Chris Bowen (Prospect, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

in reply—I thank all honourable members for their contribution in the debate on this bill. I must, however, start with the rather bizarre and confused contribution we have just heard from the member for Paterson, who said: ‘We support this bill, which affects car dealerships, but what is the government doing about the commercial property sector? What is the government doing about other sectors having trouble getting finance? Why won’t the government do something about those sectors?’ He said, ‘It’s not your money; it’s theirs.’ I have a response for the member for Paterson: it’s not your job; it’s theirs! It is the people in the commercial construction industry who are looking for government action. They are also looking for opposition action and opposition support for a bill in the House called the Australian Business Investment Partnership Bill, which the opposition is opposing all the way. (Quorum formed)

I was in the process of pointing out the confused and bizarre contribution from the member for Paterson when the quorum was called. The member for Paterson said the opposition supports the special vehicle for car financing but asks: ‘What else is the government doing? Where else is the government support for the commercial property industry?’ This is from a member of the party who has opposed to the bitter end the Australian Business Investment Partnership, which is designed to do just that. Talk about inconsistency. The member for Paterson must not have been present at the party room meeting that decided to oppose the Australian Business Investment Partnership, a partnership which has been called for by business across this country for months. The opposition of the Liberal Party is something that business just cannot understand. They cannot understand the reason why the so-called pro-business party in this country would oppose such a sensible measure.

I thought the member for Paterson laid out quite a good case for the Australian Business Investment Partnership. I thought he made quite a compelling argument to vote for it. And yet this is a man who voted against it and whose colleagues in the other place are threatening it. They are trying to derail it and they may very well be successful in derailing the Australian Business Investment Partnership through their opposition. If a member of the opposition is going to come in here and say, ‘We’ll support this: it’s good as far as it goes. It’s fine inasmuch as it achieves, but the government needs to be doing more,’ it would be helpful if he put his vote where his money is and supported the government’s actions by supporting the Australia Business Investment Partnership. So it was a particularly bizarre contribution from the member for Paterson.

I want to take this opportunity to also respond to another opposition member. This time the contribution was not bizarre; it was a contribution that was quite passionate by the member for Riverina. The member for Riverina spoke on this debate last night and I watched her contribution. She clearly is very interested in this topic and she clearly feels very strongly about this topic, and I welcome her contribution. The member for Riverina, if I understood her argument correctly, was concerned that the criteria of the special vehicle may restrict some of her car dealers from applying, but that is certainly not the case. It is the case that this special vehicle will not be operational until the bill has passed both houses of parliament, and certainly we join with the opposition and the member for Riverina in wanting that to happen urgently.

If I interpreted the member for Riverina’s concerns correctly, she was concerned that there may be criteria in this bill which would require a turnover of half a million dollars a month for the car dealer to have access. That is certainly not the case. That is a requirement from some of the private sector providers in place at the moment, but it is certainly not the case for this special vehicle. There are some former GE or GMAC finance dealers who have not been able to secure new financing arrangements, particularly in rural and regional Australia, which the member for Riverina referred to. Most of these dealerships have now been issued final notices. That is the reason the government has embarked on this process and would like to see the bill passed swiftly. I think it is correct to say that the member for Riverina has been in contact with the Treasurer’s office, and I certainly encourage her to continue that dialogue and we will certainly do everything we can to facilitate matters with her constituents who have raised those issues.

So while it is very pleasing that it has not been necessary to activate the OzCar facility in the last six months since it was launched because of the success of many former GE and GMAC finance car dealers in securing the wholesale floor plan financing from alternative providers, it has now become necessary to activate the facility. The OzCar SPV facility is critical in ensuring that one of the largest providers of the wholesale floor plan financing in Australia, Ford Credit, is able to remain in Australia to continue to support its network of around 230 car dealers, about 140 of which are in regional centres.

There is little doubt that, if Ford Credit is not able to secure liquidity from the OzCar SPV over the next 12 months, a large number of Ford Credit’s current dealers in regional New South Wales, Queensland, Victoria and South Australia will fail, resulting in hundreds of job losses in many vulnerable communities. The OzCar SPV is also critical in providing liquidity support to the small number of former GE and GMAC dealers who have not yet secured alternatives sources of wholesale floor plan financing.

It is often forgotten that the vast majority of car dealerships are small family businesses. These businesses have often been developed over many years involving generations of the same family. This bill will therefore allow a large number of small family businesses to continue to develop and grow during a very difficult and challenging economic period. The Car Dealership Financing Guarantee Appropriation Bill 2009 simply seeks to enact a standing appropriation to support the Commonwealth guarantee that will apply to around $550 million of securities issued by the OzCar facility. The Commonwealth guarantee is necessary to provide the four major Australian banks with the legal certainty they need to purchase their respective equal share of OzCar securities. OzCar will raise funds by selling securities to the four major Australian banks. At a time when the debt securitisation market has dried up as a result of the global financial crisis, we welcome the willingness of the four major Australian banks to support this initiative by agreeing to purchase OzCar securities.

The overall size of the OzCar facility will not exceed $850 million; it is likely to be much smaller. The contingent liability risks to the Australian government are small. Treasury has entered into a contractual arrangement with Credit Suisse, the OzCar program manager, and a range of service providers on the operation and administration of the OzCar SPV facility. The Treasury will be providing the Treasurer with regular reports on the operation performance of the OzCar facility and will prepare quarterly reports on the operation of the SPV that will be made available to parliament. The OzCar SPV is designed to wind down by 30 June 2010. The standing appropriation that this bill puts in place will then wind down.

There is no doubt that the Australian car industry is facing some very serious challenges. The next 12 months are expected to be more challenging than the 12 months that have just passed for that sector. Throughout the global financial crisis, the government is acting decisively and responsibly to support Australian jobs. Initiatives such as the OzCar SPV are absolutely critical in providing not only real material support to many car dealers but also critical confidence to the entire car industry at this time, when it needs it most. Again, I thank honourable members who have contributed. I welcome the opposition’s support—despite the bizarre contribution from the member for Paterson, who I thought, at one stage, had announced the opposition’s support for the Australian Business Investment Partnership because he made a very cogent argument for it. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

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