JOHN ALEXANDER:
Welcome to Bennelong and Josh Frydenberg, the Roger Federer of Treasurers, welcome to the innovation capital of Australia. Last Tuesday, just a week ago, and it’s two years ago we won back Government, so it’s a big day for us. Last Tuesday you talked about the inventions of wifi and the bionic ear. So, wifi was invented just up the road at CSIRO. We are at Cochlear today which is a superstar of innovation of the bionic ear. I would like to introduce you to Dig Howitt, the CEO of Cochlear.
DIG HOWITT:
Thanks, John. Welcome to Cochlear. We are certainly very pleased to see the patent box legislation. Australia, as everyone knows, punches above its weight in world-leading medical research. We have created world-leading med-tech biotech companies. But we can do more. The patent box legislation in last week’s Budget is a real opportunity for Cochlear to solidify our future in Australia and, importantly, to create and enable new companies to grow in Australia. Why do we want that? We want that because they create high paying jobs. Cochlear exports 95 per cent of what we make in this factory, but here in Australia, more than 40 per cent of our global employees are based in Australia. They’re here because we do our manufacturing and R&D in Australia. To support that, Cochlear spends 12 per cent of our global revenue on R&D, that enables us to create an enormous amount of technology and know-how in patents and it’s with those patents and technology we’re able to have world-leading products that enable people to hear right around the world. Thank you.
JOSH FRYDENBERG:
Thanks very much, Dig. Firstly, to John Alexander, thanks for your strong advocacy on behalf of the biotech and medical device industry. You’ve been a staunch advocate for their success and their growth here in Australia, as well as a wonderful member for Bennelong. Dig, thank you very much for welcoming us here to Cochlear. Cochlear is a great Australian success story. To think that just forty years ago it was established after groundbreaking research and innovation and the work of Professor Graeme Clark, together in collaboration with the University of Melbourne. As Dig reminded me, it was kick-started with a commercialisation grant at the time from the Federal Government. Started with just four employees and now it has more than 4,000 employees. Around half of whom are employed here in Australia, and the other half as part of Cochlear’s global outreach. To know that it's exporting this wonderful product to 180 countries in the world is a real credit to all your hard-working staff and the leadership team here at Cochlear have shown incredible vision. Here at this facility, we’re meeting scientists, engineers, technicians; people who are advanced in their area and who are participating in advanced manufacturing here on site. The products that Cochlear are developing are restoring hearing loss to hundreds of thousands of people around the world. Of course, the bionic ear is something particularly special. Now, the Government has placed a focus on our manufacturing strategy, identifying key areas where we want to see more investment here in Australia. Now, one of those key areas is in the medical device and the biotech industry. As JA has said, we have made some wonderful inventions here in Australia, like the Gardasil vaccine for cervical cancer. Like the Resmed sleep apnea devices. Like the Cochlear bionic ear. And we want to see more of those innovations here in Australia and their commercialisation, here in Australia. So on Budget night we announced that Australia will have a ‘Patent Box’ for the biotech and medical device sector. This will mean that if the research is done to develop a patent, and it’s registered here in Australia, then the income that is derived from that patent will be taxed at a reduced rate of 17 per cent. Providing a greater incentive for businesses like Cochlear to invest and commercialise here in Australia. Business is not very sentimental. We know that capital is very mobile, and businesses like Cochlear are sought out by governments and countries right around the world. But we want to keep this wonderful innovation and technology here in Australia. We want to see it derive more export income. But importantly, create more jobs, and as Dig said, “high paying jobs, value adding jobs” here in Australia. So today, we’re celebrating Cochlear. We’re celebrating Australia’s medical device and biotech sector. But we’re also looking forward to the future which will be stronger as a result of the measures announced in Tuesday’s Budget. Are there any questions? Are there any questions on the Patent Box?
QUESTION:
Treasurer can I ask you what percentage of the population will need to get vaccinated before the Government will open borders?
