House debates

Thursday, 2 October 2014


Automotive Transformation Scheme Amendment Bill 2014; Second Reading

10:07 am

Photo of Rob MitchellRob Mitchell (McEwen, Australian Labor Party) Share this | | Hansard source

Today I rise to talk about the Automotive Transformation Scheme Amendment Bill 2014, which is going to have huge impacts across the state I come from, Victoria, particularly in the northern suburbs with the closure of Ford, Holden and Toyota.

This government comes in with this mantra that the age of entitlement is over, so it is pulling funding from the automotive industry, which will spell disaster for many people in manufacturing and automotive sectors and for the supply chains that supply the three manufacturers in this country. What we have heard over the last couple of days is the government saying: 'It's all good. They've got to stand on their own two feet. They've got to look after themselves and, if they're not competitive, we shouldn't be supporting them.' They say that subsidies are outdated and we should not be subsidising industry, but at the same time they pump billions of dollars a year into the mining industry subsidies. Wherever you look across the country, there are subsidies in a whole range of things: banking, child care, private health insurance—all these things are subsidised by taxpayers because they are important to our country.

We are one of only 13 countries around the world that manufacture our own cars, and our own cars are of a very high standard. I remember growing up as a kid near the Ford factory, seeing the new models roll out and seeing the improvements that each model made in safety and comfort, all these things that happened over time. Today's modern car has just about everything you want bar a coffee machine. It is the development work that has been done by workers in this country who put together these motor vehicles.

I can remember the Prime Minister's exact words from before the election. I will quote him:

I want to see car-making survive in this country, not just survive but flourish.

That was what now Prime Minister Abbott said on 21 August 2013. He wanted to make it flourish. So what does he do? He pulls the money and support out, pulls out the strength behind the industry. Roughly $18 per car goes into it. He pulls that away, and in the end we have all three manufacturers walk away.

With Holden we have seen executives come out and say they are not manufacturing cars in Australia any more because we had the cigar-chomping Treasurer up there in his leadership spiel threatening and goading Holden to leave. He said: 'Go on, go. Leave if that's what you want to do.' And they did because they lost the support of the Australian government to manufacture cars.

We have been manufacturing cars in Australia for a long time. We invented the world's first ute. We have cars that have delivered safety standards right across the world, and components that we manufacture go right around the world, but they have always relied on having a strong, solid car industry here. Those opposite sit there and say the component manufacturers can still make their products with no problem. The problem is that, if you take from any business their largest source of income, which is local production—take away the thousands of components they make every year that go into our motor cars—their business case is not sustainable. We have seen that happen with in Gisborne with air conditioning components. You cannot take the base product away from a company and expect it to be able to manufacture. The cost base is not there. That is what happens.

We have people in the car industry—good, hardworking people who have worked a long time and are very proud of the products they make and deliver—who have been doing that for many years, and the question has to be what happens to those people. A 50-year-old manufacturer who has been working on a car assembly line all his life—where is he going to go? What is he going to do for a living? They on the other side say there will be new jobs and everyone will have a new job. It does not work that way. You would think that a party that claims to be the friend of business would have that basic understanding. These are highly technical jobs, and what this government has done by ripping out the car industry support is put many small businesses and jobs in small businesses at risk.

An example is a company that I know quite well. They do a little tiny part of the car industry: they service the cranes on the Toyota line. It is probably 0.1 per cent of Toyota's manufacturing process. It is a small business. You would think the Minister for Small Business would be standing up for these people, but he is not. They are now going to have to put off seven employees because that type of work is not going to be made available. That is one tiny company. That means seven families are going to lose their incomes.

They will tell you there are a few thousand automotive manufacturing workers gone and that is it. That is the tip of the iceberg. The iceberg is all the surrounding industries: the truck drivers who move the parts, the forklift drivers, the repairmen, the salesmen at truck manufacturing companies that sell the trucks that do these things. There are also the caterers, the cleaners, the engineers, the tool specialists plus all the service work that gets done The list goes on and on.

We saw it with Nissan. One member opposite said yesterday that Ford announced its closure and sales dipped. Yes it did dip. Blind Freddie could see that it was going to dip. Once a company announces it is pulling out of Australia, the sales drop off. It happened with Nissan when Nissan pulled out of Australia. They went to almost no sales at all. They have been able to maintain a small slice of the market but not the big slice of the market that they used to have. Once the message is out that we are not manufacturing the cars in Australia, people think, 'Well, maybe we're not buying them.' Maybe there is going to be an issue getting parts, service or those sorts of things. That is why Ford and Holden have had dips in sales. But also remember that four of the top 10 selling cars in this country are Australian made.

People like their Fords, Holdens and Toyotas. They like Australian made cars because they know the quality is good. The quality is so good that Holden had a great export program selling the Caprice and Statesman to the United States as police cars. That was a really big boost for Holden sales but that was when the Australian dollar was at 85 or 86 US cents, so they manufactured the cars and made the sales at that price. When the Australian dollar went to US$1.06 it was not profitable, and Holden was you losing money hand over fist. That program had to stop. If you ask people in the United States who have used the Statesman cars as police cars they will tell you that they are fantastic motor vehicles—better than the old Ford Crown Victoria that the police were lumbered with for many decades because of protectionism in the US market.

We strongly oppose this legislation because it means the death knell for the automotive industry in this country. I worked in the automotive industry for 15 years and I know just how important this is and how big a reach it has right across our economy. There are many people in the Ford, Holden and Toyota factories who have been left in disbelief of this government because what it said before the election was totally opposite to what it did after the election.

That has come across with a whole range of things. Prior to the debate on this bill we spent half an hour learning how Labor, standing up for pensioners, has forced this government to back down on the pension cuts—cuts they said, before the election, that they would never do. What did they do in their first budget? Bang!—they snipped the indexation for aged pensioners. They put pensioners on the scrap heap.

What this government have done affects young kids who lose their jobs—those in the automotive industry are a perfect example. If you are a 29-year-old with a family, buying a house and trying to start your life together, and you lose your job because this government made a decision to scrap the car industry—they scrapped the support to keep the car industry going—you would be out of work and this government was proposing that you would not get benefits for up to six months. Thanks to the good, hard work of Labor and the Australian people that is not going to happen.

The question has to be asked: how is someone going to pay their rent, put food on the table and pay their bills? This government has no interest in manufacturing. It has no interest in the automotive sector. It has shown that it has no interest in vulnerable people. Whether you are an aged pensioner or a young person this government has you in its sights. We need to keep fighting and make sure that we stop that.

There is no doubt that, in workplaces in this day and age, there is an element of ageism. If you are in your fifties and you are going for a job it is very difficult. I have people coming into my office every day of the week—good people who have worked their whole lives, buying a house, raising a family and doing the right thing—who, when they lose their jobs, find it difficult. They can go for 30 or 40 jobs and not get put on. They know damn well that it is because of their age.

When people lose jobs in the automotive sector this scheme was to help them develop skills to try and find a job in a new industry. This is the second biggest drop in a single industry that we have seen since the Ansett collapse. The difference with the Ansett collapse was that a lot of people found more work in the industry. It did not matter if you went to Tiger, Jetstar, Virgin or Qantas; you could fix the planes—they were the same sorts of jobs. But in automotive manufacturing you do not have that opportunity. This is an industry that is closing, not a big player.

This government should be condemned because even an organisation—not traditional Labor people—such as the Federal Chamber of Automotive Industries have spoken about this. Yesterday, one member on the opposite side of the chamber said, 'We shouldn't need to listen to industry. Why should we? We'll make the decisions.' I said yesterday, and I will say it today: that is arrogance personified.

The Federation of Automotive Products Manufacturers have said :

The government continues to press on with the amendment bill knowing that a reduction in ATS funding will put in jeopardy up to 30,000 jobs in the component industry …

ABS figures show that in Victoria one per cent of the workforce will be gone; in South Australia it is 0.6 per cent. Then you have to look at the potential rolling impact on the vehicle manufacturing sector. The flat-earth policies of the free-trade think tanks, who opined that subsidies should be removed at all costs, invariably do not offer a solution. Those think tanks do not have a solution to the deindustrialisation and large-scale unemployment that their prescription of flat-earth policies will eventually bring.

The issue here is that there has been a quick, simple decision of the government to say, 'Let's remove this. We'll take the money out of the automotive industry, jobs and small business, and we will put it aside so that people earning $100,000 a year can get $50,000 from the government for having a baby.' It is just ridiculous.

The priorities of this government are screwed. The government really need to come back to earth and realise what they are doing to people right across country as they take away jobs, investment, support and, most importantly, confidence. If people do not have confidence they tighten their belts. When they tighten their belts it retracts the economy and the whole economy goes backwards. It is all because of a decision made by this government. The decision was not based on any policy or any factual evidence; it was based on ideology. The coalition do not care; they have never cared. The problem is that it will be ordinary Australians who pay for this government's bad decisions and bad governance.

10:21 am

Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

I rise to speak on the Automotive Transformation Scheme Amendment Bill 2014. I would like to note that I was not down to speak on this bill but I could not continue to sit by and listen to the complete gaggle of opposition speakers, one after the other, rabbit on about such nonsense and espouse such fictions, without joining the debate.

I will speak specifically to the bill. This bill is in response to the decisions of Holden and Toyota to cease manufacturing cars in Australia in 2016 and 2017. The Automotive Transformation Scheme is a legislative instrument which provides assistance to registered participants for the production of motor vehicles and engines for those who invest in eligible research and investment and allowable plant and equipment. Effectively, it is a government subsidy. What we will actually be doing is reducing the appropriation for the Automotive Transformation Scheme from $2.5 billion to $1.6 billion.

Photo of Rob MitchellRob Mitchell (McEwen, Australian Labor Party) Share this | | Hansard source

It's a cut!

Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

Yes, the member for McEwen is right; this will save the budget $900 million. That may seem a lot of money, but I am sure the member for McEwen is aware that that $900 million will pay the interest bill on the debt left by the previous Labor government for about 23 days. Without paying any of the principle back, the interest bill run up by the previous Labor government is now costing this nation more than $1 billion a month. So that $900 million saving equates to 20-odd days worth of repayment of that debt—and we know that 70 per cent of that money simply flows out of the country because those government bonds had to be sold overseas to finance the previous six years of Labor government's reckless, wasteful and politically-inspired spending.

It is heartbreaking to see any business close down. When Holden and Toyota close, in two and three years time, it will cause some heartbreak to those people who are unable to find jobs. It will also cause pain to the regional areas where those factories have been set up. We in this parliament are right to express our concerns for those workers, even though they will receive some generous redundancy payments. This government has put together a $155 million growth fund to help those workers find new and better jobs and to help businesses in those areas diversify into new markets. That is great for the workers in the car industry. But over the six years of the previous Labor government we saw a net loss of 519,000 jobs of people who were employed in small business. Where was the subsidy package for those people? Where were the tears of members of the Labor Party who were coming in and expressing their concerns for those 520,000 people? Where were they? They were completely and utterly silent as more than half a million jobs in the small business sector were lost.

As I have listened to this debate I have heard Labor speaker after Labor speaker attempt to create a fiction by saying that somehow the closure of the car manufacturing industry here in Australia all happened under a coalition government—that it is all the coalition government's fault—and if only Labor were back in power all these jobs would be saved. But let us look at the facts. The first of Australia's major car manufacturers to close down was Nissan back in 1992—surprise, surprise—under a Labor government.

Mr Mitchell interjecting

Then Mitsubishi followed in 2008, again under a Labor government. The member for McEwen may remember the closure of Mitsubishi in 2008. I think he was a member here then. When Ford announced its closure, in 2013, it was again under a Labor government. We have seen three major car companies close down when the Labor Party were actually in power, and yet we hear the idea that the coalition is somehow responsible for the closure of the car industry. We also hear the absolutely bald-faced hypocrisy of the Labor Party when Labor member after Labor member come into this chamber and claim the high moral ground, put their hands on their hearts and say, 'We are the supporters of Australian manufacturing.' They are the people who imposed the world's highest carbon tax on every Australian manufacturer in this country—which put every manufacturing company in this country at a comparative disadvantage with their competitors overseas who were not liable for that tax. If someone were producing an apple for an apple, the good produced here in Australia had the carbon tax on it and the good produced in a factory overseas did not have the carbon tax. That was one of the biggest hits to the manufacturing industry in this country. That is what the previous Labor government did. They voted time and time again, kicking and screaming, to retain the carbon tax. Of course, we know what will happen if they are ever returned to the treasury bench. Yesterday we heard the member for Chisholm make the most extraordinary statement. She actually stood there and said how outraged she was that her electricity bill had come down nine per cent! I am sure there must be an outrage amongst all those struggling manufacturing companies in Australia that their electricity bills are coming down nine and 10 per cent.

Photo of Rowan RamseyRowan Ramsey (Grey, Liberal Party) Share this | | Hansard source


Photo of Craig KellyCraig Kelly (Hughes, Liberal Party) Share this | | Hansard source

Fifteen, as my friend next to me advises me.

Mr Mitchell interjecting

From that statement by the member for Chisholm—and we also hear the member for McEwen interjecting over there—we know, as sure as night follows day, that if they were to come back into power they would reintroduce that carbon tax and continue to put Australian industries at a competitive disadvantage.

A responsible government needs to deal with the harsh and sometimes painful economic realities of the world. If we do not deal with those economic realities and instead—as the opposition does—deal simply in populist sentimentalities just to make ourselves feel virtuous for a short period of time, all we do is postpone that problem and make it worse and more painful to deal with down the track. One of the first harsh economic realities is that government subsidies, time after time, have been shown not to work. In fact, we have seen throughout our economic history that government subsidies often harm the very industries that they are meant to support. Adam Smith knew this back in the 1700s, when he wrote The Wealth of Nations:

… the bounty to the white-herring fishery is a tonnage bounty; and is proportioned to the burden of the ship, not to her diligence or success in the fishery; and it has, I am afraid, been too common for vessels to fit out for the sole purpose of catching, not the fish, but the bounty

That could well describe the multinational companies that are set up to manufacture cars here in Australia. They are not set up to produce cars that are fit for the market but to take the bounty from government.

Let's just go through some of the actual bounties that have been paid to these multinational car companies. The Productivity Commission has estimated that the automotive industry between 1997 and 2012—so we are talking about a 15-year period—received $30 billion in government support. Some $30 billion worth of subsidies flowed to that industry. During that time, it worked out, there were about five million vehicles produced, so that equated to a $5,748 subsidy of government support for every vehicle produced. In August 2008 the Productivity Commission chair, Gary Banks, warned that with the current levels of assistance or subsidies every single job saved in the car industry came at a cost of—wait for it—$300,000. Every job supposedly saved cost the economy and the taxpayer $300,000.

We have also seen the recent examples of Labor's failure, rolling out more subsidies to the car industry. We saw the Labor government hand out $34 million to Ford, $25 million to Toyota and $215 million to Holden. What did the previous Prime Minister say after handing out all this cash? She said:

This is exactly the type of investment we identified at the Future Jobs Forum and the PM's Manufacturing taskforce to help shore up the future of our manufacturing sector.

It's smart, it's competitive and best of all it will secure jobs, not only in Victoria but also across the nation.

We know it was dumb, we know it did not save jobs and we know it simply added to the debt burden that this government has to deal with. In fact, Paul Kelly, the Australian's editor at large, described this massive government subsidy scheme as 'one of the most epic failures in public subsidy in Australia's national history'.

Even despite all this industry assistance, this $30 billion worth of taxpayers' funds, unfortunately these car companies could not turn a profit. We saw Holden announce their worst loss ever before they announced they would close down—$553.8 million just for one calendar year, in 2013. That took their total losses to over $1 billion over the last eight years. We saw Ford announce its worst ever loss, $267 million—a $1.1 billion combined loss over the last eight years. These companies made it very clear that no more government support could have saved the car industry.

I know this is going to come as a surprise to members of the opposition, but there is simply no magic pudding. You cannot spend the money more than once, and a subsidy has to come from somewhere. When you subsidise one industry, all that you are doing is raising taxes on more efficient industries that are out there doing a job, creating employment and creating wealth for this country. The money has to come from somewhere and all you do when you raise subsidies to give to one industry is punish other industries, and that is exactly what we have seen. It comes at a net loss to the economy, a net loss to employment, and it reduces our total standard of living.

Look at some of the factors in the global car industry that caused the car industry in Australia to close down. In China there are now 240 million vehicles on their roads and they expect that to increase by 20 million vehicles every single year. Today there are something like one billion cars and trucks on the planet, and by 2050 that is expected to grow to 2.5 billion. So on the surface this is potentially a chance for Australia to export something to those markets, but what has happened is that, because of this increasing demand, we have seen so many countries in Asia develop their car industries. In fact, a recent Wall Street Journal article says there are 170 different car manufacturers in China today. The problem they have is that the global capacity of these new factories coming online to meet the demand is close to 100 million cars, but the demand at the moment is only something like 60 million cars. So there is close to a 40 million overcapacity in the industry.

It is unfortunate. We hate to see the car industry close. But what it will allow, as we have seen over the last decade, is for cars to become more affordable to Australians—cars of higher quality, with more comfort, better technology and accessories, better fuel performance and less pollution. They are safer and more reliable. As just one quick example, in 1960 it took 60 weeks of average male earnings for someone to buy a new Ford Falcon. Last year that same Ford Falcon—a far superior car—took just 30 weeks earnings. So yes, it is sad that the car industry is closing in Australia, but we cannot continue to throw subsidies to the industry, because those subsidies actually harm every other industry in the country and harm consumers. We are right to give $155 million in assistance to the former workers, but I commend this bill to the House. (Time expired)

10:36 am

Photo of Mark ButlerMark Butler (Port Adelaide, Australian Labor Party, Shadow Minister for Environment, Climate Change and Water) Share this | | Hansard source

Last December, I think it was, I came across a car industry executive who was leaving the ministerial wing here in Parliament House—someone from South Australia whom I knew. I had a quick chat to him and it is fair to say he was ashen faced. What he said to me was not about the detail of the discussions he was having with the government at the time but about his deep concern that the ministerial wing was populated with people who just did not understand the manufacturing industry. It is important to say this was not about the Minister for Industry, Ian Macfarlane, who I think everyone in the parliament, across the chamber, recognises understands manufacturing very well. He was very concerned that the very senior ministers to whom the industry was talking at the time, as Holden's fate hung in the balance, simply did not understand how supply chains work; manufacturing, particularly the automotive sector; and the multiplier effect that operates, particularly in the car industry. The member for Hughes did not really go to that point. But, perhaps most importantly, from my perspective, simply do not understand the degree to which urban communities have grown up around and depend upon and are nurtured by manufacturing industries in cities like Adelaide, Melbourne and other parts of Australia.

I want to talk about the impact that this bill and the associated policies of this government, the associated decisions of this government, particularly in the automotive industry, will have on communities that I live in, that I have the privilege of representing, that my family has lived in for many, many generations. The impact of policies made in this place on community when it suits them is a favourite topic of those opposite. A favourite topic of the Prime Minister was to stand up and say the carbon tax would wipe Whyalla off the map, would wipe Gladstone off the map. It is a favourite topic when it suits them. But I want to talk about the very, very serious impact that this bill is going to have on communities in Adelaide.

I have had looked speeches made by my colleagues: the member for Wakefield, who represents the northern suburbs of Adelaide where the Holden factory is located and where so many supply companies are also located; I have seen the speech by the member for Makin, who understands this deeply and has responsibility for the opposition in this area; I listened to the speech of the member for Corio from Geelong, who understands that deeply; the member for Hotham; and a number of others. I will not go over the ground that they covered in talking about the return on investment and the comparison of the support—the coinvestment that the Australian government makes and has made for many years to the car industry compared to those other small number of nations that actually are able to manufacture a motor vehicle from the design table to it rolling out into the showroom. I know that if you look at those figures, Australia's support—the support from taxpayers to that industry—is significantly lower per capita than nations like the United States, Germany and many, many others.

