Jamie Briggs (Mayo, Liberal Party) Share this | Hansard source

Just prior to question time, I was talking about the importance of the car industry to my home state of South Australia and Victoria in particular. We were discussing the change in the economic structure in South Australia, ushered in in the nineties by the former Liberal government under the guidance of Dean Brown and John Olsen, with Rob Lucas changing what was an old school economy that relied very heavily on the manufacturing industry into a fast-moving and much more adaptable economy that relies on newer industries. The defence industry in the electorate of Port Adelaide is doing quite well, thanks to the support of the previous government, and so forth.

What had happened was that Mitsubishi, in the southern suburbs of Adelaide, which for a long time had been subject to government support and employed a lot of people in South Australia, had run into significant financial hurdles. I think it is not unreasonable to say that the reason they survived so long was probably the attitude of management in Japan. They were able to keep the plant in South Australia going for some time, probably longer than they would have liked. When they eventually shut down the plant—I think it was only 12 months ago that it came to a complete end—they adapted the structure of those areas in that labour market. They took it away from relying wholly and solely on heavy manufacturing, the car components area, at Tonsley Park and Lonsdale to a situation in the mid-2000s where the number of employees at the Mitsubishi plant was the sum total of people affected by its closure.

Of course, it was difficult for most people, but I think it is true to say that most of the workers found other work without having to access the employment assistance programs that were on offer—and that was a tribute to the way that issue was managed. It goes back to this question: what value for money do we get for the significant assistance we give to the car industry? This government is proposing to give nearly $5 billion worth of assistance to this industry. What the opposition is rightly saying is that we need a level of scrutiny on that money. We need to ensure that we get value money. When we are paying back $300 billion of debt, we have to ensure that every dollar the government spends is directed to the right place.

Moving forward as a country, we need to look at investment in science, technology and education, investment in the newer industries. I am sure the wine industry in the Adelaide Hills in my electorate would not mind $3 billion over the next 10 years to assist their development. But, of course, they have not asked for that. They have simply asked the government not to take away the Wine Equalisation Tax in the Henry review. I am sure the Minister for Agriculture, Fisheries and Forestry, who is at the table, would be very alert to that issue. He is probably seeing some of those fine wine industry people this evening to discuss that issue!

Over time the Australian government, in conjunction with South Australian and Victorian governments both Labor and Liberal, has offered significant assistance to the car manufacturers. It is time, I think, that the government and the taxpayers were assured that they are getting value for money. You cannot survive in the Australian car manufacturing industry without having a large focus on exports. Toyota do very well at it and Holden do very well at it. Ford probably trail, but they are still focusing on exports. Of course, that is what they must do. They must be part of the global supply chain in this industry because that is the way it has moved. Whether we like it or not, we do compete against lower cost economies when it comes to manufacturing, and that does make it difficult for us. We are not playing on a level playing field—I accept that. However, we have to ask: at what point are we spending too much on this industry? I think the level of scrutiny that has been suggested by the shadow minister is appropriate. Coming from South Australia, I know it is a big issue. I am sure that the member for Wakefield, who I see is listed to speak on this bill, will be very supportive of the assistance given to constituents who live in his electorate and work at Holden and in the car component sector around it. We need to have a mature debate about this. We need to consider this carefully because there is a lot of money at play.

As I said before question time, the Productivity Commission has commented in the past. It looked at this in 2008 and said that it costs the taxpayer around $300,000 per job per year to keep people employed in this industry. What we have been saying in this debate is, ‘Let us look at the accountability of this issue.’ I know the Prime Minister, when he was first elected Leader of the Opposition, highlighted manufacturing in his first press conference. I think he said something like, ‘We need to be a country that still makes things.’ Of course, we all agree about that. I think that is a reasonably non-contentious thing for him to say.

I think we should keep making cars. I think we make good cars. I drive a Ford Territory. It is a very good car, a fine Australian product. However, we have to also understand that many fellow Australians choose to buy overseas-manufactured cars. That puts pressure on our industry, but it also indicates that it is in a very competitive environment. It is one that we need to keep an eye on and see how it is developing, because chucking more dollars at it will not work in the long run. We saw that with Mitsubishi.

I think if you had said in early 2008, when Mitsubishi finally announced they were leaving Adelaide, that the government was going to give them more money to try and help keep them here, you would have seen a very strong reaction against that. Going back 10 years, I do not think that would have been the case. Ten years ago, in 1999, had Mitsubishi said they were going to leave—and in fact they did a couple of times, and they got significant amounts of money out of it—the reaction would have been different. The community attitudinal change is quite significant.

I think that reflects the change that our economy is going through. I suspect that has helped in South Australia, as we have moved to a more flexible economy, which has meant that we have not relied on the heavy manufacturing industries as we have in the past. It is all very well for us to cling to the historical story-line that we need a car industry in Australia, but, if it is costing us too much as a government, if it is costing us too much as taxpayers, we need to give serious consideration to how we move forward with this industry.

The final issue I want to briefly deal with this evening before concluding my remarks is this. There are changes that the government is making or has made which will make management of the car industry more difficult going forward. None are bigger than the changes it has made to the industrial relations system. The rewind of the industrial relations system poses a great threat to this industry, as it does to the Western Australian mining industry. We heard what Governor Glenn Stevens of the Reserve Bank said about that last Friday—that, if you re-regulate, if you have more industrial disputation in Western Australia, you will kill the golden goose. I think that is equally true in the manufacturing industry. Changes such as allowing good faith bargaining and so forth, I think, are a very big danger for the industry going forward. Privately, the industry will tell you the same. They do not like the changes. They know the changes pose problems for them. Employee costs in that industry are quite significant. I think that is a major worry, with increasing union activity leading to disputation and strikes and increasing wage costs in the industry. That is another concern brought on by changes the government has made.

The biggest change of all to our economic structure which will affect this industry, will affect our ability to continue to pump in the millions that we do, is the amount of debt, obviously, because we will as a country at some point need to make some attempts to pay that debt off. That may be through tax increases, the Labor way. That is what we will see with Labor; that is the way they will try and pay this debt off. But we will also need to have a serious look at the services our country provides, so we can get back to the balanced budget situation that we on this side of the House desire and the Australian community desire. I am not so sure about those on the other side of the House. With those short remarks, I will conclude.

See this speech in context