Maria Vamvakinou (Calwell, Australian Labor Party) Share this | Hansard source

I rise this evening to speak on the Automotive Transformation Scheme Bill 2009 and the ACIS Administration Amendment Bill 2009. The Automotive Transformation Scheme Bill 2009 is a very important bill and it provides the legislative framework for the establishment of the new Automotive Transformation Scheme, with the administrative details included in the regulations. I want to begin by congratulating the government and the Minister for Innovation, Industry, Science and Research for bringing this bill before the House at this time. This is a new, better targeted and greener scheme, which implements the centrepiece of the government’s automotive policy, announced on 20 November 2008, entitled A New Car Plan for a Greener Future.

The car plan includes an expanded Green Car Innovation Fund of $1.3 billion, brought forward to 2009 and running over a 10-year period, and changes to the Automotive Competitiveness and Investment Scheme in 2010 to smooth the transition to the ATS, to the value of some $79.6 million. The plan also includes $116.3 million to promote structural adjustment, through mergers and consolidation in the component sector from 1 January 2009, and facilitate labour market adjustment; $20 million from 2009-10 to help suppliers improve their capacity to integrate into complex national and global supply chains; $6.3 million from 2009-10 for an enhanced market access program; a new Automotive Industry Innovation Council, bringing the key decision makers together to drive innovation and reform; and a $10.5 million expansion of the LPG vehicle scheme, to start immediately. That in fact doubles payments to purchasers of new private-use vehicles that are factory fitted with LPG technology.

The Automotive Transformation Scheme, running from 2011 to 2020 and providing $3.4 billion to the industry, is, as I said, a new, better targeted and greener assistance program. The Automotive Transformation Scheme encourages the competitive investment and innovation necessary for the future viability of the Australian automotive industry. It provides assistance to registered participants who invest in eligible research and development, plant and equipment and, in the case of motor vehicle producers, the production of motor vehicles. The bill provides much needed flexibility in order to address changing circumstances in the Australian automotive industry.

The main feature of this bill is a renewed emphasis on innovation. This renewed emphasis will be achieved by increasing the level of assistance for eligible investment in research and development from 45 per cent to 50 per cent. This provision is particularly important as it reaffirms the government’s commitment to driving its innovation agenda across all industry and, in particular, the automotive industry. This government understands how important innovation is to Australia’s future prosperity. The Australian automotive industry needs to develop new technologies to meet the new and changing circumstances of the 21st century. What is at stake is nothing less than the very survival of the automotive industry, and a strong and innovative automotive industry is vital to technology development and innovation in a whole range of industries in this country.

The renewed focus on innovation in this bill will be of substantial benefit, for example, Mr Deputy Speaker Thomson, to our state of Victoria, which has over 82 per cent of Australia’s automotive research and development being undertaken there. That translates to nearly $540 million worth of R&D. But we must always remember that, in ensuring the survival of the automotive industry, we are in fact ensuring the survival of the livelihoods of the many thousands of hard-working Australians either directly or indirectly employed in the automotive sector.

As the member for Calwell, which is home to the Ford Motor Company, no-one understands this more clearly than I do. Ford has been a major employer in my electorate for many years, and, as a result of Ford’s existence in Calwell, there are many other employers in the area who supply and depend on Ford for their ongoing viability. My constituents, the people of Calwell, are typical of thousands of other workers across Australia. Their livelihoods depend on Australia having a strong and viable automotive industry. So, through bills such as these, the government is maintaining and strengthening our manufacturing capacity. In the last two years we, in my electorate, have suffered many job losses in the car component industry. Many constituents have spoken to me of their personal angst and worries for their future in the context of the global financial crisis. They know that this economic downturn has hit the major car manufacturers in the US and in Europe. They are worried about their livelihoods, and they are worried about the livelihoods of their children.

We have all watched the car industry come close to being brought to its knees by this global financial crisis. Across Australia, in fact, we have held our collective breath as its potential impact has become apparent. But I can say with confidence—and, to a certain extent, with great pride—that the government and, in particular, the Minister for Innovation, Industry, Science and Research are doing everything we can to protect, support and develop our manufacturing capacity. We are determined to refocus and reshape our car industry, because we are committed to preserving and growing its capacity. The car industry not only provides vital employment for Australians, it is a driver of manufacturing innovation across many other industries as well. And having a local car industry that is strong and confident enough to innovate is essential for Australia to be at the forefront of adapting to our pressing environmental needs.