My electorate encompasses a range of suburbs in what is known as Northern Adelaide and also the north-western suburbs of Adelaide. Over the last several months in particular, but over the last few years as the future of the car industry has been deeply uncertain, I have talked to so many members of those communities at functions, at street corner meetings on Saturday mornings about the impact that that is going to have. It is not just the northern suburbs and the north-western suburbs that will be impacted by this bill and associated policies; it is important to say that the car industry and the manufacturing sectors that have been able to spring up around that hub of the car industry have been utterly central to South Australia's fortunes, particularly Adelaide's fortunes, really for the better part of 100 years.

Holden, as the member for Hughes described it, is now part of a multinational car company. For a long time—not anymore, but for a long time—the largest car company in the world, General Motors. But it began as a family business about 150 years ago in Adelaide doing work for horse-drawn carriages. It very quickly set up its operations in Port Adelaide in the heart of my electorate and transformed from a horse carriage business, as the car became increasingly ubiquitous in modern society, and became a car supply company. About 100 years ago it decided to move into car body building and in 1924, about 90 years ago, Holden, still in a family company, set up the largest car body building factory outside of North America and Europe in Woodville, just a couple of kilometres from my house and my children's school, actually. It is no longer a car factory; it is now Bunnings, which I think gives you a sense of the transformation of the world economy. But back then it was the largest car body building factory outside of North America and Europe.

The fortunes of Holden really changed in the 1930s for Adelaide. South Australia's economy was hit as hard as any economy in Australian by the great depression due to its very significant reliance on commodity products, particularly primary produce at the time. Its economy was very, very deeply hurt. At the same time, Holden, which suffered a big hit to the demand for its products, decided to seek support from overseas companies and was then bought out in 1931 by the American company General Motors, which still owns the Australian operation. At the same time Holden decided to consolidate its operations around the country and had pretty much a signed a contract to move all of its Adelaide operations to Fishermans Bend in Melbourne. Had that happened, the economy in South Australia, particularly in Adelaide, already devastated by the great depression to a greater degree than most parts of Australia, would have been even more devastated.

The state government at the time did a lot of work to convince Holden to keep their operation going in Woodville. I will not go through the list of policies that were put in place. Suffice it to say that that process really sparked the industrialisation of South Australia—the diversification of an economy that had been so overwhelmingly reliant on primary produce with a bit of manufacturing on the side became the sort of industrial powerhouse for the country that we knew it to be, starting in the thirties and continuing in the postwar government, particularly of Tom Playford and later. I am sure it is only coincidence that Ted Holden was elected at about that time to the legislative council, too, which I am sure helped cement his commitment to the state of South Australia.

That postwar shift in production methods, that postwar economic boom in Australia, allowed a company like General Motors Holden, around the country but including in Adelaide, to start to become more ambitious. Instead of just building car bodies essentially for overseas designs to put together in other factories, as we know very well, Holden became the first company to put together a car from scratch in Australia, rolling off the assembly line in Fishermans Bend in 1948 with a body built at that same factory I talked about in Woodville.

The member for Wakefield talks about this passionately and often. It was then decided that, from the operation in Woodville in the old north-western suburbs of Adelaide, we would build a new suburb called Elizabeth then in the far north of Adelaide and that that suburb would not only deal with the postwar boom, the migration boom and also the baby boom, but it would also be a suburb that would house its massive expansion in the car industry. That suburb was built in 1955 to pre-empt the building of the new Holden factory in 1958. Around that hub, a whole range of supply companies—to take up the member for Hughes' point, and I am sure the Minister for Small Business will be interested in this—and countless small businesses sprang up in the Elizabeth area and the northern suburbs. They all, at the end of the day, depended on the stone that was dropped in the pond from the Holden factory, which was the behemoth in those northern suburbs. Generations of families have worked at Holden ever since—they have either worked at Holden or they have worked at the different supply companies that I talked about. My stepmother's mum, her dad and her brother all worked at Holden. Countless times I have gone to street-corner meetings, especially since the decision taken in December, to talk, particularly, to men—because it is still a predominantly male workforce in the automotive sector—whose fathers worked there, whose sons work there today or who hope their sons will be able to get a job there. These are good, secure, stable, relatively well-paying jobs that really underpin the economy of the northern suburbs of Adelaide. There are even bigger numbers in the supply companies.

This is not just in the northern suburbs. If you know the geography of Adelaide this is also in the north-western suburbs, where the bulk of the electorate of Port Adelaide is; that is where I live. Within two kilometres of my house there are four factories I can think of which are car component factories dependent upon the work of Holden and of Toyota in Victoria. These are the particular targets of this bill. We had hoped that these companies would be able to change and diversify their products to do something other than supply the Australian factories of Toyota and Holden. No-one underestimated the challenges involved in that diversification, given the degree to which factories are tooled to a particular purpose, but that already very difficult task is made so much harder by this bill.

The Minister for Agriculture, in question time yesterday, got up and had a great old time enjoying himself trying to point out how many members on that side understand the farming sector and how many members on the opposition side understand the farming sector. It is great entertainment when the Minister for Agriculture takes up precious time in question time doing that! But frankly I am not confident that members sitting around the cabinet table today—again, other than the Minister for Industry, for whom there is a great deal of respect in this parliament—or for that matter, members in the broader caucus of government, have a great deal of understanding of the significant degree to which so many communities in the north and north-western suburbs of Adelaide and parts of Melbourne depend on this manufacturing industry, not only for their economic fortunes, but for their social strength and cohesion.

This bill and the decisions going back to December will have a devastating impact on those communities. I am not confident that is well appreciated or understood by those opposite, which is why it is so critical to keep the Automotive Transformation Scheme in place and properly funded. There are thousands of workers in my electorate—not at Holden; the decision has been made at Holden—who rely for the chance of a job post 2017 upon the ability of their companies to transform. That is the purpose of this scheme—to be able to transform and diversify; to take the opportunities that are out there in the rest of the world and supply the manufacturing industries and primary manufacturing companies that are now elsewhere.

In government our investments ensured that Australia, and South Australia particularly, maintained its automotive industry in the face of the GFC and the high Australian dollar. The schemes we put in place and the approach we had in government was based on the idea of co-investment. They were based on the idea that, if the taxpayer brought in money, the multinational companies to which the member for Hughes referred would also have to put in money and give assurances about long-term certainty. It was not a handout; it was an investment. Not only was there co-investment in the direct manufacturing sense, to underpin jobs, but we also know the automotive sector was the largest spender on research and development in Australia's manufacturing industry for many years.

For a government that before the election claimed to be able to create a million jobs, they are going about it in an interesting way. The Prime Minister said before the election: 'I want to see car making survive in this country, not just survive but flourish.' Unfortunately, as I recall it, he then went away and left things in the hands of the Treasurer. And what was the Treasurer's treatment of Holden, a company that had in good faith decided to enter into a process started by the Minister for Industry and involving the Productivity Commission? The Treasurer stood up in this place and in the media and goaded Holden—a company which, whether under the ownership of General Motors or as a family company, had for 150 years underpinned the economic fortunes of tens of thousands of Australians.

We oppose this bill because this is the last hope for so many companies and so many thousands of workers to accept what has happened with Holden and Toyota but have the chance to see their company and their industry transform, diversify and create economic opportunity for thousands of families into the future.

10:51 am

Photo of Andrew GilesAndrew Giles (Scullin, Australian Labor Party) Share this | | Hansard source

I rise to join my Labor colleagues in voicing my strong opposition to the legislation before us, the Automotive Transformation Scheme Amendment Bill 2014. Before I go to the provisions of this bill, a bit of context is important.

As the member for Scullin, I am very proud that we have strong tradition of manufacturing in Melbourne's northern suburbs. As of the most recent data there were 1,100 people employed in motor vehicle manufacturing and components manufacturing residing in the Scullin electorate. I speak for those people in this place, as have my colleagues from Adelaide, like the member for Port Adelaide, or indeed my colleagues from Melbourne—those from the western suburbs, like the member for Gellibrand and the member for Lalor, or from the south-east, like the member for Hotham. I join them in standing up for our communities—proud manufacturing communities—for whom the automotive industry has been lifeblood and a source of great pride, as well as of good jobs that people could count on.

The other bit of context goes to the nature of work in Australia. I am reminded of Paul Keating's famous statement that:

When you change the government, you change the country.

That has, sadly, been prophetic since 7 September last year—most particular, in terms of the nature of work, as we are tracking to become a much less equal society. Good jobs—high-skill, high-wage jobs—are becoming harder and harder to find. This government is unconcerned at best; hostile at worst. I think of the way in which government members speak of childcare workers' push for professional recognition and professional wages in this regard. And while there are some campaigns in civil society—and I think of the Jobs You Can Count On campaign organised by the National Union of Workers but reaching far beyond that union's coverage, and building on the great work done by Brian Howe in terms of the secure jobs inquiry—Australia's government continues its ideological crusade to liberate workers, effectively into insecure working arrangements and insecure lives.

This is not confined to manufacturing. As well as shipbuilding at present, we see the terms and conditions in the jobs of public service workers under threat, notably. But, in recent weeks, the focus in this place from Labor members has rightly been on this government's lack of concern for manufacturing in Australia. In particular, the treatment of the automotive industry has, sadly, been a recurring theme. I have spoken in this sitting period in respect of the impact of the Korea-Australia Free Trade Agreement on this sector. This week, I joined many Labor colleagues in opposing the government's changes to the Fair Entitlements Guarantee scheme—a scheme of disproportionate importance to manufacturing workers. It is something we should think of when we think of the impact of these cuts on components manufacturers.

