Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry, Tourism and Resources) Share this | Hansard source

I say to the three members who have spoken in the debate on the ACIS Administration Amendment (Unearned Credit Liability) Bill 2007the member for Grayndler, the member for Corangamite and the member for Oxley—that we do appreciate their contributions. In relation to the most recent contribution, that of the member for Oxley, I say to him that perhaps he has been reading his own press releases and speeches for far too long and he has not actually taken a lesson in reality.

This government developed the action agendas on, and is working in, advanced manufacturing and tooling, and is progressing in the areas of the aviation industry and the motor industry. There is a lot to go forward. The whole idea is that the government works with industry but that industry takes a leadership role, because industry understands and knows the solutions. The action agendas are designed for industry to have its say to government and then for government to have the opportunity to enact the recommendations that come out of the action agendas.

Today, we are talking about ACIS, involving the automotive industry. There are some key points for consideration, and I will come back to the comments by others in a little while. One of the key points is that this is an exciting industry—an industry that has gone through remarkable change. It is an industry that is renowned world wide for its innovation; it is renowned for the quality of standards and, in particular, for expertise in design and engineering.

I want to give the House a level of understanding of this issue, which is perhaps highlighted by General Motors-Holden’s recently announced export deal. They will be sending Commodores to the USA, badged as the Pontiac G8. This shows that Australia can compete in an international environment. Americans in particular are very fussy about their motor vehicles.

Our motor vehicle sector has achieved a lot. It employs more than 70,000 people, has a turnover of nearly $24 billion, comprises four major motor vehicle producers and more than 250 component producers, machine tool producers and service providers. The ACIS provides assistance for research and development and is intended to assist investment in these areas in order to achieve further international competitiveness. It is an amazing sector that has gone through the ups and downs of industry, but a sector which has still achieved export volumes of $5.2 billion in 2005-06—a record figure.

In 2006, around 126,000 vehicles were exported to the Middle East, the United States, China, South America, South Africa, New Zealand and South-East Asia. As I said, last week Holden announced it would commence significant new exports to the United States from the fourth quarter of this year. Those exports are likely to be 30,000 units per annum, and possibly more. Ford will be producing new versions of its Falcon and Territory models, and has indicated some will be for export. Toyota has an excellent record in export; it is our leading exporter, primarily to the Middle East. The component sector is also performing well within its export performance arrangements. All of these factors are essential if we are to have a strong domestic industry. The export industry is the cream on the top of our domestic industry.

I listened with amazement to the comments by the member for Oxley. He talked about how it was Labor that got rid of the tariffs that built the viability of this industry. Unfortunately for the member for Oxley, he has not been here for the same period of time that I have. He does not seem to remember his colleagues voting against all of the tariff reductions this government put into place to enhance industry in particular and its competitiveness.

He talks about investment; he wants to talk like a drunken sailor spending. Ninety-six billion dollars was the black hole this government was left with. He wants to talk about increasing taxes so that the government has a bigger cash bag to spend as it sees fit. The best people to understand spending are those who pay the taxes. They do not mind their taxes being invested in a wise manner that returns the benefit to them or to Australia, but they do have concerns when they are used to ramp up spending and then go into an era where spending gets out of control—in particular, in the last year of the Labor government we were left with a $10 billion black hole, which accounted for roughly 10 per cent of the $96 billion worth of debt.

I contrast that to the comments by the member for Corangamite, who made a good contribution. He has been true and steadfast to this motor industry, predominantly because he has the Ford motor vehicle company in his electorate. The member for Corangamite could see the future and knew that, by reforming not only industrial relations, which he mentioned, but also reducing the tariffs agendas, it would provide a more competitive industry and would lead to a higher quality built product in Australia. He understands the industry.

The one who amazes me is the member for Grayndler. He gives the appearance of being a smart fellow, but his speech changed that interpretation. People like the member for Grayndler will continue to grandstand on false figures. It is this government, the Howard government, which is working hard to build a sustainable future for the Australian manufacturing industry. Its industry and workplace reforms have provided a sound economic framework, allowing industry to grow and adapt to a changing global market. As we heard the member for Corangamite say, ‘240,000 jobs have been created since the introduction of Work Choices.’

