Brendan O'Connor (Gorton, Australian Labor Party) Share this | Hansard source

I rise to comment upon the report that was tabled in the parliament this week entitled Shifting gears: employment in the automotive components manufacturing industry. It is a unanimous report authored by the House of Representatives Standing Committee on Employment, Workplace Relations and Workforce Participation and provides a series of recommendations to the automotive parts industry in order for that industry to have a viable future.

This has been a very important inquiry because, as we know, this industry is certainly, to say the very least, in a state of transition. Some would say it is at a critical point in its history because, during the course of our inquiry, whilst we listened to some of the dry commentary from industry players, we were witness to the many closures of small- to medium-sized companies that were feeling the effects of competition from our external competitors. It is true to say that a lot will have to be done to ensure that this industry survives. Without the automotive parts industry there will be no automotive industry in this country—so it was a very important inquiry. The federal government and, indeed, the state governments have an essential role to play in providing a level of assistance to ensure that the industry is competitive.

I think the reason this report is unanimous is, firstly, that we did not engage in an ideological debate over the industrial relations policies of this land. You can be assured that there would have been a comprehensive dissenting report if the government members had asserted that the Work Choices legislation is the answer to the problems that have beset this industry and others in our country. The reason I think the government members of the committee chose not to engage in the industrial relations battles that we have in this place is that most, if not all, of the employer bodies, and indeed the major union, said that was not the significant threat to this industry—that is, the failure to reform the industrial relations laws. If you look at the submissions that were made by the peak employer bodies, you will find it is a very low-order issue—that is, the changes required to our industrial relations laws. There was very little mention of Work Choices by any of the employer representatives before the committee. The major issues that they raised about the way in which the Commonwealth of Australia could assist the industry were in areas of attending to skill shortages and attending to our failure—to date—in research and development, which I think has been one of the wanton failures of this government. If you were going to point to an area which has been ignored and wilfully neglected, it is clearly the failure to invest in research and development. If you measure the investment in this country in that particular field and compare it with countries in the OECD set of nations, you will find that we are falling behind at a rapid rate. Therefore, it is not entirely surprising that some of our markets are having difficulty competing with other nations’ markets.

I would like to commend the chair of the committee, the member for Deakin, and other government members and, indeed, the opposition members—but I think it is always harder for government members to effectively draw to the attention of the executive that there has been a failure of government in assisting the industry in the areas of skill shortages and research and development. Many of the recommendations in this report go precisely to those particular areas. I know it is not fair to suggest that the government members on the committee were brave, because that might damn them, but I do think they looked at the issues clearly, they listened to the witnesses before us and they did indeed indicate, as did all members, that there were failures by government. I have to say that would of course include, to a degree, some of the state governments.

As we know, this industry is primarily based in Victoria and South Australia. There are some companies located elsewhere, but over 85 per cent of the industry is located in those two states, primarily in my state of Victoria. There have been some efforts by the state government there to assist in recent times. It is playing catch-up to a degree, but certainly there are positive signs that the state government is now assisting the industry. However, if you look at the 18 recommendations, Mr Deputy Speaker, you will find that there is a clear message being sent by this parliamentary committee to the ministers responsible to start assisting. I would like to refer in particular to a number of those recommendations. In recommendation 8, the committee recommended:

... the Australian Government investigate options to encourage the retention of local and foreign-born engineering graduates within Australia, including measures to facilitate entry into the workplace in areas of skills shortages.

We found that in the area of engineering there are clear shortages which are causing problems in many of our small to medium companies. I think we have provided a practical recommendation that the government can embrace in order to ensure that those companies are not wanting when it comes to having decent engineers in this industry. In recommendation 9, the committee recommended:

... the Australian Government support the establishment of an automotive component manufacturing leaders forum to develop strategies aimed at improving recruitment and overcoming stereotypes surrounding the image of the industry.

