Stewart McArthur (Corangamite, Liberal Party) Share this | Hansard source

In all developed Western democracies there is a problem with changing technologies. Jobs have moved out of the manufacturing sector fundamentally because of improved technology. Of course, some jobs have moved in the component industry to low-wage countries. He talks about a sound industry policy. Like the Leader of the Opposition, we are still waiting to see what a sound industry policy actually means. My final observation is that he makes the untruthful remark that the Howard government has managed to support the manufacturing industry by cutting wages. The reality, as the member for Hunter knows, is that real wages have increased by about 16 per cent from 1996 to 2006. Contrary to what the member for Grayndler was saying, manufacturing has provided jobs and real wage increases to those workers, even though there is a fundamental change, as we all know, in the manufacturing sector in Australia and other westernised nations.

I am delighted to contribute to the debate on the ACIS Administration Amendment (Unearned Credit Liability) Bill 2007. You may recall, Mr Deputy Speaker, that I have had a strong interest in Australia’s automotive industry for many years, as Ford operates out of Geelong and is an important employer across the Geelong region.

ACIS, which stands for the Automotive Competitiveness and Investment Scheme, was introduced by the Howard government in January 2001. The ACIS program is part of the government’s strategy to enhance the long-term competitiveness, profitability and sustainability of the Australian automotive industry. The automotive industry operates in a very competitive international environment. Trade liberalisation has put significant pressure on Australian car manufacturers over the past 20 years to reform, to adopt new technology and innovation, and to embrace more flexible industrial relations practices in order to compete successfully on the domestic market in competition with imported vehicles and to enhance the industry’s position by exporting Australian manufactured cars to markets overseas. The ACIS program encourages new investment and innovation in the automotive sector through the provision of import duty credits to help the transition to a new low-tariff environment.

It is important to recognise that the Howard government has provided the automotive industry with certainty in moving towards a low-tariff environment. By contrast, the Labor Party has flip-flopped over recent years on the automotive industry tariff question. Under the Hawke government, the Labor Party took an enlightened approach to the industry. The Labor Party MPs at that time recognised the importance of the future for our domestic automotive sector of moving away from the high-tariff protection of the past to a low-tariff environment. I particularly commend Senator Button for his contribution to that policy debate. Those of us who were sitting opposite at that time supported Senator Button’s endeavours. Unfortunately, Labor in opposition have often reverted to a parochial position on tariffs and industry policy, playing to the high-tariff protection prejudices of union leaders like Doug Cameron, who is well known to many in this House. Labor members know the future of our manufacturing sector lies in international market liberalisation, but they try to pretend otherwise to get some union support and win a few union votes.

In this regard, I was interested to note that on the day of his election as Labor leader the Leader of the Opposition nominated a renewed emphasis on industry policy. It has never been explained what Labor’s new belief in industry policy means—whether it is just a return to the bad old days of protectionism: an inward-looking, uncompetitive and unsustainable industry propped up by taxpayers and consumers. Those of us on this side of the House wait with interest to learn of the opposition’s policy plans for the manufacturing sector. We hope it will not take the country backwards and we look forward to a more precise position from the Leader of the Opposition and the member for Grayndler on industry policy.

Under the ACIS program approximately $2.8 billion of transition assistance was provided to the Australian automotive industry between 2001 and 2005 in the context of a reduction in the automotive industry tariff for passenger motor vehicles and automotive components from 15 per cent down to 10 per cent in 2005. That debate on tariff reduction has been very much part of my philosophic stance over many years and I am delighted that now the Australian automotive industry is becoming world competitive in terms of both price and quality.

The ACIS program is continuing between 2006 and 2015 with an estimated additional package of $4.2 billion of assistance to encourage the industry to move to a long-term sustainable position with the proposed further tariff reduction to five per cent in 2010. That five per cent is basically a negligible tariff level. That position has been the subject of considerable argument. The exchange rate has a much greater impact, as members would be aware, than the tariff itself.

Over the full life of the ACIS program to 2015, some $7 billion in assistance will be provided to the automotive sector under the program to help industry move to a viable and internationally competitive position. Under the ACIS program the industry has been able to plan for the future and invest with confidence. I emphasise that point. The success of the government’s approach to the automotive industry is demonstrated by the very positive results being achieved by the industry. In 2005-06 Australian automotive exports reached a record value of $5.2 billion. That is a far cry from what the member opposite said—that the manufacturing industry was in decline. The automotive component exports were last year valued at $1.76 billion, and there was $3.44 billion in vehicle exports. Again, this is a far cry from the historical position where the automotive industry was basically designed for the domestic market. Some 126,000 vehicles were exported in 2006 to destinations including the Middle East, the United States, China, South America, South Africa, New Zealand and South-East Asia. Again, that is a remarkable transformation from what was an inward looking industry. In 2006 our domestic automotive manufacturers exported 38 per cent of local production. This is compared with only seven per cent of local production exported under Labor in 1990.

