Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

My question is to Senator Ronaldson representing the industry minister, Mr Macfarlane. Yesterday I met with senior representatives of the Federation of Automotive Products Manufacturers. Of the 33,000 direct jobs in the automotive component sector in Australia—that is, separate from the 12½ thousand direct jobs in car manufacturing—as few as 30 per cent may survive in Victoria and only 20 per cent in South Australia after the departure of Ford, Holden and Toyota as car makers in this country. FAPM has repeatedly called on the federal government to amend the criteria urgently for grants under the Automotive Transformation Scheme in order to allow component makers to diversify to new customers and sectors. Why has the government refused to amend the regulations given that, firstly, the fund, on current criteria, will be underspent by at least $500 million and that, secondly, changing the regulations is the easiest and quickest path to save jobs in the sector?

Michael Ronaldson (Victoria, Liberal Party, Minister for Veterans’ Affairs) Share this | Link to this | Hansard source

I thank Senator Xenophon very much for his question. It would probably be useful for the chamber if I go through very quickly what the government has done in relation to the ATS. Senator Xenophon is probably aware that on 10 March the $500 million was restored. From recollection, that was very much supported by the Federation of Automotive Products Manufacturers Chief executive, Richard Reilly, who said the funding ensures companies of some clarity on their business models, will assist some suppliers competing internationally to avoid the valley of death and will support the transition of the industry.

As Senator Xenophon is acutely aware, the ATS is linked to production volumes. At this stage we do not know whether the restored funding will be fully utilised by the industry or not. From recollection, the breakdown of component manufacturing and direct automotive manufacturing is about 55-45, but I stand to be corrected on that. Senator Xenophon, I know you will have some supplementaries on this. We are, of course, deeply concerned about job losses flowing from the automotive sector. The government's growth fund is targeted towards South Australia, where, you quite rightly say, the great bulk of these job losses will come from. There are a number of initiatives under the growth fund which will start to address those job losses. I am sure you are aware of them but I will go through them for you. There is the $30 million Skills and Training Program, a $15 million extension to the Automotive Industry Structural Adjustment Program, the $20 billion Automotive Diversification Program and the $60 million Next Generation Manufacturing Investment Program. (Time expired)

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Given that the Bracks report in 2008 estimated a multiplier effect of six jobs for every automotive manufacturing or component job, what plan does the government have to deal with the expected loss of 150,000 to 200,000 jobs mainly in South Australia and Victoria? Does the government agree with that multiplier figure? If not, what other multiplier figure does it suggest?

Michael Ronaldson (Victoria, Liberal Party, Minister for Veterans’ Affairs) Share this | Link to this | Hansard source

I am sure the honourable senator will understand that I will take the second part of the question on notice in relation to the exact figures and I am sure the industry minister will get back to him. Part of the government's program to address the unfortunate demise of the automotive manufacturing sector in this country is the Automotive Diversification Program. On 10 March this year the successful recipients of round 1 were announced. There were 12 recipients across South Australia and Victoria, and they totalled some $16.2 million. Another program was opened, and it is closed on 21 April. I understand an advisory panel was looking at that. But I think, just very quickly, the Adelaide Tooling company received a grant— (Time expired)

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. What forecasts are there of an underspend on the ATS on the current criteria? And what forecast does the government have of the projected job losses with the demise of automotive manufacturing in this country in the absence of spending that $500 million that appears to be sitting there?

Michael Ronaldson (Victoria, Liberal Party, Minister for Veterans’ Affairs) Share this | Link to this | Hansard source

I thank the honourable Senator for his questions. I said earlier on that the ATS is linked to production volumes. I will take on notice the specifics about the potential job losses. The minister may well have some further examples of that.

I want to just go through a couple of these programs in your home state, Senator Xenophon, where we are indeed trying to transition these companies, and the component manufacturers in particular, into new innovative and advanced manufacturing industries. Blown Plastics: $831,000 to machinery to develop and manufacture export packaging for their local fast-moving consumer goods industry. Monroe Australia: $125,000 for equipment to enable the company to manufacture and export powder and metal sintered multi-tunable valve support components. There are a large number of very good programs. Indeed, this will assist us in the survival of those— (Time expired)