Mike Symon (Deakin, Australian Labor Party) Share this | Hansard source

I rise to speak in support of both the ACIS Administration Amendment Bill 2009 and the Automotive Transformation Scheme Bill 2009 before the House today in this cognate debate. These bills are a clear and unmistakable sign of the Rudd government’s commitment to stand together and support a local automotive industry that, according to 2007 figures—from the 2009 yearbook Australian Automotive Intelligencedirectly employs more than 67,000 Australians. This includes people from my local electorate of Deakin and people from my city of Melbourne—Victoria being a base of automotive manufacturing. Companies such as Holden, Ford and Toyota all operate out of Melbourne and have done for a long time. Of course, they also operate out of other cities in Australia, being based, notably, in South Australia.

The automotive manufacturing industry is one of our major exporters, which earned export revenues of $5.8 billion in 2008 alone. That was from the export of around 159,000 vehicles, both passenger and light commercial. In 2007 the industry had a gross turnover of over $24 billion and, importantly, an R&D spend of $635 million. The passing of these bills would ensure a smooth transition from the previous Automotive Competitiveness and Investment Scheme, the ACIS regime, to the new Automotive Transformation Scheme, the ATS, commencing in January 2011. I support these bills, as someone who is a Labor Party member, as someone who is committed to supporting jobs in the manufacturing sector and as someone who believes that our next generation of cars needs to be more fuel efficient, more environmentally friendly but, importantly, built here.

As an electrician in years gone by, I have been employed at various times at automotive factories such as Ford in Broadmeadows, at the old GMH plant in Dandenong, at Altona Toyota and at the GMH engine plant at Fishermen’s Bend. They were all good, well-paying jobs at the time. It was a different era. For most of the time there was much more manufacturing then of cars locally. Even though the jobs were hard and dirty they were consistent. There was always ongoing work at the car factories. It is important that there is that sort of continuity and support for people who are after jobs who have skills. Sometimes there is not much work happening in other sectors of the economy, but there has always been that fallback for some skilled trades in the automotive industry.

What is often forgotten when discussing jobs in any particular sector or industry is the flow-on effects for contract services and supplies and, as I said, in the automotive sector particularly for skilled tradespeople. It flows down the line. It flows back to the local workshops that do metalwork, fitting services or electrical switchboards, for instance, that are supplied to automotive manufacturers every time a production line is rejigged or changed or a new one put in place. There are also maintenance workers at those plants. The plants in Melbourne, both Ford at Broadmeadows and the GMH engine plant at Fishermen’s Bend, have large teams of maintenance staff to ensure that things do go right and that they operate at maximum capacity.

Component manufacturing and design is the other side that is associated with the industry. Many companies, especially in suburbs, are not what you would regard as heavy-manufacturing suburbs but are light industry suburbs, do work, do design and do produce components that are not only used by car manufacturers here in Australia, particularly in Melbourne, but are also exported to other countries in the world. Just as the FX Holden was the first car for Australians, produced by Australians, this bill will ensure that Australians will keep producing Australian cars and components for markets not only in Australia but, as I said, across the world for years to come.

As members may be aware, $3.4 billion ATS was a key recommendation of the government commissioned review of the automotive industry, popularly known as the Bracks review. Of the then proposed ATS, the honourable former Premier of Victoria, Mr Bracks, said:

In particular, the Review recommends that the existing Automotive Competitiveness and Investment Scheme be reformed into a new Global Automotive Transition Scheme, which supports greater innovation through enhanced research, development and design.

He continued:

The emphasis on exports of assembled vehicles and component parts is also reinforced, noting that the Australian automotive industry is crucial to our worldwide trading position.

The automotive industry, from the local producer manufacturing hinge components for car doors in Bayswater North in Victoria to the Holden Commodore that rolls off the line in Elizabeth, South Australia, is a key employer in these states and across the nation. Supporting this industry and insisting on innovation in this industry is about jobs. That is the bottom line: jobs now, jobs in the future.

These bills will amend the current ACIS and replace the current ACIS regime. The ATS will include a shift from an import credit based transfer of payments to a grants system. This change was requested by the manufacturers—a clear sign that this government is willing to work with and listen to the stakeholders in the industry, delivering a package of government assistance that supports manufacturers and, in turn, supports local jobs. Importantly, the government will also boost the maximum rate of assistance for eligible research and development from 45 per cent to 50 per cent—again, done as a result of industry feedback, aimed at strengthening the focus of manufacturers on research and development.

This is a 10-year plan. The ATS will include secure funding streams from its beginning in 2010 until its planned conclusion in 2020. Capped assistance will be $1.5 billion for 2011 to 2015 and then a further $1 billion from 2016 to 2020. It is this capped assistance that will provide the much needed certainty to local car manufacturers throughout the coming decade.

