Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

It is very disappointing that my favourite Rudd government minister is not able to stay for my contribution this evening to the debate on the ACIS Administration Amendment (Application) Bill 2009.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

It better be good!

Jamie Briggs (Mayo, Liberal Party) Share this | Link to this | Hansard source

And, to the member for Wakefield, the contribution will be short. Thank you for the intro. As I understand it, this bill corrects a technical error in a piece of legislation that we discussed not too long ago in this place. The government’s New Car Plan for a Greener Future committed to providing motor vehicle producers with a smooth transition to the new Automotive Transformation Scheme by providing increased assistance under ACIS in 2010. It was also the government’s decision that this additional assistance be conditional on the enactment of the Automotive Transformation Scheme Act 2009, which occurred on 29 September 2009.

The amendment corrects, as the government has termed it, the unintended consequence arising from the link between the ACIS Administrative Amendment Act 2009 and the commencement of the Automotive Transformation Act 2009. It is a technical amendment that would give formal effect to the legislation already considered in parliament and would honour the original intent of the legislation.

The bill clarifies that the commencement date for the ACIS act is 1 January 2010 and not 1 July 2010. The coalition do not oppose this piece of legislation. We do have some questions, which I will put in Hansard for the consideration of the minister. How was the unintended consequence of the original legislation overlooked? When was the mistake found? Was this due to a lack of consultation with industry? And was it, as we see with so many pieces of Rudd government legislation, a last-minute rush job which resulted in this error? These are issues which, I am sure, the minister will address in his summing up of this bill, which fixes an administrative error.

Obviously, over the 11½ years of the coalition government the car industry received an enormous amount of support, particularly in my home state of South Australia, including Holden, which is located in the member for Wakefield’s electorate and which employs many people who live in the member for Makin’s electorate, and also Mitsubishi, which was in the member for Boothby’s electorate. However, it decided not too long ago to terminate its operations in Australia. I think that highlights a potential issue we will have going forward with this industry as the challenges become greater than they are today. As we said in the debate on the original legislation, this place and the government of the time will need to consider just how much assistance this country is willing to give to this industry. I acknowledge that it is an important industry in certain parts of Australia, but it is also a lot of money that we are paying.

The amendments that we moved in the consideration in detail stage of the original bill provided transparency, and it was a pity that the government did not see the reasons for those amendments. It is something that is worth while considering, because they are large sums of money we are talking about with this industry and there are important considerations for employment in certain areas. There is a very thick set of jobs in certain areas and we are seeing that, with the assistance packages for Holden workers, more are taking them up than was expected.

It will be a challenging time for not only the car industry but also the associated industries and communities. I suspect that this subject is difficult and touchy for many people and it is very difficult to manage. I know that the member for Wakefield is intensely interested in this issue, and we all look forward very much to his contribution to this debate, as we do to the contribution of the member for Makin. On that note, I will conclude my remarks.

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

I take this opportunity to speak about the ACIS Administration Amendment (Application) Bill 2009. I note with interest that the three speakers on this amending legislation are all from South Australia, which I suspect indicates, at least, the level of support for the automotive industry via the South Australian representatives in this chamber. That is certainly the case in respect of the member for Wakefield, who is in the chamber, and me because there is no question that we believe the automotive industry is absolutely vital to the long-term future prosperity of South Australia and, in particular, to those families which are employed and which, in many cases, have been for a long time, at the GM plant at Elizabeth.

The bill corrects an anomaly that would have resulted in automotive manufacturers receiving a lower amount of money than was intended under the Australia Competitiveness and Investment Scheme during the transition period until the Automotive Transformation Scheme came into effect. This was an unintended consequence. The Automotive Transformation Scheme was implemented and during the transition phase it became obvious that automotive manufacturers would have in fact been paid less than they would otherwise have expected under the old ACIS. The importance of those payments should not be understated at all. By way of background, the automotive industry in Australia directly employs some 63,000 people across the country and there would be around another 100,000 employed in the supply chain and support industries to the automotive manufacturers. The industry contributes $7.7 billion a year to the Australian economy, and we still have automotive plants in Victoria and South Australia—manufacturing Toyotas and Fords in Victoria and manufacturing Holdens in South Australia.