But, of course, these decisions pale in comparison to the huge cut that is the centrepiece of the legislation before us now. It is a companion piece, as I see it, to the Treasurer's shameful comments effectively daring Holden to leave last year—pushing industry out the door, having dared them to leave.

As Labor's candidate for Scullin last year, I was and remain profoundly affected by my visit to the Ford factory in Broadmeadows—a few kilometres to the west of the Scullin electorate—shortly after Ford's sad decision to cease its Australian operations. Together with the then minister, Greg Combet, and the members for Calwell and McEwen, I listened to proud workers explain what this industry meant to them. It was so much more than just their jobs.

A few days later, I met with automotive students at the wonderful outer-northern Trades Training Centre, Peter Lalor Secondary College. These impressive young women and men had a much stronger sense of their futures than what I had at their age—futures that, a year on, have been dramatically confined through no fault of their own.

I thought of these workers and these students when I spoke in this place for the first time. I spoke then of Melbourne north's proud tradition of manufacturing and of my hopes for an exciting future. Hope is still there, but we need a government, and Melbournians need a government, prepared to rise to this great challenge, not walk away.

I also spoke then of the importance of considering the social consequences of the policy choices governments make. In this, I was pleased to be criticised in the opinion pages of The Australian by Gary Johns. This view was said to be naive and romantic, I think. I ask government members: what is the alternative? Do government members really believe they can divorce themselves from the human consequences of their actions? What will they say to the workers at Ford, to the young men and women at the Peter Lalor Secondary College and to those in components manufacturers in suburbs like Thomastown and Epping?

Unemployment in Victoria, as I speak, is unacceptably high. We are in a jobs crisis in Melbourne—it is as simple as that—with the promise of much worse to come as a direct result of this government's ideological war on manufacturing. This legislation before us will contribute to this, make no mistake. The greatest impact of the collapse of our once great automotive industry will be felt in Victoria. We face the loss of 100,000 jobs—a huge impact on gross state product. There is a likelihood that job numbers will not recover until well into the next decade.

It is more than just the raw numbers when it comes to this jobs challenge we face. I join my colleague and friend, the member for Hotham, in raising the question of the quality of jobs in the context of this debate. And this makes the rhetoric of liberation so offensive. For most of us—and I am pretty sure all of us in this place—what we do defines who we are. This is also the case for every autoworker I have spoken with. It is tragic that government members will not listen to their voices in this debate.

Of course, the challenges facing Australia's automotive industry did not begin with the election of this government. But this government has, through its actions and, sometimes, through inaction, killed off this vital industry. At the conclusion of his second reading speech, Minister Macfarlane spoke of providing certainty. Well, the government that he is a member of has done that now. Having committed before the election to make the industry—in the words of the then opposition leader—'flourish', the government has made certain the death of automotive manufacture in this country, and now it is hurrying it along.

The Automotive Transformation Scheme Amendment Bill amends the Automotive Transformation Scheme Act 2009 in order to give effect to the government's $500 million cut to the ATS over the 2014-15 to the 2017-18 year period, announced as part of MYEFO. The bill also has the effect of terminating the scheme as at 1 January 2018, cutting a further $400 million from the scheme—a budget announcement.

This scheme was, of course, a scheme that Labor introduced in 2009 to encourage investment and, importantly, innovation in the industry. The scheme has provided assistance in the form of co-investment to firms with the production of vehicles and engines, and for investment in R&D and plant equipment. It is a scheme that arose from a proper process—through a review of Australia's automotive industry by the former premier of Victoria, Steve Bracks. In 2009, Senator Wong, who then delivered the second reading speech in support of the legislation, said:

Car making is a cornerstone of Australian manufacturing. It makes a critical contribution to Australian employment, skills, innovation and exports. The automotive industry directly employs more than 52,000 people. This scheme will help to secure these vital jobs as the industry faces intense pressure in the short term as a result of the global economic downturn, as well as the long-term challenge of modernisation and renewal.

She noted also that the automotive industry is also one of Australia's top export earners—despite the effects of the global economic downturn—with exports of $5.8 billion in 2008. I note that this scheme was starting to do some important work, and it particularly touched on the Scullin electorate. I think of the impact on Manumatic in Epping in particular in this regard.

Before the last election, Labor announced A New Car Plan for the 2020s—a vision for the future, to keep making cars in Australia and to keep good jobs in the Australian automotive industry. This included a new program of $300 million per annum to support the transformation of the industry to attract new investment, support research and development and design and engineering from January 2016. Labor's commitments would have seen the motor vehicle producers commit to new investments in Australia and a secure jobs future for thousands of auto manufacturing workers—jobs that are now on the line. Of course, as I said a moment ago, the then Leader of the Opposition said before the election, 'I want to see car-making survive in this country, not just survive but flourish.' I think most people would think that this would equate to a pledge of support for the car-marking industry, but as has so often been the case, this is a government that said one thing before the election and has done quite the opposite in government.

It is an understatement to say that. A bit over a year since the Prime Minister made that commitment things have changed dramatically, with predictable, and tragic consequences. As others on the Labor side of the House have already pointed out, and those opposite refuse to acknowledge, none of the above was promised before the last election. I think that what has happened in terms of manufacturing has been a tragic story: the conceit of the Productivity Commission review at a time when the manufacturers needed a commitment to maintain operations; the decision in MYEFO, which this legislation gives effect to; the refusal to commit to Labor's co-investment plan; and then, worst of all, the campaign to undermine Holden, culminating in the Treasurer's cajoling statement given in this place.

And, of course, on top of all that and adding insult to injury, they cut $5.1 million from vital skills and training programs for auto workers. We all know how important that is for the workers in our electorate at this time.

Yesterday, I heard the member for Corangamite's attempt to pretend that the government had a jobs plan, when she encouraged people to fill out a petition about jobs. It is as simple as this: a petition is no substitute for a jobs plan. Let's imagine the scene: a worker made redundant from the Ford factory in Geelong, facing huge uncertainty about how his or her family is going to pay their bills. But wait! They have the opportunity to sign a petition from the member from Corangamite about jobs! This is what the coalition does when it does not have a jobs plan. It has no idea what these people are going to do when the factories and the components manufacturers close. None. And they are, in effect, through this bill, hurrying these closures along.

I gave the minister some credit in referring to certainty earlier in my contribution. But one important aspect of this legislation is these cuts; this broken promise has changed the basis on which decisions have been made along the supply chain. I note the warning given by Holden managing director Gerry Dorizas, who said in The Age on 14 August:

Suppliers have invested based on the ATS to break even. They needed this kind of subsidy and at this particular time they’re in dire straits, …

This is the reason why we’re actually very focused on the supplier base because if that happens then nobody will be able to produce cars, …

It is compounding the certain loss of jobs in manufacturing by hurrying these along.

I note the bizarre comments by the minister reported in today's Australian Financial Review, where he is quoted as saying:

I did put in $4.3 billion into the automotive industry, but I'm not sure for what outcome to be perfectly frank, …

The outcome under Labor—under a government that cared—was jobs. Jobs that were high-paid, highly skilled and, most importantly, secure. They are being replaced with either no jobs, or low-paid, low-skill, insecure jobs. It is the worst possible outcome for these employees, their families and their communities. The minister went on to describe the government's approach as 'very tough love'. Well, I think that I can say that workers in automotive are not feeling any love. And yet, there is an issue with the rationality of this decision, as well as its morality. Due to government's behaviour, welfare payments and lost tax revenue from an industry shutdown are projected to exceed $20 billion, and it will be more than 10 years before the economy recovers from the underlying hit to GDP.

As I have said earlier, the more than 1,100 people in Scullin currently employed in motor vehicle and motor-vehicle-part manufacturing deserve better. Decision-makers should always have foremost in their minds a deep appreciation of what job loss means to individuals—the ways in which lives are reshaped for the worse. But this government cannot help itself; it consistently refuses to help the Australian people in need. The auto industry faced challenges. Everyone knows this, but the fact remains that there is not a single car anywhere in the world that is not supported in some way by the government where those cars are made. Australia's automotive industry was, of course, the least supported in the world.

These governments, and until recently the Australian government, supported industry because of the significant and pervasive multiplier effects of having a vibrant and robust manufacturing industry. This government has chosen to walk away unilaterally from these workers for no benefit—for purely for ideological reasons. Again, who could forget the sad spectacle of the Treasurer daring the auto manufacturers to leave Australia? I will not and I am sure that the workers in Scullin will not either.

On that note, I echo the words of the member for Throsby, who asked in the context of the debate over the Fair Entitlements Guarantee, 'What is it about automotive workers that makes this government hate them so much? When members opposite called for support for the agriculture sector which has been affected by drought, they had Labor's support, as they should have. And yet all we see is hypocrisy and not reciprocity when it comes to the auto sector. This government knows, as the opposition leader said this morning, the price of everything and the value of nothing.

11:06 am

Photo of Jill HallJill Hall (Shortland, Australian Labor Party) Share this | | Hansard source

I congratulate the member for Scullin on a fine contribution to this debate. He touched on key areas: the areas that are really synonymous with Labor's position when it comes to this Automotive Transformation Scheme Amendment Bill 2014.

The Abbott government was elected as a government that was going to create one million new jobs. The thing that we have seen since the government was elected is that unemployment has risen to over six per cent, and we have seen that over 200,000 jobs are set to go in the automotive industry. That is absolutely unacceptable.

This government is a government of ideologues and it is a government that is driven simply by a desire to please its friends in big business. It is a government that has no vision and no plan for jobs into the future. The only plan that the government has for jobs is to see those jobs going offshore.

