Tony Zappia (Makin, Australian Labor Party, Shadow Parliamentary Secretary for Manufacturing) Share this | Link to this | Hansard source

I make it clear from the outset that Labor will be opposing the Automotive Transformation Scheme Amendment Bill 2014. I will explain why in my contribution to this debate. When Holden made its submission to the Productivity Commission inquiry in November 2013, Holden said:

Nineteen of the G20 countries all have automotive manufacturing at their core.

Australia still is a G20 country which makes cars, but because of the Abbott government, it will not be for much longer. The Abbott government will indeed be remembered and condemned for abandoning Australia's automotive manufacturing industry and for abandoning the 200,000-plus workers and the hundreds of businesses across Australia which depended on that industry. On 21 August 2013, before last year's federal election, then Leader of the Opposition Tony Abbott said:

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

After the election, his promise turned out to be just another one of Prime Minister Abbott's litany of broken promises. Adding insult to injury, after turning his back on car workers and provoking the end of car making in Australia, on 18 December 2013, Prime Minister Abbott said about automotive workers:

Some of them will find it difficult, but many of them will probably be liberated to pursue new opportunities and to get on with their lives …

I have not heard one car worker, and I have spoken to many since that statement was made, who feels liberated about losing their job, their income and their security. How car workers can get on with their lives without a secure job shows just how disconnected with reality Prime Minister Abbott and his government members are. Then we have the totally out of touch Treasurer who believes that low-income Australians do not drive cars. Prior to the election, the member for North Sydney, Treasurer Joe Hockey said:

The coalition will be the best friend the car industry has.

Yet once elected, the Abbott government proceeded to cut $500 million of automotive funding. It then ordered a predictable Productivity Commission inquiry into Australia's automotive industry with full expectations of what the findings would be to use as a cover for its intended cuts and even worse having the commission hand down its report after the deadline GMH had set for having to make a decision about its future in Australia. There was never ever any intent by the Abbott government to keep Holden in Australia or to support the automotive industry. The Abbott government also knew—it could not possibly not have known—that if GMH pulled out, so too would Toyota because component suppliers could not remain sustainable supplying just one Australian car maker. That was well known throughout the industry. So the Abbott government knew that, if Holden were to leave on the back of Ford leaving, Toyota would have little choice but to do the same. Yet instead of senior members of the Abbott government meeting with car makers and attempting to overcome their problems and keep their operations in Australia, as the previous Labor government had done, the Prime Minister and the Treasurer did the opposite.

To my knowledge—and I stand to be corrected if I am wrong—neither the Prime Minister nor the Treasurer ever met with senior GMH executives prior to GMH's announcement that they would cease operations here in Australia. In parliament Treasurer Joe Hockey made it clear to GMH that the Abbott government was not interested in them. I want to remind members of what the Treasurer said at the time, on 10 December:

So I would say to the Leader of the Opposition … join with the Acting Prime Minister and the government in calling on Holden to come clean with the Australian people about their intentions here. We want them to be honest about it—we want them to be fair dinkum—because, if I was running a business and I was committed to that business in Australia, I would not be saying that I have not made any decision about Australia. Either you are here or you are not.

In answer to another question, he then said:

A hell of a lot of industries in Australia would love to get the assistance the automotive industry is getting. A hell of a lot of other businesses, and foreign owned businesses, would love to be able to remit money from Australian taxpayers to head office in Detroit …

I am not surprised that Holden the next day made an announcement to leave this country after those remarks were made in this parliament by the Treasurer of Australia. If I were a GMH executive, I would have found those remarks highly offensive. I would also have found those remarks to give me a very clear indication that this government is not interested in us continuing to build cars in Australia. And not surprisingly, that is exactly what happened. GMH made an announcement literally overnight that they would cease operations in Australia in 2017. They made that announcement while their CEO here in Australia, Mike Devereux, only the day or so before, had made it clear that no decision had been made about the future of GMH operations in Australia. Indeed, industry Minister Macfarlane, who I understand at least had met with GMH executives here in Australia and had been saying that no decision had been made by GMH about its future in Australia, was left stranded by the Prime Minister and the Treasurer in the same way that Australia's automotive workers were. Industry Minister Macfarlane said:

We are working on a solution for the car industry and we will continue to do so.