JOSH FRYDENBERG:
Well as you know we put in assumptions in the Budget about gradual opening up of the international borders from the middle of next year. This is not a policy decision of Government, this is actually an assumption, and if we can move earlier, based on the medical advice for example in respect to international students the Prime Minister has said we look favourably upon applications from the states, as long as they are ticked off by the Chief Medical Officer. As long as the numbers are above the quarantine caps, we would support those cohorts coming to Australia. That would be good for the international education sector and good for the economy, more broadly. With respect to the vaccine, we're rolling it out as quickly as possible. We have already seen more than three million doses distributed around the country, more than 10 per cent of the population, more than 30 per cent of those who are aged over 70 and we have also seen more than 85 per cent of the aged care facilities. We are rolling out that vaccine with 5,000 plus contact points around the country, including GPs and the state and territory clinics. So our goal, our objective is to roll out the vaccine to as many people as quickly as possible and based on the medical advice at the time, we will make a decision on the international border. But what we won't do is compromise on the health and the safety of Australians. The Prime Minister was criticised last year when he closed the international borders to China and then to other countries. But it was the right thing to do and it has helped set Australia up to successfully suppress the virus. Some people say Australia got lucky because the virus has not spread here. Well, that is not right. Australia makes its own luck. And we have been able to achieve what we have done because we have moved decisively and quickly and comprehensively on the health and the economic front. The United Kingdom is also an island, yet they have seen the virus run rampant across the country with a large number of deaths. We are an island but we moved decisively to close our international borders. The net result has been that to date, we have successfully suppressed the virus.
QUESTION:
Can you give us a threshold, I mean businesses are calling for a threshold, for vaccination rates to the opening, so what is it? 80 per cent? Can you give us a threshold?
JOSH FRYDENBERG:
We’re not putting a number on it because what we are saying is that we need to continue to take the medical advice and rollout of vaccines as quickly as possible. What we will do is wait until we get the medical advice that says it is safe to open the borders. That is what our focus is now.
QUESTION:
So will that be herd immunity? Where does that kick in? What percentage of the population will need to be vaccinated?
JOSH FRYDENBERG:
In this world where the virus is mutating around the world, new variants of the virus, we have seen tragic images out of India, there’s a great deal of uncertainty. So you can’t be precise in this world where there is a great deal of uncertainty. What we will do though is continue to take the medical advice which has served us well.
QUESTION:
There is some evidence that older Australians are putting off getting the AstraZeneca vaccine in the hope of getting the Pfizer or Moderna vaccine later in the year. What is the Government doing to address this?
JOSH FRYDENBERG:
Well again we’ve got 5,000 contact points, we’re rolling out the virus as quickly as possible. The uptake has been increasing. More than 400,000 people in the past week, that’s a significant increase than what we’ve seen previously. So we’ll continue to use the facilities that we have in place, the relationships we have developed among the GPs as well as bringing in more supply to get the vaccine to as many people as possible.
QUESTION:
Have you got any specific strategy to address that particular issue of people, older Australians, putting off getting the AstraZeneca?
JOSH FRYDENBERG:
Well, we’re obviously encouraging getting as many people as possible to take the vaccine. We’ve got a communications strategy to do that, GPs are working with their own patients, and, of course, working closely with the medical profession.
QUESTION:
Can I ask you, why has the Government broken its promises about building car parks at train stations in Melbourne?
JOSH FRYDENBERG:
Well, we’ve put a significant amount of money to the car parks that are being constructed right across the country. We have to work with the states, but we remain committed to rolling out the car parks, including in my own electorate. But, when we work with the states, we have to get, obviously, their support too, and that’s why it’s taken a bit longer for some of the carparks to roll out.
QUESTION:
But some of them have now been scrapped.
JOSH FRYDENBERG:
Well, again, we remain committed to rolling out these car parks right across the country. Some of them are ready, under construction, more will be in the coming weeks and the coming months, but they remain an important way to get more cars off the road, to get people to work sooner and safer, and they remain an important investment.
QUESTION:
You promised them at the Federal election, and shouldn’t you have got the approval of the state governments before you made this an election promise?
JOSH FRYDENBERG:
Well, again, we worked closely with the state government on a whole range of areas when it comes to infrastructure, but we are committed to rolling out more car parks; we’ve already done so to date, and they’re well-received and welcomed by the local communities, because what they do is they enable people to get home sooner and safer, as well as to work, and taking some cars off the road is definitely a positive.
QUESTION:
Was this an attempt at pork barrelling that’s gone wrong?
JOSH FRYDENBERG:
This is an attempt to deliver better outcomes for local communities. Our infrastructure commitments have been at a record level. We’ve seen, in the Budget, $15 million committed to infrastructure spending. We’ve seen a ten-year, $110 billion pipeline of infrastructure spending. These measures are designed, whether it’s around large rail projects or large road projects, they’re designed to boost the productivity of the nation, create jobs, and, obviously, keep Australians safe. Now, we’ve got those large scale projects, but we’ve also got some smaller scale projects, including working with the state governments and the local governments on a use it or lose it basis, we’ve allocated more money for local projects.
QUESTION:
You promised those car parks but five of those projects have now been scrapped. Isn’t that a broken promise?
JOSH FRYDENBERG:
We are delivering lots of car parks to lots of communities right across Australia. Certainly more car parks than the Labor Party ever promised. Thank you.