Tuesday, 26 August 2014
Community Affairs References Committee; Report
I seek leave to take note of the report of the Australian Workforce and Productivity Agency.
I would like to make some comments about the Productivity Commission's report concerning the Australian automotive industry. This is a very poor report; this is a very bad report. It demonstrates yet again that the Productivity Commissioner's fundamental failure to understand the significance of automotive manufacturing to this country. This is a classic and a perverse position that the report has taken, whereby it appears that the productivity commissioners are taking on the role of a coroner, in which the coroner regards the death of the subject with glee. The motor vehicle industry's announcement that they will cease their manufacturing operation by 2017 has created a mood of inevitability in some commentary amongst some of the more conservative elements of this country. This is an assumption that this industry will die. They go on to take this view, which we have heard recently by incredibly well-paid bankers, who are receiving $19 million a year—I am thinking of Mr Smith from the ANZ bank, who said that it was inevitable and that nothing could be done to prevent it. This is an assumption with which I fundamentally disagree. This is an assumption which is flawed.
Nothing is inevitable. While there are still assembly lines capable of moving and while firms of the supply chain remain capable of producing components, Australia's automotive industry is able to look to a renaissance. This is exactly the same position the British automotive industry was in after the fiasco of the Thatcher government. It is exactly the same position the English faced when they had to deal with the catastrophe of Margaret Thatcher. The British industry, too, was expected to die, and that just did not happen. The prophets of doom were confounded because the scorched-earth industry policy of the Thatcher era were abandoned. Successive British governments came to understand that new policies aimed at attracting different forms of investment in automotive manufacturing could succeed. Instead of high-volume production aimed at mass markets, investment that was directed towards advanced manufacturing for niche markets could be successful. The industry developed lines of specialisation, such as engine production, and it was able to attract new international investment. Today, the United Kingdom automotive industry is thriving and no-one questions its viability. In England, the Conservative Party understands the importance of co-investment. Of course, the doom sayers are not to be found there apart from the right-wing think tanks, who always work on the assumption that manufacturing workers jobs and manufacturing families' lives are not worth defending.
I do not suggest the British experience will be replicated in every respect in this country, but I do not take the view that the shutdown of the automotive industry was inevitable. We have to acknowledge the change in investment polities could begin the transformation of the industry in this country. What the Productivity Commission has done is to actually state the view that the wider vehicle producers were unable to survive in a highly-competitive, global and domestic market. Of course, they cannot if the government of the day seeks to drive them out of the country.
It was a simple proposition, so this government hounded the automotive industry out of this country because of the neoliberal views of extremist elements of the Liberal Party that had their heyday with Joe Hockey, the North Shore merchant banker who was able to succeed in destroying so much of the investment, so much of the capability, that had been built up in this nation over generations because of his ideological fetish for turning his back on the auto industry. He was to strip out some $2½ billion of industry support from the department of industry, and of course he has made the pledge to take $900 million out of the Australian automotive industry programs that were developed under the Labor government. The ACIS cuts especially imperil the livelihoods of hundreds of thousands of Australians. This Productivity Commission report fails to acknowledge the consequences. Innes Willox, of the Australian Industry Group, has put out a statement tonight which bells the cat. He is well known as a person who is not unsympathetic to the political aspirations of this government, but he makes this point:
The Productivity Commission's final report … released today seriously underplays the impact of the end to car making in Australia and should be treated with caution.
Mr Willox says:
The report fails to acknowledge that the situation facing the auto sector is not just another minor 'adjustment' in the economy; it represents the virtual closure of an entire industry. This will happen within a relatively short span of time and it will affect a large number of businesses, employees and communities.
In this context, the PC Report displays a disappointing and disturbing absence of practical recommendations to help facilitate an orderly transition of businesses and people seeking to move out of the local auto supply chains, beyond the existing set policies that were devised well before the current situation emerged. This absence of practical policy advice or new recommendations seriously undermines the value of the report. As a result, the report misses the opportunity for Australia to make the most of the considerable capabilities, skills and experiences in Australia's auto supply chains and to avoid the wasteful destruction of those capabilities.
We found none of those sentiments in this report from these vandals of Australian automotive manufacturing. What we know is that the Productivity Commission's report has fundamentally missed the point. The bulk of the evidence presented through the inquiries and submissions demonstrated support for ensuring that investment is created, that jobs are created and that industrial capabilities are developed so that we can build upon those capabilities through so many industries.
We have here a case of blind faith being exhibited by the neoliberals and free marketeers in this government that shutting down the automotive industry will somehow or another create new economic opportunities. We know the reality. Some suburbs, particularly to the north of Melbourne and the west of Melbourne and in the south-east corridor in Melbourne, and to the north of Adelaide, are going to be savagely affected. Given the rising levels of unemployment in this country, you would have thought that the commission's glib prediction that 40,000 people will lose their jobs was fundamentally underestimating the social distress that is being created as a result of this government's blind vandalism when it comes to manufacturing in this country.
The report goes on further to suggest that we should open up the prospect of importing second-hand cars from overseas. These people know no limits. Some 230 dealers and service centres oppose the recommendation to open up the Australian automotive market to grey imports of second-hand vehicles. It is put to me by the automotive industry that grey imports of second-hand vehicles from other countries will open up Australian drivers to consumer risk and will also have a significant impact on jobs in dealerships across the country. It could halve the new vehicle market, I am told, meaning that fewer people will be employed in dealerships across the country. Dealerships of all new car brands are respected and leading businesses and community sponsors, particularly in country areas. The information provided to me goes on further to say that, for consumers, grey imports will decrease the residual value of the cars that people currently own and this will make it more expensive to trade in on a new vehicle, and for people salary sacrificing this will cause lease rates to increase. In this context Labor simply will not support changes to the Motor Vehicle Standards Act that would allow for a flood of substandard second-hand vehicles that would undermine the warranty and other safety provisions that Australians rightly expect.
This report, like so many of the Productivity Commission's attitudes on the automotive industry, should be confined to the dustbin of history. It is a tragedy that the Australian automotive industry has not had a friend within this government, despite the promises that this government made prior to the last election. I seek leave to continue my remarks later.
Leave granted; debate adjourned.