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

No country is ever successful in the long term … without a really strong and vibrant manufacturing base. It's the foundation of all economic development.

That was said by Alan Mulally, the President and CEO of the Ford Motor Company. We know that just last year, under the Labor government, Ford made the decision to leave Australia. We know that Mitsubishi decided to leave Australia in 2008—also under the former government. That is something the current government is making much of. But, because there are only two remaining manufacturers standing, General Motors Holden and Toyota, there is now a greater duty of care for the government of the day. It is their responsibility to make sure that the industry remains alive—because, if you lose that industry, the consequences will be, according to Richard Reilly, the Chief Executive of the Federation of Automotive Products Manufacturers, 'devastating' and 'diabolical'.

It is all well and good for the government to say that Mitsubishi and Ford left under the former government's watch, but there is a greater duty of care now—we have to make sure that the supply chain does not collapse. That would cause great harm to the Australian economy. But that is what is happening here. That is why people like Richard Reilly, a good man who as Chief Executive of the Federation of Automotive Product Manufacturers knows firsthand what the impact will be, are speaking out.

This industry is an ecosystem. It is a big economic ecosystem which employs tens of thousands of Australians. We know that automotive component manufacturers employ something like 40,000 people, most of them in South Australia and Victoria. Those jobs will be lost. In my home state of South Australia, we have really good component manufacturers like ROH, Futuris Automotive Interiors, Multi Slide Industries, Tenneco Australia, TI Automotive, Toyoda Gosei Australia, SMR Automotive, and Precision Components. They have state-of-the-art facilities, but they need to be part of a supply chain. That supply chain will now collapse and that will have a huge impact on our economy.

Paragraph 4 of Toyota's media release refers to 'increased competition due to current and future free trade agreements'. I was wrong earlier when I asked a question in which I said that a Ford Territory costs about $40,000 here and about $100,000 in Thailand. I apologise. It is actually about $57,000 for the top-of-the-line model here and it costs over $100,000 in Thailand. Why? Because of non-tariff barriers. We have been mugs in the way we have negotiated these free trade agreements. We are causing great damage to our economy. We are laughed at internationally. They talk about us as the 'free trade Taliban' because we take such a literalist, purist approach to free trade—to the detriment of jobs in this country.

Let us talk about some of the cost inputs. I think Senator Abetz was right to talk about intervening in the dispute between Toyota and the union, because I think there should have been a bit more flexibility to allow the workers to have a say. But to blame unions and the workers, when you consider that labour costs only make up about 10 to 16 per cent of the cost of a vehicle, is really stretching it. Maybe there is scope for flexibility, but it would not have made much difference. What would have made a difference is the government committing to the co-investment. It might have cost an extra $500 million, but I suggest that this government will be forking out a hell of a lot more than that in welfare benefits to the many thousands of Australians who will lose their jobs and will not be able to get a new one. This is very serious stuff. Let us talk about the carbon tax. Let us get rid of it—but let us also achieve lower electricity costs by making sure that the electricity industry is not inefficient. These are important issues.

I want to conclude with an observation. From the mid-1990s, for almost a decade, John Howard had the so-called 'Howard battlers' behind him—hundreds of thousands of people who, up until then, had been Labor voters but who voted for John Howard because they felt that he was making good decisions. They felt safe with his economic management. I suggest that, as a result of what we have seen today and other decisions this government has made, those Howard battlers will turn into people who will battle against the Abbott government.