Ms Anna Burke (Chisholm, Australian Labor Party) Share this | Hansard source

I also rise to speak on the Automotive Transformation Scheme Amendment Bill 2014, and I stand amazed that we are talking about a scheme that proposes to make a $500 million cut to the Automotive Transformation Scheme over 2014-15 to 2017-18, when we need it the most. We are going through the most significant transformation we have ever seen in the auto industry, and we are now proposing to cut much-needed funds from a scheme that was there to assist these individuals in transition. It just seems outrageous. It was not enough for this government to just sit on their hands and watch Australia's car industry die; they had to get in there and clobber it to death as it takes its last gasps and its last breaths. I was astounded to see the Treasurer in the days leading up to the agreement with Ford and Holden literally teasing them to leave the country—and then they did. Surprise, surprise! The Treasurer of the day said, 'Like it or leave it,' and they left it. But what have they left? Literally hundreds of thousands of people without jobs.

I watched the manufacturing job losses in my community under the Howard government. Now history is not only repeating under the Abbott Liberals; it is going even further. The bill proposes to completely terminate the ATS from 1 January 2018. The Automotive Transformation Scheme, ATS, is a legislative scheme that encourages investment and innovation in the Australian automotive industry. This scheme provides assistance in the form of co-investment to firms for the production of motor vehicles and engines, for investment in eligible R&D and for plant and equipment. By cutting the ATS the coalition government is cutting livelihoods away from Australian workers—not from overseas manufacturers but from Australian workers. Nationwide, we will see 198,826 jobs lost, with the greatest impact in my home state of Victoria, where an estimated 100,000 jobs will be lost. Already in my state we have the highest rates of unemployment we have seen in decades, and no jobs on the horizon. That is the tragedy of this whole endeavour: we are losing an industry which is vital but there is nothing to replace it. Where are these 100,000 individuals to transition to? By cutting this scheme it means that you do not want them to transition anywhere and, by virtue of the social security legislation that we have also been talking about in this place today, you want to transport them not onto some form of benefit but into poverty.

My electorate of Chisholm will be one of the hardest hit as a result of the abolition of the ATS. Many will find this hard to believe, but my electorate is home to some of the largest car component manufacturers in the country, employing around 5,000 in companies such as Unidrive, whose skilled toolers make the drive shafts, drive trains and other components for Ford, Toyota and Holden. I have had the pleasure of visiting Unidrive on many occasions. This has been a thriving, innovative business that has won accolades here and throughout the world. Indeed, Toyota set up a design skill plant and an innovation centre there, because they were doing such great things at the plant in Clayton. Without these car manufacturers, Unidrive are losing most of their business and, subsequently, most of their jobs. While they do have a significant export business providing parts for Corvette, they are deeply concerned that without the support of the local supply chain and with the decrease in local demand they will not be able to get the products they need at a competitive price to support their export business. Indeed, their export business may dry up as well. This is a company that has worked hard to diversify. They employ skilled individuals whose jobs are under threat and this government has no intention of offering any form of assistance or protection.

There is also TRICO Products, who make windscreen wipers; Moss products, who make plastic components; Premoso, who provide apparel and trimmings; MtM Auto and what is left of Robert Bosch in Australia—which has been in significant decline for a long period. While only part of Robert Bosch's business is in the automotive industry, this was a thriving, huge business and, again, I visited many times. You used to go into this sea of a carpark, over acres of space at the end of my electorate. Now you would be lucky to see a tiny part of the carpark filled with cars. This is a tragedy. The absolute tragedy of these losses in my electorate is that these businesses will shut, the factories will go, and housing will be put up. Why is that an issue? Because there are no jobs in those houses. I have seen this time and time again in my electorate. I have spoken of it many times in respect of what was Brockhoffs when I was growing up but Arnott's when it shut down—the biscuit factory, another manufacturing hub in my electorate. At Moss there were 500 jobs on site; there were about 1,000 jobs in all when it went downstream. The factory shut and it is now, I think, about 150 homes. So instead of having jobs where people live, where people can transport and where people want to be, the jobs have gone and houses have gone up but no replacement factory has come onstream anywhere—certainly not in my electorate.

I also have the Toyota Technical Centre in Notting Hill in my electorate, which employs about 150 people. It is a centre that does not manufacture anything but does major engineering work to support Toyota's global operations. It is centred in Notting Hill, obviously near Monash University and CSIRO, and works in collaboration with this great design hub, engineering and innovation in my electorate. It is a centre that should not have to close but from 2017 it will be significantly scaled back with rounds of redundancies and only limited operations. This is groundbreaking work that we are also losing high value, high end technology.

The automotive industry has been a key pathway for engineers in this country and there are no jobs, programs or industries waiting for these people. So it is not just people on the manufacturing floor. It is the whole supply chain in this area of employment. This government has no plans to ensure that a new pathway for engineers is developed that will ensure their skills can be utilised in this country. This is not only a major loss for the individuals whose jobs will be affected, but for our entire country. We will lose vital skills and, as we know, once we lose skills it is very hard to get them back.

