Senate debates

Monday, 9 December 2013

Matters of Public Importance

Automotive Industry

4:55 pm

Photo of Stephen ParryStephen Parry (Tasmania, Liberal Party) Share this | | Hansard source

A letter has been received from Senator Moore:

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

"The Coalition's failure to support investment and jobs in the automotive sector".

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today’s debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | | Hansard source

In moving this motion today I would like to express to the Senate my very deep concern about the welfare of up to 200,000 workers. I am very concerned about the 50,000 workers who are directly employed in the automotive industry and those who are dependent upon the automotive industry. The recent speculation that has been generated by senior ministers in the government about the future of General Motors Holden is nothing short of extraordinary. In the 20 or so years that I have been in this parliament I cannot recall a circumstance—certainly in my understanding of political history in this country—where, in the first three months of a government's life, the government has had to dip into the money barrel to buy their way out of trouble—as is the case with schools—and where, in the situation regarding the automotive industry, senior members of the government are backgrounding against a cabinet colleague—the industry minister—in a deliberate and calculating way. In the first three months of a government this is truly a remarkable set of events.

As I understand the situation, the essence of this matter is the proposition that General Motors has already decided to cease manufacturing in Australia. That is the claim that has been made and repeatedly asserted. Both the industry minister and I can say to the chamber that, as far as I know, this is untrue. There has been no formal decision made by General Motors to depart from manufacturing in Australia. I can say that there is an attempt being made by sections of the government to establish an alibi for the failure of the government to meet its responsibilities to the future of the automotive industry.

These deep divisions inside the government over car industry assistance have been demonstrated through numerous media outlets, in particular the ABC. Yesterday, we saw on the ABC Eliza Borrello and Chris Uhlmann's story, which said that the brawling within the coalition was sparked in the early weeks of the new government. The story stated:

The ABC can now reveal an internal brawl was sparked in the early weeks of the new Government when, in an interview with News Corp, Mr Macfarlane flagged "arm wrestling" the Treasurer over more money for the industry.

The story went on to quote Mr Macfarlane as saying:

"I've won a few, I've lost a few. Let's have that arm wrestle, I'm happy to do it. I'm sure Joe (Hockey) will be clean," …

The report indicates that this statement by the industry minister:

… outraged cabinet colleagues who said he had turned the heat off Holden and back on the Government.

So here we have senior ministers backgrounding against the industry minister and outlining the strategy of the government to deal with what is an incredibly serious situation within this country—namely, a social and economic catastrophe which, in my view, could be so easily avoided.

What we do know is that there has been a cynical attempt by the government to try to avoid dealing with the policy of the automotive industry. There has been an enormous amount of energy paid to the politics of the industry but very little attention paid to the policy of the industry. I know from my direct experience and from the advice provided to me by the Department of Industry—the same officials that now advise the current minister—that $300 million per annum for the whole industry would be sufficient to keep it going. That was the basis of our new car plan for the 2020s. That was a plan developed in close consultation with the industry and, I say, direct consultation between the department and the industry throughout the months of June and July and announced by the former Prime Minister Kevin Rudd during the election campaign.

In that was a figure considerably less than $150 million for General Motors Holden which would be sufficient to secure the $1 billion investment needed for the new models—the new generation Cruzes and the new generation Commodores as they come. Of course, what we have discovered in the report in The Sydney Morning Herald today is this quote:

A senior Liberal source with close links to the industry, said he understood the $300 million figure was correct, and would keep Holden, Toyota and more than 160 parts suppliers in Australia.

It is not me saying this; this is a senior Liberal source identified here. It goes on to say:

If the government wanted to secure the industry until 2025, it would need to restore the $500 million it cut from the assistance fund and commit to $300 million a year from 2016, the source said.

So what we have is a very clear understanding that the collapse of this industry is not inevitable and does not need to happen. But what you have is a group of ministers—a faction within the Liberal Party—seeking to prepare an alibi, a scapegoat, for the loss of this vital industry; for the loss, in Victoria's case, of what could be 33,000 jobs. And what, of course, we see in South Australia is devastation as a consequence of that.

What we have is the proposition where the Prime Minister himself says that he would like to talk about the two-finger salutes being given to Australians. We know that for the automotive industry that is exactly what was given last Friday when the Prime Minister said there would be no more money. Of course, that follows on from repeated statements by Mr Hockey and other members of the government. This is despite the fact that the Productivity Commission had been set up to make the claim that they would be evaluating the need for more money and that no assistance could be given to General Motors until the Productivity Commission had reported. No matter what you think about the Productivity Commission's predetermined attitude on this—and we have noticed that a number of Productivity commissioners have spoken out in the hearings, giving their personal views—what we do know is that clearly the Prime Minister has now pre-empted the Productivity Commission process and made a complete farce of that arrangement.

What we also know is that as far as this industry is concerned, this is a government that has walked away from its responsibilities. I notice many of the Liberal Party members from Victoria have been less than enthusiastic in their support for the automotive industry. I know the Victorian government is at its wits end, trying to get an understanding of what the federal government's real position is. I think it is very, very clear that they do not want to support the industry.

