Alex Gallacher (SA, Australian Labor Party) Share this | Hansard source

I too rise to make a contribution on this debate on the Automotive Transformation Scheme, and I will take the challenge from Senator Ruston to make my contribution not so much negative, but more positive. The reality, though, is that there was an election in September 2013 and a government was elected. Whilst it is fair to say that they can argue that decisions made prior, or no decision made prior, can impact on their ability to govern, they cannot keep trotting out the same excuse two years later: 'Our hands are tied by another government.' You are the government. There is a transformation package and there are two competing views here. There is the economic rationalist view: just chop it, let it burn, let it die, move on, get the workers into another sector of the economy and let it all go.

Let us go back and see what we are talking about here. Let us take Holden—the history of Holden dates back to 1856 when it started as a saddlery business in South Australia. Today Holden is one of only seven fully integrated global General Motors operations that designs, builds and sells vehicles for Australia and around the world. It is a very tight, efficient operation.

We know that Chifley launched the first mass-produced Australian car in 1948. We know that Holden has had its headquarters in Port Melbourne, Victoria, with the engine-manufacturing plant on site and vehicle-manufacturing operations in Adelaide. Holden is represented by 230 dealerships nationally and employs about 3,500 people. We know that, in 2013, Holden began the production of the VF Commodore, the most advanced car ever built in Australia, incorporating light-weight technologies such as aluminium construction, a raft of cutting-edge driver safety and infotainment systems and that it set a new standard for Australian cars. We know that that is what is at risk.

We also know, those who want to listen to the argument, that we are a small country and that 200,000 cars is probably not the economy of scale that the modern global manufacturing motor vehicle sector needs. I know they make a million cars in Thailand. When I visited Thailand, we had the opportunity to meet business people who put together a trade mission to South Australia to talk specifically to the component manufacturers there about refocussing their attention on the emerging opportunities in both Thailand and Myanmar. They came to talk to South Australian component manufacturers who should refocus their attention from Holden, as it is today, Ford or Toyota, to the emerging opportunities in Asia. Despite the best endeavours of Senator Xenophon, Senator Madigan and the Labor Party, we find that these people are not able to turn their activities to the opportunities that may be around, the opportunities that arise from their great skill and expertise in the work they are currently doing.

Senator Rushton was critical of this side of the chamber about free trade agreements. I was fortunate enough to sit through the Japan-Australia Economic Partnership Agreement inquiry and the Korean-Australia Free Trade Agreement. Hopefully I will be around long enough to go through the China-Australia Free Trade Agreement inquiry. One of the things that really struck me in the evidence given, not by someone who is opposed to the free trade agreement but by someone who is in favour of the free trade agreement, representing the Australia Chamber of Commerce and Industry, was that they represent 18,000 companies. I thought that was a really good slice of Australian business. Of those companies, 20 per cent export but 100 per cent face the full competitive effects of a free trade agreement. So the people who are quietly going about their business in Australia, people who do not export but just do things in the economy which makes them a quid, are employed and reasonably happy, but they have no idea what the effects of a free trade agreement will be in their world or that their business could be turned upside down. They are not ready for it. They have no knowledge of it.

The economic rationalists say that competition is good. What competition actually means in a lot of sectors is failure of business, reduction of employment and people exiting. And low and behold, I think that is why you have a transformation scheme. All governments, of whatever colour or persuasion, have a responsibility to mitigate the effects of competition or decisions which they have made on the economy.

Here we have 100 years of history. You have a manufacturing sector which makes motor cars. The simple fact is I am probably the last generation who drives a six-cylinder, rear-wheel drive Ford or Holden. I will not drive anything else. It is quite apparent that younger, more savvy consumers are buying more fuel efficient cars and small cars. Therein you have the problem. Holdens, Fords and large Toyotas are probably not the flavour of the month with young buyers. They are not getting the penetration and the market share any more. I suppose we have to accept that, but we should not accept that the 100 years of expertise and skill which has been generated in the component industry and in the other sectors is just thrown out with the bathwater. We should allow those people to access funds to return themselves to other sectors of the economy where they can also take their skill and expertise. Let me give an example.

There is a warehouse on the road as we speak. There is a truck leaving Melbourne. It will get to Nhill and within a 35 kilometre radius of Nhill, which is half-way to Adelaide, another truck will meet it, they will swap over and the components will go both ways. That trucking activity will stop. That warehouse on the road will disappear. You can argue there is plenty of work in transport, that they will just cart something else, but they are good well-paid jobs. This transformation scheme should be getting to the point, as Senator Xenophon and others have said, where people who have good expertise and good ideas are assisted to continue to add value to the economy; they should not just be laid to waste.

Independent modelling has said that up to 200,000 jobs that will be lost between now and 2017—100,000 jobs in Victoria, almost 25,000 in South Australia and over 30,000 in New South Wales. If consumers have decided not to buy Fords and Holdens and the company has decided, as we hear, not to produce cars here in future, I would contend—egged on and booted around particularly by the Treasurer, Mr Hockey, and Senator Rushton would say it is our fault or some other government's fault—that it is incumbent on any government to look at look at 165,000 potential job losses and have a bit of a think about what can be done. Where is it that we can mitigate? We only have to see the work that has been done in very recent times by the coalition in South Australia in shipbuilding, where the Prime Minister has been dragged kicking and screaming, under the threat of his own job and electoral losses, to announce grudgingly and very late some improvement in the situation. Why doesn't he come to the table here? Why doesn't he get Minister Macfarlane to look into this and spend the money? Make an attempt to let people transition to a better part of the economy without the job losses and without the closures.

