Tim Watts (Gellibrand, Australian Labor Party) Share this | Hansard source

In this debate on the Automotive Transformation Scheme Amendment Bill 2014, I rise to speak on behalf of the 2,500 Toyota workers directly employed in my electorate, who have had to pay for the Abbott government's reckless and arrogant approach to the automotive industry. I speak on behalf of the 2,500 workers who were promised before the election that their industry would 'not just survive but flourish' under an Abbott government and that an Abbott government would be no threat to their jobs. I speak on behalf of the 2,500 workers who saw these promises broken in less than three months after the election; who saw $500 million ripped out of the Automotive Transformation Scheme, or ATS, in October, the mechanics of which can be seen in the bill before us today; who saw the announcement that Holden would cease operations and believed that their government would work as hard as they could to ensure they did not suffer the same fate; and who then watched as the government ignored the calls from the auto industry for a commitment before the end of the year and then blundered into the new cycle, attacking complex union negotiations at a sensitive point.

I speak on behalf of the 2,500 workers who saw the true meaning of the Abbott government's intent on a Monday afternoon in February: that, despite the strength of the skills and expertise of our auto workers and despite the research and innovation that has gone into the plant in Altona in recent years, Toyota would cease operations in Australia by 2017. These workers received more promises from our Prime Minister at that time—promises that there would be assistance from the government in reskilling workers and finding them alternative jobs; promises that, in these turbulent times, their government would provide them with a path to a new career. Once again, these workers have seen these promises broken.

They have seen the government treat the review into the assistance program with the utmost disdain—even keeping the preliminary report sitting on the minister's desk for a month before any attention was drawn to it. They have seen another $400 million ripped from the ATS in the budget in May, bringing total cuts to $900 million. They have seen the introduction of a weak $100 million growth fund to address the closure of the Holden and Toyota plants, with only a $30 million investment into reskilling workers—an investment made entirely by Holden and Toyota, with not one cent contributed to by the government. It is these workers, Prime Minister, who you need to answer to. You need to answer how you could treat these workers' futures with so little care. You need to answer how you could place in jeopardy not only these workers' livelihoods but also the livelihoods of thousands of component manufacturers throughout my electorate and the Australian automotive ecosystem. These component manufacturers are another casualty of the bill before us today.

The bill under consideration decreases government investment in the automotive industry by cutting $500 million from the ATS over the 2014-15 year period and it stops investment in the ATS on 1 January 2018—that is, two years earlier than planned and reducing the ATS by another $400 million. The ATS was an initiative designed to encourage investment in our automotive industry. It allowed for investment to car manufacturers for producing vehicles, undertaking research and development and investing in capital such as plant and related equipment. It recognised Australia's proud history of auto manufacturing and the wealth of highly skilled manufacturing talent we have on our shores. Australia is one of just 13 countries around the world that are able to make a car from start to finish—well, we are today—and that, when it comes to auto manufacturing, Australians get more bang for their buck.

Car industry support in Australia is $17.40 per capita, compared to $264 for every American and $334 for every Swede. Despite this, the ATS was not a free handout. Every company that received funding from the government had to invest an equal amount. So government was working with the businesses to expand our auto industry for the future. The auto industry was committed to this long-term future. It was the largest contributor to research and development in the Australian manufacturing sector, contributing $700 million per year. This research and development was paying dividends by creating a manufacturing industry in Australia that was world-class. Indeed, last month Ford Australia announced that they were doubling their design staff due to the wealth of research and development talent in Australia. CEO Bob Graziano stated:

Australia is a centre of excellence in the Asia Pacific region for Ford product development and design.

But the ATS was not just crucial for Holden, Ford and Toyota; it was also critical to the livelihoods of many manufacturers of component parts.

These component manufacturers are already looking at a difficult transition period away from the major car manufacturers and towards new clients and new industries. They planned their business models and hired their staff with the ATS in mind. Now, with these cruel cuts to the ATS, the component manufacturers have to immediately deal with increased international competition for the parts that they already manufacture and lose the support needed to enter new markets and transition away from the auto manufacturing industry. The sad result is that some businesses will survive, but many will not and will be forced to close. Up to 30,000 people in Australia in the component manufacturing sector, including many businesses in my electorate, could be hit by these changes.

The Federation of Automotive Products Manufacturers have been unequivocal about the impact of the Abbott government's changes to the ATS. They have stated that the cuts contained in the bill under consideration:

… will have serious implications for the continued operations of many firms within the automotive supply chain.