As tariff levels have declined, the Howard government has helped industry compete internationally and export to foreign markets. Holden has recently announced it will be commencing significant new exports later this year to the United States of the Commodore, as the Pontiac G8. The Ford Motor Company, which is well known to me in Geelong and Broadmeadows, plans to export some of the new versions of its Falcon and Territory models. These developments demonstrate that Australia is becoming a competitive producer of quality motor vehicles under Howard government policies.

Nationally, the automotive sector has a turnover of $24 billion and employs 70,000 people—a far cry from the remarks of the member for Grayndler. The sector is much larger than just the four major vehicle producers, with 250 component producers, machine tool producers and service providers. Again, I emphasise the importance of the component producers in the regional city of Geelong, in Melbourne and in Sydney.

In this more internationally competitive environment, where the market is much more important to car manufacturers than government programs are, the Howard government support for the automotive industry remains strong. The government has initiated an Automotive Industry Strategic Group to work towards a coordinated effort to access global supply chains and secure more international work for the Australian automotive component sector. Ford Australia has received a $52.5 million grant to develop the next generation of Falcon and to design and engineer a pick-up truck platform for the world market. The government has provided a $6.7 million grant to Holden, matching the funding by the Victorian and South Australian governments, to introduce safety and fuel management improvements and further reduce greenhouse gas emissions from Commodore vehicles. There can be no doubt of the government’s commitment to a viable automotive sector.

In addition to the ACIS program, which is providing transitional assistance and encouragement for the automotive industry to move to a low-tariff environment, the Howard government has improved competitiveness of the automotive industry through the following fundamental policies. Firstly, there is the lowering of inflation through our policies of strong economic management, thus minimising the rise in domestic input costs. That is a very key component of making our automotive industry competitive internationally. The government has also provided an improved business investment environment by creating conditions of low interest rates, which again is a very important factor for those manufacturing facilities. Finally, there is the introduction of greater flexibility in the industrial relations system, which provides significant benefits to our large manufacturers and also to the smaller businesses manufacturing automotive tools and components and those businesses delivering services to the automotive sector.

I was recently in the Toyota factory and saw the results of the more flexible approach to industrial relations, and I commend that particular company for the way in which they have organised their workforce and their quality control. That was a standout example of what the manufacturing industry is doing in car production, and I think the changes in industrial relations have helped that quite large workforce adapt to the quality control and delivery of very high-quality vehicles to both the Australian and the international markets.

Of course, there has been some indecision and evasion from the opposition over its position on Work Choices reforms and what the Labor Party would do if they were elected to government. It is hard to ascertain exactly what the deputy leader says on industrial relations—whether it be on unfair dismissals, big business or small business. We await the debate this afternoon. There might be some enlightenment on where the Labor Party stands on industrial relations, because it is very hard to understand from the public comments exactly what they have in mind, except to rip up the current legislation.

The Labor Party’s position on IR should be of great concern to Australians employed in the automotive sector. Even smaller businesses with fewer than 100 employees providing services and components to the automotive sector would be concerned about employing new staff because the Labor Party might restore the unfair dismissal provisions, which they voted against. As the honourable parliamentary secretary at the table, Mr Hunt, knows, the Labor Party voted 44 times in this parliament against the unfair dismissal legislation. Now the Leader of the Opposition is saying, ‘We might look at it; we might not.’ It will be interesting to see where he finally ends up on unfair dismissals.

Small business operators know that these provisions have helped to create jobs by giving employers the confidence to employ more people, secure in the knowledge that they can take action against lazy or unruly employees. As the honourable member who is at the table knows—the Hunter Valley has many small businesses—small businesses now know that if they put somebody on and it does not work out they can put somebody else on without parting with about $7,000 because of an unfair dismissal claim. In this context it is important to recognise that more than 240,000 new jobs have been created since the introduction of the Work Choices reforms in March 2006—240,000 more Australians have jobs as a result of the government’s policies. These jobs would be at risk if the Labor Party were elected and returned to the old industrial relations laws.

In the context of this debate on ACIS—a program providing transitional assistance to the automotive sector to adjust to a low-tariff environment—I wish to make a few comments on other policies that might impact on the sector and the future of manufacturing in Australia; in particular the debate on greenhouse emissions and climate change. Climate change is a topical debate in this House and in the broader community. Climate change radicals, including the Leader of the Opposition, the member for Kingsford-Smith and the member for Grayndler, persist in trying to scare the public on climate change. For years the Labor Party has been talking up radical premonitions of climate ruin and the need for equally radical measures to address climate change, such as emission targets, renewable energy targets and emissions trading schemes. The Labor state governments have even proposed going it alone, introducing emissions trading schemes to win the plaudits of the green movement at the detriment of our industries. Only this last week we have seen an argument about the coal industry erupt in some of the Labor electorates. The Leader of the Greens is saying that the coal industry should be wiped out over the next three years. What a remarkable policy position the Greens have on the coal industry!

Over the last week the Leader of the Opposition got himself into some trouble with his climate change policies, which put at risk major industries such as coal. There has been an ongoing debate about this. I notice that the Labor Party have changed their position because of those of its members who have historically represented the coal mining electorates. Labor has not put on the record what the implications of signing the Kyoto protocol would be for Australian industries or the impacts of other related policies, such as increasing the mandatory renewable energy target—

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