Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | Hansard source

I rise to speak on the Automotive Transformation Scheme Amendment Bill 2014. I have just listened to the greatest diatribe and 'living in denial' from the member for Makin that I have ever heard. I would remind the member for Makin about the Mitsubishi plant in his home state of South Australia. Where was his voice at the time it closed? I perhaps could remind him of Ford and the great headline by former Prime Minister Gillard where she turned up in Geelong, in January 2012, announced $34 million for Geelong and told them how it would create 300 new jobs, only to find eight months later that 330 jobs had gone. Then of course there was that devastating headline, on 24 May 2013, that Ford would shut. Which government was in power in 2013? The former Labor government. So to hear the rhetoric being delivered by the member for Makin is beyond belief.

Holden, Ford and Toyota have announced they are going. Mitsubishi is already gone. Holden, Ford and Toyota are leaving our shores by 2018. Until this occurs the government will continue to provide some $700 million in assistance that began on 1 July this year. Car manufacturing in Australia has been slowing for many years. As I said, Ford and Mitsubishi made the announcement under the previous government.

The member for Makin is saying, 'If only they had thrown a few more dollars in, perhaps we would have an industry'; but if that was the case Mitsubishi and Ford would have stayed under the previous government. The reality is that what we are seeing is consumer choice. There are 67 brands of car in Australia, and over 360 models. It is consumers who decided not to buy the Australian produced vehicle.

Toyota in particular were producing Camrys for the international market, and work practices drove them out of competition. Under work practices, the workers and the unions decided you needed to shut down in January so everyone could have a holiday for 26 days when our greatest purchase market was in their peak buying period—the Middle East. It just did not work. In just-in-time manufacturing, you cannot stockpile motor vehicles to get you through a month glut; you have to continue production.

When Toyota put it to the unions and the workforce, it was resoundingly rejected—in other words, the heads of the unions preferred 100 per cent of nothing, to 80 or 90 per cent of something. The government could not continue to contribute to motor vehicle subsidies on each and every model produced in Australia, when the consumers were not there to help sustain or support the industry.

The Productivity Commission estimated that between 1997 and 2012 the industry had received some $30 billion in the form of tariffs and budgetary assistance. That was to create a sustainable industry, but it did not. The reality is that, despite all this money, the industry was not sustainable.

But what we saw regularly from Labor prime ministers—and in particular Kim Carr, who was the minister responsible for the industry—were these 'We're saved!' events. They would line up with the motor vehicle heads and all say: 'We're saved!' That was the big announcement. I will give you a classic example. In March 2012 at Holden, Senator Carr joined with the MD of Holden, Michael Devereux and South Australian Premier Jay Weatherill for another 'We're saved!' event. They promised money, but the money was never delivered. Holden actually sacked a few hundred workers almost immediately afterwards.

So we had these regular media profiles—'We're going to save the industry'—but in fact nothing happened. With Labor what we would get was all talk, no action. When it was time for the rubber to hit the road, Labor was not there. They did not understand how to save an industry. Contributions by members opposite—on this subject in previous debates and in discussions in this place—make it clear they have no understanding of how to create sustainable industry. You have to be competitive. Yes, we have a higher dollar. Yes, we have had a lot of problems. But the reality is that taxpayers, after some $30 billion between 1997 and 2012, could not prop up the motor vehicle industry to the level required. If it was that easy, we would still have Mitsubishi and Ford. I remind you again that the announcement to quit Australia—and we had already seen the close of Mitsubishi—happened on the former government's watch.

What is critically important is what we do from here on in; how we work with the workers; how we get them trained and skilled up for new jobs and new opportunities; how we work with industry in transformation, to provide opportunities through advanced manufacturing and new innovative technologies to create new jobs and new industries. The change that is occurring to the face of Australian industry will be dramatic in the next five years and particularly in the next 10 and 20 years. We need a properly trained and skilled workforce to make sure that we can seize those opportunities.