Premier Napthine is now, of course, at a loss to know how to respond. I know that in Victoria there is a great deal of attention paid by the Liberal Party to the opinions expressed in the Herald-Sun, which is a paper that is known to pay particular attention to the welfare of the Liberal Party. So it is interesting that I read in today's Herald-Sun editorial:

HOLDEN car workers will spend the weeks before Christmas worrying about losing their jobs as the economic argument about the car industry's future in Australia turns political.

It goes on to say:

This is not a test of who has the most testosterone. It is about the livelihood of many thousands of Australians. Unlike cars, these workers should not be switched on and off at the whim of those responsible for the industry.

If Mr Abbott wants people to think of him as being in the driving seat as Prime Minister, he needs to be more assertive than just wishing Holden would clarify its intentions.

Mr Abbott is no longer an opposition leader and needs to stop acting like one. Get both hands on the wheel, Mr Abbott.

That is the position that is expressed in Melbourne this morning, and one would think that perhaps some in the Liberal Party will take notice of it.

We do know that the speculation about the future of General Motors has been generated by the government itself, a truly extraordinary proposition. We are told, 'Why should money go to the automotive industry?' Well, governments make choices all the time. They make choices about economic priorities and about which industries should come and go. What we do know is that in terms of budgetary assistance and tax concessions there is actually more money given to sheep, to beef cattle, to dairy cattle, to livestock and to pigs than there is to the automotive industry—$685 million a year.

What we do know is that mining gets $700 million a year. What we do know is that electricity, gas and water get $1 billion a year— (Time expired)

5:05 pm

Photo of Scott RyanScott Ryan (Victoria, Liberal Party, Parliamentary Secretary to the Minister for Education) Share this | | Hansard source

I am going to commence my response to Senator Carr's contribution by stating my own personal view and the feelings I have for the workers, who are legitimately concerned about their futures. I say this—

Photo of Don FarrellDon Farrell (SA, Australian Labor Party, Shadow Minister for the Centenary of ANZAC) Share this | | Hansard source

Well, protect them!

Photo of Scott RyanScott Ryan (Victoria, Liberal Party, Parliamentary Secretary to the Minister for Education) Share this | | Hansard source

And before you open your mouth, Senator Farrell, I say this because I saw it in my own family. I say this because I saw my father lose his job when the first phase of the automotive industry went in the John Button car plan, when truck manufacturing closed down in Australia. Thousands of people—blue-collar workers—lost their jobs, never to get meaningful employment again. I saw that in my own family.

So before people assume that there is a motive or a lack of compassion in this, I urge them to consider the experiences that people all around this building may have, despite the legitimate disagreements.

This is a very important debate, but it is not a debate that can be based on deceitful statistics. This was covered in Senate estimates in great detail. To say there are 200,000 jobs dependent on automotive manufacturing in Australia is wrong—absolutely and utterly wrong, admitted by the Department of Industry in Senate estimates and admitted by the industry when it is put to them. There are just under 50,000 people who work in the automotive assembling, manufacturing and components industry in Australia. The difference between those two numbers is explained when you consider the entire automotive sector, which includes people that sell and service a Mazda or a VW or another imported vehicle. It is not fair to somehow count their jobs in the Australian—

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | | Hansard source

So how many is it?

Photo of Scott RyanScott Ryan (Victoria, Liberal Party, Parliamentary Secretary to the Minister for Education) Share this | | Hansard source

I just said, Senator Carr, it is just under 50,000, but—

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | | Hansard source

That is direct; how many indirect?

Photo of Scott RyanScott Ryan (Victoria, Liberal Party, Parliamentary Secretary to the Minister for Education) Share this | | Hansard source

that also includes those people who work for the aftermarket auto components sector who do not get a single cent of subsidy or protection under the industry policy of the previous government, so let's base this on the true statistics.

Today is the 30th anniversary of the Hawke and Keating government floating the dollar. I am amazed that I have Senator Farrell yell out that I should be protecting jobs. I am amazed that I constantly hear from members opposite that it is the role of government, indeed that it is even possible for government, to somehow deglobalise the Australian economy. Thirty years ago today, with the support of the opposition, Prime Minister Bob Hawke and Treasurer Paul Keating floated the dollar. That is a decision that I think was the right one to take for this country. That is a decision that was one of the stages that opened up our economy to the globe; that provided thousands, tens of thousands, hundreds of thousands of job opportunities for my generation, which was lucky enough to be the beneficiary of a globalised Australia. I saw tens of thousands of blue-collar men and women, often from the TCF industry, who were exposed to that competition and lost their jobs. For people to say that those decisions were not important, that a globalised economy is not important, denies the sacrifice that was made by those people who saw their livelihoods disappear but who, through a number of government policies, Liberal and Labor, saw the future for their kids—of which I am one—be a lot more prosperous.