It would seem to be a callous and uncaring government that would actually let this happen. They simply look at the forward estimates and at the money saved and not look at the destruction of lives, families, economies and small business. These people will not all be in large businesses; they will be in small businesses, supposedly the heart and soul of the coalition's constituency. They are absolutely callous. When you look at the South Australian small businesses that will be affected both by the valley of death in shipbuilding and at Holden, it is almost impossible to believe that a government could actually do this.

I note that Senator Ruston made a contribution in this debate. I was expecting Senator Edwards, Senator Fawcett or even Senator Birmingham to make a contribution, but they are as quiet as church mouses. The deputy whip got the job of reading the platitudes and blaming the other side—'It is their fault,' 'They did not do this,' and 'They did not do that.' I remind you again that in September 2013 you were elected to govern. It is your job to govern. You govern with the circumstances that you face—and you face potentially 155,000 jobs lost in Victoria, SA and New South Wales. What are you doing about it?

People are crying out for access to funds to transition their small business into different sectors. As I have said, a group from Thailand visited South Australia looking to get the component manufacturers to redirect into that large manufacturing country where they make one million motor cars a year and even to look at the new frontier that is opening up in Myanmar. Let us look at the global motor vehicle supply chain. A classic example of that at the moment is the Takata airbags. A Japanese company designs them, they are made somewhere and they are in every Toyota. They are not going too well. Apparently a number of them are defective so there is the biggest recall in the history of the world of automotive manufacturing.

Why is it that we exclude ourselves from the opportunity to participate in making components and having them in every motor vehicle that is exported around the world? Why are we shutting down our opportunity to continue with almost 60 years of acquired skill and experience? Why are we not endeavouring to retain some of that? I do not know the answer. Perhaps someone from the other side will give us the answer in a later contribution. I have to tell you that the answer is not that it was Labor's fault prior to 2013. That is not the answer. The answer has to come from this government, and I suspect the answer is that the economic rationalists are totally in control. The forecasts of budgetary savings are more important to those in charge of the Liberal Party than the livelihoods of 155,000 people in Victoria, South Australia and New South Wales. I suspect that is the case. If it is not the case, I am sure someone will take up that challenge in debate.

It really beggars belief that there is an automotive transformation scheme that component manufacturers are excluded from, given the fact that diffs are made in South Australia, engines are made in Melbourne, components are made in all different geographic sectors of Adelaide and they are then consolidated at the manufacturing plant. I suppose in Thailand it would be no different. Components would come from other countries and components would come from other regions. Why can't we join the manufacturing world game? We have the expertise. We know from information here that General Motors has only seven plants in the world that do the whole lot—it is fully integrated and global.

We used to sell Camaros to the Californian Police Force. We used to export many status, prestige cars—the Caprice and those sorts of cars—to the Middle East. We know that when the dollar was down at about the level it is now at those opportunities were growing. I can remember driving past the embarkation point for cars on the Port Adelaide wharf and seeing it full of Camaros going to the United States. We know that there have been a lot of trials and tribulations. We know that the zero tariff on cars coming in has precipitated this decision. If you look around the world five per cent is actually equivalent to a zero tariff but in Australia we are so economically pure that our economic rationalists go right down to zero. If you wanted to take a carton of milk into the United Arab Emirates and you were not competing against any dairy industry there, there would be a five per cent tariff on it, but anyway that is probably a debate in another area.

Senator Ruston did comment about our opposition to free trade agreements. We are not opposed to free trade agreements. I think 'free trade' is a bit of a misnomer in some respects. We are not opposed to competition; we are opposed to unfair competition. People need to be aware of what is coming. The evidence from ACCI was quite clear—20 per cent of their people export and not many of those people actually know all of the rules and regulations of export and take full advantage of the export opportunities, and 80 per cent of them do not and hit the full competitive force. In essence, this is what is happening with the Korean free trade agreement. We are getting cars in for zero and it makes it tougher.

There has been an onslaught on our car manufacturers for a lot of years. There should be a genuine transformation package. It has been put often enough in this debate that the coalition has turned its back on the indust

Those opposite have turned their backs on the industry and are just going to let this wash out. It will wash out.

If we return to the debate in question time today where Senator Abetz said it is probably be fine to get a text message or an email saying your job is no longer there, well, if this comes to pass and 100,000 jobs in Victoria, 25,000 jobs in South Australia and 30,000 jobs in New South Wales go through lack of action in this sector, then I would be suggesting that those people may well be sending a text or an email to Senator Abetz and his cabinet colleagues saying, 'We are going to use our best endeavours to make sure your job goes. The day of the election is the day we will tell you about what we think about your actions, sorry, lack of actions in this sector.' I am sure that Senator Abetz has probably had plenty of texts or emails reflecting on that matter so it will be water off a duck's back.

But you cannot destroy a manufacturing sector, you cannot walk away from core promises on building submarines or ships in a small manufacturing economy like South Australia and not pay an electoral price. It is my view that the Liberal coalition and members of parliament in South Australia are going to pay an electoral price for this lack of action. It is also my view that they should turn around and start acting now to put in place remedial action to address the situation that 25,000 South Australians could lose their jobs and 100,000 Victorians could lose their jobs. They need to think it through and get on the front foot. They are the government. They cannot keep hiding behind carbon tax or stop the boats. This is in front of them; it is happening to them.

There is an opportunity to steer small component manufacturers and small businesses into more productive sectors of the economy to give them opportunities to join the global export of components and they should do it now as an absolute matter of urgency. They cannot hide away from this issue. They cannot blame former ministers or former governments. It is their watch, it is their time to act and they should act now.