Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Hansard source

What we are witnessing today from the coalition is an attempt to camouflage cowardice. What we are seeing are these after-the-event explanations occurring. They did not extend to the Australian public the decency, as they were leading up to the election, of saying what would happen after the election in reference to support for the auto industry. Bear in mind that, as much as you hear members of the coalition suggest today that they are doing the right thing—that we can no longer extend this type of assistance and it is not right for us to support one industry over another—prior to the election, they were making out they would be the friend of the auto worker. They were making out that they would be there in tough times to support people.

We heard this from no-one less than the Prime Minister who, in the weeks leading up to the election itself last year, said, 'I want to see car making survive in this country, not just survive but flourish.' There is no way in the world, when you reflect on that quote, that there is any suggestion this would be a piecemeal level of support; rather this would be, as suggested by the coalition, a level of support that would allow the sector to flourish. It would allow the sector to continue. It would ensure that jobs remained in the sector and that the coalition would be there when the auto sector needed it. What did we have afterwards? We witnessed a number of things. For instance, knowing that decisions would need to be made by the auto manufacturers by Christmas, instead of backing up the sneaky words they used to try to snare votes from people concerned about the future of the auto sector—instead of backing those commitments up—what we had was the coalition trying to refer things off for further studies or Productivity Commission reviews.

They were not there to allow the industry to flourish. There were not there to allow the industry to survive. They were basically building the edifice, the framework, with which they would stab auto workers in the back. They did not fulfil the commitment they made back on 21 August 2013 when the then opposition leader, now Prime Minister, was saying he wanted to see car making not just survive but flourish.

As a result we see this bill before the House now referring to the Automotive Transformation Scheme, which is a legislated scheme encouraging investment and innovation in the sector. It is supposed to provide the form of support that would be evidenced through co-investment by firms in the production of motor vehicles and engines and in eligible R&D and plant and equipment. This bill amends the Automotive Transformation Scheme Act 2009 and we oppose it. We oppose it strongly because, if it is passed, it will see $500 million cut in funding from the ATS between now and 2017, and effectively terminate the scheme from the end of 2017 with no support whatsoever for surviving component companies.

What does this mean for the 200,000 Australian men and women who rely on the auto manufacturing industry for their jobs? We will see those jobs put under direct threat. The opposition has argued that it is critical that government does not pre-empt the closure of the industry and risk the early closure of firms before 2017 through this reduction in funding. The proposed early closure of the scheme ignores the fact that dozens of component manufacturing companies employing thousands of workers will still exist. The intention is that they will exist post 2017, so it is absolutely vital we have this scheme in place so we can work with an industry in transition and ensure we rebuild jobs and maintain capabilities.

But this government is not interested in that. This government now, having deceived the Australian public, has no intention of fulfilling their commitment to seeing this industry survive. And, in fact, I was stunned to see the Treasurer of this country stand at that dispatch box and basically goad Holden out of the country, not prepared whatsoever to support those jobs. The government now put on this brave face; they don courage now and claim that they want to see public funds spent in such a way that they are not picking winners and that they are not there supporting particular industries. But they never had the decency to say that before the election. They never had the decency to look people in the eye and say, 'We will not be there for you when the crunch comes.' And then we had the Treasurer goad GMH out of the country and refuse to support them.

What are the government actually there to do to support the economy? They want to see the end of auto manufacturing; they are happy to see the decline of manufacturing. They are not there for innovation. You see them now basically pulling back on the NBN and slowing down the rollout, despite the critical need for us to invest in better broadband infrastructure. We have those on the other side cheer that they will get better mobile phone coverage, but, for the actual critical infrastructure of the nation in broadband—which will help support the growth of the digital economy, as the rest of the world is basically getting ready for the digital era—the government is slowing down the rollout. They are not interested in that level of innovation. On anything that has to do with innovation policy, they are either delaying, avoiding or not making decisions that will help support it. Basically, all the government want to see this country do is mine stuff, shear stuff and bank stuff—and that is it. They do not have any plan for or any notion about where they want to see the economy go into the future. And they are happy to see people's jobs go in the meantime because they have no direct capacity and no direct plan themselves.