What is just as important in respect of the automotive industry is that certainly in South Australia, and I expect it is the case in Victoria, it underpins invaluable research, design, innovation and engineering right across the manufacturing sector. Without a viable automotive sector, many of those smaller industries involved, whether it is in research, design, innovation or engineering, would simply not be able to survive. In fact, if we lost the automotive industry the result would undoubtedly be an undermining of the ability and capacity of Australia to continue to manufacture goods. To its credit, the Howard government recognised this and, in 2001, introduced the Automotive Competitiveness and Investment Scheme. After being in place for only one year, the scheme was extended for a further 10 years and was due to continue to 2015. This, quite rightly, highlighted the importance of the automotive sector to the Australian economy.

When the Rudd government came to office, time had moved on. We had seen tariffs reduced in 2005, from 15 per cent to 10 per cent, which in turn had some impact on the industry. The Rudd government commissioned the Bracks inquiry, which resulted in A New Car Plan for a Greener Future for Australia. The Rudd government committed $6.2 billion towards ensuring that the plan can be implemented over the next decade, and within that funding is, of course, the $3.4 billion associated with the Automotive Transformation Scheme.

We all know that the global financial crisis has literally decimated the automotive industry across the world, particularly in the Western countries. When you combine that with the competition that automotive manufacturers in the Western world are now experiencing from new car plants in developing countries, you can understand why this is an industrial sector that has some real challenges ahead. Schemes such as the Automotive Transformation Scheme and the ACIS scheme are vital to the survival of the automotive industry in Australia and will be even more so when tariffs are reduced from 10 per cent to five per cent from 1 January 2010.

The GM plant in the northern region of Adelaide—and I note that the member for Wakefield is in the chamber and I am sure he will speak in a similar vein in a moment on this matter—has been there since the mid-1940s. I cannot recall the exact date but it has been there for around 60 years. For the last 60 years it has been the critical industry that has sustained that region. Whilst over the years that region has expanded and many other industries have also been established there, the fact is that they were all drawn to the region because of the presence of the GM operations in Elizabeth.

Only yesterday, when I was speaking on the Foreign Acquisitions and Takeovers Amendment Bill 2009, I referred to the case of the Bridgestone plant in Salisbury, which opened in 1964 but, sadly, is planned to close in April next year, with the loss of some 600 jobs. Only recently the member for Wakefield, the member for Port Adelaide, the Minister for Employment Participation, Senator the Hon. Mark Arbib, representatives of the ETU, the AMWU and the LHMU and I attended the Bridgestone plant to ensure that the employees there are being provided with the necessary support as part of transitioning to other employment and in respect of any redundancy payments due. I reiterate what I said yesterday: I compliment the work of all those unions and, in particular, David Di Troia, the secretary of the Liquor, Hospitality and Miscellaneous Workers Union, who along with his team has been working diligently to ensure that all of the people at that plant, the majority of whom are members of his union, are given their rightful entitlements. In that respect, I also acknowledge the contribution made by the federal and state governments of $5.7 million—over $4 million of which came from the federal government—to support those workers. That is a classic case of the importance of the GM operations to that region. I have no doubt that it was a result of the downturn in production at the GM plant that contributed to the closure of the Bridgestone plant. So you do not have to go very far to understand the importance of the automotive manufacturers to the regions, wherever they are established in Australia.

On a positive note, I was pleased to read that the GM operation at Elizabeth has begun to increase its production of motor vehicles. I understand that production has in fact now risen from 310 vehicles per day to 340. That is encouraging. But none of that would have been possible had GMH not been supported by the federal government over the last decade. Again, the previous government needs to be recognised for that, and certainly the Rudd government’s $6.2 billion automotive restructuring plan will ensure that we continue to have a viable automotive industry.

There is, of course, another element to ensuring that we continue to have a viable automotive industry. The proposal we are looking at, A New Car Plan for a Greener Future—and the title quite rightly says, ‘a greener future’—is all about designing and building cars that create lower emissions. That goes hand in glove with the very issue we are confronted with in Australia and across the world in reducing carbon emissions—a matter that is the subject of debate before this parliament right now and which will be debated in Copenhagen next month. As the Prime Minister has said time and time again, it is a matter that is in the national interest. If we can support car manufacturers in this country, it will ensure not only that there is some economic benefit but also that, simultaneously, there will be the benefit of producing lower emission vehicles than are currently being produced. Unless they do that, the reality is that they will find themselves coming under increased competition from overseas manufacturers and designers who are doing exactly that and who are perhaps gradually increasing their market share in Australia because they are manufacturing cars that produce lower emissions.

I represent an electorate where many of the families who work at the GM operations at Elizabeth live. They are very much dependent on the future survival of that plant. This amendment bill, as I said, corrects an anomaly in the legislation that was introduced into this House earlier. In so doing it will enable the GM operations, particularly at this point in time when they have some very serious challenges ahead of them, to continue their operations.

