Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Health) Share this | Hansard source

I rise to speak on the Automotive Transformation Scheme Amendment Bill 2014.

In three years time, Australia will no longer have a local car manufacturing industry. Sixty-five years of proud achievement in manufacturing, employment, research, development, skills and productivity will come to an end. That great site of the first Holden rolling off the assembly line, being delivered to Ben Chifley—now 65 years down the track—gone. This has been a devastating blow for tens of thousands of Australian automotive workers and their families, many of whom work in my electorate. But not content with that timetable, the Abbott government is now determined to drive not only the car manufacturers to the wall, but the entire car component sector, and with it, tens of thousands, possibly hundreds of thousands of jobs, many of them in rural and regional Australia.

The Abbott government's Automotive Transformation Scheme Amendment Bill cuts $500 million in funding for the car industry, ending all assistance by 2017. The only transformation this bill will achieve is to transform the car components sector from an industry that directly employs 50,000 people, and a further 200,000 indirectly, into oblivion.

The news in February that Toyota would join Holden and Ford in ceasing its automotive manufacturing operations not only signalled the end for the local car industry; it was a devastating blow to those employed throughout the car component supply chains. This will have a lasting impact on our economy that goes way beyond the direct jobs lost at the three car makers.

Manufacturing is a critical part of the Victorian economy, and Holden and Toyota sit at the heart of Victoria's automotive manufacturing industry. Australia's car makers directly employ thousands of people, and with around 70 per cent of Australia's automotive industry's component manufacturers based in Victoria, indirect employment through their supply chains results in many more thousands of jobs, many of which are in regional Victoria, many of which are in small and medium enterprises.

In my own electorate of Ballarat, local car component manufacturers produce metal pressings and assemblies, disk brake pads, seatbelts, exhausts and automotive electrical harnesses. There are small companies in very small towns throughout regional Victoria making seat covers, making seatbelts; all of them highly reliant on Toyota, Ford and Holden.

The jobs, design expertise, manufacturing skills and investment provided by our automotive industry flow through the economy and into other sectors. Without a local car industry many of these businesses will simply not have enough work to be viable. The wilful destruction of the automotive industry rips the heart out of manufacturing in Australia, cascading through the economy like a series of dominoes. That is why Labor believes our automotive industry is vital for our economic future and it is vital for Australia to stay at the forefront of innovation. This government's decision to compound its destruction of local car manufacturing by slashing the Automotive Transformation Scheme, and then terminating it in 2017, is a further betrayal of the small businesses in the car components sector, and tens of thousands they employ.

Holden's Managing Director, Gerry Dorizas, has warned that suppliers are extremely vulnerable without the additional $500 million worth of funding originally allocated by Labor under the Automotive Transformation Scheme. He points out that suppliers have invested based on the ATS to break even: 'They needed this kind of subsidy and, at this particular time, they're in dire straits,' Mr Dorizas said. And, without this support, the car industry might not be able to even continue in this country until 2017, because, without the supplier base, nobody will be able produce cars, especially for the parts that are specific to Australia.

About two-thirds of the parts in a Ford Falcon and a Ford Territory are made locally, and up to 70 of the parts in a Toyota Camry. Even though less than half of a new Commodore is now made with locally produced parts, the reality is that those vehicles cannot be built here without Australian-made components. Without this support not only will car manufacturing be driven out of Australia, but so too will the car component sector. People who have invested their life savings in businesses that supply the car makers now risk seeing everything gone. Workers who have spent their lives training to work in manufacturing now risk seeing their jobs taken away with little prospect of alternative work. Anywhere that occurs is devastating for the businesses and those they employ; but outside the major cities those effects are multiplied, with the crucial skills base that supports regional economies like my home town of Ballarat lost forever.

Labor has always supported a strong local car industry because it has always been about so much more than Falcons and Camrys and Commodores. Government co-investment in the automotive industry has always delivered far more in return that was ever put in. That investment delivers a return on jobs, a return on the multiplier for local economies and a return for design and innovation across the entire manufacturing sector. The $2.7 billion that Labor invested in the industry has seen $26 billion in new investment. The car makers wanted to stay in Australia and wanted to continue to invest in this country—invest in manufacturing, invest in innovation, invest in jobs and invest in local communities. Instead, we had the Treasurer taunting them to leave, insulting their contribution to this nation and casting aside 65 years of a proud local industry.

Everyone in this parliament would have driven a locally produced car at some time in their lives. For many it was their first car. My first car as an 18-year-old was a cyan blue HQ Holden. My brother did his apprenticeship at Fishermans Bend as a fitter and turner. Holden has been very much a part of my own family's story and history. My brother-in-law still works on the assembly line at Toyota today—but not for much longer. For other families it was Ford or Toyota. Particularly in recent years Australians took great pride in knowing that the locally built cars they drove were as safe and as well made as those they could buy from overseas—in fact, even better.