Since the 1991 recession that we had to have, brought upon us by Paul Keating's policies and interest rates that are unimaginable in today's era, we have had a period of virtually uninterrupted economic growth. We have seen three economic global downturns that Australia has avoided in the main—though not entirely; there are pockets of disadvantage in Australia, socioeconomic, regional and spread around our cities—so I do not discount any of that. But we have seen a period of growth that has avoided all the tragedy of mass unemployment, economic opportunities lost and social dislocation that we see in the closed economies of Europe and the indebted economies of North America and Europe.

This anniversary is important, as I said. And the reason Senator Carr's contribution is misleading people into believing that the government can protect their jobs and it not have a cost to other people in the economy is that it backtracks on what I know will be an aberration in the history of the Labor Party, which was a party committed to openness. Hawke and Keating were not a turning point for you; they were an aberration. What we are hearing now are throwback economic policies, misleading people that somehow you can just write a cheque big enough and that that does not have cost.

Senator Carr, the question that has never been answered is: what is your limit? When you were industry minister you made promises and the rug was pulled out from underneath you. Overnight, hundreds of millions of dollars were pulled out from promises you made to the industry. You know what is more destructive than a promise, even if it is not great policy? It is a promise that is broken, a promise that is pulled out from under their feet, like the Green Car Innovation Fund was, which provoked the heads of Ford and GM to say, 'This is bringing an element of sovereign risk to car investment in Australia.' That is what Labor policies involved: promises that not only were not delivered, that not only were misleading people into thinking that somehow protection was a future pathway for Australia, but that then had the rug pulled out from underneath them, making Australia an even more uncertain place to invest.

Nineteen months ago in this place we had then Prime Minister Gillard, Premier Jay Weatherill and the car companies say that the car industry, and Holden in particular, had been saved. It had been saved because the government had done a deal. Yet, like every promise made by the previous government, it was a deal that did not deliver because, 15 months later, apparently another deal needs to be made. So for Senator Carr, despite Holden having said for months leading up to the election that their future here was not certain, to accuse the opposition of looking for an alibi is a blatant misrepresentation of the facts—and no-one believes him because of his own record.

What we have to ask ourselves is: what is the limit of our contribution? Last week the Prime Minister made it clear there was no more money. But the important point is that all the money in the existing program is not being used. Under the existing program, you—sorry, Mr Acting Deputy President, through you—Senator Carr took some of that unused money and wrote a cheque to Ford which was meant to keep them in Australia, and 12 months later they announced they are shutting up shop in Broadmeadows and Geelong.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | | Hansard source

That is rubbish.

Photo of Scott RyanScott Ryan (Victoria, Liberal Party, Parliamentary Secretary to the Minister for Education) Share this | | Hansard source

All this money was being reallocated without selection criteria. There was not a Productivity Commission inquiry. There was a Labor mates inquiry, by getting former Labor Premier Steve Bracks to deliver what the government wanted, which was an excuse to write a cheque. But all those promises have been completely unfulfilled because we are back here at the same place again. Then we have Labor saying that we need to subsidise for the injury that Labor policies themselves caused. Senator Carr interjected during question time that the carbon tax was not worth $400 a car. His own department actually tried to assert it was under $100.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | | Hansard source

Fifty—get it right!

Photo of Scott RyanScott Ryan (Victoria, Liberal Party, Parliamentary Secretary to the Minister for Education) Share this | | Hansard source

They did assert it was $50, but that is if you do not count the cost on the people that make the parts that put the car together.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | | Hansard source


Photo of Scott RyanScott Ryan (Victoria, Liberal Party, Parliamentary Secretary to the Minister for Education) Share this | | Hansard source

So if you don't count the panels that come in, if you don't count the windows that come in, if you don't count the seatbelts and everything else you have to put a car together and if you don't count the costs on the suppliers, it is only $50? That is insane economic policy—absolutely insane. The carbon tax costs $400 a car.

Photo of Kim CarrKim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | | Hansard source


Photo of Scott RyanScott Ryan (Victoria, Liberal Party, Parliamentary Secretary to the Minister for Education) Share this | | Hansard source

Four hundred dollars a car. Senator Carr and the Labor Party are arguing for a subsidy, yet they come in here and refuse to even allow a vote on repealing this lead in the saddlebags of the Australian car industry. Even if you disagree about the number, surely getting rid of the burden will help. But, no, that is not good enough. Over my 5½ years in this place I have seen a number of proposals come in here for subsidies. There was even the idea of the Rudd bank; there have been Senator Carr's constant promises that you know are never going to be delivered; there has been money flowing, then money being taken away. I have not heard of promises to save thousands of jobs in tourism that might have gone in Queensland or, indeed, in parts of regional and coastal Victoria, because Labor only wants to protect some jobs. We have a responsibility to the entire community. First and foremost, this economy—as, indeed, the Hawke and Keating government started arguing 30 years ago today—needs to be exposed to global competition and you need to have a balanced budget. You need to get your fiscal house in order.

So for Senator Carr to try to confect outrage, to mislead people into saying that somehow it is only in the last 12 or 13 weeks that the car industry in Australia has had challenges, and then, most of all, to try to lead them into believing that he could have saved them is to ignore his record. It was on his watch that Ford went after he gave them taxpayers' money and there is nothing that Senator Carr can say now that can correct his record where he saw two car companies close and others threaten to.