I support the amendment. The member for Mayo talked about whether this amendment arises because of a lack of consultation at the time that the original legislation was introduced. Can I say, as someone who has taken the trouble to read this legislation in detail and to look at exactly the way in which the New Car Plan for a Greener Future and the Automotive Transformation Scheme are structured, that this is a very complex matter. It is not surprising and it is not unusual that unintended consequences are highlighted once a piece of legislation is brought into the House. That is exactly what has happened here. The fact of the matter is that the legislation will correct that anomaly. It will correct it in time, before the Automotive Transformation Scheme payments come into effect. Therefore, there has been no detriment to the automotive industry at all. The very fact that it has been brought into this House at this point of time shows that the government is on the ball with this legislation. I commend the bill to the House.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

It is a great honour to follow my colleague the member for Makin, who always speaks in a very intelligent manner and with a great deal of knowledge and street smarts. He was a great mayor of the great council of Salisbury. I was happy to be a resident of Salisbury and happy to vote for you Tony too, on occasion. You always did a great job by those in my electorate and also by those in the electorates of Port Adelaide and Makin. You have a long history of serving the northern suburbs.

It is also always interesting to follow the member for Mayo, who has departed to the party room for the CPRS debate—no doubt to participate in that cage match that they are having. It is a bit of a cage fight. It reminds me of that movie Fight Club. Do you remember Fight Club? Underground boxing by people who should know better but do not? Young men just punching on, I think is the expression. There is no doubt that a Liberal Party meeting is a lot like that at the moment. But I digress and I should be discussing the importance of manufacturing in Australia.

This industry is tremendously important to Australia. It produces billions of dollars in export revenue, it directly employs over 50,000 people and it indirectly employs thousands more. These people need our support and encouragement to keep making the great products that they make. This government knows that if you do not have car manufacturing—if your country does not have a car manufacturing industry—then generally you have very little manufacturing full stop. This is a government and a Prime Minister that want to see Australia as a country that makes things, that makes elaborately transformed manufactures. As Paul Keating used to often say: ‘We don’t just want to be a mine or a quarry or a beach for the rest of the world. We want to make things and we want to export things.’

This industry is tremendously important to South Australia. I cannot stress its importance enough. Despite all the tribulations of the previous decade—losing Mitsubishi and losing many component firms associated with car and other forms of manufacturing—manufacturing is still the heart and soul of the South Australian economy. Defence manufacturing is increasingly important and it is interesting to note that the Rann government has won some $44 billion worth of defence contracts in recent times. Manufacturing has been tremendously important to the wine industry, which has a big impact as an employer and an exporter in my electorate and the areas adjacent to it.

Of course car manufacturing is where it all began, when Sir Thomas Playford, a great Liberal premier of our state, went out to the world in his own particular fashion. It is hard to imagine a more humble man—he was a cherry farmer from the Adelaide Hills—but he marched into various boardrooms and convinced them to invest in South Australia. That is why a lot of companies like Holden and Bridgestone set up in South Australia. There are a lot of great stories about the foundation of manufacturing in South Australia. In my heartland in northern Adelaide, in the city of Playford and the city of Salisbury, one in four workers is a manufacturing worker. The income they earn is tremendously important to their families. Manufacturing jobs tend to be well paid, they tend to have good conditions and, despite what some people say, they do have good secure futures. If you doorknock places like Salisbury, Elizabeth or Gawler or even the country towns to the north, like the town I grew up in, Kapunda, you will find vehicle industry workers from Holden, Bridgestone, Futuris and the hundreds of small engineering firms that get their business from manufacturing either in the food area, in cars or in defence. Manufacturing has been important to the identity and the culture of the northern suburbs of Adelaide. Holden is still a major sponsor of the Central District footy club.

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

Premiers!

Kate Ellis (Adelaide, Australian Labor Party, Minister for Early Childhood Education, Childcare and Youth) Share this | Link to this | Hansard source

Boo!

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

The premiers this year, as we are many years. I hear the member for Adelaide, who would be disappointed of course because a couple of years ago the Bays, of which her family are great supporters, went down in a screaming heap yet again. It will happen one day for the Bays, I am sure, as it will happen one day for Sturt or North Adelaide—one of them. One of them will win, eventually. But I digress again.