In the debate surrounding government assistance to the automotive industry, there are many—and there have been many speakers here on the opposite side today—who think and have stated that we should cease or seriously limit taxpayer-funded bailouts and let the chips fall where they may. But I was at one with the government when we expressed the view that better targeted schemes are the answer—schemes such as this, that will drive innovation throughout the automotive industry. Those who may oppose this scheme, I say, simply want to surrender Australia’s car manufacturing capacity.

An example of the opposition to this government’s bill is the contribution today by the member for Wide Bay, who not only voiced opposition to our investment in the automotive industry but sought to misuse the Productivity Commission data as he went on to say that support for the industry was the equivalent of a $300,000 subsidy per job and cited the Productivity Commission as the source of this figure. The fact is, though, that the Productivity Commission did not say that every job in the auto industry received the $300,000 subsidy. Instead, the Productivity Commission did an exercise where they assumed that the industry received $1.1 billion per annum. It estimated that if government assistance were removed it would lead to the loss of 3,000 jobs, so that each job saved cost $300,000—3,000 times $300,000 implies $900,000,000. The $300,000 is an estimate based on an assumption that is not valid. The fact is that 3,000 jobs have been lost in recent months in the auto industry as a result of the slump in the auto market following on from the global financial crisis. This has occurred in the context of the loss of tens of thousands of jobs in this industry around the world.

When in government, the opposition recognised the importance of the automotive industry and provided support through the ACIS program. The question now is: have they changed their minds on this? The member for Wide Bay questioned whether this support was indeed worthwhile, and our question is: is this just another case where the National Party perhaps thinks differently on this issue from the Liberal Party?

Without the support provided by ACIS and the ATS, many more jobs in the car industry would be lost, and a critical element of our manufacturing industry would also be lost. I want to remind the House, because it is a very important thing to remember, that some of the key automotive industry performance indicators reaffirm the need to support and maintain our automotive industry. We are looking at exports to the value of $5.8 billion in 2008. We are looking at an employment figure of 46,474 people as of May 2009, an industry value of $5.8 billion between 2006 and 2007, and a business expenditure on research and development which was worth some $648 million in 2006-07. And of course we are also looking at demand: the industry used $11.4 billion worth of inputs from other sectors—services, primary industry and other manufacturers—in 2004-05.

Despite this, the opposition want us to surrender our manufacturing sector to the vastitude of the globalised free market. They want us to surrender our skills base and, ultimately, the livelihoods of working Australians, such as my constituent Mr Kalpa Dewan. I want to mention Kalpa because I had a chat to him recently about this. Kalpa lives in the suburb of Campbellfield in my electorate of Calwell. He has been working at Ford for 20 years and is now in the customer service division in the spare parts warehouse, where he is the occupational health and safety representative. Manufacturing for Kalpa is not an abstract economic indicator. Manufacturing for Kalpa is actually his livelihood. This government intrinsically understands the importance of this sector to the fabric of Australian life, to workers such as Kalpa, to families, to communities and to the whole region across this country.

I am proud to say that the Automotive Transformation Scheme Bill 2009 proves that the government are committed to Australia’s manufacturing future and that we will not surrender this industry. That is why we believe it is imperative that we make investments such as those included in the bill today. This government understand that it is incumbent on us to intervene in an area as important as manufacturing. As I have said, my electorate of Calwell, with its large manufacturing base, has many thousands of constituents whose livelihoods depend on the availability and the provision of manufacturing jobs.

Ford Australia, as I have mentioned, has an assembly plant in Broadmeadows and employs some 4,500 people across the country. In my own state of Victoria, the automotive industry is in fact the largest element of the state’s manufacturing sector, contributing approximately $3 billion in 2006-07 to the economy. Figures for February 2009 indicate that some 25,000 people were employed in this area. That is over 48 per cent of Australia’s total employment in motor vehicle and parts manufacturing.