5:15 pm

Photo of John MadiganJohn Madigan (Victoria, Democratic Labor Party) Share this | | Hansard source

Thank you, Mr Acting President Sterle, and thank you, Senator Moore, for giving me the opportunity to speak on this extremely important topic. What we are talking about today is people's jobs. We are talking about what is at stake for the nation, for the community, for the family and for the individual. We know from the Australian Bureau of Statistics figures that 50,370 people are directly employed in the automotive industry. I think the 50,370 employees is a good figure to start with, as it is more than a significant number of Australians to be concerned about and is extremely conservative should we lose our automotive manufacturing sector.

When this MPI came across this morning, I thought I would add up some figures to see what the effects would be of 50,000 people losing their jobs. Say 50,000 people were on a wage of $55,000 per year. Each person would be paying in excess of $9,000 tax. This figure equates to $471.1 million each year. This money helps pay for people who are doing it tough, those who are retraining for new work, or suffering from mental illness, or people who need to receive rent assistance because they have defaulted on their mortgage. These 50,000 people may be joining them if the government does not ensure we keep the automotive industry here in Australia.

I kept crunching the figures and decided to find out how much it would cost the taxpayer to have 50,000 people on Newstart allowance. Based on each employee being single and having no dependants, the full figure is $501 per fortnight, or $651.3 million for 50,000 newly unemployed hardworking well-skilled but surplus workers over 12 months. Based on the loss of tax and the expense of Newstart allowance, the figure totals over $l billion dollars in one year.

But this does not take everything into consideration. It fails to take into account the added costs to our support services, to our health professionals, for example. It does not take into account the stress and interruption passed onto children and families. It does not take into consideration the increased costs of procurement projects for other sectors including defence, as the local supply chains will be ravaged. Mr Acting Deputy President, the automotive manufacturing industry is a great asset for our country. Government currently provides around $18 per person with a return of around $934 per person. That is a massive return which should not be taken for granted.

I would just like to conclude by noting that in this chamber, when talking about jobs, when rationalising other people's employment and livelihood, we need to think about where people can find more work. Who is employing? Where are these jobs? It seems we only hear about blue-collar jobs being lost rather than not created. I implore the government to consider that offering assistance to the car manufacturing industry is keeping Australians in work and contributing to our economy fifty-onefold.

5:19 pm

Photo of Alex GallacherAlex Gallacher (SA, Australian Labor Party) Share this | | Hansard source

I suppose the contribution from Senator Ryan really does set the coalition's position very clearly. They give us a skewed history lesson and say, basically, that we cannot support jobs in the industry. I think the simple facts are that the Australian automotive industry is our largest contributor to manufacturing research and development, some $693 million in 2011-12. That gives an avenue for all those bright people who go to university and study to get into design research and development. I dare say they do not continue their career entirely in the manufacturing of motor cars, but I think they add to the economy as a whole. If we are to be a smart nation, if we are to be a value-add nation, then we do need research and development, and $693 million worth of investment, were it not there, would make Australians and the Australian economy much worse off.

Despite Senator Ryan's comments about the Australian dollar, we still managed to export $3.7 billion worth of vehicles and components in 2012. Despite the difficulties associated with the high Australian dollar, $3.7 billion worth of vehicles and components in a single year were exported. I take the caveat from Senator Ryan about the number of people employed in the automotive industry. There are fact sheets about which say that 260,000 people across more than 20,000 enterprises along the supply chain are employed. I take the point that it might be an ambit figure but, if we agree on 50,000 Australians working directly in the manufacturing area, and we do agree that there are people supporting them, then it may not be 260,000 people that would be affected but a lot more than 50,000 and probably closer to the 200,000.

The simple fact that we are one of the eight nations that can design and build a car from scratch is something that we cannot ignore, and the fact that we need to subsidise it is relevant but needs to be put into context. Basically, they receive about $18 per person in government funding—which equates to about $500 million—but the return to the economy is $21.5 billion, equating to a return investment of $934 per person. The industry has an annual turnover of $160 billion and pays more than $10 billion in tax to Australian governments.

This is not a small thing. A senator coming in here and give us a skewed history lesson about the Hawke-Keating government being an aberration and saying that Labor are into protectionism does not give any comfort to any of those thousands of workers, either in the state of Victoria or the state of South Australia, who are looking at a very bleak future. They may well have skills and will transition to another part of the economy, but if they are happy and doing a great job at the moment the future is looking extremely uncertain for them.

As we speak, there is not one South Australian Liberal senator in this chamber. Senator Birmingham, Senator Fawcett, Senator Ruston, Senator Bernardi—I think Senator Edwards may make a contribution later, and we will judge the content of that contribution as to where he sits—do not care enough about their own state to get in here and listen to the debate.

South Australia has 33 direct suppliers and 700 indirect suppliers. Make no mistake, if this goes ahead through wilful neglect of the Abbott government, and if they do not act to attract a billion dollars worth of investment in the automotive industry, we will see the impact on thousands or, as Senator Ryan has admitted, perhaps even over 100,000—we did not actually get the figure from him, but we know it is between 50,000 and 250,000—people affected by this very important decision, which is characterised by this incoming Liberal government.