That quote was only in the days before the announcement was made by GMH. Deputy Prime Minister Truss added to that comment by saying, 'We want a strong car industry.' And, yet, in the days when this matter was being debated, I understand, by government Abbott government ministers, only one of the 19 Abbott government ministers were prepared to support Australia's automotive industry. And I would expect that that was Minister Macfarlane.

Having pushed GMH and Toyota out of Australia, the Abbott government then allocated a paltry $100 million of transition funding. The funding does not include a single cent to help auto workers retrain and reskill. Indeed, my understanding is that, originally, they were prepared to put only $60 million on the table. Only yesterday there were comments made about the level of funding required, and a figure like a billion dollars was suggested by one of the commentators as being more appropriate, given the number of people that are going to be affected. Yet, the Abbott government, having provoked the car makers to leave Australia then puts a paltry $100 million on the table to assist 200,000-plus Australians that are likely to lose their jobs as a result of car making ending in this country. The Abbott government's contempt for automotive manufacturing in this country could not be clearer.

To add to the woes of co-workers who already face a grim future, this legislation, the Automotive Transformation Scheme Amendment Bill 2014, effectively now cuts $900 million of funding from the Automotive Transformation Scheme. And, by doing so, it is very likely to bring forward the demise of car making in Australia. Labor is not going to turn its back on car makers, component suppliers and co-workers, and Labor will oppose this legislation.

This bill gives effect to the Abbott government's $500 million of cuts to the Automotive Transformation Scheme over the years 2014-15 through to 2017-18, as announced as part of the government's 2013-14 Mid-Year Economic and Fiscal Outlook. The bill also terminates the Automotive Transformation Scheme on 1 January 2018, some three years earlier—cutting a further $400 million from the ATS in line with the Abbott government's budget announcement. On 24 September, only a few days ago, Tony Weber, Chief Executive of the Federal Chamber of Automotive Industries, said:

If the Amendment Bill passes Parliament, it will reduce the Automotive Transformation Scheme by $900 million and intensify the financial pressure on the automotive supply chain at a time when they are trying to transition their operations into new business area.

His comments were supported by those of Richard Reilly, Chief Executive of the Federation of Automotive Products Manufacturers, who said, 'Reducing funding of the ATS by 66 per cent in 2015 and by a further $150 million each year in 2016 and 2017 will have serious implications for the continued operations of many firms within the automotive supply chain.' Mr Reilly goes on to say:

To reduce the funds available mid-stream leaves companies in the supply chain vulnerable to more competitive international pressures … a reduction in ATS funding will put in jeopardy up to 30,000 jobs in the component industry, not to mention the potential impact on jobs in the vehicle manufacturing side of the sector.

There you have it, Mr Deputy Speaker: two of the chief executives of the independent associations that represent automotive manufacturers in this country have both assessed this as bad policy for their industry sector. It seems that the only one who does not seem to understand that this legislation is bad policy and bad for the economy is the Abbott government, whose ideology is to shut down the automotive sector as fast as it can. Indeed, the Abbott government's auto industry response from the outset has been driven by ideology rather than good public policy and the national interest.

Nearly 50,000 Australians are directly employed in Australia's auto industry, and a further 200,000 jobs are in some way linked or dependent on the industry in fields ranging from metal manufacturing through to scientific services and general community services. The sector contributes billions of dollars to the Australian economy each year. Again, there have been several reports that talk about the quantum—and, depending on which report you read, these will give you a different figure. But none of them talk about it as contributing in the millions; they all talk about it contributing in the billions. It also contributes almost $700 million annually to research and development in Australia. Indeed, it is the largest research and development contributor in the manufacturing sector. Research and development expenditure from the automotive sector benefits so many other sectors of Australian society and we will lose all that once automotive manufacturing ceases in this country.

Indeed, Australia is one of only 13 countries that can make a car from start to finish. And Ford, Toyota and Holden have some of the best design teams in the world right here in Australia. Again, how much longer they will be here for, we do not know. In recent years, a combination of the global financial crisis, which in turn created a glut of cars and a downward push on the price of imported cars, the high Australian dollar, increased government assistance in other countries, currency manipulation by other governments, generous government establishment assistance in emerging economies and tariff reductions have all impacted on the competitiveness of the Australian car makers. Indeed, tariffs in Australia right now have dropped to, on average, three per cent. Given that, whilst the figure is notionally five per cent, because of several free-trade agreements that Australia has entered into the average figure is more like three per cent. I note that both Toyota and GM Holden, at the time of making submissions to the Productivity Commission or making public statements about leaving Australia, cited free trade agreements as being one of the issues that caused them to make the decision that they did.