There are, of course, some common-sense strings attached to this assistance. Manufacturers will be required to show that they are improving environmental outcomes and, importantly, the development of better workplace skills and capabilities. This is one of the reasons that the Australian Manufacturing Workers Union supports this legislation. There are tens of thousands of jobs on the line, and there are opportunities for the upskilling of the workforce. The five per cent increase in the eligible assistance rate is also expressly aimed at increasing our export capabilities and boosting productivity.

In supporting the industry but also insisting on a move to less-polluting vehicles and more productive manufacturing processes, the Rudd government aims to future-proof the industry to ensure its long-term viability. The Rudd government believes in sensible trade liberalisation, but it will encourage the local car industry to modernise as one of only 15 concept-to-completion car-producing nations in the world. We can do this by changing tack and developing a more modern industry that is well placed to capitalise on its proximity to markets such as India and China.

We are all aware of the effect that the global financial crisis has had across the world as credit has dried up and economies have shrunk. The automotive industry globally has been hit hard, with no greater examples than the short-term bankruptcy of Chrysler and then General Motors filing for bankruptcy in the United States in June this year. The Obama administration in the US has changed its approach in how it has dealt with automotive companies, compared to US administrations of the past. As part of dealing with the problems that came to the surface in the US, it ordered both companies to reform work practices, modernise their approach to environmental impacts and, especially, look at the fuel efficiency of their finished products. The Obama administration made a range of commitments, including money for the development of cheaper batteries for electric cars, tax credits for the retooling of factories to build plug-in vehicles, and tax offsets—all aimed at fostering modernisation.

Thankfully, in Australia we are not facing the complete collapse of our major producers, as was almost the case in the US, but a good government can see that it is better to prevent rather than cure the ills of its major industries. The composition of the global car industry is changing as well. For the first time, China has overtaken the United States as the second biggest car producer, as more plants across the US are set to close, with estimates showing that up to half the existing plants in the US will close in the coming years.

In 2008, more than 70 million motor vehicles were produced worldwide. Certainly, due to the effects of the global financial crisis, that number will be smaller in 2009, but, going forward, one would hope that it does pick up and that the industry also picks up with that increase in demand. Changing attitudes and rising fuel prices have seen diesel car sales rise sharply in Europe. Legislative changes in California have spawned a shift to hybrids and especially driven a new interest in electric cars in the US. The threat of climate change has seen people change their preferences when buying a new car. People are moving to smaller cars with greater fuel efficiency and fewer cylinders or better engine management controls. The Australian car industry needs to shift with these changes, and the government needs to help it do so as quickly as possible.

I want to also take this opportunity to remark on our Green Car Innovation Fund. Many years ago, the then Minister for Industry and Commerce, John Button, put forward the motor industry development plan known to many as the Button plan. That helped kick-start a rise in exports and greater efficiency in the industry back in the 1980s. For instance, the number of vehicles exported from Australia in 1988 was a grand total of 1,921, some 150,000 vehicles fewer than were exported from Australia in 2008. Again it is left to a Labor government, some 25 years later, to usher the Australian car industry into a new era, and the Rudd government is doing so through the introduction of the Green Car Innovation Fund.

The fund includes a $1.3 billion investment over the coming decade, targeted specifically at boosting the environmental performance of our locally produced vehicles. The ATS requires improved environmental outcomes; the Green Car Innovation Fund will help the industry deliver it. This funding is not just for producers but also for component makers and, importantly, our local researchers and developers. Importantly, this funding will operate on a funding basis of one dollar to every three dollars, ensuring that we as a government are supporting and bolstering research and development, all aimed at multiplying the value of our initial contribution. As I remarked before, trends in consumer preference are changing. This fund will help the industry place itself front and centre in the development of new, more fuel efficient technologies, particularly with a focus on export markets.

When discussing issues of climate change, which I note have been a popular topic round here lately, the issue of the creation of ‘green-collar’ jobs comes up with people that I talk to. It is government initiatives such as these that will help develop a viable green-collar job base in this country. Ongoing increased demand will then lead to more employment opportunities. This fund in particular is part of a much wider commitment on the part of the government to tackle climate change. The Minister for Innovation, Industry, Science and Research, Senator Carr, put it quite plainly:

“Labor’s new car plan is a car investment scheme and companies will not get any benefit unless they undertake new economic activity,” he said.

“Therefore, there is a direct link between the level of assistance and the level of economic activity.”

In conclusion, the Rudd government is committed to stand with and support a local car industry that directly employs more than 67,000 Australians. We stand with an industry that is also one of our major exporters, major employers and major drivers of research and development. The ATS, along with amendments to the ACIS, will bring the automotive industry forward into a new era of more modern, internationally competitive, greener domestic motoring options. In time, I am confident that future generations may look back upon this scheme as some look back upon the Button scheme and say to themselves, ‘This was the point where we set up the automotive manufacturing industry in Australia on an economically sustainable footing.’ I commend the bills to the House.

See this speech in context