I read the other day that their first 100 days can be characterised by 100 delays. We see caution and inaction. 'I won't be bullied!' says the Hon. Joe Hockey, the Treasurer, and yet foreign investment into GrainCorp was denied. I think I know why: it is because there are people on that side of the chamber in the coalition who do stand up for workers in rural Australia, and they could see that GrainCorp being taken over by a company like ADM may have impacted on some of their rural communities and jobs.

We on this side of the chamber get accused of only standing up for union workers—well what is wrong with that? Why wouldn't we stand up for the 13,000 direct employees in South Australia? Why wouldn't we stand up for their families? Why wouldn't we stand up for the deli down the road from General Motors Holden who will be out of business if those workers do not drive past it every day? Why wouldn't we stand up for the video store or the pizza parlour—all those people out of work and no longer able to give into the economy. Why wouldn't we stand up for those small businesses? In our state that is what we do—although I do note a distinct lack of South Australian Liberal senators in here at the moment—and we will never, ever give up on this sort of stuff.

This is a huge contributor to the Australian economy; it is factual, it is researched and the amount of subsidy is not in the vein that Senator Ryan alleged it was. If the Australian dollar were to take a nosedive, we may go back to exporting Camaros to America, which is where we were when the General Motors plant in Elizabeth put 1,000 people on night shift to design, build and send Camaros to the Californian police force. They are still a very much sought-after car, but the vagaries of the Australian dollar have made that export avenue less attractive.

Senator Ryan is right about one thing: the Australian dollar is a significant challenge to manufacturing, but what he is not right about are the reasons why Holden is at risk. The basic reason that Holden is at risk is that this government is not doing the right thing and is not willing to make an investment to attract a billion dollars worth of investment in Australian manufacturing and jobs. I am sure that there are any number of countries in our part of the world—Thailand, Malaysia, Indonesia—who would make all of the right decisions with respect to a billion dollars worth of investment if it were offered to them.

I think Senator Carr has put on the record that the most significant threat to the future of the car industry is that senior ministers in the Abbott government look like they are trying to kill it off. As I said, Senator Ryan's contribution will give no comfort to a family at General Motors, whether it is in Victoria or at the plant at Elizabeth. The government are talking to journalists in secret rather than talking to workers or talking to General Motors. The Hon. Tony Abbott should end this debate with a commitment to invest the money needed to save this car industry.

Our fearless opposition leader in the great state of South Australia did not put in a submission to the Productivity Commission inquiry, has made no comments about this and is sitting quietly behind his mask of silence waiting for someone else to stand up for South Australia. I think South Australians will recognise who is standing up for them. The challenge that we have is to keep this noise as loud and as public as we can and not allow the opposition to not attend the chamber, not participate in debate and instead send Senator Ryan down here to give us a lecture on his skewed version of the economic chain since the Hawke-Keating years.

The automotive industry is too important to this country, to Victoria and to South Australia for us to let it die. It needs investment and it needs decisions—it does not need another 100 days of delays from this coalition government.

5:29 pm

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

The rhetoric from the opposition continues in the face of our spending nigh on two weeks trying to fulfil the will of the Australian people and actually repeal the carbon tax, which has placed such a burden on our manufacturing industry, not just on the automotive industry but also on the AMWU workers that work in regional Australia in food manufacturing.

Opposition Senators:

Opposition senators interjecting

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

It must be preselection time. Anyway, ultimately the decisions made by Holden and Ford are made in foreign boardrooms with their only consideration being profits, and there has been significant risk to those profits placed on those foreign entities by the past government, the carbon tax being one of them. It is a classic case of crocodile tears about manufacturing job losses when one has been listening to the rhetoric of those opposite, bemoaning the automotive job losses, as they are, and claiming that those of us on this side of the parliament are not concerned about job losses in manufacturing.

Our former member for Indi, Sophie Mirabella, was very loud about our concern about manufacturing job losses under the previous government, and that continues now that we are in government to ensure that our manufacturing industry remains strong and is released from the burden of the carbon tax imposed on it by the past government. It is the same tax that they are using refusing to support us in rescinding. But we are going to keep our commitments in government. We want a viable car manufacturing industry in Australia and the Prime Minister has made that clear and the minister has stated our support. We have a plan of how to deliver a sustainable car manufacturing industry going forward and it is important to follow due process, so that all the details are properly considered—and that is why we made it very clear going into the election. We knew there was an issue and we stated what we were going to do about it and we plan on going forward with that commitment.