In the now nationally archived Real Solutions document—now shredded, hidden from view, and in some sort of witness protection program, not to ever see the light of day—they promised, they made a commitment to, one million jobs. It was never done through any economic work. It was merely, as has been evidenced now and as is on the public record, a plucked-up figure. It has basically been picked out of the air: one million jobs created—or, the intention is, to be created—by this government. And what have we seen since they came to office? We have seen unemployment rise higher than what was experienced in this country during the GFC. The unemployment figure in this nation has now got a six in front of it, and it is going to stay that way for a considerable period of time. So you would think that a government which has been confronted by that unemployment figure would actually want to do everything it can to either protect jobs or find new ways of lifting jobs. And what do you see? You see this bill being placed before the parliament, with 50,000 direct Australian jobs in the car industry now at risk and a further 200,000 jobs which rely indirectly on the industry on the line. We think that there is a fight worth having in this country not only to protect Australia's manufacturing capabilities but to ensure that the people who have jobs in this sector keep them. And we will do everything we can to stop these cuts to the Automotive Transformation Scheme. We are certainly calling on the crossbench and minor parties to stick up for Australian jobs, too. We think they are worth fighting for, and we believe that they should fight for them as well.

It is also worth noting and bearing in mind, as to maintaining the sector, that four in 10 of Australia's top-selling cars are locally made. People want to see Australian cars produced. Certainly, the impact of the dollar cannot be discounted. It has increased production costs to the tune of 30 per cent, and Holden has had to confront that, as have other companies. But only 13 countries, including Australia, can make a car from start to finish. Every single one of them supports their industry. In this country, the amount that we support the sector by is a mere $17.40 per capita. That is the cost of the car-industry support for Australians. What are they doing in other parts of the world? If you look in Germany, it is $90. It is $17 here; $90 in Germany. In America, $264 is extended to the auto industry. If you are in Sweden, it is $334. So, to save the mere per-capita cost of $17.40, this government is withdrawing that support and, as a result, seeing those jobs go.

The government are happy to see those jobs go because they want to pursue ideology instead of protecting people's jobs right here in this country. It is something that people should be well aware of: the government failed to meet their promise of protecting these jobs. People might think, 'Okay, maybe it is a lot to support this sector; maybe we are investing too much', but the minute they recognise that other countries are supporting their industries way more than we are, they recognise that this is not a bad proposition whatsoever but is actually something that is worth following up. You then wonder: 'If those jobs go, what happens to the people who lose their jobs?' Instantaneously, they will need to turn to support, because, bear in mind, there are no jobs in the broader economy to support them now.

As I mentioned a few moments ago, unemployment is higher now than what it was during the GFC. So, if they are turning to support, what will be the cost to the public purse of that? The indication is that welfare payments, plus lost tax revenue from an industry shutdown, are projected to exceed $20 billion. So for the $500 million that this government saves in the short term, we lose $20 billion in total. And it will be more than 10 years before the economy recovers from the underlying hit to GDP as a result of this short-sighted decision—a decision that is founded upon deceit, because it was founded upon a suggestion extended to the Australian public that Tony Abbott, the Prime Minister, would be there in tough times for the auto industry. The minute he got into office, the job he was more interested in was his own and not the jobs of those auto manufacturing workers who needed him to be there. In parts of the country—like Melbourne—gross regional product will not recover until 2031, two decades away. And what are they supposed to do in the meantime?

Now, looking at the reaction from the sector, I have had drawn to my attention an article that appeared in The Age last month—sorry, not last month, in August; we have already hit October:

Holden has warned the local car industry could crash early as a result of proposed cuts to the federal government's funding scheme.

This is what Holden is saying. The article continues:

The company's managing director Gerry Dorizas delivered the bleak assessment on Tuesday, fearing that underlying component suppliers - not car manufacturers - were most vulnerable without the additional $500 million of funding …

This is the funding that I have talked about in my contribution to the House. To quote him from the article:

"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," …

He continues by saying:

"This is the reason why we're actually very focused on the supplier base because if that happens then nobody will be able to produce cars, especially for the parts that are specific to Australia."

So, again, I will make the point that there are these flow-on effects from the bill that we are debating right now and there are real jobs on the line, and this will have a complete impact on the sector.

For example, if you look at the Federal Chamber of Automotive Industries, they oppose these cuts. They say:

Reducing the Automotive Transformation Scheme (ATS) will have serious consequences for the 45,000 workers directly employed, and the more than 100,000 workers indirectly employed in the automotive sector, around Australia.

They have called on the parliament to reject this bill. They say that it is:

… important the Government realised the impact any cut to the Scheme would have on the Australian automotive supply chain, who have already factored ATS funding into their long-term business plans.

They also claim:

If the Amendment Bill passes Parliament, it will reduce the Automotive Transformation Scheme by $900 million and intensify the financial pressure on the automotive supply chain, at a time when they are trying to transition their operations into new business area.

So, this government, which says it is therefore jobs, is doing everything it can to affect jobs. On that side of the chamber they have deceived the Australian public and deceived auto workers, and now they are trying to mask cowardice with courage, claiming something that they were not prepared to tell the public before the election.

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