Kelvin Thomson (Wills, Australian Labor Party) Share this | Hansard source

He said:

I found myself as Prime Minister greatly concerned to see whether we could establish an industry of building motor vehicles in Australia, and this was regarded by a lot of people with some horror and we had all sorts of expert advice. Expert advice is the very devil. You want to have at least a hundred experts and then conduct a Gallup Poll among them and then think out the answer for yourself. That's my firm belief.

The experts said, 'Oh, but you can't do it. Nobody could build a car in Australia … Well, it is only twenty-five years ago that that was happening. I remember it very well. There were all sorts of misconceptions, there were all sorts of expressions of anxiety and inferiority on the part of people, and today we have in Australia a state of affairs in which 400,000 new motor vehicles go on the roads every year.

That was Robert Menzies back in 1964—a giant compared to some of the free-market pygmies we deal with now. He continued:

I don't need to be told that there are quite a number of people here, as I go around who are what we used to call New Australians, who are people who migrated here since the war. There are millions now anyhow, something well over a million in Australia and every large factory I go to contains a high percentage of people who have come in in these years. There could not have been a n immigration policy or programme without employment on this scale in industries of this kind. The rural industries, vital as they are to the survival of Australia, can't employ people by the scores of thousands extra every year, we know that they can't. It is industries of this kind which enable the migration programme to continue, and the fact that the migration programme continues, that you have this remarkable increase in the population year by year has given strength and tone and optimism to the people who run retail stores in Australia, to all sorts of other manufacturers who produce things that in demand by stores and which are bought by them because they are in demand by their ordinary customers. This is a whole interwoven structure.

That was Sir Robert Menzies saying you cannot have migration without manufacturing. This government is unravelling it—killing off manufacturing in general and the car industry in particular. Mark my words, this is not going to end well for Australia—this narrowing of our industrial and economic base.

Another Liberal Prime Minister, Harold Holt, back in November 1967 at the inauguration of the Lonsdale plant of Chrysler in South Australia said:

…this is a great moment in the history of this State, and it is a very welcome occasion in the history of the economic and industrial growth of Australia. It is, I assure you, for me a stirring experience to go around this country as your Prime Minister and see in all parts of Australia in one form or another … Australia's developmental strength and our industrial growth.

… … …

In formally declaring this Lonsdale Plant open, I convey to you on behalf of my colleagues of the Government my own personal good wishes, every wish that you will continue to prosper and that you will be a permanent element in a growing and increasingly prosperous Australian automotive industry.

That was Harold Holt. We also had former Liberal Prime Minister Malcolm Fraser, in 1976, saying:

The motor vehicle industry is, obviously, of great importance to Australia's national economy and particularly to South Australia.

… … …

The plans announced by Chrysler are not only important for the industry as a whole and for Australia but they are also of special importance for South Australia where motor vehicle manufacturing is obviously very significant for the industrial development of the State.

Now we come forward to today's Prime Minister who said on 7 September 2013, before he was elected:

I want to see car making survive in this country, not just survive but flourish.

Then—surprise, surprise!—in December he decided to turn his back on our auto industry. He turned his back on the car makers; he turned his back on the 50,000 Australians employed in the sector and said:

Some of them will find it difficult, but many of them will probably be liberated—

His word, 'liberated'—

to pursue new opportunities and to get on with their lives.

This Liberal Prime Minister has seen the car industry vanish on his watch and he should be ashamed he has allowed this to happen, when previous Liberal Prime Ministers were strong supporters of it. Robert Menzies got it; Harold Holt got it; and Malcolm Fraser got it.

The bill before the House amends the Automotive Transformation Scheme. That act was established to encourage investment and innovation in the Australian automotive industry. It gives effect to the government's $500 million cut to the Automotive Transformation Scheme from 2014-15 to 2017-18, which was announced as part of the Mid Year Economic and Fiscal Outlook. It also has the effect of terminating the Automotive Transformation Scheme on 1 January 2018, cutting a further $400 million from the Automotive Transformation Scheme which was announced in the budget.

Labor strongly opposes this legislation. We think it spells disaster for the 200,000 Australian men and women who rely, either directly or indirectly, on the automotive manufacturing industry for their jobs. It is a disgrace that this government is seeking to bury the manufacturing industry as quickly as possible. And we think that this decision to withdraw support for the manufacturing sector through this bill and refuse to co-invest with Ford, Holden and Toyota in continuing to grow a high-skilled manufacturing base, when combined with the increasingly preferred option to build Australia's next generation of submarines overseas, will damage our manufacturing industry and damage Australian companies and Australian workers.

This comes at a time when Australia has high unemployment levels. We have a national unemployment rate of 6.1 per cent and a participation rate of 65.2 per cent. In my state of Victoria, our unemployment rate is 6.8 per cent. Youth unemployment is the highest it has been for the last 15 years. We have high regional unemployment and high long-term unemployment, and yet we have a government which is abandoning manufacturing and thereby abandoning Australian job opportunities.