As for the Productivity Commission review, Senator Kim Carr stands up and critiques that approach. He critiques the strategic response, the holistic response, towards the crisis within car manufacturing in this country. How typical of the former minister that came up with the plans that he did! Who can forget the Green Car Innovation Fund or the multitude of other responses across a range of portfolio areas that his government was quick to have a thought bubble over but nobody actually sat down to do the strategic hard work of working out a plan for the long term for the 21st century—and that is exactly what this government plans to do under Minister Macfarlane. We have been consulting with car makers and with the components industry, and that will continue until we have the full report next March. We have also moved quickly to remove another burden that the former government had placed on the car industry as we got rid of Labor's $1.8 billion fringe benefits tax albatross and we are moving quickly—as we are trying very hard in this chamber—to get rid of Labor's carbon tax, which adds up to $400 to the cost of every vehicle manufactured in Australia. If Labor were even half sincere it would get on board with our positive actions to strengthen the economy and boost the prospects for car manufacturing. Senator Carr has also made reference to the sovereign risk scenario and situation at the moment. Labor belted the car industry when it was in government. Senator Kim Carr, in his book this year, said:

Unfortunately the—

Green Car Innovation—

Fund was abolished, leaving international company executives wondering just what they had to do to get a consistent government policy commitment in Australia.

So if we are worried about sovereign risk and if we are worried about increasing the risk level that foreign international investors and boards are considering as they consider their investment and their businesses within the Australian context, then really even Senator Carr recognises the risk that the former government posed particularly to international car manufacturers' operating plants in Australia.

The government, unlike Senator Carr, respects the in-confidence nature of the discussions that we, as a government, are having with automotive industry officials, and we are going to continue to do that. But it is not a new issue. Australian cars account for less than one in 10 new vehicles purchased. When Labor took office, the vehicle production in Australia was over 335,000 units a year. When they left, it was down to 221,000 units a year. I wish Senator Carr were still in the chamber hearing the concerns when we consider he presided over a 34 per cent decrease in the amount of Australian car manufacturing. This has also had a major adverse impact on the automotive supply chain. When Labor took office, there were over 200 businesses in the supply chain. Now there are fewer than 150, and over 25 businesses that were in the supply chain are no longer in business—many of them located in regional Australia. The previous government cut assistance and then cut it again. As I said, we are committed to working with industry. What I would like to put on the record is that we are continuing to support the automotive industry.

Senator Farrell interjecting

Listening to the opposition you would think it is at zero, Senator Farrell. But, no, we are just simply not increasing government assistance. We are continuing government assistance; we are just not increasing it. We are going to implement all of our election commitments including reducing the Automotive Transformation Scheme by $500 million. Something is wrong and we recognise that, which is why we set up the Productivity Commission review into the automotive manufacturing industry, and I am looking forward to its report, which will actually look very widely into the sustainability of the industry, and I encourage unions and the small manufacturers that support the wider industry community actually to have input into that process as we move forward to the reporting date in March. So we do recognise that there are significant challenges as our automotive industry does adjust to the high value of our Australian dollar and a highly competitive and fragmented market in this particular sector, and we have been working hard with industry.

The leasing industry was blindsided by the previous government's approach to the fringe benefits tax and almost immediately was hit with job losses—so here we are with those opposite not concerned about the job losses incurred under the previous government across a whole range of industries and sectors and I find that a little ironic. There were also claims that the policy of the previous government, with regard to the fringe benefit tax on cars, would see a decrease in Australian manufactured cars by more than 100,000 cars a year.

I briefly want to talk to some comments made by Senator Carr with regard to government assistance given to a variety of industries. He made some claims about agricultural industries where he said that the estimated effective rate of assistance measured as the value of assistance as a proportion of value-added primary production, in all its forms—sheep, aquaculture et cetera—is 3.3, whereas motor vehicle and parts is 9.4. It is simply false for Senator Carr to come into the Senate and quote misleading statistics.

5:37 pm

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

I share the concerns of my colleagues in relation to the future of the automotive industry in this country, and I think there have been a number of strategic mistakes made by the federal government. Most recently, the Prime Minister made a statement just a few days ago to the effect, 'Not a dollar more for Holden'. I do not understand why that statement was made given that the federal government was committed to having a Productivity Commission inquiry to look at the future of the automotive industry. What is the point of having a Productivity Commission inquiry if the Prime Minister is saying, 'Not a dollar more for this industry'. Aren't we meant to hear from the Productivity Commission to see what needs to be done, the importance of this industry, and to see what steps can be taken and what can be put in place to save the tens of thousands of jobs that are directly connected to this industry—not only the 1,700 jobs at Holden, but also the 12,000 or so jobs in South Australia directly related to component manufacturing. There are 33,000 jobs in Victoria. We are talking in the order of 50,000 jobs directly employed by this industry, let alone the multiplier effect. I do not understand why that statement was made by the Prime Minister. It does not make sense to me. It seems to be pre-empting what the Productivity Commission is looking at.

I know the Prime Minister told radio 3AW in Melbourne at the end of last week:

… I think the message that we’re getting from Holden is that they’re in two minds—

the Prime Minister said. Well maybe they are in two minds because we are not getting clear signals as to what the federal government is intending to do.

Having said that, I still have confidence in the genuineness of Minister Ian Macfarlane in relation to this. But I am concerned that there are members of the federal cabinet who are undermining Minister Macfarlane. I think Minister Macfarlane genuinely, passionately wants this industry to survive. I note the comments from the state secretary of the AMWU in South Australia, John Camillo, a great champion for the automotive industry in my home state. He shares my confidence in respect of Minister Macfarlane.