This is about reform. It is not about words written on paper; it is about affirmative action taken by government that delivers real results. The member for Grayndler talked about a lack of investment. I would say to him we are investing more than $7 billion in the automotive industry, plus another $1.4 billion in the textile, clothing and footwear sector, which he also mentioned, through our long-term industry plans.

It is within this positive economic climate that Australia’s manufacturing sector is achieving some impressive results. Manufacturing industry value added in 2005-06 was $96 billion in real terms, representing 10.4 per cent of GDP. That is sourced from the ABS national accounts figures. Our total manufactured exports on an industry basis rose by $11.4 billion in the 2006 calendar year to reach a record $83.1 billion. The source of that data was the ABS publication on international trade in goods and services. Over that same period exports of elaborately transformed manufactures, or ETMs, rose by nearly $1.4 billion to reach $27.4 billion. The source of that information is the DFAT STARS database. In fact, private new capital expenditure by the manufacturing sector was also at an all-time high last year, as sourced from the ABS publication Business indicators.

It makes a furphy of what those opposite have said: that we have driven back investment, that we have driven back jobs, that we have denied industry investment. I put it to you, Mr Deputy Speaker, that we have created the framework, we have made the investment and, in parallel with that, industry has made the development. In fact in 2004-05 research and development in the manufacturing sector represented almost 41 per cent of Australia’s total business expenditure on research and development, with total expenditure increasing by 3.8 per cent to a record of almost $3.5 billion. The source of that data is again the ABS, in its publication on research and experimental development in businesses. The government is working with industry, the government is creating jobs, the government is attracting investment. This bill, ACIS Administration Amendment (Unearned Credit Liability) Bill 2007 is part and parcel of that.

The government has been providing significant support to the industry through the Automotive Competitiveness and Investment Scheme—ACIS. ACIS is a transitional assistance scheme which encourages the industry to become internationally competitive through investing in its own future at a time of phased tariff reductions. Through these arrangements, the government has provided the automotive industry with a decade of certainty.

The participants in ACIS number about 250, and they include the four motor vehicle producers and the automotive component producers, automotive toolmakers and automotive service providers. ACIS will deliver assistance to participants through the issue of duty credits and will provide over $4 billion in assistance during the period 2006-2015. This will be of great benefit to the 70,000 employees who work in this industry.

Assistance is provided up-front—that is, duty credits will be issued on receipt of quarterly claims from registered ACIS participants. A subsequent audit process will ensure that claims are legitimate and eligible expenditure. If items of ineligible expenditure or other areas are identified in unearned credit liability, it will be issued to the participant and offset against their future ACIS credits.

A recent decision by the Administrative Appeals Tribunal has important implications for the Commonwealth’s ability to issue UCLs under the ACIS Act other than in a very limited range of circumstances. That decision has raised the prospect that the eligibility of claims from participants may have to be fully assessed prior to any credits being issued, and that will create more red tape for industry. This government is about reducing red tape for industry.

It would be unacceptable from a financial management perspective for the Commonwealth to issue credits unless it is certain that it has the ability to recoup any issued credits to which a participant is subsequently found to be not entitled. The up-front assessment of all claims would result in lengthy delays in the issue of duty credits, which could impose significant financial hardship on members of the automotive industry. The industry has long accepted that issuing credit up-front, and then issuing UCLs should ineligible expenditure be identified, is the best way for them to receive credits in a timely manner. The Commonwealth is keen to ensure that that approach continues.

This bill will confirm the Commonwealth’s ability to issue UCLs. It will ensure that industry can continue to receive credits as soon as practicable after they submit their quarterly returns, and it will ensure that the ACIS scheme can continue to be administered in the manner agreed by all parties when it was established.

In summary, the amendments being debated are designed solely to restore to the Commonwealth the power to administer the ACIS scheme in a manner that best meets the needs of the Australian automotive industry. As I said, members opposite need to take a reality check when they look at industry, which is becoming more competitive and needs red tape to be cut. This bill is a part of that process. I commend the bill to the House and I urge members opposite to support it.

Question agreed to.

Bill read a second time.

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