Tony Zappia (Makin, Australian Labor Party) Share this | Hansard source

I take this opportunity to speak in support of the Automotive Transformation Scheme Bill 2009. Having listened to the contribution to this debate by the member for Fadden, I have to say that I am deeply disappointed at what I heard. I am deeply disappointed, because it is absolutely clear to me that he does not understand the significance of the automotive industry to this nation. It is also clear that he is at odds with members of his own party—and I was pleased to hear the reassuring comment from the member for Herbert that coalition members will be supporting this bill. It is consistent with comments I heard from a previous minister from the Howard government when he came to Adelaide some three or four years ago to support the release of a new model of the GM Holden Commodore. He spoke glowingly about the importance of the automotive industry in this country. I hope that that sentiment still applies to at least the majority of members in the coalition, because it is indeed important.

When you come from South Australia, as I do, where the automotive industry was the home not only to GM Holden but also at one stage to Mitsubishi, you very much understand and appreciate the important contribution it makes to the state as a whole, not just to one region. I suspect that any member who has an automotive plant within their electorate or near their electorate would have the appreciation that I am alluding to. It is an appreciation which goes far, far beyond the direct employment of the people who work in that particular factory, wherever it may be located.

I understand that in Australia there are some 63,000 people directly employed in the automotive sector. There are probably another 100,000-plus people employed in indirect supply industries. Added to that are the tens of thousands of additional jobs in industries that are in no way connected to the automotive industry but which rely on the prop up to the local economy that that particular industry provides. I say that as someone who is very much aware of how important such an automotive manufacturing plant is. I refer specifically to the GM Holden plant in Elizabeth and the significance of that plant to the whole northern region of Adelaide. I say it as someone who over many years had a close relationship with the GMH plant at Elizabeth. I saw firsthand not only what it did but also the significance of the contribution it made to the region.

As an example, adjacent to the GMH plant at Elizabeth there is now is the Edinburgh Parks development. Edinburgh Parks is a billion dollar development and it was only made possible because all of the supplier industries to GMH located there. As a result of their location there, other industries came to the region and, in turn, contributed towards that billion dollar investment of businesses and industries in that region. So the GMH plant was the catalyst for a whole range of direct supply industries—and others as well. When you multiply the combined effects of all of those industries, you start to understand the value it has to that region. I suspect it would be exactly the same in every other region of Australia, wherever there is an automotive plant in place.

But I will go further than that. In the northern region of Adelaide we have a very strong Defence Force industry and a defence supply industry. In fact, I would venture to say that it is probably home to the biggest Defence Force sector in this nation in terms of industries that are defence related. Most of them have contracts with the Department of Defence. But, in order to underpin and sustain their operations, many of them have to deal with manufacturing at one stage or another. As a result of GMH being there, and the supply companies to GMH also being there, they have access to products and contracts that they would not have access to if those automotive industry suppliers were not there as well. So one industry feeds off another, and that is the multiplier effect that is not reflected in the 100,000-plus people who owe their jobs indirectly to the automotive industry being there. So when the Rudd government came to office and committed some $6.2 billion to the Automotive Transformation Scheme, it was an investment that was welcomed certainly in my region but also, I suspect, by tens of thousands of families around the nation—because that is how many people would be relying on the automotive industry remaining viable.

If the automotive industry in this country were to go down, there would be a concern that I believe every Australian would share, and that is this: whilst our manufacturing industry across the nation has been in decline for several decades—and I think few people would dispute that—if the automotive industry were not around, the manufacturing industry would decline even further. In my view, that would leave this country totally vulnerable if in future years we were not able to make our own goods and did not have the facilities or the skilled people with the know-how to do exactly that. I say quite clearly and openly that I certainly refute the views put forward by the member for Fadden.

Before I get on to my own remarks, I would like to talk about a matter that was raised by the member for Mayo. He made reference to his concern about industrial relations under this government. GM Holden at Elizabeth has been competing in a very competitive environment across the world for the last couple of decades. The reason that it has remained competitive in the worst possible times—and even right now during this time of global economic downturn—is because the workforce at the GM plant, working hand in glove with management at the GM plant, know what is best for the future of the industry and have worked together to ensure the viability of that plant. It is through almost a decade of cooperation between the workforce and management that that plant remains viable. That plant was, in fact, one of the most productive GM plants around the world. So much for the concerns expressed by the member for Mayo. The situation is, in fact, quite the opposite. The people in the workforce in those plants are not there to try to ensure that they bring down those plants or create problems; rather, they understand what is in the national interest and they understand what is required of both parties—employer and employee—in order to ensure that the industry remains viable.

The attitude and approach of the workforce has been commended by GM executives time and time again. As someone who has been associated with that plant, I have seen the GM executives come and go and I would have to say that, without exception, each and every one of them has always understood, respected and commended the workforce at that plant for their approach in all of this.