Following the decision last year by Ford to close, I hosted a Wills Car Industry Forum in Fawkner with the intention of providing local businesses and employees with information and assistance. The decision by the Ford Motor Company to cease manufacturing in Australia in 2016 affects all Australians, but clearly very greatly those in the electorate of the member for Corio, who is here, and also local auto component manufacturers that supply parts to Ford, to its businesses, the local employees and their families in my electorate of Wills and the neighbouring electorate of Calwell. I was very conscious at the time of the difficulties that Ford's decision would cause for some people in my electorate. The forum was an opportunity for people in Wills to share their views and concerns. Residents, employees and business people who were affected by the closure attended. They expressed their views and concerns about the closure announcement. We had speakers from a wide range of agencies and companies, including Austrade. Many of the speakers administered or managed programs that could be of assistance to the car industry and our community. One of the key aims of the forum was to ensure that all of my constituents are fully aware of the range of services that can help them through what are difficult times.

Manufacturing is a critical industry sector for Melbourne's northern region, and it is vital that we work to proactively assist and create new opportunities for local businesses and employees as soon as possible to help support the manufacturing sector, local businesses and local jobs, and maintain strong community and social fabric. This bill will hurt my community in terms of social cohesion, jobs and support for manufacturing industry, and making sure that suppliers and businesses have the time and the support that they need to transition to new markets and products.

I agree with economist Dani Rodrik, who says that:

… countries ignore the health of their manufacturing industries at their peril.

He says that:

High-tech services demand specialized skills and create few jobs, so their contribution to aggregate employment is bound to remain limited. Manufacturing, on the other hand, can absorb large numbers of workers with moderate skills, providing them with stable jobs and good benefits. For most countries, therefore, it remains a potent source of high-wage employment. Indeed, the manufacturing sector is also where the world’s middle classes take shape and grow. Without a vibrant manufacturing base, societies tend to divide between rich and poor—those who have access to steady, well-paying jobs, and those whose jobs are less secure and lives more precarious.

Dani Rodrik says that in the United States the fall of manufacturing's share of employment has been damaging to productivity because labour productivity is substantially higher in manufacturing than in the rest of the economy. The bulk of new employment in the United States:

… has come in 'personal and social services', which is where the economy's least productive jobs are found. This migration of jobs down the productivity ladder have shaved 0.3 percentage points off US productivity growth every year since 1990.

In Latin America, he says:

Redundant workers have ended up in worse-performing activities, such as informal services, causing economy-wide productivity to stagnate …

I want to add my voice to the concerns being expressed about the offshoring of Australian manufacturing. I agree with economist Herman Daly, who says that:

… off-shoring production is not "trade."

He says that:

No goods are traded.

And:

It is absurd that off-shoring should be defended in the name of "free trade".

He says that offshoring increases imports, increases the trade deficit and lowers either employment or wages. The policy of free trade is based on the doctrine of comparative advantage. One of the premises on which the doctrine of comparative advantage rests is the international immobility of capital. But offshoring involves moving capital abroad. And if we were fair dinkum about free trade as a policy, we would be looking at capital mobility and offshoring.

The idea that manufacturing jobs are degrading and that everyone is going to be re-educated to become a mining engineer or an investment banker is delusional. Manufacturing jobs are worthwhile jobs, holding families together and holding communities together, and we should not let them slip away. The Nobel Laureate Professor Robert Solow's growth model showed that the only way to break the bonds of steady state stagnation is through rapid innovation and technological change that lifts the productivity of both capital and labour out of the steady state. R&D represents the seed corn of technological change and innovation.

Regrettably, since coming to office, this government has gone out of its way to trash Australia's automotive capabilities. The government claims that the age of entitlement is over, but we have here a situation that welfare payments and lost tax revenue from an industry shutdown are projected to exceed $20 billion, and it will take more than 10 years before the economy recovers from the underlying hit to GDP.

The greatest impact from the wind-down of the automotive industry will be in my home state of Victoria, where an estimated 100,000 jobs will be lost. And this is the state with the 15-year-high youth unemployment rate of around 12 per cent. Gross regional product in Adelaide and Melbourne will not recover until 2031—nearly two decades away—and employment levels are not expected to recover until the end of the 2020s. In addition to the losses estimated in Victoria, South Australia is projected to lose 24,000 jobs, and New South Wales and Queensland are expected to lose 30,000 jobs. So this is an industry which has been vital in my electorate and vital in Victoria and other parts of the country. I think it deserves better treatment than the treatment it has received from this government.

I strongly oppose the bill—I wish that the government would reconsider its attitude towards manufacturing in general and automotive manufacturing in particular. Labor will do everything we can to stop these cuts to the Automotive Transformation Scheme and we ask the crossbenchers and minor parties in the Senate to stand up for Australian jobs and to block these cuts in the Senate.

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