Unlike other advanced economies including the USA that value their auto industries and were prepared during times of need to provide billions of dollars of assistance to keep them afloat, the Abbott government was not only prepared to see the Australian auto industry shutdown but it literally pushed it out the door. Governments in every country with whom Australia competes against all support their car makers by far greater amounts than the Australian government was being asked to do. They do so because they understand the wider value car making adds to their economies. For example, in Sweden, the per capita cost of government support is around $334; in the UK it is $28; in Canada it is $96; and in France it is $147.

The US government committed $81.3 billion to bail out its automotive industry in the midst of the global economic downturn. They did that because they understood the value that that industry brings to their country. Contrast that with what was being asked and what was being provided by the Australian government: $17.40 per capita of support by the Australian government. And for every dollar of Australian government assistance, we saw a substantial co-investment by the car makers. For example, every dollar of support from GMH saw a three-dollar co-investment by GMH, which, in effect, translated to a total economic return to Australia of around $18 billion for the $1 billion of support that Holden received over the last decade. It was a pretty good return on taxpayer funds. And it was a similar outcome with respect to Toyota, where, I understand, the economic return was in the order of 20:1.

Other Australian industry sectors continue to receive billions of dollars in government assistance. I mention mining and agriculture as two of them. But those subsidies are never questioned or scrutinised. What is even more illogical about the actions of the Abbott government is that the cost to the Australian government of the industry closure will be much greater than the co-investment that was originally sought. It does not make economic sense. It may make ideological sense but it does not make economic sense, particularly by a government that claims that one of its priorities is to balance the budget, because this is going to make its task of balancing the budget even more difficult.

Earlier this year, in fact I believe it was April this year, a University of Adelaide analysis by Bianca Barbaro, John Spoehr and the National Institute of Economic and Industry Research into the loss of the auto industry found firstly that Australia is expected to suffer a fall in national employment of around 200,000 jobs as a result of the planned closure to motor vehicle manufacturing between now and 2017. Econometric modelling forecasts a negative annual shock of $29 billion or more by 2017 in 2011 prices, a total of around two per cent of national gross domestic product. The largest regional shot to gross national product is expected to be felt in Victoria with an annual decline of $13 billion in 2011 prices expected by the end of 2017 then followed by a $5-billion drop in New South Wales, a negative figure of $4.3 billion in Queensland and a negative figure of $3.7 billion in South Australia.

Those figures are indeed concerning because they will have undoubtedly a flow-on effect right throughout Australia. It does not matter where you are in Australia, in one way or another when your economy takes those kinds of hits there will be a flow-on effect. I understand from other reports—and there have been several reports into this matter in the last three or four years alone—that the welfare payments and the lost tax revenue are projected to exceed $20 billion—that is, the tax that would have gone back to government by people being employed in the auto industry or the reliant sectors. The taxes that the government raises through payroll tax and the like and the cost to government of paying welfare payments to those people who will find themselves unemployed will exceed $20 billion. They are the projected costs.

I have no doubt that government members and others will say that those figures are only estimates, they are only projected and the like. That may be so but the figures are staggering. Even if they do not turn out to be spot on, the reality is that there is an undeniable impact on this country that is going to hit Australia very hard. It is also estimated that it would take some 10 years before the economy recovers from the hit.

Just to break down the job losses across Australia, there will be: some 98,000 in Victoria; 30,000 in Queensland; 11,000 in Western Australia; 400 in the Northern Territory; 32,000 in New South Wales; 24,000 in South Australia; and 1,700 in Tasmania. There is not a state or territory that will not be affected. In my home state of South Australia, the end of Holden will directly affect around 6,000 auto jobs. The South Australian economy will take $1-billion-plus hit and the result will be thousands of additional job losses—as I say, 24,000 are the long-term estimates.

