who seeks to create employment and economic opportunities for the people of New South Wales as we diversify our economy. The numbers you have—I suspect a lot of energy companies might first go to Minister Sharpe, as a first port of call. But, of course, I'd be open to—
Ms ABIGAIL BOYD: We're talking about BAE Systems, Lockheed Martin—a whole bunch of really big global weapons manufacturers. We know their weapons are being used to target civilians in different wars around the world. At what point does New South Wales say, "We don't want to be an exporter of that type of weapon. We are going to put some limits on it"? Will there ever be any limits or are we just getting as much money as we can out of this industry?
Mr ANOULACK CHANTHIVONG: I'd make a couple of points, because there are a few questions in that. The first point is around export of defence equipment. That is a matter for the Commonwealth to determine what, if anything, comes out of the country.
Ms ABIGAIL BOYD: Are you getting pressure from the Federal Government to try to meet the AUKUS agreement by producing more complicated and nasty weapons out of New South Wales?
Mr ANOULACK CHANTHIVONG: No, I'm not getting any pressure from my Commonwealth colleagues. My job is to ensure that we put engagement and policies in place to diversify our economy. I can say to you, earlier this morning, as a demonstration of the Government's commitment to cleaner energy, myself, Minister Scully and Minister Sharpe held a hydrogen round table with—
Ms ABIGAIL BOYD: Okay, but I'm talking about weapons. Where are the limits? You have consulted with all of these weapons manufacturers. At what point do you consult with the people of New South Wales and say, "Do you want these weapons that are used against civilians being made in New South Wales?" Where has that consultation been, Minister?
Mr ANOULACK CHANTHIVONG: I suppose you also have to recognise, Ms Boyd, that the sector does employ over 22,000 people in New South Wales.
Ms ABIGAIL BOYD: Yes. What I'm hearing from you is that there is no ethical limit. There is no point at which you go, "Actually, New South Wales doesn't want to be involved in that kind of weapons manufacturing."
Mr ANOULACK CHANTHIVONG: I accept you have a position which is different to mine on the defence and aerospace industry.
Ms ABIGAIL BOYD: It's called ethics.
Mr ANOULACK CHANTHIVONG: I want to ensure that, as the Minister for Industry and Trade—to push the Government's agenda when it comes to skilling our people, when it comes to creating the capability and the capacity to move from one sector to another, and that requires—
Ms ABIGAIL BOYD: So it's the Government's agenda not to have any ethics when it comes to weapons manufacture?
Mr ANOULACK CHANTHIVONG: It's the Government's agenda to always continue to find ways to provide economic and employment opportunity for the people of New South Wales.
Ms ABIGAIL BOYD: Regardless of the industry and the ethics.
Later in the hearing:
Ms ABIGAIL BOYD: Coming back on the discussion I was having with the Minister in relation to weapons manufacture, I understand that the innovation blueprint is still under consideration and I understand that there is a bunch of other documents yet to be revised. But is there something, somewhere, that gives guidance as to the extent to which we would invest in that sort of activity and where we would draw a line if something was being exported that we thought to be particularly dangerous?
REBECCA McPHEE (Deputy Secretary, Investment NSW, Premier's Department): I think it might be helpful to put my response in context of the defence industry. The defence industry in New South Wales, which is very broad, as you know, is currently worth $3.4 billion in GVA. That's 0.5 per cent of GVA for the State. So, whilst important, it pales in comparison to industries like construction, which is currently sitting at $53 billion.
Ms ABIGAIL BOYD: The website says we're trying to grow it.
REBECCA McPHEE: We provide support to a range of different industries including defence but, if you're looking at priority industries, clearly areas like minerals extraction, green energy, modern manufacturing and local manufacturing are very clear priorities for Government, where we are focused and there is significant expenditure ongoing. There's extremely limited direct investment in defence from the New South Wales Government.
Ms ABIGAIL BOYD: What about the Western Sydney airport development and the cluster of agreements around that that we now have, with different weapons companies and an advanced manufacturing facility to help those companies? It seems to all be very defence related around that project. Is that going to increase our percentage of what we're churning out in terms of product?
REBECCA McPHEE: I'm extremely sorry but I'm going to have to refer to any questions to the Bradfield development agency—apologies.
Read the full transcript hearing here.
10 September 2024