In recent years the car industry has struggled with changing tastes—families have abandoned the traditional big six for an SUV—and especially the high dollar. In many ways the car industry has been forced to pay the price for the success of our resource economy. But with modest government support it still had a future building cars here and driving employment, research and development, and skills and innovation in Australian manufacturing.

The facts are that, even today,    four of the 10 best selling cars in Australia are still locally made; 50,000 people are directly employed by Ford, Holden and Toyota and their 150 component manufacturers; and the auto industry is still the largest R&D contributor in the Australian manufacturing sector, contributing almost $700 million annually. These are hardly the vital signs of an industry in its death throes. But still this government, which is obsessed with ideology above common sense, has decided it as industry Australia could best do without. The reality is that it will cost taxpayers many times more to let this industry fail than it would have cost to support it. Modelling by the University of Adelaide shows the loss of the industry will cut our economy by $9 billion, or about two per cent of GDP. Higher welfare payments and lost tax revenue will exceed $20 billion and it will be a decade before the economy overcomes this shock.

In South Australia and Victoria it could be nearly two decades before the local economies overcome the loss of a critical part of their manufacturing base—and it is even worse for regional communities. In Ararat, for example, the local car component factory there is one of the only employers in town. What do you do to the economy of that town when you rip that out? Do you tell people who have been employed for 20, 25 or 30 years in that particular components factory that they could go into retail or the services sector? What do you do in Ballarat, which already has a higher than average unemployment rate? Where are the next jobs coming from? The cascading effect for regional and rural communities, particularly for car componentry in Victoria and South Australia, is going to be quite staggering for our local economies. What is so disappointing about the government's decision to rip this money out of the car componentry sector is the compensation and assistance to transform our economies. Do think that is going to make its way to Ararat and to Ballarat? It might make its way to Geelong and Broadmeadows, but I can absolutely assure you that we have not seen one dollar come into our local councils and economic development groups to assist those smaller communities to deal with these shocks.

And it is not as though the Abbott government have not seen this coming. Indeed, they have been repeatedly warned of the consequences of their $500 million cut in assistance for the industry and what effect it would have on the automotive manufacturing industry and our economy. They were warned before the election when they announced that this was their policy, they were warned when they shut down the car industry, and they continue to be told how damaging this policy is now. My most immediate thoughts are with the businesses and employees who are going to be directly affected by this decision. Within the next three years thousands of workers who have produced world-class cars will through no fault of their own be staring at the loss of their livelihood.

In the years to come the destruction of this industry will spread across Victoria and South Australia as many workers and businesses not directly employed by Ford, Holden and Toyota—small to medium enterprises in this sector—experience the shockwaves of this collapse. Many of them are in small regional communities. They were established as family businesses. They have worked really hard to win contracts to supply our major car manufacturers. They have worked incredibly hard to deal with the shocks of Chinese manufacturing and the high Australian dollar. They have diversified what they have been doing within the car componentry sector. But literally overnight they have been told that they are not getting any more support from this government.

Many of these companies have been looking to diversify, to find new contracts that will allow them to survive and continue to grow their business and their workforce. This is precisely why the early winding up of this scheme is so devastating. With just a little support and some certainty, many of these businesses might have been able to find a way to transition from cars to other forms of manufacturing, despite the best efforts of the Abbott government to finish them off. I have seen examples of car component companies that started to look at how they might actually engage in renewable energy manufacture particularly in the solar area. Good luck with that under this government as well! Instead, many now risk premature closure, being forced out of businesses even while Holden, Toyota and Ford still seek to build their final locally produced cars. Having finished off locally produced cars, the Abbott government now seems determined to rid this country of all evidence we even once had a car industry.

Labor will stand up for manufacturing jobs and the tens of thousands of Australians employed directly or indirectly by the industry and the 150 car component manufacturers. We will stand up for jobs and businesses and innovation and do everything in our power to stop this ill-judged attempt to hasten the demise of our car industry by cutting suppliers off at the knees before they have a chance to reposition themselves. This bill and the cuts to this assistance, particularly to the car componentry sector, will have a devastating impact on communities across this country but particularly in my home state of Victoria, in South Australia and in rural and regional economies. The fact that the government has failed to engage with any of those communities about how we may transition our economies, how we actually deal with what is a substantial shock to the manufacturing base of these economies, is, frankly, appalling. It is easy on the headlines. We know that there are large-scale job losses in Broadmeadows. We know the large-scale job losses in South Australia and we know the large-scale job losses in communities like Geelong who have had many, many shocks. But this bill and the implications of this bill for the hundreds of car component employees and the hundreds of businesses that have been feeding those industries, and the failure of the government to effectively transition those through our economies right through country Victoria and country South Australia, frankly, show that this government has absolutely abandoned them. It is not interested in manufacturing jobs or in growing regional economies particularly when it comes to manufacturing—those great jobs that allow us to earn a good living and provide a great opportunity for young people to be trained and stay within their local communities. Frankly, this government should be ashamed of the decisions it is making when it comes to regional and rural Australia.

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