Paul Fletcher (Bradfield, Liberal Party, Parliamentary Secretary to the Minister for Communications) Share this | Hansard source

I am pleased to continue my remarks on the Automotive Transformation Scheme Amendment Bill. At the point before the debate was interrupted last night, I was observing that the economic realities in the fundamental uncompetitiveness of the Australian automotive industry do not make the transformation that needs to be faced any easier. It may be a reality, it may be inevitable but that does not make it an easy transition for those in the industry, for employees, for the businesses or, of course, for the affected communities. But while it is not an easy transition, the status quo is simply not a viable status quo and this is something that any responsible government must recognise.

Tragically, the previous Rudd-Gillard-Rudd governments refused to recognise the reality and instead preferred to keep throwing taxpayers' money at an unsustainable industry. Labor consistently refused to acknowledge economic reality. Indeed, in 2013 then Prime Minister Gillard insisted that the car manufacturing industry remained viable in Australia. She reassured the workers of Ford that the government would make a special effort to assist them. There were continuing handouts to the automotive industry with $42 million of taxpayers' money paid to assist the development of two Ford Eco vehicles which, unfortunately, failed to meet the requisite environmental criteria for some state government fleets.

You would have thought that the Labor Party would learn from experience. Suggesting that additional money be thrown at industries which are unviable and unsustainable and, critically, businesses whose management teams had decided to exit Australia in such circumstances is the height of folly, the height of irresponsibility. You would have thought that the Labor Party would have learnt from experience and would have recognised that reality. But unfortunately that was not the case.

When we saw the announcement from General Motors just before Christmas that Holden would cease manufacturing vehicles in Australia, what was the response from the Leader of the Opposition? In February 2014 he said:

Government subsidies for car makers are essential for keeping manufacturing alive.

He was determined to keep throwing taxpayers' money at that industry. He was determined to wilfully close his eyes to the evidence even from the managers of the businesses themselves that this was not a sustainable industry.

What did we hear from former Rudd government minister Senator Carr—Kim Il Carr as he is known quite appropriately? He made the completely unsubstantiated claim that the coalition could save Holden for as little as $150 million a year and could secure the entire Australian automotive industry by spending double that—just spend a bit more. Despite the fact that the management teams of these companies were saying 'this is not a sustainable business', as far as Senator Kim's car was concerned, if we just spent a little bit more and a bit more then we could solve this problem. It was a wilful refusal to acknowledge reality.

It is very important to acknowledge that senior General Motors executives said the decision to exit manufacturing in Australia was driven by basic scale economics, not by government incentives or by reductions in them. The decisions to exit manufacturing in Australia by 2016 in the case of Ford and by 2017 in the case of Holden and Toyota, were taken by the manufacturers themselves. All three manufacturers indicated that the level of government support was not the reason for their decision to cease manufacturing vehicles in Australia. But the Labor Party remained wilfully blind to the economic realities. Why? Because in part, as usual, they were dancing to the tunes of the union masters.

What did we hear from the former secretary of the Australian Workers Union? In 2012 he gave a speech at the National Press Club complaining that manufacturing jobs had disappeared. What was his solution? Unsurprisingly, it was more government assistance for the car industry and for the manufacturing industry. He went on to say:

The Australian Workers Union does not want to see Australian industry lose. We want Australian industry to win. We want Australia to rediscover its industrial policy vision.

What is that code for? I will tell you what that is code for: that is code for more taxpayers' money being shovelled in to subsidise an industry which is manifestly uncompetitive. Let us be clear. Of course we want Australian industry to succeed. Of course we want Australian manufacturers to prosper. But it is a fool's paradise to imagine that manufacturing can prosper on the basis of subsidies from government. Manufacturers need to be competitive and they need to be world competitive if they are to survive. There are plenty of instances of Australian manufacturers being innovative, being world competitive. But they need to find market segments where they can compete and they need to do it on the basis of their own expertise, knowledge and capacity—not on the basis of decisions made in Canberra. The Abbott government recognises that competitiveness is critical for our economy. To promote competitiveness, we need to move away from a mindset of dependency and play to our strengths.

This bill is one which will make sensible savings in public expenditure by reducing an ongoing subsidy to an uncompetitive industry. The automotive transformation scheme will close from 1 January 2018 after motor vehicle manufacturing in Australia ceases. This bill amends the automotive transformation scheme legislation to give effect to this decision. Savings of some $900 million in total will be achieved and will be directed to repairing the budget bottom line, filling the yawning chasm of deficit we were left by the previous government and to fund other important government priorities. But approximately $700 million remains in assistance for this industry.

This is an important bill which secures economies and recognises the economic reality, the reality that the other side of politics wants to stay wilfully blind to. This is not an industry in which we can remain competitive on the present terms.

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