A recent survey only reported yesterday in Adelaide carried out by the University of Adelaide found that one-third of SA businesses in Adelaide's northern suburbs—that is, the region surrounding the Holden plant—risked closure as a result of the Holden shutdown. One in three feared that they may have to close once Holden ceased operations. Smaller enterprises felt most vulnerable, with almost half of them risking closure or a downturn in trading and profitability. We are talking about businesses in a region of Adelaide that is already doing it tough, with high unemployment and youth unemployment, currently running at around 18 per cent. So the closure of Holden and all those other businesses will have a devastating effect. For those people who are going to lose their jobs, you then compound that fact by adding the uncertainty of the Abbott government's policies in respect of replacing our naval fleet, in particular the submarine replacement program.

The fact that the Abbott government is now no longer prepared to commit to building the submarines in South Australia compounds the real concern that every South Australian has because, if the submarines were to be built in South Australia and if other defence contracts were to come there, as expected and as promised, then it would offer some alternative opportunities for those people who will lose their job from the closure of the car industry. But that now does not appear to be likely.

Interestingly, when it comes to both the car industry and the submarine project, the South Australian Liberal members of parliament, who were all happy to campaign in support of both the car industry and the replacement submarine contract prior to the 2013 election, are now nowhere to be seen. They have gone silent.

I note that the member for Hindmarsh is starting to feel the pressure and has written to the Prime Minister about a compromise option for the submarines. I say to the member for Hindmarsh: a compromise is not what South Australians were promised by the Abbott government—a compromise will not deliver the best outcomes for South Australia and a compromise is a clear admission of a broken promise.

This legislation compounds a bad decision by the Abbott government because it not only directly affects car making in this country but is likely to hasten the demise of car making in Australia at a time when there is nothing in place to assist car workers when unemployment is trending upwards and when naval contracts are in limbo, thereby closing off manufacturing opportunities for retrenched car workers and engineering companies that might have otherwise been able to be supported by that sector.

Contrast all of that with Labor's record in office. In government, Labor's investment ensured that Australia maintained its auto industry in the face of the global financial crisis, global industry restructuring and a record high Australian dollar. A New Car Plan for a Greener Future, announced in November 2008, provided $5.4 billion of car investment support, from 2010 to 2020. The centrepiece of the plan was the Automotive Transformation Scheme, which provides $3 billion and which is now being cut. Labor's approach has always been based on co-investment and in providing long-term certainty. It is not a handout. The industry only ever received support when it was prepared to put its own investment on the table. Labor support was critical in keeping the industry here and attracting new investments, new models and new capacity.

Before the election, Labor announced a new car plan for the 2020s, to keep making cars in Australia and to keep 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, support research and development, and design and engineering, from January 2016.

Labor's commitments would have seen motor vehicle producers commit to new investments in Australia and a future for the thousands of Australian automanufacturing people whose jobs are now on the line. I feel for those people, because they are people whom I represent as the member for Makin. My electorate is not far from the GMH plant. I grew up in the region where GMH operates within and from where it draws many of its employees and where many of the components suppliers or other support industries are based. I see these people on a daily basis. I have spoken to so many of them in the last year or so. The concern is absolutely real. In fact, I took a phone call yesterday—and I referred to it when speaking about the previous legislation only an hour or so ago—from a person who is indeed concerned about the impacts of the closure of GMH and the many small businesses in the area. Those concerns are very real because I know that, once GMH ceases operations, those businesses will struggle to remain viable, unless there is an alternative for them. The alternative is not, supposedly, to retrain them or point them in a different direction because, quite frankly, there may be different directions for them to go but not for all of them. There are simply not the jobs out there in the community to transition to. This sector is not just a minor sector of employment; this sector impacts over 200,000 Australians. That is why this legislation, which speeds up the process and brings forward the demise of the car industry, is bad legislation, bad policy and Labor opposes it.

Bob Baldwin (Paterson, Liberal Party, Parliamentary Secretary to the Minister for Industry) Share this | Link to this | Hansard source

I rise to speak on the Automotive Transformation Scheme Amendment Bill 2014. I have just listened to the greatest diatribe and 'living in denial' from the member for Makin that I have ever heard. I would remind the member for Makin about the Mitsubishi plant in his home state of South Australia. Where was his voice at the time it closed? I perhaps could remind him of Ford and the great headline by former Prime Minister Gillard where she turned up in Geelong, in January 2012, announced $34 million for Geelong and told them how it would create 300 new jobs, only to find eight months later that 330 jobs had gone. Then of course there was that devastating headline, on 24 May 2013, that Ford would shut. Which government was in power in 2013? The former Labor government. So to hear the rhetoric being delivered by the member for Makin is beyond belief.