What have we done in relation to this? The government has developed the $155 million growth fund, in collaboration with Holden and Toyota and the Victorian and South Australian governments, which will provide $30 million for affected automotive workers, providing access to a range of information services—for things like training and advice—before they leave their current jobs, to help them get new employment. Workers who have been made redundant will get immediate access to intensive employment support through the Automotive Industry Structural Adjustment Program. There is $20 million to assist automotive supply chains to diversify and invest in non-automotive manufacturing through the Automotive Diversification Program. Round 1 for the ADP closed on 11 September 2014. There were 25 applications. There is $60 million to support businesses that are investing in capital projects to establish or expand their manufacturing operations in areas of high-value manufacturing in Victoria and South Australia through the Next Generation Manufacturing Investment Program; and $30 million to support new infrastructure projects, outside of manufacturing, which facilitate industry collaboration, additional investment and development of common-use infrastructure that will facilitate new economic activity in Victoria and South Australia through the Regional Infrastructure Program.

As I said, reskilling and training your workforce and working with industry to seize new opportunities that will occur and creating these new opportunities is critically important. Last Friday I was in Melbourne and I met with a couple of companies that have gone into advanced manufacturing. In fact, Marand Engineering, who have been involved in provision of tail sections for the Joint Strike Fighter, were originally a company that produced tooling for the automotive sector. Over a period of time they saw the demise of Australian manufacturing of tooling for the automotive sector, and they started to specialise in new and innovative technologies. They took on new opportunities, and through advanced manufacturing they secured contracts under the Joint Strike Fighter Program. They are now delivering a new credibility and a new reputation for Australian industry. But they are also training and upskilling their workforce to take up all of the opportunities that will occur in relation to this.

We are also investing some $484 million in the Entrepreneurs Infrastructure Program, which will improve business competitiveness, support business improvement and promote economic growth—with the aim to create new jobs. We are looking at a whole range of new programs. You cannot keep doing what you have always done, because you are always going to get the same result. Even though money was being pumped into the motor vehicle industry—and being amplified on the way through—what we saw here in Australia was an absolute deterioration of the economic position of the motor vehicle industry and its competitiveness.

These are difficult decisions. They are tough decisions. But I have to say that, at the end of the day, you have to make a decision. You have to know when to cut; you have to know when to fold; and you have to know when to grow new opportunities. I listened to the speech by the member for Makin, where he said, 'If only we had thrown in a few more dollars.' Mitsubishi had already gone. Ford were on the way out under their watch and it was only a matter of time before Toyota and Holden joined the throng. They were going, and no amount of rhetoric from members opposite would have delayed that. No amount of money would have delayed it—because it was not only the financial prop-up package; it was the fact that our productivity in Australia was just not cutting it compared to productivity internationally.

I met with the head of Toyota when he came to Australia. I sat down with him and said, 'Tell me one thing: what is our production line doing that is different to what you are doing in Thailand or Japan? What machinery and technology do you have there that we don't have in Australia?' His reply was quite interesting. He said that the production lines were exactly the same—the same machines, the same robots, the same technology and the same processes. We are just not as productive as those overseas. That is why we are not producing anymore vehicles after 2018 in Australia.

It is alright to say, 'We should just keep throwing more money in,' but what we should be doing is investing our money in new opportunities and new ways forward. We should be looking to advanced manufacturing and being innovators in industry. We should be looking for new ways of doing things and new opportunities to create so that we can create a workforce of the future. If we do not do that, it will continually cost the taxpayers more and more money—and we are now in an economic position where we no longer have the money to be able to do that. I also remind the member for Makin about the great support they provided for the motor vehicle industry in the lead-up to the last election. We all remember the $1.8 billion fringe benefits tax, which basically stopped vehicle sales in their track. Putting in a $1.8 billion FBT was not the way to create future growth.

Quite simply, it is time to get on with the job. It is time to look at new opportunities. It is time to stop just throwing money after a problem. It is time to start investing money in things that will deliver for the long-term future. We promised—it was an election commitment—that we would be cutting this funding, and we are doing that. It is a sad reality that sometimes dollars do need to be cut. But you need to live within your budgetary means—and this is a part of it. To say otherwise and try to pretend that, if the money had stayed there, there would still be a motor vehicle industry in this country post 2018 is nothing more than misleading the public and playing to their own imaginations. I support this bill.

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