Coming from Victoria and being the member for Calwell, I cannot stress enough the duty that we as parliamentarians have to ensure quality job opportunities for our constituents. We also have a duty to provide these opportunities in a targeted way which will ensure their long-term viability. It is not something that I believe we should let fall to the whims of circumstance. I know that my constituents support this view, and they are thankful that this government is doing everything possible to support their industry.

On 24 June this year, Minister Kim Carr announced a $230 million investment in Ford Australia. Ford Australia, with the support of this government, have convinced their Detroit headquarters that the first application of the EcoBoost technology to a rear-wheel-drive platform should begin here in Australia. This is not only a great achievement for Ford and a great outcome for Ford Australia but also a great achievement and a great outcome for Ford Australian workers and my constituents in the seat of Calwell.

The support this government has provided will revitalise and strengthen the automotive sector into the future. This government is not about just throwing money at the issue. In the context of the fund, the automotive industry is expected to build the skills and innovation capacity that is required to compete internationally into the future. Through the Green Car Innovation Fund, the Commonwealth will also contribute $42 million to Ford’s ambitious sustainability initiative. These are all important investments and they demonstrate clearly that this government is not willing—and nor am I, as the member for Calwell—to surrender our manufacturing sector.

The Automotive Transformation Scheme Bill 2009 provides capped assistance totalling $1.5 billion from 2011 to 2015 and $1 billion from 2016 to 2020. This assistance is guaranteed by the inclusion of a standing appropriation in the legislation, and the total assistance also includes an uncapped element for motor vehicle producers. Importantly, the scheme requires participants to improve environmental outcomes and promote the development of workforce skills and capabilities. The administration of the scheme is set so that assistance will be provided in grants instead of duty credits as was the case with ACIS.

Moreover, this bill makes it explicit that the scheme is self-assessed. This will ensure prompt payment to industry whilst reducing administrative costs to government. This bill also ensures that the Commonwealth can recover moneys overpaid to scheme participants, and these recovered funds can be redistributed. Payments to participants will be subject to robust verification and compliance. The measures in this bill are carefully and deliberately targeted. This is a scheme that looks to the future by requiring participants to demonstrate a commitment to improving environmental outcomes and developing workforce skills in the industry today and to do so now.

Additionally, it is important that I take a moment to note that the success of our cooperative efforts with industry have not occurred in isolation. Throughout this process, the government has maintained a commendable working relationship with the Vehicle Division of the Australian Manufacturing Workers Union. In conjunction with industry, the vehicle builders union has worked tirelessly with the government to ensure the survival and future prosperity of the automotive sector. While those opposite may attempt to gain political points by trying to demonise the union movement—and we see that happening constantly, and I am sure the member who speaks after me will do his bit as well—this government is prepared to roll up its sleeves and get on with the job with any stakeholder that is willing to fight for the long-term viability of Australian jobs and Australian industry. I invite the members opposite to be among those stakeholders who wish to ensure the survival of Australian jobs and our manufacturing capacity.

This bill protects jobs because it requires participants to promote workforce skills development. This element of the bill recognises that a key contributor to the future viability of the industry is the development of a highly skilled and highly paid workforce. In response to some of the concerns that have been raised publicly by the opposition, the government is proposing amendments to this bill to deal with those concerns. The opposition wanted a greater focus on economic sustainability and transparency in the operation of the scheme. The government is proposing amendments that will address those concerns. These amendments emphasise economic sustainability and provide for an annual report to the parliament on how the industry is progressing towards achieving economic sustainability, environmental outcomes and workforce development. These amendments will increase the transparency and accountability of the ATS and should be supported, not attacked.

In conclusion, as I have already mentioned, speaking to this bill gives me a great sense of pride because I know that this government is doing everything it can to protect, support and develop our manufacturing sector. It gives me pride because I represent an electorate that will directly benefit from the provisions in this bill. It gives me pride because of the progressive manner in which this government has brought all stakeholders to the table. And, finally, it gives me pride because I know that this bill is the centrepiece of the government’s A New Car Plan for a Greener Future policy. I commend this bill to the House.

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