Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Hansard source

I will be happy to speak in this discussion about the importance of the ATS to the Australian economy. In starting from this proposition, I acknowledge the comments that have been made the coalition senators in this regard, but in a government that is dominated by Sydney North Shore merchant bankers, one would have to expect that there would be little understanding of how important manufacturing is to this country. One would have to expect that, because of the idea in Sydney that everything west of the Sydney Harbour Bridge can be discarded and what is really important is our place within the international trading system for commodities, the decisions taken by this government to destroy the automotive manufacturing sector were going to always be made.

Prior to the last election, that is exactly the proposition that the Liberal Party announced. They said that they wanted to take $500 million out of the ATS. Then they went further after the election and said $900 million. Do we all have such short-term memories that we cannot recall the actions of the Deputy Prime Minister of this country goading General Motors to leave? Do we forget what actions were taken by the Treasurer of this country in describing our automotive manufacturers as rent seekers? What do you expect from the merchant bankers of North Sydney? You expect an attitude that, essentially, is contemptuous of blue-collar Australia. You expect an attitude that, essentially, is contemptuous of even using the word 'innovation'. You expect an attitude that attracting new investment is somehow or another immoral because, unlike every other part of the world, the free trade Taliban in this country has to operate on the basis of the absolute free market. Of course, nowhere in the world does automotive operate in that way—nowhere. We know that in this country, by international standards, the support for the automotive industry has always been very modest—less than the price of a footy ticket per capita, compared to the hundreds of dollars spent in the United States, in France or in northern Europe. Why have governments, up until this government, chosen to do that? There has been a bipartisan approach. Why was that? Because of the importance of automotive to the future of this nation.

We know the consequences of the decisions that have been taken. We know about the hundreds of thousands of people that are now facing a crisis in their lives. We have heard Mike Devereux being quoted. What we know now is what he said at the time: it would cost more to lose the automotive industry than it would to keep it. Isn't that a chicken coming home to roost?

We know this government makes much of what it is doing to put the bandaid on the enormous gash that it has created in Australian manufacturing jobs. We know it has taken $3 billion out of industry programs in this country. So is it any surprise that we now have the highest level of unemployment in 20 years in this country? This is despite the fact that the dollar has come down so much.

What we have is a new car plan that not only saw the automotive industry in this country prosper at a time when around the world the automotive industry was in retreat but also meant that in Australia we were attracting new investment at a time when the costs were going up by 30 per cent just as a result of the currency movements. What a contrast we see with this government! The diversification program has been mentioned here. What does this government do at a time like this? It cuts it in half. We heard great stories about what has happened in battery technology, among other things. These are the products of the new car plan. We instituted programs that saw the development of new research projects with the CSIRO to give us that cutting edge in battery technology. The new program in regard to Nissan was a direct result of the new car plan.

In the last election, the Labor Party announced $300 million per annum for the ATS that could be used to sustain all operations of the original manufacturers, plus 144 tier 1 suppliers, which of course are underwritten by thousands of other minor businesses. That could all be done for $300 million a year. What do you think the unemployment bill is going to be when we lose the jobs of up to 200,000 people? What is the contrast? Not just extraordinary waste in terms of human dignity and respect that comes from people being forced into unemployment, and not just the extraordinary loss of abilities and creativity in this country, but the loss of capacity across so many other industries. That is the big cost here. The big cost here is to be felt in aluminium, in steel, in glass, in electronics, in carbon fibre and in a whole string of industries. I recently met a lock manufacturer who said, 'Because of the demise of the original motor manufacturers, we'll have to be shutting up shop.' The consequences flow through textiles and plastics. It is quite extraordinary just how profound this decision by this government to destroy those manufacturing operations of General Motors and Toyota will be. It is just extraordinary to think about it.

The cost to this nation in social and economic terms, of course, needs to be understood: $29 billion of GDP. The biggest impact is in Victoria: at least a $13 billion hit to the state's regional product by the end of 2017. In New South Wales it is $5 billion and 30,000 jobs. In South Australia it is $3.7 billion and probably up to 25,000 positions. For a state like South Australia, that will be even more profound than the loss of 30,000 jobs will be for New South Wales. This was presented as a cost-saving exercise. Nothing could possibly be further than the truth.

We know that this industry is a powerhouse of innovation—of engineering, design, research and development. But I maintain this proposition, and I think Senator Fawcett was correct in this regard: those that attempt to assert that there will be no automotive industry in this country are wrong. Even after the very best efforts of the economic vandals from the merchant banking brigade in this government, there still will be an automotive manufacturing industry in this country. We know that there will be an industry. The scale and scope of it will ultimately depend, however, on government policy, as it is in every other part of the world. So the question of the future of the ATS is critically important.

The government suddenly have discovered that we are going to keep the ATS now. Having been faced with the electoral backlash and the political odium of their actions, they say, 'Oh, we'll keep the ATS.' Of course, it is another one of those 'fool's gold' exercises, because they simultaneously say, 'Of course, come 2017 there'll be no original manufacturers and therefore it'll collapse by itself.' So when they say, 'We don't want to change the guidelines; we want to provide stability,' it is a ruse, because they believe that their budget savings can be achieved by another means.