I support this bill because it does a number of things. It underpins the viability of the automotive sector within Australia, but it also does two other significant things that I believe would be of concern to each and every one of us. We have just spent weeks and weeks debating the Carbon Pollution Reduction Scheme. We have debated in this chamber about what should and should not be done in order to minimise the effects of climate change, and we have debated in this chamber about what is the best way to reduce carbon emissions. When you look at Australia and you consider that something like 13 per cent of the carbon emissions that are produced in this country comes from the burning of fuel for the automotive sector, you can understand how important it is to ensure that we reduce the amount of carbon emissions coming from the automotive sector. It is not that difficult to do that if we are prepared to invest in some research, development and better designs. That 13 per cent could easily be halved, from the material that I have read. An investment in new car technology will, if nothing else, make huge inroads into our ability as a nation to reduce the carbon footprint of this country. If that is then transferred worldwide, as it currently is, it is surely one of the most productive ways of reducing carbon gas emissions across the globe. We need to do that for all the reasons that I suspect most members in this place understand.

It is interesting; only this morning I went to a breakfast presentation put on by World Vision. Tim Costello was there as the host of the breakfast, and there was a specific presentation relating to the effect of carbon emissions across the globe, how that links in with climate change and the consequences for each and every one of us. It is sad and somewhat disappointing that not all members of this House were able to go to that breakfast, because what they would have seen, I suspect, would have frightened them. It was indeed very concerning. But, putting that to one side, I make that point simply to reinforce the concern that is out there with respect to the importance of reducing carbon emissions. Investing in new car technology is certainly one of the ways of doing that.

That is one of the other critical outcomes of this bill. The third is this. We have debates in this place about the cost of crude oil and the impact it has on petrol prices. We know that we went through a period last year where crude oil was being sold for something like US$160 or US$170 a barrel, and we saw petrol in this country rise to $1.70 or $1.80 a litre. At the moment it has come back down in my home state to around $1.20 a litre and crude oil is selling for around $50 a barrel. But there are two issues relating to crude oil that truly concern me. One is this: it is inevitable that once the economy picks up crude oil prices are likely to rise. If it does, the increase in the price of crude oil will be transferred to the motorist—that is, the homeowners, the mums and dads, the people of Australia who rely on petrol to get to their workplaces, schools and wherever else they need to go. It would directly affect the household expenditure that households will be faced with.

So it is important to try to reduce that burden by coming up with more fuel efficient cars. This bill will do that. If you can reduce household expenditure on the petrol that is consumed, you will directly impact the household because of their expenditure. As we all know, everything we consume in this country has the cost of petrol factored in at some point or another. It adds a huge amount to the daily cost of living of people in this country. For that reason it is important that we come up with more fuel efficient cars.

In addition to the question of fuel efficiency per se, there are also views out there that the production of oil around the world has already peaked. I do not know whether that is true or not; I read mixed reports about that. But if it is true, given that countries like India and China are increasing the numbers of cars they produce and are selling to their own people in high numbers, it is likely that we will have, on one hand, less fuel and, on the other hand, greater demand for it. The consequence will quite clearly be that the cost of crude oil will increase. If it increases, that will be deflected directly onto the motorists and households of Australia.

It is imperative for the future of Australia’s automotive industry, for Australia as a nation and for the world that we reduce greenhouse gases. It is imperative that we reduce our reliance on petrol. It is imperative that we do whatever we can to minimise the costs of living associated with higher petrol costs. The $6.2 billion that was committed by the Rudd government as part of the auto plan will go a long way towards providing the kind of support that the automotive sector need to encourage them to make the investments that they need to make in order to design the cars that will ensure that they remain competitive around the world.

In that respect I come back to the GM plant at Elizabeth and commend the plant for having the foresight and making the commitment to change its design next year so that it is building a four-cylinder, more fuel efficient vehicle. I was at the plant probably six months ago when that announcement was made. I have seen the kind of model that they are looking to provide. I have also seen the timetable for the production of that car. Right at a time when we were going through probably the worst economic recession that the world has ever seen, that plant was planning for the future—a future that was dependent on a car that was going to be globally competitive. My understanding is that everything is on track to build that car within the time lines and have it in production by late next year. That was the information that was provided to me when I last spoke to the plant manager there, and I have no reason to believe that that will not happen.

I also commend the current workforce there, who at this very difficult time for the plant—and the workforce understands the difficulty that the plant is in—have agreed to reduce their hours of work so that they can ensure that no-one loses their job at GMH at Elizabeth. It is a great example of what I would call Australian mateship, in which the workforce have agreed collectively to work fewer hours each and that way ensure that no job is lost. The importance of that is, firstly, that it ensures that every household at least maintains a level of income. More importantly, it reflects the confidence that that workforce and management have in the future of that plant as a result of the new model that they will be building next year. That confidence is such that they do not want to lose their workforce. It is a workforce that is highly skilled and highly trained. It is a workforce that GM out at Elizabeth has invested a lot in. Quite clearly, they have the confidence to say to them, ‘Stay with us during hard times because we will bounce back and, when we do, you will have your job and you will have the full hours that you were accustomed to in better days.’

I say again that I commend the workforce and the company for sitting down and agreeing to the deal that they did some months ago in order to secure the jobs of all of those people at Elizabeth and, in doing so, put to an end the myth that was constantly going around that the future of the GMH plant at Elizabeth was in jeopardy and that the plant might close. It certainly did not—and, as a result of that, all of those other industries that depend on it were also given the confidence that they needed to continue their own operations.

Debate interrupted.

See this speech in context