This government has been tremendously supportive of the manufacturing industry, and our New Car Plan for a Greener Future contains the Automotive Transformation Scheme, which works in tandem with the ACIS Administration Amendment (Application) Bill. It starts in 2010. It provides $3.4 billion in grants to industry for research and development to improve environmental outcomes and work skills development. It is all about renewing this industry and making sure it has a future in Australia. It is all about helping it to adjust to a greener economy.

This assistance also takes into account the reduction in automotive tariffs from 10 per cent to five per cent in January 2010. This reduction will mean that Australia’s tariffs on passenger vehicles are amongst the lowest in the world. In fact, we will have the fifth most open market for cars in the world, and that is an important signal to the rest of the world about free trade. It is an important message at the moment about learning the lessons from the Great Depression and avoiding protectionism, particularly during a period of economic crisis and declines in world trade. That is obviously a larger global issue. We often wait for other nations to practically implement some of their rhetoric around free trade and not just talk about it. I have told the House a few times of my reservations about rapid tariff reductions, and I still hold those reservations. Australia does lead by example in this area, and my electors hope that the rest of the world follows at Doha. It is tremendously important to the world’s economic growth, but it is also important for the rest of the world to match Australia’s performance in this area.

This bill does correct an unintended consequence that would have produced a three-month gap in support from 1 January 2010 to 31 March 2010, which occurred through the linking of this scheme, ACIS, with the Automotive Transformation Scheme. Such things happen; you just have to get on and fix them. Nobody is immune to oversights or mistakes, and we are correcting this one.

The content of the bill basically delinks assistance from a calculation based on an ever-declining tariff rate to a new calculation based on the flat rate of 7.5 per cent, and it treats the value of cars the same, regardless of whether they are produced for domestic or export markets. That is an important thing to do.

As I conclude, I would like to make a few remarks about Bridgestone and about some of the economic dislocation that is occurring in the western and northern suburbs of Adelaide. Even before Bridgestone, we had faced over 3,000 redundancies, and a lot of those jobs were manufacturing jobs. If you want to know about the toll of the economic crisis then you need to come to western Adelaide or northern Adelaide.

It is tremendously damaging to people’s lives and to their families to lose a job and have to go on the hunt for a new one. It produces uncertainty and economic hardship, and it unsettles families and communities. We want to avoid that at all costs, which is one of the reasons why we have invested in the economy and put stimulus into the economy, because we know that, without that, thousands more would join the job queue. And that figure does not include Bridgestone; it does not include the 600 who will face an uncertain future as they come to the end of that plant’s life.

Many of these workers devoted decades of their lives to this plant, and it is not just a job for them; it is a way of life. Making tyres is a way of life. It is about their workmates and friends, who are more like a family than any other relationship. It is about losing stability and certainty about where they work and what they earn. Many of those workers face an uncertain future, and no-one in this House or outside of it can predict the individual paths that they will take from here.

We have unions fighting for better wages. The government has visited the plant and has pledged resources for retraining. We have an excellent local employment coordinator, a lady named Pippa Webb, on the ground drumming up enthusiasm and putting employers who do want to employ Bridgestone workers together with those workers. There are some employers who have come to the party already, and I certainly congratulate them. But, in the end, no-one can predict the future for these workers, and such circumstances breed worry, anxiety and anger, and it is perfectly justified that these workers feel this way.

When we visited the plant, along with the members for Makin and Port Adelaide and the Minister for Employment Participation, Mark Arbib, we took a tour through the plant. Such tours are always a little stage-managed by companies, I think it would be fair to say, and workers are never entirely frank. But we did have a few interactions with some of these workers that just brought home what they face.

One fellow who we stopped to talk to had previously had a WorkCover injury—he had an injured arm—but he was still working. The first thing he said to us was, ‘I want to work; I am a worker,’ and you could just tell that, for him, that was the priority—that he get another job and have the dignity of looking after himself and his family. He did not want to go on the dole. He did not want a redundancy. He did not want to have to face uncertainty and unemployment. And I think that is commendable. These are the people that you are dealing with—good people; working-class people.

Another worker I met had to suffer the indignity of hearing from a relative that his job was gone. He was a night-shift worker. His brother-in-law rang him to tell him that the plant was closing; he had seen it on the news. I think that is a terrible indignity for anybody to have to endure—to be told by a friend or a relative who has seen it on the news before you have heard it yourself. And if there is one message I want to give to companies, it is this: there is absolutely no excuse in this day and age for a worker to hear from someone else or from the news about their job being finished. These days, with text messages, emails and telephone calls, communication is instantaneous. You can have instantaneous communication with your workers—and Holden does this. When Holden has a significant change to any part of its plant or its production schedule, they make sure the workers know before the media know—that the workers know before anybody else knows. That is a really empowering thing to do. It is the decent thing to do. And it is in the company’s self-interest, too, because you get the one message going out to workers; they are not left in the dark.

