VIDEO: Senator Tim Ayres Outlines Albanese Government’s Manufacturing Vision at Business Hunter Breakfast

14 March 2025

Assistant Minister for “a Future Made in Australia” and trade, Senator Tim Ayres, addressed the Business Hunter Breakfast at the University of Newcastle’s Q Building this morning. His speech centred on the Albanese Government’s vision to rejuvenate Australian manufacturing, with a particular emphasis on the Hunter region’s role.

A focal point of Ayres’ address was Tomago Aluminium, Australia’s largest aluminium smelter, located approximately 13 kilometres northwest of Newcastle. Operational since 1983, the smelter boasts an impressive annual production capacity of 590,000 tonnes, accounting for 37% of the nation’s primary aluminium output. The facility is an independently managed joint venture, with ownership stakes held by Rio Tinto (51.55%), Gove Aluminium Finance Limited (36.05%), and Hydro Aluminium (12.40%) .

The smelter is significant thanks to its substantial economic contributions, injecting $2.2 billion annually into the Australian economy, with $800 million spent locally. However, Tomago Aluminium faces a range of challenges that threaten its future stability.

One concern is the expiration of its current power contract with AGL Energy in 2028. The transition from coal-based power to more expensive renewable energy sources could potentially double electricity costs, jeopardising over 1,000 jobs. Rio Tinto CEO Jakob Stausholm highlighted the critical need for competitively priced electricity to ensure the smelter’s viability .

Adding to the complexities, the smelter has recently been embroiled in industrial disputes. Over 500 workers initiated industrial action due to a stalemate over a new pay agreement. The Australian Workers Union has been advocating for a 4% annual pay rise over three years, along with additional sign-on payments and back-pay. Management’s counteroffer fell short of these demands, leading to significant disruptions at the facility.

In response to these challenges, the Albanese Government has unveiled a $2 billion aluminium production credit aimed at supporting domestic producers like Tomago Aluminium in their transition to renewable energy sources. This initiative is part of a broader strategy to decarbonize Australia’s heavy industries, ensuring they remain competitive in a global market increasingly prioritising sustainability .

Senator Ayres highlighted the government’s commitment to backing firms as they navigate competitive challenges, he said it is important to maintain aluminium smelting operations in regions like the Hunter. He highlighted that the shift towards low or zero-emissions production is not merely an environmental imperative but a market-driven necessity, as global consumers increasingly demand sustainable products.

Compounding domestic issues are international trade tensions, notably the recent protectionist measures by the Trump Administration, which imposed tariffs on aluminium and steel imports. While Australia’s direct exports to the U.S. in these sectors constitute a small fraction of its total exports, the broader implications of such tariffs could disrupt global trade norms and affect market dynamics. The Australian government is actively seeking exemptions and engaging in diplomatic efforts to mitigate potential adverse impacts on local industries.

Senator Ayres’ address was about resilience and adaptability. By investing in renewable energy infrastructure, supporting fair industrial relations, and engaging proactively in international trade discussions, the government is hoping to strengthen our the manufacturing sector.

However in recent media reports, opposition leader Peter Dutton has slammed the Albanese government for failing to secure an exemption from the 25% US tariffs on aluminium. He claimed that the previous government successfully negotiated such deals and criticised Prime Minister Albanese for not even securing a phone call with President Trump, calling his leadership “weak and incompetent” and arguing that this failure endangers thousands of Australian manufacturing jobs.