The managing director of Holden, too, has stated bluntly the effect of the ATS on the component supply chain. He indicated:

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.

What is even more concerning is that, with the cuts to the ATS, these component manufacturers might not even be able to rely on work from Holden, Ford and Toyota until 2017. Holden and Toyota have indicated many times that they want to perform a soft exit from Australia and they want to give as much support as possible to the workers who they are leaving behind—workers who have given much of their loves to these companies. But their business plans are designed with the existing ATS in mind. With a decrease in government funding, Holden and Toyota may be forced to make a quicker exit than they had hoped or planned for.

The effect is more insecurity for our auto workers, who are faced with the possibility of walking through the doors of the Altona plant for the last time sooner than they expected. It is another blow for them from a Prime Minister who has stood by and done nothing while the auto workers of Australia have suffered; a Prime Minister who arrogantly announced to his caucus that he has 'started the roads', but failed to mention that he has abandoned the men who built the cars to drive them; a Prime Minister who stated blithely that these workers would feel 'liberated' by the loss of their jobs—'liberated' by a government decision to take them out of the Toyota Altona plant and into a Newport Centrelink 10 minutes away!

But the shattered remains of the government's promise to look after the auto industry—to provide for an auto industry that would not just survive but flourish under the Abbott government—does not just affect the workers in my electorate. The shock of this decision will reverberate across the country for many years to come.

According to modelling provided by the University of Adelaide, up to 200,000 Australians will be affected by the loss of the auto industry; 100,000 jobs will be affected in Victoria alone. We will see another 30,000 jobs affected in New South Wales and Queensland, as well as 24,000 jobs affected in South Australia. Overall, we will see a hit of $2.9 billion to the Australian economy by 2017, equivalent to two per cent of Australia's GDP. The welfare payments alone from the auto industry's sudden collapse are estimated to cost over $20 billion. Most horrifically, we will not see the recovery of employment levels until the end of the 2020s. That is an entire generation of workers who will not see the days of full employment until they are 15 years into their careers. For many of these workers, it means they will be cut out of a job in the manufacturing sector altogether. For those who have already been working in the manufacturing sector for some time, it means there is little chance they will find a similar job at any point in the foreseeable future.

The flow-on effects across our community with mass unemployment of this kind will be severe. Studies from similar situations in the US bear repeating here. Workers in these situations suffered a 15 to 20 per cent decrease in their earnings over the long term. The life expectancy of these workers declined by one to 1½ years.

But the Abbott government has done little to support the transition of these workers through training in skills. In fact, in the May budget this year—the budget most workers hoped would contain the government response to the loss of Holden and Toyota; a budget that would send a signal to these workers of their government's support—how much do you think was included in skills retraining for auto workers? Zero. That is right: nothing. In fact, the Abbott government actually cut funding for skills training. Five point one million dollars was cut from vital skills and training programs for auto workers in the May budget. Instead, all the government has committed to is a measly $100 million 'growth fund' for these workers, with most of the money stumped up by Holden and Toyota, as well as the Victorian government. In fact, the miserable amount of Commonwealth money that is contained in the fund is geared towards unemployment services, which means these workers will have support as they fill out their 40 job applications in an increasingly desolate job market—particularly the youngest employees of Toyota and Holden. But it does not create the jobs that the workers will need. It does not train them for alternative work should no manufacturing jobs re-emerge.

It is the classic short-term approach of a government that is determined to cling to free-market extremism, even when faced with the evidence of the effect this deranged attachment is having on the lives of Australian workers. It is a government that not only ignores the workers it has promised to help but treats these workers with the utmost disrespect in doing so. It is a government that started off with a mealy-mouthed pledge to see the car industry flourish in Australia, but the result has been the largest car manufacturers being the ones developed in the pursuit of science alone.

Labor will never let the Abbott government off the hook for their behaviour towards the auto workers in Australia. I speak on behalf of the 2½ thousand workers in my electorate today when I say that this broken promise will never be forgotten in my electorate. I and my Labor colleagues will continue to fight for the rights of these workers. We will continue to fight the cuts to the ATS at every opportunity. We will call on the crossbenchers and minor parties to do the same—to answer the free-market extremism of the Abbott government with economic sense. We will continue to speak for the auto workers of Australia until we finally get through to this arrogant Prime Minister. The automotive workers of Melbourne's west did not vote for this bill, and they do not want it.

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