I have seen many redundancies—at John Martins, at places like Harris Scarfe, and at textiles factories like Levi’s in Adelaide. It is always a terrible process; it is always a difficult process. It is never pleasant for employers or employees. But it can be done properly, which means telling workers first, giving them accurate information and giving them certainty about their entitlements, about production schedules, about retraining options, about time off for a new job and about the method of paying redundancies—whether they can leave for a new job and still get their redundancy. These are all important things to do. Communicating with workers is an important thing to do. It makes a difficult process more bearable and it allows people to leave their jobs with some dignity and without bitterness or anger.

It is my hope that Bridgestone adopt a best practice approach to their closure, but I am very fearful that they will not. I am very fearful that this company will get it wrong and that there will be a bitter taste left in these workers’ mouths. Despite all the efforts of their unions and of this government, that is my fear. If there is one message I would like to leave the House and Bridgestone with it is that you have to actually do this right. It is not good enough to just pack up and leave Australia and leave these workers in the lurch and not to a good job in saying goodbye. If it has to be goodbye, then do it properly.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

I thank those who have spoken on the ACIS Administration Amendment (Application) Bill 2009: the member for Groom, the member for Mayo, the member for Makin and the member for Wakefield. I do not know the member for Wakefield all that well, although I am getting to know him. I do know, though, that he—

Kate Ellis (Adelaide, Australian Labor Party, Minister for Early Childhood Education, Childcare and Youth) Share this | Link to this | Hansard source

Don’t get too close!

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

I am being urged not to get to know him to well. Fortune favours the brave and I will stick on my present course—

Janelle Saffin (Page, Australian Labor Party) Share this | Link to this | Hansard source

Ignore the interjections, Minister.

Craig Emerson (Rankin, Australian Labor Party, Minister Assisting the Finance Minister on Deregulation) Share this | Link to this | Hansard source

They are very disruptive, that is right. I do know that he has represented vulnerable workers during most of his working life before coming into this parliament and he has had to experience and work through the sort of dislocation that he has just described in respect of Bridgestone with textile, clothing and footwear workers. You have heard from the member for Wakefield some of the human costs associated with the dislocation and closure of plants and so on. When there is a story of human turmoil, the family is often badly affected. I think his call for businesses to be as sensitive and helpful and supportive as possible should be endorsed by everyone in the chamber. I know the member for Makin would join me in making those observations and urging that we always need to be mindful of the terrible consequences for families of people losing their jobs—and he told of the loss of the dignity of work in one particular story.

In summing up the bill I point out that the bill does amend the ACIS Administration Amendment Act 2009 to correct an unintended consequence arising from the act’s link with the commencement date of the Automotive Transformation Scheme Act 2009. Under a New Car Plan for a Greener Future, the government announced additional support through the Automotive Competitiveness and Investment Scheme to smooth the transition to the Automotive Transformation Scheme. The additional support, estimated at $79.6 million, delinks the assistance rate for cars produced in 2010 from the general tariff rate and replaces it with a flat rate of 7.5 per cent. It also equalises the treatment of cars produced in 2010 for the export market with cars produced in 2010 for the domestic market. The unintended consequence, if not corrected by this bill, would be that not all the additional support would be provided, and this would diminish the ability of Australian vehicle producers to continue their recovery from the global economic crisis.

I would quickly point out, too, that figures on motor vehicle sales in Australia came out yesterday and they are quite encouraging. I would add that, in the commentary on motor vehicle sales from the National Australia Bank, it points to the influence of the small business tax break and the fact that businesses appear to be getting in on that tax break before its expiry date of 31 December.

I was asked by the member for Mayo to provide information to the parliament on when this oversight was detected and whether there was ample industry consultation. The advice to me is that the oversight was detected on 12 November and that there was ample industry consultation.

By including an application provision, the bill clarifies that the government is providing additional assistance under ACIS for motor vehicle production from 1 January 2010, not 1 July 2010, as currently provided by the act. This amendment delivers the certainty promised to this vital manufacturing industry as it moves into a new area where economic sustainability is driven by investment in innovation. I commend the bill to the House.

Question agreed to.

Bill read a second time.