The particular legislation we have before us today, the Automotive Transformation Scheme Amendment Bill 2014, amends the Automotive Transformation Scheme Act 2009. It gives effect to the Abbott government's $500 million cut to the ATS over 2014-15 and right up until 2017-18, which was announced as part of the 2013-14 Mid-Year Economic and Fiscal Outlook. It has the effect of terminating the ATS in January 2018 and cutting a further $400 million from the ATS, which was announced in the budget. This really demonstrates the government's lack of vision and lack of commitment to jobs within Australia. This scheme provides assistance in the form of a co-investment for the production of motor vehicles and engines and for investment in eligible research and development, plant and equipment. Now we have seen this government's lack of vision when it comes to research and development. The fact is that it does not value research and development. The fact is that its answer to new ideas, new investment, is to move away from supporting industries where with a little bit of vision, a little bit of foresight, a little bit of investment, these industries could flourish. It is not only the automotive industry; it seems to be a policy across the board that this government does not support research and development and will not invest in it.

We on this side of the House strongly oppose this legislation. As I mentioned a moment ago, it will cut $500 million in funding from the ATS between now and 2017, and terminate the scheme at the end of 2017. It really spells disaster to 200,000 Australian men and women. These are Australian men and women who rely indirectly on the automotive manufacturing industry for their jobs. This legislation is about jobs. This legislation is about Australians no longer having jobs—many of whom have worked for 20 years and longer in the industry. These people are highly skilled workers, workers who have developed these skills over a long period of time, and many of those skills are not transferable. Once the car industry closes down it will be difficult for them to retrain, it will be difficult for them to find new jobs. Yet this government says it is committed to creating one million new jobs. This is something that I find unbelievable and its action in relation to the ATS is unforgivable.

It is critical that governments do not pre-empt the closure of the industry and risk early closure of firms before 2017 by reducing available funds. If this happens it will exacerbate the situation that exists at the moment, that this government has created. This government really shows how its ideology pushes its policies. As the member for Scullin said, the opposition supported the government when it came to providing support for rural industries. We know that farmers struggle in times of drought and we can see the benefit to our Australian economy by providing them with support. But unfortunately those on the other side of this House cannot see the benefit of Australia having a car industry, cannot see the benefit of Australia having a manufacturing industry. The shipbuilding industry is another example of this government's failure. It is sending contracts for submarines overseas rather than having them built here in Australia. It is about the—

Photo of Darren ChesterDarren Chester (Gippsland, National Party, Parliamentary Secretary to the Minister for Defence) Share this | | Hansard source

You're just making that up, Jill.

Photo of Jill HallJill Hall (Shortland, Australian Labor Party) Share this | | Hansard source

I hear the minister at the table, Parliamentary Secretary to the Minister for Defence, supporting cuts to jobs in the shipping industry as well as cuts—

Photo of Darren ChesterDarren Chester (Gippsland, National Party, Parliamentary Secretary to the Minister for Defence) Share this | | Hansard source

Name one job that's been cut.

Photo of Don RandallDon Randall (Canning, Liberal Party) Share this | | Hansard source

The member for Shortland has the call.

Photo of Jill HallJill Hall (Shortland, Australian Labor Party) Share this | | Hansard source

to jobs in the automotive industry. This government does not support Australian jobs. It could have brought forward the frigate contracts so that workers at Forgacs in the Hunter would be able to maintain their jobs and we would have a viable shipbuilding industry, but instead—

Photo of Darren ChesterDarren Chester (Gippsland, National Party, Parliamentary Secretary to the Minister for Defence) Share this | | Hansard source

Six years and you did nothing on subs.

Photo of Don RandallDon Randall (Canning, Liberal Party) Share this | | Hansard source

Can we have some order please?

Photo of Jill HallJill Hall (Shortland, Australian Labor Party) Share this | | Hansard source

this government does not have a vision for the manufacturing industry, does not have commitment to the manufacturing industry. And the more that those on the other side of this House complain and make a noise, the more it convinces me that they are covering up for their ineptitude and their lack of commitment to Australian jobs in the manufacturing industry. I believe that they stand condemned.

The scheme is critical. It is critical that the scheme be maintained so that governments can work with industry in transition. We do not want to be in a situation where there is early closure as this will create so many more problems. The coalition government, the Abbott government, has gone out of its way to trash Australian automotive capabilities, to trash the automotive industry, to make sure Australian men and women lose their jobs and do not have the support that they need to go forward from here.

Photo of Darren ChesterDarren Chester (Gippsland, National Party, Parliamentary Secretary to the Minister for Defence) Share this | | Hansard source

How'd you go with Ford? Who was in government when Ford made their announcement, Jill?

Photo of Jill HallJill Hall (Shortland, Australian Labor Party) Share this | | Hansard source

And no matter how much protesting we get from the other side of the chamber, this shows that those on the other side of the House have no commitment to those workers who are losing their jobs, have no commitment to the manufacturing industry and have got a very narrow vision for the future of Australia. By cutting hundreds of millions in funding for the ATS, it is now at risk of causing the premature closure of motor vehicle manufacturers and hundreds of firms in the automotive supply chain.

And this is not only about jobs in the car industry of course. It is about those jobs in the industry that supply components to the automotive industry. It means that 50,000 direct Australian jobs in the car industry are at risk and 200,000 jobs that rely indirectly on the industry are in line. These figures are indisputable and they are figures that those on the other side of the House are ignoring. These are real people that will be unemployed.

We certainly hope that none of them are under the age of 30, because they will have to wait six months before they receive any financial assistance under this government's cruel and harsh plan of attack on unemployed people. So on one hand, they are getting rid of jobs and on the other hand they are making it hard for people who are unemployed. It really is a very mean-spirited government with a very narrow vision.

We on this side of the House believe that we need to maintain and fight for an Australian manufacturing industry. We believe that it is very important, as a developed nation with a strong economy, that we do have jobs in areas other than mining and agriculture. That is why we will fight very hard to see that manufacturing jobs remain.

We also believe it is important that we have vital high-tech industries. This legislation really risks the premature closure of these industries. Compare this situation to Labor's record. Labor's approach was based on coinvestment and it provided long-term certainty. It was not about handouts; it was about creating long-term viability for the industry. The industry only received support when it invested, and that is the way it should be. It is about research, development and investment and ensuring that we have a long-term viable industry. Before the last election, Labor announced a new car plan for the 2020s to keep making cars in Australia.

I might add that the Prime Minister made some announcements too about the car industry prior to the election. He has certainly backed away from those just as he has backed away from many other announcements and promises he made before the last election, promises like no cuts to health and no cuts to education. One of the statements he made before the last election was:

I want to see car making survive in this country, not just survive but flourish.

The legislation certainly will not be allowing the car industry to flourish in Australia. What it is doing is putting a nail in the coffin of the car industry and in the coffins of all those industries that ride on the back of the car industry. It is also ensuring that many Australians are left without jobs. He made that statement on 21 August 2013. What a difference an election makes! He says one thing before an election and another thing afterwards.

Since the election, the government has not only turned its back on Australian car makers, it has also turned its back on the 50,000 Australians who will lose their jobs. You would expect him to have little bit of empathy, a little bit of concern for those people who are about to lose their jobs, but his approach is somewhat different. Some of those people affected will find it difficult, but many of them, according to the Prime Minister, will probably be 'liberated to pursue new opportunities and to get on with their lives'. If unemployment is liberating, I would really like to see how that kind of liberation works particularly under the harsh regime that this government is placing on unemployed people.

The impact that this will have will go on and on, but one thing it really demonstrates to me is just a little insight this government has into issues such as manufacturing. It has absolutely no job plan and it does not look to the future when it is making decisions and developing legislation like this. A number of studies have been done in relation to this and there are a number of reports that members on the other side of this House could look at—some by the South Australia university, a number by Allen Consulting and the Automotive Industry Data Card, and the Automotive Transformation Scheme legislation back page actually highlights a couple of areas that the government could go to. This government stands condemned for its attack on workers, its attack on the car industry and on its lack of vision for the future of Australia.

11:21 am

Photo of Amanda RishworthAmanda Rishworth (Kingston, Australian Labor Party, Shadow Parliamentary Secretary for Health) Share this | | Hansard source

I join with the member for Shortland in rising to oppose this bad legislation, the Automotive Transformation Scheme Amendment Bill 2014. This legislation abandons manufacturing and throws up its hands and says, 'There is no role for manufacturing in this country. The government sees no role for us in coinvestment with the manufacturers not only of motor vehicles but also, of course, component manufacturing as well. It sees no role for us in the supply chain.' That is what this bill says and that is what this government is doing. This is ill though out legislation that shows the ideological nature of this government that at all costs they will not support manufacturing in this country. I sometimes feel very confused by this government. They do not seem to have confidence in the men and women who work in the manufacturing sector. They do not seem to have the confidence that these men and women produce high-quality, world-class products. I invite those opposite to actually visit a component manufacturing plant in my electorate, or indeed anywhere around Australia. There are manufacturing plants doing innovative and exciting automotive component manufacturing right around this country.

The Automotive Transformation Scheme Amendment Bill 2014 rips away $500 million not only from car manufacturing but indeed from assistance and co-investment with component manufacturing. We know that this government chased Holden out of Australia. We know that the Treasurer threw up his hands and goaded them to leave this country. It is appalling that a government that pretended to care about South Australians and pretended to care about auto manufacturing workers not only threw up their hands but also goaded Holden to leave this country. And, of course, the impact of that decision on South Australia is significant. We know that, despite the Minister for Industry trying his best to convince cabinet to act, the minister was rolled time and time again when it came to the Holden decision.

