Michael Danby (Melbourne Ports, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

Seven hundred and fifty million dollars of research and development is spent directly or indirectly by the automotive industry a year—the largest amount of R&D of any industry in Australia. The automotive industry directly or indirectly employs 310,000 Australians, including 33,000 directly in Victoria.

I do not consider myself a revhead nor do I follow the V8s or the grand prix, as some others in my electorate may. However, I am always a passionate supporter of Australian jobs and Australian exports. The automotive industry is in crisis—and the government has been aware of this problem for nearly a year. The automotive industry needs urgent commitment from the federal government or the industry, particularly General Motors, with its thousands of jobs and billions of dollars in investment, will be lost. Future investment is at stake, with GM thinking of investing $1 billion into developing two new models in Australia. Large-scale investment like this hinges on the federal government's commitment to the future of the Australian industry.

In Australia the cost per capita of government support is around $17 per vehicle—lower than the $90 per person in Germany and the $264 per person in the United States. There is not a car on the road around the world that is not supported by a government somewhere. The government's repeated claim of $400 per car cost of the carbon price is outrageous. Advice provided by the industry department shows that the average cost per vehicle under the fixed-price scheme was $50, which had dropped to $12 under the proposed Labor ETS.

Forty per cent of all Australian vehicles produced are exported overseas. Of course, the total automotive manufacturing industry turnover declined while the value of the Australian dollar increased. The high value of the Australian dollar is the principal reason that the Australian industry has problems. However, I would like to add that this is due not only to the high value of the Australian dollar but also the very unusual low level of the Japanese yen—understandably produced by Mr Abe to have the deliberate effect of boosting their exports. Toyota, in particular, is extremely successful with its export of cars like the Camry. One hundred thousand are produced in Australia. Even GM is still producing 80,000.

Richard Dudley, the Australian Motor Industry Federation chief, said: 'On average, 450 businesses a year are closing in sectors such as car retailing, service and maintenance sectors,' and that new approach is needed so that the other 75 per cent of the industry, which employs 320,000 Australians in 100,000 businesses are not jeopardised.

When the Labor government invested $2.7 billion in this industry we saw a $26 billion return on new investment. That is a return on investment of 9:1—pretty impressive. Some may be concerned that we are spending a lot just in the automotive industry. We actually spend more on grains, sheep and beef than on auto. We spend more on primary production and more on mining. The high Australian dollar has hit production costs and has increased the cost of a vehicle by about 30 per cent.

Holden has 168 plants around the rest of the world. I am afraid that the extreme free market ideology of this government is going to affect the safety of the Australian automotive industry. The idea that General Motors or Holden will be driven out of Australia by Australian government inaction is an outrageous idea that will permanently affect the Australian economy. It will not only affect people directly or indirectly employed in the automotive industry; the hit to the budget bottom line of increased welfare payments if the auto industry were to close would exceed $20 billion. The death of the automotive industry would slash $7.3 billion from Australia's GDP by 2018 and the economy would be $21.5 billion smaller.

What we need is a government that is concerned with Australia in the long term. Australian automotive manufacturers are having problems exporting around the world because of the high dollar, but the idea that we would get rid of all the capital that we have built up in these marvellous Australian plants that generate so much research and development is not sensible in the long term. That is particularly so, when one considers that the Australian dollar will probably return to much lower levels, when higher levels of exports will be generated. When mining declines we will need the export of manufacturing industry, including the automotive industry. The government should be more active in seeing that General Motors stays in Australia. (Time expired)