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

The member for Aston spoke about Ford in Geelong, and my heart certainly goes out to the 1,200 workers in Broadmeadows and Geelong who will lose their jobs. Facing redundancy is a terrible thing—I saw it many times as a union official. It is a very hard process to go through and there is a great deal of uncertainty about where you will end up and what you will end up doing. It is important that the government packages that are put together deliver services to workers on the ground and make sure they have a future in some alternative career. We do not want to see any worker who is in that situation fall through the cracks.

It is because of this issue that I rise to talk about the car industry tonight and to place some facts on the record. Whatever Ford's business issues, whatever the problems with their business model—which were plainly caused by the lack of an export model, and perhaps some decisions by Ford in Detroit prevented the production of an export model—it is important for us to acknowledge that any car maker in the Australian domestic market faces a hypercompetitive situation. It is an unusually competitive market where there are many different brands from all over the world coming into what is the freest car market in the world for a car making country.

The problem has been exacerbated over the past few years by our currency—by the fact that the Australian dollar has been high, at first because of commodity prices and now because it is regarded as a safeguard currency. It is important to note that some 19 central banks, as well as many other foreign investors, are investing in Australia because they see it as a safe economy in a world which is awash with uncertainty, with debt, with low growth and with unemployment, and in a world awash with unemployment Australia stands as an island of economic growth, of economic certainty and of low unemployment. Paradoxically, our success is working against us—it is keeping our dollar high even as commodity prices trend lower.

This is the first time that our country has faced this situation, and it is certainly an unpleasant fact that as our currency is stuck at a higher value than the fundamentals would suggest it should be at, our competitor countries, whether they be European countries or Japan or the US, either by accident or by design have currencies that are notably weaker than they otherwise might be. In the case of the United States and Japan, it is because they are printing money, trying to stimulate their domestic economies. Of course this has the additional effect of making their exports cheaper and so Japanese cars and United States cars are cheaper on the Australian market because not only is our dollar high but also their currencies are low. Of course Europe's currency, and this affects German cars in particular, are artificially low because even though Germany is not suffering a recession they have almost made certain that the Eurozone is and so the Euro currency is now very low compared to Germany's fundamentals. Unsurprisingly, we are getting a lot of German-made cars in the marketplace. This is likely to be a temporary situation. It is not likely to persist indefinitely, but we need to make sure that we provide our car industry with as much assistance as can possibly be given during this time to make sure that we retain the car industry and do not see more tragedies like what happened at Ford Broadmeadows and Ford Geelong. I certainly do not want to see it in my home state with Holden.

Holden is of critical importance to the South Australian state economy. In a report prepared for the state government on 4 February 2011, Barry Burgan, who is with the University of Adelaide, pointed out that Holden's operations were estimated to provide at that time $1.1 billion in gross state product, or about 1.3 per cent of gross state product, and about 11,700 jobs, or 1.5 per cent of employment, and to directly contribute $65 million a year to state taxation. That is a critical figure, and it is important to know that he also had a look at what would happen if Holden were not there. The conclusion he came to was that, if Holden suddenly absented itself from the South Australian economy, we would lose in the order of $1.3 billion in gross state product, 16,000 jobs and $83 million per year to the state taxation base. It is pretty obvious that, without Holden in the state economy, South Australia would suffer from, in effect, a recession. It would be a brutal blow to my state, and I certainly do not want to see Holden go.

Holden have issued a statement on the withdrawal of Ford. It was very unfortunate that Ford made their announcement on the same day that Holden were launching the VF Commodore, which is a really great car. But Holden's statement made it clear that they have a 10-year manufacturing plan that was agreed with the Australian government in 2012, based on the economic and marketing conditions at that time. The plan sees Holden investing $1 billion in the country and producing two all-new global vehicles, which will take production out to 2022. That is an absolutely critical thing for South Australia. Most importantly, one of the things that Holden's statement on 23 May 2013 said is:

The industry needs swift action to make Australia’s automotive policy settings clear, consistent and globally competitive as quickly as possible.

It then goes on to say

Holden is working closely with the Australian Government, Federal Coalition and the State Governments to ensure the viability of the industry …

What Holden is begging for in that statement is a bipartisan commitment to secure this critical billion-dollar investment to South Australia and to the country. The most important thing about this investment is that it maintains an Australian choice once we are past these issues with the dollar, which will affect whatever government sits on the Treasury bench in this place. The high dollar is not a Labor-only issue, although some future government may be the beneficiary of the fundamentals changing around the world. But Holden are begging for a bipartisan commitment.

I wish I could tell the House that we had that bipartisan commitment, but unfortunately we do not, because the Leader of the Opposition persists in maintaining the rhetoric. You would have heard him, on the closure of Ford, saying, 'We will keep the Howard government's plan.' I know people love being nostalgic in this building. More people on the other side of the aisle like being nostalgic about that period, and I understand why. Sometimes I get nostalgic for the easier times before the global financial crisis. But the problem is that that plan in effect will cut $500 million from automotive assistance, and Holden have made it very clear that, if that were to happen, it would jeopardise $1 billion worth of investment. If an incoming coalition government were to abandon in effect what has been a bipartisan commitment to the car industry in this country and jeopardise that investment or see it not happen, leading to the same situation that has happened at Ford, that would be a very great tragedy indeed, because it would plunge southern Australia—not just South Australia but Victoria as well—into a recession. We would suffer a localised recession. It might well have a very detrimental impact on consumer and economic confidence in Australia. So my plea to the coalition—and it is a plea—is to rethink that $500 million cut, rethink the nostalgia of the past, meet with Holden and give them the guarantees that they need to invest.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The time for the grievance debate has expired and the debate interrupted in accordance with standing order 192 (b). The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.

Federation Chamber adjourned at 21:40