This bill is another nail in the coffin of the car industry and of co-investment. It really suggests that the government does not believe that there is a role for auto component manufacturers in the global supply chain and that it has no interest in supporting them. This will have a huge impact right around the country. Two hundred thousand workers are either directly or indirectly part of the supply chain. They are employed by car component manufacturers or directly employed by car manufacturers. These are real people with huge amounts of skill. I think that is what the government should remember. These workers have world-class skills that are constantly being ignored and dismissed by the government. I was so disappointed to hear what our Prime Minister said about the 50,000 Australians who will lose their jobs as a result of Australian car manufacturers leaving this country. He said:

Some of them will find it difficult, but many of them will probably be liberated to pursue new opportunities and to get on with their lives

Doesn't that show our Prime Minister's contempt for the workers in automotive manufacturing? It shows contempt not only for the 50,000 who will lose their jobs directly as a result of Holden, Ford and Toyota leaving this country but also for many workers in my electorate who work at companies like Walker Australia, Tenneco, SMR and Bosch. There are thousands of workers in my electorate who go to work every day. They are proud of the product they manufacture and proud of the work they do. With this bill, this government is saying, 'We are going to abandon you and cut $50 million from co-investment.' The government is abandoning not only the workers but also the small businesses that work very hard to provide innovative and exciting products. We always hear from those opposite that they are the champions of small business. With this bill that is certainly not the case. Indeed, the automotive suppliers have urged the Senate to reject this automotive bill. A press release on 24 September states:

Australian automotive component manufacturers remain steadfastly opposed to the federal government’s intention to cut $500 million of funding from the Automotive Transformation Scheme …

They have made it really clear that as a group they are distressed and upset about the fact that this government has shown no interest in automotive suppliers. So much for being the party of business! And it is not only the automotive suppliers who have urged the Senate to reject this bill; the Federal Chamber of Automotive Industries said that reducing the Automotive Transformation Scheme will have serious consequences for 45,000 workers directly employed and more than 100,000 workers indirectly employed in the automotive sector around Australia. They are calling on the government to reject the amendment bill introduced in the House of Representatives and their Chief Executive, Tony Weber, has said that it is important that the government realises the impact that any cut to the scheme would have on the Australian automotive supply chain.

Once again, we see the government not only ignoring and showing contempt for the workers in this industry but also showing complete contempt for businesses in this industry. The government have goaded Holden to leave this country, but you would think that they would then look at the supply chain and say, 'Okay, sure we have chased out one of your biggest customers, but we want to work with you to ensure these small businesses survive.' Of course, that has not been the response by this government. Not only will this have an impact on thousands of people in my electorate but it will also have a significant impact on the South Australian economy. South Australia has had proud manufacturers for many years. Evidence suggests that, with this government abandoning both car manufacturers and the supply chain, the gross regional product of Adelaide will not recover until 2031—nearly two decades away. Isn't that appalling?

The government are absolutely walking away from South Australia. Of course, we know that they are walking away from not only automotive manufacturing in South Australia but also the future submarine project. They have now made clear that, despite election promise after promise, they have no intention of building 12 submarines in South Australia. They are walking away from that promise, once again showing that they do not have the confidence in South Australian workers to do the job. They do not have the confidence in the skills and expertise that we have in South Australia to do the job. They should stand condemned for that. The now Minister for Defence made a promise to build 12 submarines, but he has walked away from that again and again. The Prime Minister, who made this promise in Adelaide before the election, has walked away from it again and again, once again showing that not only do they have contempt for auto components manufacturers and the car manufacturing sector but they have contempt for all manufacturing and jobs in South Australia. I have spoken on this many times in the House. I urge the Prime Minister to reconsider if the deal has not already been done; or, even if a deal has been done, rip up that deal and give these jobs to South Australia, because we have the expertise and the know-how.

What is really concerning is: where are the South Australian government members on this issue? Where is the member for Hindmarsh on this issue? He has many, many workers in his electorate. Where are the member for Mayo and the member for Sturt? They are silent on this issue. It is a pity that they do not listen to great minds that have gone before. I do not usually agree with Nick Minchin, previously a senator from South Australia, but even he has recognised the importance of coinvestment in the car industry. He was previously industry minister and he said:

Australia has over many decades invested in establishing a world-class expertise in car manufacturing which should not lightly be discarded. Our capacity to produce world-class automobiles remains a significant strategic asset.

In terms of government expenditure, support for car manufacturing pales into insignificance compared to the long list of more expensive programs presided over by Canberra.

So it is not just Labor; stalwarts of the Liberal Party recognise the importance of investment in the car-manufacturing industry. Really, Senator Minchin busts the myth that many of those on the other side have been spouting—why should car manufacturing get support over other sectors? No-one else gets support in Canberra. That is just not true. As Nick Minchin said, there are many industries that get support from Canberra. It shows that the government is ill-informed and seems to have an ideological agenda against workers in the car industry. Of course, Nick Minchin could never be thought of as a raging leftie, and some might ask when he made those comments. Was he industry minister and thought it was really important then? No. The comments were published in The Australian in November 2013.

So I ask those South Australians who have abandoned the car industry—those members on the government benches—to reconsider this. Stand up for your electorates and stand up for your state. I send the same message to senators in the other place: stand up for your state of South Australia—and not only on cars. You should stand up for your state of South Australia when it comes to the submarine project, because that is years and years worth of work. But, of course, we have had silence. Weak, weak members from South Australia on the government benches will not stand up for South Australia. They cannot seem to get their message through to the Prime Minister.

We know that the Prime Minister continually abandons South Australia, and not only when it comes to cars or submarines; now we hear that he is going to rip the GST revenue away from South Australia. We already know that he has ripped about $655 million from our hospitals, but he seems to have a plan to do much more. Where are the South Australian members in this debate? They have been silent. We know that some are ideologically driven, but the member for Hindmarsh especially should stand up for workers in his electorate, stand up for businesses in his electorate, argue with the Prime Minister and get the government to change this ill-fated decision.

As alluded to by former Senator Minchin, this is not a handout to automotive manufacturing. I have seen firsthand how coinvestment can ensure that businesses thrive. I refer to REDARC in my electorate, an innovative business who, after the closure of Mitsubishi, which affected my electorate significantly, received government assistance in the form of a coinvestment. They invested, the government helped them invest and now they employ many, many people. They do R&D on site, they have sales on site and they are constantly winning awards for the innovative niche manufacturing that they do. This would not have been completely possible without coinvestment from the government. That is what coinvestment can do. It can unleash support for jobs, and the benefit to our economy is manifold. It grows exponentially once government invests, and we saw that time and time again with the work that Labor did in government to build jobs.

That takes me to my final point. If the government are going to abandon the car industry and abandon work on the submarines and the defence industry in Australia, where is their plan for jobs? They get asked this over and over again. The poor Minister for Industry wants to have an industry plan that supports industry to grow and thrive, including automotive manufacturing and other advanced manufacturing. He wants that plan; we know he does. He might not be able to say it in this parliament and he might not be able to say it publicly, but we can see the look on his face. He wants to support industry, but, of course, he cannot get it through his cabinet and he gets rolled every single time. It is time for backbenchers to stand up and support this industry minister. They need to get behind him because it is their electorates that are suffering. It is not the Treasurer's electorate that is suffering; it is not the Prime Minister's electorate that is suffering; it is the backbenchers' electorates that are suffering. They need to get behind this industry minister and show support for manufacturing in this country.

11:36 am

Photo of Sharon ClaydonSharon Claydon (Newcastle, Australian Labor Party) Share this | | Hansard source

I rise today to join with my Labor colleagues in our strong opposition to the Automotive Transformation Scheme Amendment Bill 2014. This bill seeks to amend the Automotive Transformation Scheme Act 2009 and gives effect to the Abbott Liberal government's $500 million cut to the Automotive Transformation Scheme, or ATS. In addition, this bill also has the effect of terminating the ATS on 1 January 2018, cutting a further $400 million from the ATS, leaving absolutely no support for surviving component companies. If this bill is passed here in this House it will spell disaster not only for the 50,000 Australians who are directly employed in the auto industry—and they are people who are spread across the three automotive manufacturers: Ford, Toyota and Holden—but also the 150 component manufacturers there. You are looking at a range of at least 200,000 jobs that are on the line if this bill is passed here today.

The ATS is a legislative scheme that has encouraged investment and innovation in the Australian automotive industry. It provides assistance in the form of co-investment to firms for the production of motor vehicles and engines and, just as importantly, for investment in eligible R&D, plant and equipment. Indeed, when it comes to R&D, we know it is the auto industry that is the largest R&D contributor in the Australian manufacturing sector. It is contributing almost $700 million annually in important research and development that enables our manufacturing sector to be increasingly more sophisticated and high tech in the work they do here in Australia.

We know that the automotive industry is leaving Australia now. The Treasurer himself made it very clear when he stood up in this House and goaded those industries to leave our country. He made it very clear last December that they were not welcome here anymore, but it is critical that governments do not pre-empt the closure of the industry and risk the early closure of firms before 2017 by reducing available funding. Further, the proposed early closure of the ATS ignores the reality that many dozens of component manufacturing companies, employing thousands of workers, will still exist post 2017.

The legislation we are debating here today confirms the Abbott Liberal government's hostility to Australian auto companies and workers. Cutting hundreds of millions of dollars in funding from the ATS now risks causing, as I said, the premature closure of motor vehicle producers and the hundreds of firms in the automotive supply chain, sending thousands of Australian jobs offshore long before the previously proposed date of 2017. This means that the 50,000 direct Australian jobs in the car industry are at risk and, according to a study conducted by the National Institute of Economic and Industry Research, a further 200,000 jobs which rely indirectly on this industry are also at risk. That is more than 30,000 jobs in Queensland, about 24,000 in South Australia, 32,000 in New South Wales, 11,000 in Western Australia, 800 or so in the Northern Territory and ACT combined and nearly 2,000 in Tasmania, but it is a staggering 98,483 jobs in Victoria. Why have we not heard every backbencher opposite from Victoria screaming about the 98,483 jobs that are set to be lost by this government and this legislation? The numbers are truly astounding and are a horrible indictment on this government. These are not workers being liberated as the Prime Minister would have us believe; these are men and women whose livelihoods are being ripped clean away from them.

I stand alongside my Labor colleagues today in our fight to maintain Australian manufacturing capabilities and jobs while members opposite have given up. They are sitting back, seemingly unperturbed by the apparent pre-emptive closure of this vital high-tech industry and the multiple risks associated with the early closure of firms before 2017—early closures that are inevitable as this government continues to cut available funds. Labor will do everything in our power to stop these cuts to the Automotive Transformation Scheme, and we call on the crossbenchers, the minor parties and those courageous backbenchers opposite to stand up for Australian jobs and manufacturing and to block these cuts up in the Senate.

