George Christensen (Dawson, National Party) Share this | Hansard source

I rise to speak on the Automotive Transformation Scheme Amendment Bill 2014, which is a prime example of the Liberal-National government making a sound economic decision to rein in another wasteful spending measure by the previous Labor government. The Liberal-National coalition first announced the savings to be made from amendments that are in this bill in 2011, and took this commitment to the 2013 election. This is a substantial and economically sound commitment which will deliver substantial savings of $900 million. It will be achieved by reducing the assistance available under the Automotive Transformation Scheme over the next three years, saving $500 million; and closing the scheme altogether from 1 January 2018, saving another $400 million.

That scheme will close altogether because there will no longer be an automotive industry in this country to transform. Though it will undoubtedly be a sad day for many when the last Australian manufactured vehicle rolls off the production line, it comes down to the difference between economic reality rather than romantic notions. When it comes down to the question of who you want in charge of the nation's purse-strings there is no doubt that it is the economic realists rather than the romantics who will make the right decisions for the nation and the taxpayer.

There has long been a romantic notion that we could continue to build cars in this country. It is the kind of romantic notion which underpins that old Aussie, or so we thought, car commercial, with the slogan, 'We love football, meat pies, kangaroos and Holden cars'. This was a jingle from 1976 which claimed to capture what it meant to be Australian. Interestingly enough, that little ditty is about as Australian as the car industry actually is—it was not Australian at all. It was actually a rehash of an American Chevrolet commercial, and the original lyrics were, 'We love baseball, hot dogs, apple pie and Chevrolet'. This is the kind of romantic notion which flourished in the hearts and minds of Labor politicians, who relentlessly continued to throw good money after bad in their attempts to prop up an industry whose time was past.

In 2012 and 2013, when car manufacturers cried out for more money, it was Labor that was giving it away like the money was going out of fashion. They gave $34 million to Ford, $29 million to Toyota and a massive $215 million to Holden. This was on top of billions of dollars in other assistance, such as $2.5 billion under the Automotive Transformation Scheme, which was scheduled to run from 2011 to 2020. Remember that one? Former Prime Minister Julia Gillard saying that we would save the car industry, have Ford continue going until 2020. Short memories those have on the opposite side, because it was under their watch, under their reign, with their money on the table, that actually Ford decided it would leave. They had $1.3 billion under the Green Car Innovation Fund, and $35 million—partly federal, partly state—for the Automotive New Markets Initiative. That figure of $35 million was then increased to $47 million when Ford announced it would stop manufacturing in Australia in 2016.

This is millions upon billions, for an industry which had become used to such assistance—an industry sadly out of touch with economic reality and out of touch with Australian consumers. In fact, the automotive manufacturing industry in Australia is one of the most heavily assisted industries in this country. The Productivity Commission inquiry report Australia's automotive manufacturing industry, which was released in March this year, stated that about $30 billion was provided to the automotive manufacturing industry between 1997 and 2012. During that period, there were 5.186 million vehicles manufactured in Australia—5,186,765 vehicles, to be precise. This equates to $5,784 per vehicle of government support or taxpayer dollars during this period. In August 2008, Productivity Commission Chair Gary Banks warned that on current assistance levels or subsidy levels each job 'saved' in the car industry actually came at a cost to the taxpayer of $300,000 a year. This massive taxpayer funded subsidy was described by The Australian's editor at large, the esteemed Paul Kelly, as:

… one of the epic failures in public subsidy in Australia's history.

And yet, even with all this assistance, the industry could not survive in a highly competitive global market.

Holden recently announced its worst ever loss, a $553.8 million loss for calendar year 2013, taking its total losses to about $1 billion for the last eight years. Ford recently announced its third-worst ever loss, a $267 million loss, taking its total losses to $1.1 billion for the last eight years. Some other economic realities are outlined very clearly in the Productivity Commission inquiry report. Reality number 1: the report states that most analysts believe an assembly plant should produce at least 200,000 to 300,000 vehicles each year to be cost competitive. In 2012 Toyota produced just over 100,000 vehicles, Holden produced just over 80,000 vehicles and Ford produced less than 40,000 vehicles. Reality number 2: due to strong competition motor vehicle producers are increasingly moving to large-scale plants in low-cost locations where there is growing demand—places like Brazil, China, India and Thailand. Higher cost plants in the US and some parts of Europe, as well as Australia, have closed or are closing.

There has been another romantic notion at play on the subject of cars, and that is that Aussies like to drive Aussie-manufactured cars. But that is not the case. The reality of what car consumers want can be seen in every car park and every road across this country. We like diversity and we like value for money, and we don't give a hoot where it comes from. That is the reality. Though Labor failed to comprehend the economic realities afflicting the car industry, others in the wider community certainly could. Deloitte Australia's senior economic adviser, Henry Ergas, put it best when he was quoted in The Age on 13 January 2012:

Taxpayers have every right to wonder whether they're getting value for that money. We don’t have any comprehensive assessment of the effectiveness of that assistance.

He said the car making industry in Australia remained hooked on the public purse:

This is an industry that has always had dependence on government assistance. It was created by government assistance, and has survived thanks to it.

Here is a quote from the ANZ's industrial economist, Julie Toth, who saw the writing on the wall way back in 2008. She said in TheSydney Morning Herald of 10 November, 2008:

With regard to the Big Three, no matter how generous the Australian Government is to our three remaining local car makers, the main game for them is not in Australia. Huge losses, liabilities, declining sales and other problems in the US and elsewhere will be quite rightly foremost in the attentions of their respective parent companies.

Even one of their own on the opposite side, former Labor leader Mark Latham, criticised the plan to spend billions of dollars. He said in the Financial Review of 7 November last year:

As a Victorian powerbroker, Carr relies heavily on the support of the Australian Manufacturing Workers’ Union … Carr’s strategy was to pay huge amounts of public money to industries such as car manufacturing to prop up the union’s membership coverage and consequently, its influence inside the ALP.

If that is correct, what a disgraceful use of taxpayer dollars by the former minister, Kim Carr.

It would be nice to think that governments have these big buckets of money to throw at any individual, business or industry that faces tough times. The actions of the former Rudd-Gillard-Rudd Labor government would make you believe that is the case—that government does have this big bucket of money. I know there are thousands of mining and construction workers, businesses and service industries, in my electorate of Dawson and throughout Central Queensland and North Queensland, that also wish that was the case. Those workers and businesses are dealing with harsh economic realities and the realities are hitting home at an escalating pace. Today we have heard of the closure of the Isaac Plains mine, which will cost 300 jobs. Last week, BMA announced they were cutting 700 jobs from their mining operations throughout the Bowen Basin. That is the loss of a thousand jobs within a week. In fact, over the past two years there are estimates that upwards of 12,000 jobs have been lost in that sector. No-one has come along with a big fat chequebook in order to save them. You can imagine the response from those opposite—particularly from my 'friends' in the Greens—if, for example, BMA cried out to the federal government for an industry assistance package, or if Thiess jumped up and down and put their hand out for a fistful of dollars.

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