Holden, Ford and Toyota have announced they are going. Mitsubishi is already gone. Holden, Ford and Toyota are leaving our shores by 2018. Until this occurs the government will continue to provide some $700 million in assistance that began on 1 July this year. Car manufacturing in Australia has been slowing for many years. As I said, Ford and Mitsubishi made the announcement under the previous government.

The member for Makin is saying, 'If only they had thrown a few more dollars in, perhaps we would have an industry'; but if that was the case Mitsubishi and Ford would have stayed under the previous government. The reality is that what we are seeing is consumer choice. There are 67 brands of car in Australia, and over 360 models. It is consumers who decided not to buy the Australian produced vehicle.

Toyota in particular were producing Camrys for the international market, and work practices drove them out of competition. Under work practices, the workers and the unions decided you needed to shut down in January so everyone could have a holiday for 26 days when our greatest purchase market was in their peak buying period—the Middle East. It just did not work. In just-in-time manufacturing, you cannot stockpile motor vehicles to get you through a month glut; you have to continue production.

When Toyota put it to the unions and the workforce, it was resoundingly rejected—in other words, the heads of the unions preferred 100 per cent of nothing, to 80 or 90 per cent of something. The government could not continue to contribute to motor vehicle subsidies on each and every model produced in Australia, when the consumers were not there to help sustain or support the industry.

The Productivity Commission estimated that between 1997 and 2012 the industry had received some $30 billion in the form of tariffs and budgetary assistance. That was to create a sustainable industry, but it did not. The reality is that, despite all this money, the industry was not sustainable.

But what we saw regularly from Labor prime ministers—and in particular Kim Carr, who was the minister responsible for the industry—were these 'We're saved!' events. They would line up with the motor vehicle heads and all say: 'We're saved!' That was the big announcement. I will give you a classic example. In March 2012 at Holden, Senator Carr joined with the MD of Holden, Michael Devereux and South Australian Premier Jay Weatherill for another 'We're saved!' event. They promised money, but the money was never delivered. Holden actually sacked a few hundred workers almost immediately afterwards.

So we had these regular media profiles—'We're going to save the industry'—but in fact nothing happened. With Labor what we would get was all talk, no action. When it was time for the rubber to hit the road, Labor was not there. They did not understand how to save an industry. Contributions by members opposite—on this subject in previous debates and in discussions in this place—make it clear they have no understanding of how to create sustainable industry. You have to be competitive. Yes, we have a higher dollar. Yes, we have had a lot of problems. But the reality is that taxpayers, after some $30 billion between 1997 and 2012, could not prop up the motor vehicle industry to the level required. If it was that easy, we would still have Mitsubishi and Ford. I remind you again that the announcement to quit Australia—and we had already seen the close of Mitsubishi—happened on the former government's watch.

What is critically important is what we do from here on in; how we work with the workers; how we get them trained and skilled up for new jobs and new opportunities; how we work with industry in transformation, to provide opportunities through advanced manufacturing and new innovative technologies to create new jobs and new industries. The change that is occurring to the face of Australian industry will be dramatic in the next five years and particularly in the next 10 and 20 years. We need a properly trained and skilled workforce to make sure that we can seize those opportunities.

What have we done in relation to this? The government has developed the $155 million growth fund, in collaboration with Holden and Toyota and the Victorian and South Australian governments, which will provide $30 million for affected automotive workers, providing access to a range of information services—for things like training and advice—before they leave their current jobs, to help them get new employment. Workers who have been made redundant will get immediate access to intensive employment support through the Automotive Industry Structural Adjustment Program. There is $20 million to assist automotive supply chains to diversify and invest in non-automotive manufacturing through the Automotive Diversification Program. Round 1 for the ADP closed on 11 September 2014. There were 25 applications. There is $60 million to support businesses that are investing in capital projects to establish or expand their manufacturing operations in areas of high-value manufacturing in Victoria and South Australia through the Next Generation Manufacturing Investment Program; and $30 million to support new infrastructure projects, outside of manufacturing, which facilitate industry collaboration, additional investment and development of common-use infrastructure that will facilitate new economic activity in Victoria and South Australia through the Regional Infrastructure Program.