There is no doubt, and it is mentioned in the chair’s introduction to the report, that there is an image issue for this particular industry. There are new and exciting jobs on offer, but they do not seem to have attracted the attention of many of our best and brightest. I think there needs to be some effort by the industry, with the assistance of the Commonwealth, to try to lift its image in the eyes of prospective employees who want to have a long and fulfilling career, because what is now going on as a result of the significant technological change happening in the automotive parts industry is not necessarily reflected in people’s perceptions of it. So I think there is a need to do something there. Again, that recommendation is a practical one that I think the Commonwealth can consider.

I would also like to refer specifically to some of the recommendations under the heading ‘Driving the industry’s future’ that go to the need to review research and development assistance. The committee recommended:

... the Australian Government review R&D assistance available to the automotive component manufacturers to assess whether it is commensurate with incentives offered internationally.

There is a view, as I indicated earlier, that this government has failed in terms of investing in research and development across all industries. Indeed, there has been a decline in investment since 1996. And not only has there been a decline in real terms in investment in research and investment since 1996; we have fallen even further behind because there has been a net increase in most of the nations that we are competing against in this industry. Because of the ideology or the particular view of the government, there has been a real failure to assist the automotive parts industry in the research and development field.

The committee unanimously recommends that there be a review. It also recommends that the government extend R&D assistance to work undertaken by the Australian based automotive component manufacturing subsidiaries of multinational companies where it can be demonstrated that the work is to be undertaken in Australia to benefit Australian products. Again, I think that is a particularly practical suggestion, and the government should take heed of that concern of the parliamentary committee.

I want to just expand upon earlier comments in relation to why the report did not focus on the Work Choices legislation. Again I do not think it was necessarily the committee ignoring evidence that was provided to it, nor was there any sort of informal view by committee members that it should not be touched, but when we looked at the evidence from the Australian metal workers union, and indeed the peak employer bodies, there was little mention of the need to have Work Choices imposed upon employees in this country.

It seems to me, if anyone understands the automotive parts industry or indeed the automotive industry in this country, there has been a significant amount of collaboration by organised labour and employers to get things done for the mutual benefit of everybody. One has only to look at the way in which the unions cooperated with the employers when the Button plan was introduced in the late 1980s to see that there has been a longstanding collaboration on the major issues confronting this industry.

There is no doubt that it was not of concern to the employers. Indeed, a number of employers raised a concern that, because the government had sought to remove award classifications in their industry—award classifications that are skills based classifications—there would be less of an incentive for people to be properly trained. They need to feel that there is some worth in their acquiring more skills, new skills and knowledge. So it was refreshing to hear an employer representing the industry at our hearing in Melbourne—and I will find the particular employer’s name if I can—indicating to us that there was a real concern that, in terms of the award-restructuring process that was going on, they were concerned that the skill based classification structure was going to be stripped away. They were concerned that just bottom rates would be left, which would send a message that either money should be provided above and beyond the minimum rates based on things other than skills, knowledge and responsibility or indeed that it would be a real turn-off for employees who are concerned with the challenges that the industry confronts. I think the government should take note of that.

We sought, as opposition members, not to dissent. There is no doubt we could have dissented—that is, by adding things that were not recommended by the committee members. It is not a particularly new idea by employers. I would like to quote Roger Boland, who was then the Ai Group spokesperson. Not that long ago he indicated his concerns about taking a rash and unfair approach in the workplace, when he said:

Where employers have adopted a bargaining strategy, in many instances it is driven by an exclusive desire to cut costs rather than pursue innovation. Now that is completely understandable in today’s competitive environment. But is a blinkered approach to achieving competitiveness through workplace change and is creating a backlash amongst workers manifested in intense feelings of job insecurity, disillusionment, lack of trust, “reform fatigue” and a shift to greater militancy.

They were the words of the AiG spokesperson not that long ago, and I think it is true to say that many employers share that view. That is why you do not see all employers, certainly from some particular industries, coming out embracing Work Choices.

That is why Work Choices is not mentioned in this report. If we want to fix the problems in this country in our work places, we have to attend to skills shortages, as was noted in this particular inquiry and in this report—indeed, we have to attend to the failure in research and development. We ask the government to seriously consider those recommendations and hopefully adopt some of them in the very near future.

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