Unlike the Abbott Liberal government, Labor believes there is a future for manufacturing in Australia, and the automotive industry, like the shipbuilding industry in my electorate, is very much a part of that future. In government, Labor's investments ensured that Australia maintained its auto industry in the face of the global financial crisis, global industry restructuring and a record high Australian dollar. The New Car Plan for a Greener Future, announced in November 2008, provided $5.4 billion of co-investment support from 2010 through to 2020. The centrepiece of the plan was the Automotive Transformation Scheme, which provides $3 billion. Labor's approach was based on co-investment and providing long-term certainty. It is not a handout as some members opposite have suggested; the industry only receives support when it invests.

Before the election Labor announced a new car plan for the 2020s to keep making cars in Australia and to keep jobs in the Australian automotive industry. This included a new program of $300 million per annum to support the transformation of the industry to attract new investment and support research and development, design and engineering from January 2016. Labor's commitments would have seen the motor vehicle producers commit to new investments in Australia and a future for the thousands of auto manufacturing jobs that are now on the line—those thousands of jobs that will hang around this government's neck if this legislation is passed.

In his contribution to this debate the member for Paterson in my region—the Parliamentary Secretary to the Minister for Industry, I might add—said that members on this side of the House had no understanding of how to create sustainable industry. I take this opportunity to remind the parliamentary secretary that is overseeing the end of automotive manufacturing industry in Australia. And it is his government that tried to kill off our food processing industry. It is also his government that is wielding the axe over the shipbuilding industry and renewable energy sectors, through its actions and broken promises.

The parliamentary secretary and Minister for Industry have obviously got their portfolio books upside down. Let me help them: your job is to secure and support industry in Australia, not kill it off. These are all industries that would have a future in Australia if Labor was in government. They are industries that may have thought they had a future under this Abbott Liberal government. The Prime Minister said in August last year before being elected, 'I want to see car-making survive in this country—not just survive, but flourish.' The now defence minister also gave assurances last year on local ABC radio 1233 in my city of Newcastle, when he famously said, before the election:

I get really fired up when I find us giving away our manufacturing base in the Defence space to foreign manufacturers. It’s just not on.

He also said in May last year:

We will deliver those submarines from right here at ASC in South Australia. The coalition today is committed to building 12 new submarines here in Adelaide.

The Defence minister's memory is clearly fading. Yesterday, in Senate question time, when pressed on the issue of submarine manufacture in Australia, the minister said:

…there is no contract, no commitment and no obligation on the government to do anything with respect to submarines in Adelaide.

This is a government that is evidently not true to its word. Its words are worth nothing. It is a government that deceived the Australian people to get elected and it is a government that is now taking a wrecking ball to the Australian manufacturing industry.

I want to take this opportunity to say a bit more about these so-called commitments of the Abbott Liberal government to defence manufacturing, and the effects of this betrayal on my community of Newcastle. Family owned shipbuilder Forgacs, one of Newcastle's largest employers, could not have been more clear in their warnings that they will have to close their shipyards at Carrington and Tomago next year, 2015, laying off more than 900 highly skilled tradesmen and women, unless the federal government expedited decisions on future naval shipbuilding projects and started a genuine effort to allocate work to Australian manufacturers.

They were not asking for a hand-out. They were not asking for favours. They could happily compete in an open tendering process—providing, of course, there was a level playing field for that tendering process. Forgacs have already had to let more than 100 employees go as work on the current AWD contract tapered off. The lack of interest from this government on that front has been profound. I have met with the Forgacs management team on a regular basis, as has, at my invitation, the Leader of the Opposition, shadow defence minister, the shadow assistant defence minister, and the members for Shortland and Charlton. At the Tomago shipyard we have all met with the men and women who are building Australia's air warfare destroyers.

Forgacs is an employer that does not want to give up, even when in danger of closing, and they still employ more than 80 apprentices and continue to spend hundreds of thousands of dollars on training and improvements every month. Yet this may all be to no avail. Forgacs and other shipbuilders in Australia have been unjustly maligned in commentary by the Minister for Defence and others when it comes to the AWD build. However, as a recent Australian National Audit Office confirmed, there was a decision made to build the AWDs here in Australia and to pay a premium so that this Australian ship-building industry could be built up, an adequately skilled workforce assembled, the capital invested and the industry brought to world-class levels in terms of quality and production.

Having now paid that premium—Australian taxpayers have already paid to have all of that capacity—and got the industry into a world-class position, we now see the government totally abandoning that investment at precisely the moment when this investment should come good. But instead of realising that capacity and committing to a rolling build of frigates and submarines here in Australia, this government is instead sending those jobs offshore. That is right—they deliberately locked out Australian shipbuilders from bidding for contracts for the two new supply ships earlier this year, citing an inability for Australian builders to undertake the work. That is a claim that was strongly refuted by shipbuilders, unions, the workforce and by others at a recent Senate inquiry into the decision by the government to exclude Australian manufacturers from that tendering process.

And in recent weeks we have seen evidence that the Abbott Liberal government now plans to send submarine contracts to Japan. That will mean more jobs going off shore. Thousands of highly skilled jobs in the ship-building industry are at risk across the country, including 910 workers in Newcastle, because the Abbott government is sending jobs offshore. When the Prime Minister said he would create one million new jobs we thought they would be in Australia, not overseas.

I urge the government to abandon the bill before us. It is bad for Australian industry. It is bad for Australian jobs. Unlike the Abbott Liberal government, Labor believes there is a future for manufacturing in Australia, and the automotive industry is a large part of that future.

11:51 am

Photo of Ms Anna BurkeMs Anna Burke (Chisholm, Australian Labor Party) Share this | | Hansard source

I also rise to speak on the Automotive Transformation Scheme Amendment Bill 2014, and I stand amazed that we are talking about a scheme that proposes to make a $500 million cut to the Automotive Transformation Scheme over 2014-15 to 2017-18, when we need it the most. We are going through the most significant transformation we have ever seen in the auto industry, and we are now proposing to cut much-needed funds from a scheme that was there to assist these individuals in transition. It just seems outrageous. It was not enough for this government to just sit on their hands and watch Australia's car industry die; they had to get in there and clobber it to death as it takes its last gasps and its last breaths. I was astounded to see the Treasurer in the days leading up to the agreement with Ford and Holden literally teasing them to leave the country—and then they did. Surprise, surprise! The Treasurer of the day said, 'Like it or leave it,' and they left it. But what have they left? Literally hundreds of thousands of people without jobs.

I watched the manufacturing job losses in my community under the Howard government. Now history is not only repeating under the Abbott Liberals; it is going even further. The bill proposes to completely terminate the ATS from 1 January 2018. The Automotive Transformation Scheme, ATS, is a legislative scheme that encourages investment and innovation in the Australian automotive industry. This scheme provides assistance in the form of co-investment to firms for the production of motor vehicles and engines, for investment in eligible R&D and for plant and equipment. By cutting the ATS the coalition government is cutting livelihoods away from Australian workers—not from overseas manufacturers but from Australian workers. Nationwide, we will see 198,826 jobs lost, with the greatest impact in my home state of Victoria, where an estimated 100,000 jobs will be lost. Already in my state we have the highest rates of unemployment we have seen in decades, and no jobs on the horizon. That is the tragedy of this whole endeavour: we are losing an industry which is vital but there is nothing to replace it. Where are these 100,000 individuals to transition to? By cutting this scheme it means that you do not want them to transition anywhere and, by virtue of the social security legislation that we have also been talking about in this place today, you want to transport them not onto some form of benefit but into poverty.

My electorate of Chisholm will be one of the hardest hit as a result of the abolition of the ATS. Many will find this hard to believe, but my electorate is home to some of the largest car component manufacturers in the country, employing around 5,000 in companies such as Unidrive, whose skilled toolers make the drive shafts, drive trains and other components for Ford, Toyota and Holden. I have had the pleasure of visiting Unidrive on many occasions. This has been a thriving, innovative business that has won accolades here and throughout the world. Indeed, Toyota set up a design skill plant and an innovation centre there, because they were doing such great things at the plant in Clayton. Without these car manufacturers, Unidrive are losing most of their business and, subsequently, most of their jobs. While they do have a significant export business providing parts for Corvette, they are deeply concerned that without the support of the local supply chain and with the decrease in local demand they will not be able to get the products they need at a competitive price to support their export business. Indeed, their export business may dry up as well. This is a company that has worked hard to diversify. They employ skilled individuals whose jobs are under threat and this government has no intention of offering any form of assistance or protection.

There is also TRICO Products, who make windscreen wipers; Moss products, who make plastic components; Premoso, who provide apparel and trimmings; MtM Auto and what is left of Robert Bosch in Australia—which has been in significant decline for a long period. While only part of Robert Bosch's business is in the automotive industry, this was a thriving, huge business and, again, I visited many times. You used to go into this sea of a carpark, over acres of space at the end of my electorate. Now you would be lucky to see a tiny part of the carpark filled with cars. This is a tragedy. The absolute tragedy of these losses in my electorate is that these businesses will shut, the factories will go, and housing will be put up. Why is that an issue? Because there are no jobs in those houses. I have seen this time and time again in my electorate. I have spoken of it many times in respect of what was Brockhoffs when I was growing up but Arnott's when it shut down—the biscuit factory, another manufacturing hub in my electorate. At Moss there were 500 jobs on site; there were about 1,000 jobs in all when it went downstream. The factory shut and it is now, I think, about 150 homes. So instead of having jobs where people live, where people can transport and where people want to be, the jobs have gone and houses have gone up but no replacement factory has come onstream anywhere—certainly not in my electorate.