As I said, reskilling and training your workforce and working with industry to seize new opportunities that will occur and creating these new opportunities is critically important. Last Friday I was in Melbourne and I met with a couple of companies that have gone into advanced manufacturing. In fact, Marand Engineering, who have been involved in provision of tail sections for the Joint Strike Fighter, were originally a company that produced tooling for the automotive sector. Over a period of time they saw the demise of Australian manufacturing of tooling for the automotive sector, and they started to specialise in new and innovative technologies. They took on new opportunities, and through advanced manufacturing they secured contracts under the Joint Strike Fighter Program. They are now delivering a new credibility and a new reputation for Australian industry. But they are also training and upskilling their workforce to take up all of the opportunities that will occur in relation to this.

We are also investing some $484 million in the Entrepreneurs Infrastructure Program, which will improve business competitiveness, support business improvement and promote economic growth—with the aim to create new jobs. We are looking at a whole range of new programs. You cannot keep doing what you have always done, because you are always going to get the same result. Even though money was being pumped into the motor vehicle industry—and being amplified on the way through—what we saw here in Australia was an absolute deterioration of the economic position of the motor vehicle industry and its competitiveness.

These are difficult decisions. They are tough decisions. But I have to say that, at the end of the day, you have to make a decision. You have to know when to cut; you have to know when to fold; and you have to know when to grow new opportunities. I listened to the speech by the member for Makin, where he said, 'If only we had thrown in a few more dollars.' Mitsubishi had already gone. Ford were on the way out under their watch and it was only a matter of time before Toyota and Holden joined the throng. They were going, and no amount of rhetoric from members opposite would have delayed that. No amount of money would have delayed it—because it was not only the financial prop-up package; it was the fact that our productivity in Australia was just not cutting it compared to productivity internationally.

I met with the head of Toyota when he came to Australia. I sat down with him and said, 'Tell me one thing: what is our production line doing that is different to what you are doing in Thailand or Japan? What machinery and technology do you have there that we don't have in Australia?' His reply was quite interesting. He said that the production lines were exactly the same—the same machines, the same robots, the same technology and the same processes. We are just not as productive as those overseas. That is why we are not producing anymore vehicles after 2018 in Australia.

It is alright to say, 'We should just keep throwing more money in,' but what we should be doing is investing our money in new opportunities and new ways forward. We should be looking to advanced manufacturing and being innovators in industry. We should be looking for new ways of doing things and new opportunities to create so that we can create a workforce of the future. If we do not do that, it will continually cost the taxpayers more and more money—and we are now in an economic position where we no longer have the money to be able to do that. I also remind the member for Makin about the great support they provided for the motor vehicle industry in the lead-up to the last election. We all remember the $1.8 billion fringe benefits tax, which basically stopped vehicle sales in their track. Putting in a $1.8 billion FBT was not the way to create future growth.

Quite simply, it is time to get on with the job. It is time to look at new opportunities. It is time to stop just throwing money after a problem. It is time to start investing money in things that will deliver for the long-term future. We promised—it was an election commitment—that we would be cutting this funding, and we are doing that. It is a sad reality that sometimes dollars do need to be cut. But you need to live within your budgetary means—and this is a part of it. To say otherwise and try to pretend that, if the money had stayed there, there would still be a motor vehicle industry in this country post 2018 is nothing more than misleading the public and playing to their own imaginations. I support this bill.

Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Link to this | Hansard source

I rise to speak against the Automotive Transformation Scheme Amendment Bill 2014, because this is a bill that spells disaster for the 200,000 Australian men and women who rely directly and indirectly on the automotive manufacturing industry for their jobs. The bill that is currently before the House will see cut $500 million in funding from the Automotive Transformation Scheme between now and 2017. It will then see the scheme terminate at the end of 2017, leaving no support for surviving Australian components companies—zero. If passed, this bill will likely lead to the early closure of Holden, crippling South Australia's economy further and leaving companies and workers in the wilderness much sooner than they were promised.

