Senate debates

Wednesday, 14 March 2012

Matters of Public Interest

Automotive Industry

1:28 pm

Photo of Anne McEwenAnne McEwen (SA, Australian Labor Party) Share this | Hansard source

I would like to speak about the automotive industry. In 1856, the Holden brand was initially established in South Australia as a saddlery business. Forty years later, in 1897, David Shearer finalised his design on one of the nation's first horseless carriages, initially driving his steam-driven carriage near Mannum in South Australia, and later through the city streets of Adelaide. It would have been a red-letter day for sure.

Holden, together with the rest of the automotive industry, is a huge part of South Australia's past and future. As a Senator representing the people of South Australia, I feel that South Australians should be made aware of the steps that the federal government is taking in order to make sure the automotive industry remains a part of the state's future. Across the nation, 46,000 people are directly employed in the automotive industry, spread across more than 200 companies. In South Australia, 2½ thousand of those workers are employed at the GM Holden plant at Elizabeth in Adelaide's northern suburbs. Nationally, a further 200,000 people are employed in businesses that rely on the auto industry, from metal manufacturing to scientific services, including research. In total, manufacturing jobs nationwide account for the employment of some one million Australians. The federal Labor government is committed to Australia remaining a car-making nation. We are committed to ensuring that manufacturing and research jobs are sustained to support a strong economic future in the sector.

The Gillard government understands that at present manufacturing and the automotive industry are under high strain—consequences of the high Australian dollar, the rising cost of materials and the contraction of consumer sales in major export markets. We are aware that our international exports have dropped—by 30 per cent to the Middle East, and 75 per cent to North America. However, we also believe that it is not in the nation's best interests to give up just because times are tough. The government is committed to the future of industry, and for this reason we have implemented a number of initiatives to ensure the longevity of the car manufacturing industry in Australia.

To get the Australian car industry back on track and once again prosper, we must make it stronger. We need to be innovative, productive and competitive. We are currently one of only 13 countries in the world that are capable of building a car from scratch. We have all the skills and facilities that we need right here to model, make and market cars. Unlike those who sit opposite me, the Labor government is determined not to slash funding and give up on this industry and its workers. We will work with companies to look for alternative ways to sustain manufacturing, by diversifying into other sectors and researching for more efficient production methods.

To achieve this, federal Labor has implemented a $5.4 billion package of measures—a New Car Plan for a Greener Future. These measures will support the industry through the difficult times and help reinvent the car industry on our shores to secure its long-term future. At the heart of the plan is the $3.4 billion Automotive Transformation Scheme, ATS. Through supporting the production of motor vehicles and engines, investing heavily in research and development and plant and equipment, the ATS will encourage companies to make long-term commitments to the industry. Industry partners will also be required to demonstrate their commitment to the industry by delivering business plans for the fostering of skills, innovation and environmental outcomes to carry them into the future.

The Australian car industry has a lot going for it, and this is reflected in the statistics. Out of the top 10 of Australia's top-selling new cars, four of them are made locally. This is great news for our car industry, and reiterates the fact that we need to invest and promote Australian made cars, rather than cut industry support.

Per capita in Australia, it only costs $17.40 for our car industry. This is opposed to $90 for every person in Germany, and $264 for every American. We currently have one of the most open and competitive automotive markets in the world with more than 60 brands reaching about one million sales per year. Despite the high dollar at the moment, our international export of cars still amounts to some $3.4 billion—one of our top export earners.

In 2009, at the height of the global financial crisis, the production levels of cars significantly dropped. We saw some of the lowest production numbers since the late 1950s. Current production levels are slowly recovering from the depths of the crisis, but we are not out of the woods yet. It is crucial that we continue to support the industry. A recent poll found that 58 per cent of Australians support government assistance to the automotive industry.

Another aspect of a New Car Plan for a Greener Future is the implementation of the Green Car Innovation Fund. While it is now closed to new applications, the fund has already contributed considerably to the economy, enabling the Holden Cruze to be built in my home state of South Australia—a fine vehicle it is—as well as bringing the hybrid Toyota Camry and the EcoBoost Falcon to our shores.

The third component of the government's a New Car Plan for a Greener Future is the Automotive Industry Structural Adjustment Program, AISAP, and the Automotive Supply Chain Development Program, ASCDP. Both of these initiatives strengthen the chain of component makers supplying the major producers, whilst looking for opportunities to break into global production chains. These programs have invested heavily in companies, and we are advised by Deloitte, which has done some research into this matter, that the quantifiable savings associated with the ASCDP alone over a three-year period are $85 million.

Another $6 million out of the $5.4 billion a New Car Plan for a Greener Future has been directed into the Automotive Market Access Program, which in 2010-11 helped local firms secure big business wins of some $538 million, including: Diemould, a South Australian toolmaker, which won a contract with GM Thailand; and Futuris Automotive, which won contracts to design and supply seating to US electric car makers Tesla and Fisker.

The government is very proud of its support for the automotive industry. We note that the opposition in a contrary position has proposed to cut $500 million of industry support between now and 2015. They have given no solid commitment to provide any support beyond 2015. That is a very disturbing fact for this very important industry.

I will conclude by saying that, while the automotive industry has been through tough times, I am very pleased to be part of the Gillard government that is working hard to ensure that the automotive industry in my state and elsewhere will continue to grow and be an integral part of Australia's economy.

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