But this does not make sense; it does not make sense to be going down this path. Once we lose this industry, we lose it forever. We are one of only 13 countries in the world that can design a car from the concept stage and get it out there on the road. One of only 13 countries in the world. Some are of the view, some who have a dry economic rationalist view, that we can let the mining industry take up the slack. Guess what? The mining industry in this country relies on the innovation, the technological advances that the automotive industry has brought. It is the industry that drives innovation in other sectors of the economy. That is something that must be taken into account. You lose the auto industry, you lose that innovation, you lose the engineers: we will have a brain drain and skills drain in this country. We will have our best and brightest going off to Europe, to Asia, to other parts of the world because they will not have a job here.

I note that in today's Sydney Morning Herald front-page lead 'How to save Holden' by Jonathan Swan, it says:

… the … government had confidential documents that show it would cost less than $150 million extra a year to keep Holden in Australia until 2025.

Let us put this in perspective: what will the cost be of the unemployment benefits for 50,000 Australians out of work? That is just for those who are directly employed; it does not include the multiplier effect of the local deli, the snack bar, the shops and the businesses that rely on people having work—good productive work—in the automotive industry. These are costs that we must take into account. And when we talk about recession, South Australia and Victoria could well face a real recession, a deep recession, in each of those states and drag down the national economy as a result of losing the automotive industry.

I would urge the federal government to consider this: there were hundreds of thousands of Australians who voted for the coalition at the last election who did not vote for them previously.

Photo of Don FarrellDon Farrell (SA, Australian Labor Party, Shadow Minister for the Centenary of ANZAC) Share this | | Hansard source

They'll regret it now. They'll realise they made a mistake!

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

Senator Farrell makes a point. My genuine plea to the Prime Minister is: you will burn that support base of those voters if you abandon the automotive industry in this country. It will have national implications—not just in South Australia, not just in Victoria; it will be an earthquake felt across this nation.

5:42 pm

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

I am very pleased to contribute to this debate about the future of the automotive industry in Australia, and I thank my colleague Senator Carr for moving the motion to give the Senate the opportunity to do so. Like my South Australian Senate colleagues in the Labor Party, I am very proud to stand up for South Australian jobs, I am proud to stand up for South Australian manufacturing jobs, I am proud to stand up for South Australian automotive workers who are worried about their jobs. And I am here to stand up for the families of those automotive workers who are rapidly approaching Christmas wondering whether or not they are going to have a job in the future.

It is very disappointing that no-one in the coalition is supporting automotive workers in the automotive industry in South Australia, and certainly not South Australian coalition senators in this place. I have yet to hear them articulate one word of support for the automotive industry. In fact, there are some in the coalition who are actively working behind the scenes to bring down the automotive industry, working to bring about its demise. They have been backgrounding journalists, as we know, about Holden's plans and undermining their own industry minister, Minister Macfarlane, who, as Senator Xenophon said, has shown some indication of at least paying attention to what is going on at Holden and the future of all of those jobs out there. It is very disappointing and galling for Holden workers to see the coalition government actively attempting to bring about the demise of the industry.

Let us not underestimate the importance of the automotive industry to South Australia and to Australia. As we know, Holden is at Elizabeth. There are 1,700 production line jobs there alone. Elizabeth, which is to the north of the city, desperately needs every job it can hold onto out there. All up, the automotive industry supports some 13,000 jobs in South Australia, and nationally some 200,000 jobs are directly and indirectly supported by the automotive industry. It is an industry that, according to independent reviews, is worth some $21.5 billion to the Australian economy. That cannot be dismissed lightly. This is something we have to hold onto.

This industry also supports skilled workers—designers, engineers, machinists, production line workers and sophisticated IT workers. These are the jobs we need in South Australia and this is an industry that trains workers in these really important jobs to work not just in the automotive industry but elsewhere. We can ill afford to stand by and let these jobs disappear.

Unlike the coalition that refuses to support the automotive industry, I am proud to say that the South Australian Premier, Jay Weatherill, is actively supporting the industry in South Australia and has written to the Prime Minister, Mr Abbott, requesting him to, please, take seriously the future of the automotive industry in South Australia. In his letter to Mr Abbott in the last few days Premier Weatherill said:

Every day the federal government fails to commit assistance is another day of growing uncertainty for international investors, South Australian business, South Australian workers and South Australian families.

Premier Weatherill went on to say:

On behalf of the people of South Australia I urge you to commit the federal government to reasonable and justifiable support for the automotive industry now.

I am proud to stand behind Premier Weatherill in this campaign as well.

I also note that the secretary of the Australian Manufacturing Workers Union, Mr John Camillo, is standing behind his members, as he has always done. He too wrote to the Prime Minister in the last week urging the coalition government to get behind the automotive industry. Mr Camillo points out that is not unusual for developed nations to support their automotive industries and that Australia's assistance to the automotive industry is relatively light compared to, for example, the United States and Germany, which much more heavily subsidise their industries. So this is a good thing to do. It is a good thing to get behind the automotive industry.