I also have the Toyota Technical Centre in Notting Hill in my electorate, which employs about 150 people. It is a centre that does not manufacture anything but does major engineering work to support Toyota's global operations. It is centred in Notting Hill, obviously near Monash University and CSIRO, and works in collaboration with this great design hub, engineering and innovation in my electorate. It is a centre that should not have to close but from 2017 it will be significantly scaled back with rounds of redundancies and only limited operations. This is groundbreaking work that we are also losing high value, high end technology.

The automotive industry has been a key pathway for engineers in this country and there are no jobs, programs or industries waiting for these people. So it is not just people on the manufacturing floor. It is the whole supply chain in this area of employment. This government has no plans to ensure that a new pathway for engineers is developed that will ensure their skills can be utilised in this country. This is not only a major loss for the individuals whose jobs will be affected, but for our entire country. We will lose vital skills and, as we know, once we lose skills it is very hard to get them back.

Nationwide, 200,000 Australian men and women rely indirectly on the auto manufacturing industry for their jobs. These fields range from metal manufacturing to scientific services. The termination of the ATS leaves no support for surviving components companies and research schemes, such as the newly developed manufacturing innovation precinct at Monash University in Clayton in my electorate. Cutting hundreds of millions in funding from the ATS now risks causing the premature closure of motor vehicle producers and the hundreds of firms in the automotive supply chain, sending thousands of Australian jobs offshore—long before 2017. The current government has only looked at the figures it will save in the short term and ignored the previous achievements and long term gains that can be made from the Australian Automotive Industry.

There are only 13 countries worldwide, including Australia, that can make a car from start to finish, and every one of them has a subsidised industry—every single one. The Australian contribution to the automotive industry is significantly lower than that of any other country. It costs $17.40 per capita to support our car industry in Australia, compared to $90 for every German taxpayer, $264 for every American and $334 for every Swede. How often do we talk about what is going on in Germany and Sweden, the success stories? This is a success story that we do not want to replicate, that indeed we are actually cutting off. It is not fair for our car industry to just be left out in the cold and asked to compete in this heavily subsidised and protected global market. No industry could compete on those terms.

And what of our future science and research? The automotive industry is the largest R&D contributor in the Australian manufacturing sector, contributing almost $700 million annually. That flows beyond the automotive areas. It goes into many other manufacturing sectors. This will also be lost. Reports from both academia and industry show that it would cost the government more to see the industry fail than it ever would to support it. Modelling from the University of Adelaide shows that the loss of the industry will lead to a negative annual shock of $29 billion by 2017, or about two per cent of GDP. This is just ridiculous. Why don't we ever look at the long term? How do we grow our economy and create jobs in the face of such devastating damage? A report by the Allen Consulting Group highlighted that, from the $500 million investment by the government in the automotive industry, the economy enjoys a $21.5 billion increase in size. We get back more than we put in. This equates to a return of $934 per person in this country.

The figure of $21.5 billion excludes the extra benefit of spillovers into other parts of the economy. Some of these spillovers include technology transfers through R&D innovation, lean management techniques and applications, and advanced labour skills and manufacturing techniques. The automotive industry benefits the broader economy through its extensive linkages with other parts of the economy like heavy engineering, tool making, aerospace and marine. Such spillovers benefit the economy in ways that are recognised by industry leaders around the nation. The Allen Consulting Group paper confirmed that the chief executives of companies like Boeing, BHP Billiton, Rio Tinto and Coca-Cola Amatil have each directly related the success of their own businesses to the skills and expertise gleaned from the automotive industry in Australia.

The Prime Minister often uses the phrase 'Team Australia'. How is putting hundreds of thousands of people out of jobs and pushing lucrative automotive research off our shores aligned with the 'Team Australia' sentiment? Not that I really want to be associated with the notion of 'Team Australia', but I just do not know how the Prime Minister thinks that this action will lead to an inclusive society. This is not an inclusive society. It is therefore equally critical that the scheme is maintained so the government can work with the industry in transition, rebuild jobs and maintain capabilities. Otherwise 50,000 direct Australian jobs in the car industry will be at risk and a further 200,000 jobs which rely indirectly on this industry will be on the line.

The government can talk about retraining, new skills and workplace transitions until the cows come home, but every worker facing redundancy knows that retraining is just a furphy. They know that the jobs they are being retrained for do not exist, industry knows they do not exist and the government knows they do not exist, but the government is not prepared to do anything that will actually help, like creating jobs. In fact, despite the Prime Minister saying he wants to 'deliver support for the workers', the paltry $100 million the Abbott government has committed to this so-called growth fund for the auto industry does not include a single cent to help auto workers retrain and reskill. The government's own website confirms that the element of the growth fund allocated to retraining auto workers is made up entirely of contributions from GM Holden and Toyota. So much for the Prime Minister's promise during the election:

I want to see car-making survive in this country, not just survive but flourish.

A great way of making something flourish—killing it off! This was just another cruel lie to get this government elected.

Labor, on the other hand, provided support to keep the automotive industry in the country in order to attract new investments, new models and new capacity. While in government, Labor committed to a New Car Plan for the 2020s to keep car making in Australia and to maintain jobs in the Australian automotive industry. This included a new program of $300 million per annum to support the transformation of the industry to attract new investment and support research and development, design and engineering from January 2016. Labor understood the pressures the automotive sector was under from increased overseas competition and the high Australian dollar. In response to this, Labor pledged a $1 billion Australian Jobs Plan whilst in government that had been designed to assist industry with these pressures.

The proposed abolition of the ATS is not only heartless but also poorly considered. Welfare payments and lost tax revenue from an industry shutdown are projected to exceed $20 billion, and it will be more than 10 years before the economy recovers from the underlying hit to the GDP. If the current government's agenda is to go into surplus, how is this change to legislation achieving it? It might be a one-cut wonder now, but it will actually cause more pain in the future.

More importantly, the current government is not looking out for the welfare of Australian workers. How can they expect people who have only ever worked in the automotive industry, who have worked in that industry for many years, to retrain and enter a new industry? Again, I go back to the example of when Arnott's shut down. These were lifelong bakers. They were lifelong production workers. They were families. They were husbands and wives, kids, entire generations. There were no other jobs for them to transition to. They talked about reskilling, retraining or moving to Queensland. None of that was on offer. I know several of these people. This was many years ago and they are still without full-time ongoing employment. Apart from being uncompassionate, this just goes to show how out of touch the Liberal government is with Australian workers and the current state of the unemployment landscape. I condemn this legislation.

12:06 pm

Photo of Ian MacfarlaneIan Macfarlane (Groom, Liberal Party, Minister for Industry) Share this | | Hansard source

Can I thank speakers from both sides of the House who have spoken on this bill. The Automotive Transformation Scheme Amendment Bill gives effect to the government's decision to reduce funding for the Automotive Transformation Scheme by $500 million and to terminate it on 1 January 2018, following the close of the automotive manufacturing industry here in Australia. The government took to the 2013 election a commitment to reduce the ATS by $500 million, so comments from those opposite about the government's behaviour in relation to this industry are completely untrue.

In light of the decisions made by the three motor vehicle produces to cease manufacturing—Ford Australia made that decision in October 2016 whilst the previous government was in power and we saw General Motors Holden and Toyota Australia make their decision subsequently in 2013 to end their production at the end of 2017—ATS assistance from 2018 will no longer be required for the industry. The ATS savings will in total reach $900 million. That will be directed at repairing the budget bottom line and funding other government policies and other government policy priorities. The government will continue to support the automotive manufacturing industry through the ATS. Approximately $700 million is still available under the ATS over the four financial years from 2014-15. However, ATS participants need certainty to make business planning and decisions. The passage of this bill will provide certainty to ATS participants on the level of funding assistance available for the final three years of the ATS.

Those opposite have been reeling off some spurious facts and figures in this debate.

Mr Snowdon interjecting

The per capita figures they have been reeling off are misleading, because on a per capita basis Australia produces many fewer cars than other nations. I will now put some facts on the table, particularly for the benefit of the member for Lingiari. The Productivity Commission estimates of the automotive industry received $30 billion in government support between 1997 and 2012 through both tariffs and budgetary support. From 1997 to 2012 there were 5,186,765 vehicles manufactured in Australia. This equates to $5,784 per vehicle of government support during this period. These are cold hard facts. They cannot be disputed by those who sit opposite.

Mr Snowdon interjecting

Member for Lingiari, I am happy to provide the proof. We are also working with the Australian industry to create sustainable opportunities in industries in which Australians can compete at a global market level. This government's focus is on the new opportunities for the future. The best way to support industries and communities in transition is to lay out a clear framework for new opportunities and new jobs. The government is focused on assisting the industry to transition from automotive manufacturing to other areas of manufacturing post-2017. That is why we established the $155 million Growth Fund to help workers find new and better jobs. That that $155 million is in addition to the $700 million that is available under the ATS going forward. We have established the fund to help workers find new and better jobs, businesses to diversify into new markets and invest in capital equipment, and regions to invest in infrastructure projects.

We believe in a future for Australian manufacturing that is integrated into global supply chains and competes by making the best use of our knowledge and skills. By transitioning Australian business into these industries where we have competitive edge we will make best use of our nation's investment in R&D. Again, to put some facts on the table, manufacturing industry makes the largest contribution to business expenditure on R&D, with $4.5 billion invested in the year 2011-12. Within that total it is the machinery and equipment manufacturing sector that makes the largest single contribution, followed by transport equipment manufacturing. This investment will pay dividends when industry and researchers collaborate more frequently, utilising the existing skills base and combining it with creativity and innovative thinking to develop new products and new markets. This will be the focus of our industry policy agenda going forward, which will target Australia's strengths and identify ways to foster national competitiveness and productivity to create sustainable long-term jobs. By focusing on our areas of competitive strength, Australia will be well placed to develop the opportunities and industries that have for us a long-term future. I commend the bill to the House.

Photo of Don RandallDon Randall (Canning, Liberal Party) Share this | | Hansard source

The question is that the bill be read a second time.

The House divided. [21:16]

(The Deputy Speaker—Hon. Ross Vasta)