The reality is that the ATS is vital to ensure that we are able to attract the new investment that we so desperately need. There is an opportunity here, and I firmly believe that we can attract new investment into automotive in this country. That needs to be done with government support. In the farming communities, there can be drought, a natural disaster. In fact, we spend more money on sheep and goats in this country than we do on motor cars. When there is an economic crisis in farming communities, we say the state has responsibility to stand by those communities, but, when it comes to manufacturing, the view is, 'They can sink,' no matter the social consequences. We see, when the Productivity Commission produces its tables, that it never produces the full range of support that is available to some sectors, but it runs an ideological agenda, particularly against manufacturing.

We have a Senate committee looking into this matter. Its interim report next week will consider a number of issues. One of the key issues will be the maintenance of the ATS through the legislative time line, which is not 2017 but 2021. That is well after the next election. We will have an opportunity to consider this matter in some detail in that election. The interim report provides us with an opportunity to canvass the issues around the purpose of the ATS and whether it should be repurposed to include attracting investment through production and promotion, particularly in advanced automotive manufacturing, components and materials, the aftermarket specialist vehicles, electric vehicles and gaseous fuel vehicles. These types of issues are appropriate for us to consider in such a report; whether there should be a change in the definition of automotive services, particularly with regard to the aftermarket and specialist R&D services; and whether there ought to be changes in regulation with regard to the ability to develop products in global supply chains. At the moment, there are restrictions on that.

These are the types of questions the Senate has the opportunity to consider and make recommendations to government on. In due course, my expectation is that there will be a private senator's bill to consider those matters. When the government says, 'We don't want to see any changes,' suddenly it is discovered that stability and certainty is so essential. In fact, what they will be faced with is the proposition where the government will have to make decisions. I spend a great deal of time visiting firms; I do it as often as I can. Recently, for instance, I visited Unidrive in Clayton, in Melbourne's outer suburbs, and Harrop in Preston. Those are two examples. Harrop makes brake fittings and superchargers and supplies directly to the OEMs at the moment, but it has a substantial export market in its own right. They provide engineering and R&D services to produce niche products for specialist markets. They customise brake assemblies of their own design, for instance, for Toyota LandCruisers. They will do the entire fleet for a mine, where the brakes wear out every week. They will be able to provide assistance to the mining industry in a way that demonstrates the creativity and engineering skills of the Australian industry. They need the ATS to continue. They have been able to get assistance from the ATS, but, if they lose eligibility, the first thing that will go is their design and engineering department. We simply cannot allow that to happen. With regard to Unidrive, 50 per cent of their product, using carbon fibre for drivetrain componentry, was supplied directly to the United States. They have existing contracts, but they will need to change the regulations in such a way as to allow them to continue and to develop the business case for new investment. That is a firm that has been operating in this country for many years and has been operating in Europe for centuries.

What we know is this: in the United Kingdom after Margaret Thatcher the doomsayers said that the United Kingdom automotive industry was dead, but it did not die. It is now flourishing. It is probably the largest automotive export country in Europe. Both sides in British politics came to understand, as this country once did, the importance of industry and particularly the foundation that the automotive industry provides for manufacturing capability more generally. As a consequence, the British conservative government is one of the biggest investors in automotive capacity that we see in Europe.

Senator O'Sullivan interjecting—

They have that bipartisanship because they understand that it is not just an economic question. But you do not see that here because the Liberal Party is dominated by merchant bankers who have an entirely different view about the way in which society works.

Senator O'Sullivan interjecting—

They certainly would not be dominated by the doormats of the National Party. They only get called in when required. When the dog whistle blows, in you come. There is nothing inevitable about the destruction of automotive manufacturing in this country. There is no—

Senator O'Sullivan interjecting—

Under Labor, under our New Car Plan, we survived at a time of global crisis. Expansion in automotive investment occurred here, when around the world—the United States, for instance—countries were in a state of bankruptcy.

Senator O'Sullivan interjecting—

You ought to go back to your farm on that. What we need to do, as a country—and I trust that this will happen—is develop an understanding again of how important it is to attract investment to manufacturing, particularly automotive manufacturing. Broadening out the ATS so that component manufacturers like Harrop in Preston have the security to continue their investment program will be critical to ensuring that we maintain the capabilities in this industry to attract a broader range of companies to the industry.

This is a government that has failed to appreciate that simple proposition. We need to ensure that we preserve our capabilities to create and sustain the high-wage, high-skill jobs to ensure that the prosperity that we have a right to expect in a country like this is actually spread right throughout the community. The Motor Traders' Association of Australia, for instance, has noted that there is no clearer path to meeting this aspiration than to retain the ATS so that manufacturers and components and parts suppliers continue to innovate, products can be delivered and businesses can be regenerated. The industry as a whole and the Australian government should identify a long-term policy framework for the entire industry—focus on the entire automotive industry—and I believe that the Senate inquiry will provide this chamber with the opportunity to take that up.

I am looking forward to seeing exactly what conservative senators say in this inquiry. But the government will be required to act, because, I can assure you, come the next election this will be a very important question. Stopgap politics will not work. Deceptive attempts to claim that you are suddenly a friend of the automotive industry again will not wash. And we know that the people of this country value manufacturing and will cast their vote on these types of issues. People want to know that their political parties have something to say about issues like high-quality jobs and industrial capability. The Australian Automotive Transformation Scheme must be but one tool in ensuring that we can meet our responsibilities to expand quality job opportunities in this country.