I conclude by noting also the campaign that has been running in South Australia called More than Cars. I have seen the petitions and online campaigns. The people of South Australia, unlike their representatives in the Liberal Party in the Senate, are right behind the automotive industry. (Time expired)

5:48 pm

Photo of Sean EdwardsSean Edwards (SA, Liberal Party) Share this | | Hansard source

I rise in this matter of public importance debate on the Australian automotive industry. It is fitting that three senators from South Australia are here waiting to hear my contribution to this debate. Senator McEwen, Senator Farrell and Senator Gallacher turned up. I guess you two watch each other's back wherever you go. You would not want to go on a mountain expedition with Senator Farrell, would you, Senator Gallacher?

Photo of Glenn SterleGlenn Sterle (WA, Australian Labor Party) Share this | | Hansard source

Senator Edwards, you may want to direct your comments through the chair.

Photo of Sean EdwardsSean Edwards (SA, Liberal Party) Share this | | Hansard source

Yes, I do digress. I cannot remember hearing you screaming last Christmas about the 170 people who were laid off from GMH. Mr Acting Deputy President, what was their contribution to the debate about Holden's viability last Christmas? Some 170 families—

Photo of Alex GallacherAlex Gallacher (SA, Australian Labor Party) Share this | | Hansard source

We are always concerned, Sean.

Photo of Sean EdwardsSean Edwards (SA, Liberal Party) Share this | | Hansard source

You are always concerned, but there was no action. Thank you, Senator Gallacher; I don't think so!

What about the 400 General Motors Holden workers who lost their jobs in April this year? What did we hear about that from the three Labor senators from South Australia? Nothing. They were quiet. Why was that? They were like economic rabbits in the headlights. There were 86 people laid off at Priority Engineering in early 2014 and we heard nothing. There was nothing from the member for Wakefield, Nick Champion, either. It was all swept under the carpet. While we are on the seat of Wakefield, what did we hear from the member for Wakefield, Mr Champion, when 140 people at Mondello Farms lost their jobs?

Do not lecture us on this side about what it takes to run a business. For six years you had to have the policy settings in place to ensure that General Motors Holden would not fail, but what did we see? A systematic decline in the number of cars that they sold. What were you doing? I hear Senator Carr has the answer, albeit that three months ago he had no answer at all. Fifty million dollars a year and $150 million: he has all the answers now from opposition. No answers at all is my contention. If he had any answers, he would have looked after the CFMEU, all of those mates. Look at them. I just do not understand how they can come in here. The people of Wakefield in South Australia, where the factory is centred, deserve better than what the current member gives them.

Labor were in government for six years. We saw thousands of jobs lost in the manufacturing sector and most notably in the automotive industry. You are sitting here and listening to this debate but we hear nothing about Ford. Oops, there is nothing about Ford. You are sitting here in judgement.

In 2005, in the Howard era, at Elizabeth Holden employed 5,700 people working three shifts a day. Under the watch of those over there Holden's workforce shrunk to 1,700 people working one single shift. That is 4,000 jobs gone. Labor threw $215 million at Holden at the start of 2012 and the member for Wakefield, Mr Champion, claimed that this would secure the future of Holden and its workers until 2022.

I am not sure if you, Senator Gallacher, or you, Senator Farrell, were proofreading the postal vote application letter that Mr Champion sent to voters in his electorate. There are 95,000 people in his electorate and they got a letter saying: 'I have secured support for GM Holden at Elizabeth, ensuring production until 2022.' What a cruel hoax that was in the lead-up to the election. He duped those people. He spread all those letters and, so, where is Mr Champion now after suggesting that he saved Holden until 2022?

Senator Farrell interjecting

I can assure you, Senator Farrell—you know it exists—of the crisis that Mr Champion and the Labor government created. The people of the northern suburbs of Adelaide, and all South Australians, see that Mr Champion and Labor have taken them for a ride—a ride that leads them straight to the unemployment line. We have been voted in and charged with the responsibility of getting everything back on track.

For too long both state and federal Labor governments—

Opposition senators interjecting

Senator Farrell, that would be an overstatement in the extreme. Mr Champion has only himself and the former Labor government to blame for the dire straits Holden and the northern suburbs find themselves in. Labor were completely asleep at the wheel. Today Mr Champion stated that he was confident that Holden would stay in Australia if the government put forward the right suite of policies. It is absolutely laughable that Mr Champion can sit and talk about the 'right suite of policies'. He was sitting there for six years, dabbling around on the back bench, trying to work out which way he was going to vote in every leadership battle that was set among the Labor Party and that debacle of a government. In that time he should have been sitting back with his constituents—all those people who work for Holden and who now face an uncertain future because the company in Detroit does not know which way to go. It has probably lost faith in governments in Australia because of the last six years of Labor. Mr Champion and Labor did nothing at all to help Holden.

Photo of Glenn SterleGlenn Sterle (WA, Australian Labor Party) Share this | | Hansard source

Order! The time for the discussion has expired.