Nationwide, 200,000 Australian men and women rely indirectly on the auto manufacturing industry for their jobs. These fields range from metal manufacturing to scientific services. The termination of the ATS leaves no support for surviving components companies and research schemes, such as the newly developed manufacturing innovation precinct at Monash University in Clayton in my electorate. Cutting hundreds of millions in funding from the ATS now risks causing the premature closure of motor vehicle producers and the hundreds of firms in the automotive supply chain, sending thousands of Australian jobs offshore—long before 2017. The current government has only looked at the figures it will save in the short term and ignored the previous achievements and long term gains that can be made from the Australian Automotive Industry.

There are only 13 countries worldwide, including Australia, that can make a car from start to finish, and every one of them has a subsidised industry—every single one. The Australian contribution to the automotive industry is significantly lower than that of any other country. It costs $17.40 per capita to support our car industry in Australia, compared to $90 for every German taxpayer, $264 for every American and $334 for every Swede. How often do we talk about what is going on in Germany and Sweden, the success stories? This is a success story that we do not want to replicate, that indeed we are actually cutting off. It is not fair for our car industry to just be left out in the cold and asked to compete in this heavily subsidised and protected global market. No industry could compete on those terms.

And what of our future science and research? The automotive industry is the largest R&D contributor in the Australian manufacturing sector, contributing almost $700 million annually. That flows beyond the automotive areas. It goes into many other manufacturing sectors. This will also be lost. Reports from both academia and industry show that it would cost the government more to see the industry fail than it ever would to support it. Modelling from the University of Adelaide shows that the loss of the industry will lead to a negative annual shock of $29 billion by 2017, or about two per cent of GDP. This is just ridiculous. Why don't we ever look at the long term? How do we grow our economy and create jobs in the face of such devastating damage? A report by the Allen Consulting Group highlighted that, from the $500 million investment by the government in the automotive industry, the economy enjoys a $21.5 billion increase in size. We get back more than we put in. This equates to a return of $934 per person in this country.

The figure of $21.5 billion excludes the extra benefit of spillovers into other parts of the economy. Some of these spillovers include technology transfers through R&D innovation, lean management techniques and applications, and advanced labour skills and manufacturing techniques. The automotive industry benefits the broader economy through its extensive linkages with other parts of the economy like heavy engineering, tool making, aerospace and marine. Such spillovers benefit the economy in ways that are recognised by industry leaders around the nation. The Allen Consulting Group paper confirmed that the chief executives of companies like Boeing, BHP Billiton, Rio Tinto and Coca-Cola Amatil have each directly related the success of their own businesses to the skills and expertise gleaned from the automotive industry in Australia.

The Prime Minister often uses the phrase 'Team Australia'. How is putting hundreds of thousands of people out of jobs and pushing lucrative automotive research off our shores aligned with the 'Team Australia' sentiment? Not that I really want to be associated with the notion of 'Team Australia', but I just do not know how the Prime Minister thinks that this action will lead to an inclusive society. This is not an inclusive society. It is therefore equally critical that the scheme is maintained so the government can work with the industry in transition, rebuild jobs and maintain capabilities. Otherwise 50,000 direct Australian jobs in the car industry will be at risk and a further 200,000 jobs which rely indirectly on this industry will be on the line.

The government can talk about retraining, new skills and workplace transitions until the cows come home, but every worker facing redundancy knows that retraining is just a furphy. They know that the jobs they are being retrained for do not exist, industry knows they do not exist and the government knows they do not exist, but the government is not prepared to do anything that will actually help, like creating jobs. In fact, despite the Prime Minister saying he wants to 'deliver support for the workers', the paltry $100 million the Abbott government has committed to this so-called growth fund for the auto industry does not include a single cent to help auto workers retrain and reskill. The government's own website confirms that the element of the growth fund allocated to retraining auto workers is made up entirely of contributions from GM Holden and Toyota. So much for the Prime Minister's promise during the election:

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

A great way of making something flourish—killing it off! This was just another cruel lie to get this government elected.

Labor, on the other hand, provided support to keep the automotive industry in the country in order to attract new investments, new models and new capacity. While in government, Labor committed to a New Car Plan for the 2020s to keep car making in Australia and to maintain jobs in the Australian automotive industry. This included a new program of $300 million per annum to support the transformation of the industry to attract new investment and support research and development, design and engineering from January 2016. Labor understood the pressures the automotive sector was under from increased overseas competition and the high Australian dollar. In response to this, Labor pledged a $1 billion Australian Jobs Plan whilst in government that had been designed to assist industry with these pressures.

The proposed abolition of the ATS is not only heartless but also poorly considered. Welfare payments and lost tax revenue from an industry shutdown are projected to exceed $20 billion, and it will be more than 10 years before the economy recovers from the underlying hit to the GDP. If the current government's agenda is to go into surplus, how is this change to legislation achieving it? It might be a one-cut wonder now, but it will actually cause more pain in the future.

More importantly, the current government is not looking out for the welfare of Australian workers. How can they expect people who have only ever worked in the automotive industry, who have worked in that industry for many years, to retrain and enter a new industry? Again, I go back to the example of when Arnott's shut down. These were lifelong bakers. They were lifelong production workers. They were families. They were husbands and wives, kids, entire generations. There were no other jobs for them to transition to. They talked about reskilling, retraining or moving to Queensland. None of that was on offer. I know several of these people. This was many years ago and they are still without full-time ongoing employment. Apart from being uncompassionate, this just goes to show how out of touch the Liberal government is with Australian workers and the current state of the unemployment landscape. I condemn this legislation.

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