We know that every South Australian has an absolutely vivid memory of the appalling events of late last year when this government goaded Holden into announcing their departure from Australia. The government went out of their way to drive Holden away from our nation. There was some truly despicable behaviour from members of the government, including from South Australian members, who openly and aggressively betrayed the workers in our home state. Then of course we heard that the Prime Minister had the gall to tell these workers—some of whom had been in the company for decades; some of whom had worked their entire working lives for Holden—that unemployment would be good for them. In fact, he said: 'Some of them will find it difficult, but many of them will probably feel liberated to pursue new opportunities and get on with their lives.' Thank you very much for those words, Mr Prime Minister, which show just how completely and utterly out of touch you are. I have spoken directly with those Holden workers, and I am yet to come across one who is grateful to the government for 'liberating' them by driving Holden away from South Australia and Australia. That was clearly not the sentiment that was echoed on the ground by workers.

South Australians absolutely know the impact the closure of Holden will have on our local economy. It is a shame that the Liberal South Australian members in this House either do not know or they just do not care. When you have a look at the speakers' list, you will see that not a single South Australian Liberal or National has put their name down as having the guts to come into this place and justify these cuts. One has wandered in now. Maybe he will stand up and justify cutting $500 million from South Australian industry—or else he will just join with every other one of the South Australian gutless Liberals who will come in here and vote with the government but do not have the guts to stand up and put the case as to why they are betraying our local economy and our local workforce. Now that the decision has been made by Holden to close operations in Australia, we need to look at the best way to transition the workers and reduce the impact on our economy as much as possible. We need to assist these workers during this very difficult time—and this is not best done by ripping $500 million out of auto assistance.

It is critical that governments do not pre-empt the closure of the industry and risk the early closure of firms before 2017 by reducing available funding. That is why I am proud to come in here and vote against this bill. That is why I come in here and stick up for those workers who are already facing an uncertain future and do not need those opposite making it any harder.

South Australia needs this funding in place to assist with the transition of these workers, to help the industry and to help rebuild jobs and maintain capabilities in our local economy. We know that the premature closure of motor vehicle producers and the hundreds of firms in the automotive supply chain would send thousands of Australian jobs offshore long before 2017, and we on this side of the House are prepared to stand up and fight against that. That would mean that 50,000 direct Australian jobs in the car industry were at risk, and a further 200,000 jobs which rely indirectly on the industry were on the line.

In government, Labor's investments ensured that Australia maintained an auto industry in the face of the global financial crisis, in the face of global industry restructuring and in the face of a record high Australian dollar. Labor's approach is based on co-investments—not handouts, as the previous speaker would have us believe. The industry actually only received support when it invested. So, whilst the previous speaker talked about 'financial prop-ups', let's look at the reality of this. The reality is that $17.40 is the per capita cost of car industry support for Australians. This compares with $90 per capita for every German, $264 for every American and $334 for every Swede. So those opposite cannot come into this place and say that this was an industry that only survived due to unreasonable prop-ups by the Australian taxpayer. That is simply not true, and the facts do not back it up.

We know that auto is also the largest research and development contributor in the Australian manufacturing sector, contributing almost $700 million annually. Reports from both academia and industry show that it would cost the government more to see this industry fall over than it would to support it to survive. This again proves that when it comes to the economy this government stands for short-term gain and long-term pain. We see that over and over again, and sadly we South Australians see it all too acutely on too many occasions.

We know that modelling from the University of Adelaide—

Mr Pasin interjecting—

I do not even know the name of the member opposite; he is that irrelevant. If you want to speak on this bill put your name down on the list and stand up and justify your gutless position. Otherwise, I would advise you to shut up.

Modelling from the University of Adelaide shows that the loss of the industry—

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

Order! The member for Adelaide will withdraw.

Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Link to this | Hansard source

I withdraw the call for the member to shut up.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

The member for Adelaide will withdraw unconditionally.

Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Link to this | Hansard source

I withdraw. Perhaps, Deputy Speaker, you could stop him from shouting across the chamber.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

The member for Adelaide has the call.

Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Link to this | Hansard source

Modelling from the University of Adelaide shows that the loss of the industry will have a negative annual shop of $29 billion by 2017, or about two per cent of GDP. We know that Labor's support was critical in keeping the industry here and attracting new investments, new models and new capacity—with four out of 10 of Australia's top-selling cars made locally. The previous speaker wants to talk about consumer choice but let's just revisit that figure: four out of the 10 top-selling cars in Australia have been made locally.

Due to the decisions made by the government since the election, South Australia is projected to lose around 24,000 jobs—something those opposite can be particularly proud of! Welfare payments and lost tax revenue from an industry shut-down—

Mr Hartsuyker interjecting—

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

Order! The member for Adelaide has the call.

Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Link to this | Hansard source

Welfare payments and lost tax revenue from an industry shut-down are projected to exceed $20 billion across the country, and it will be more than 10 years before the economy recovers from the underlying hit to GDP. These are the facts when it comes to South Australia. These are the facts that those members opposite should come in here and justify if they are going to support this bill.

We know that gross regional product in Adelaide will not recover until 2031—nearly two decades away—as a result of the decisions of this government, and as a result of members opposite and how they vote on this bill. But it is clear that since the election South Australia has been absolutely abandoned by the Abbott government. The South Australian members opposite are more concerned about their own jobs than those of the workers in our home state. Every step of the way, South Australians have been promised one thing and then given the exact opposite. Before the election we know that the Prime Minister told South Australians, 'I want to see car-making survive in this country—not just survive but flourish.' That is what he told voters before the election.

In July last year the member for Sturt—sadly, the most senior South Australian Liberal that we now have; a South Australian frontbencher—went and met with Holden workers. This is what he told the media afterwards. He said, 'I have a long-standing commitment to keep Holden operating in South Australia.' Well, didn't that commitment fly out the window as soon as the election came and went!

We know that both the Prime Minister and leading South Australian members have completely trashed the industry and are now trying to stick the boot into Holden further with the bill that is before the House. On our side, we will stand up for every one of those Holden workers. We will stand up for South Australian jobs and we will stand up for the South Australian economy.

Of course we know that there is a pattern that has been emerging when it comes to those opposite and the way that they treat South Australian jobs, because we also heard before the election defence minister Senator Johnston tell South Australians:

We will deliver those submarines right here at ASC in South Australia.

He said:

The Coalition today is committed to building 12 new submarines here in Adelaide.

Well, surprise, surprise! That commitment, too, has flown out the window. In exactly the same way as Holden workers been betrayed we now see the betrayal in our shipbuilding yards.

It looks as if the Abbott government will buy their submarines from abroad, instead. With South Australian having 27,000 defence jobs—3,000 of them in shipbuilding—this will further crush our economy by sending even more South Australian jobs offshore.

Before the election, the Prime Minister told South Australians there would be no cuts to health and education, but of course we have also seen that that is an utter falsehood. Yet again, I say: look at this speakers' list. Not a single South Australian member of the government will dare to stand up and try and justify this bill and these cuts.

We know that the Prime Minister is prepared to play chicken with the livelihoods of Australian men and women but, unlike the South Australian members who sit opposite, I will not stand idly by and watch the Abbott government bring on the early closure of Holden and send even more Australian jobs off shore. I will not stand by and let this government continue to betray the South Australian workforce. In fact, my colleagues and I will do everything in our power to stop these cuts to the Automotive Transformation Scheme. We stand here and proudly say that we do not support this bill. We call on the crossbenchers and the minor parties to stand up for Australian jobs, to stand up for Australian manufacturing and to block these cuts in the Senate.

If there is ever any doubt from the government, crossbenchers or minor parties about how the early closure of Holden will affect our state, I invite them to visit Adelaide to speak to the workers firsthand and say directly to those workers what they intend to say in this chamber during this debate. We have seen the history here. We have seen what they actually have the guts to say to people's face. The Prime Minister said, 'I want to see car-making survive in this country, not just survive but flourish.' That is what he told the workers to their face. The education minister said, 'I have a longstanding commitment to keep Holden operating in South Australia.' That is what he had the guts to say to their face. Do not stand up in this chamber and say one thing about how these cuts are necessary. Do not stand up in this chamber and try and justify these cuts when not a single member opposite has the courage to say it directly to the Holden workers. I am willing to bet that they do not have the courage to go and say to the Holden workers what they are saying now, late on a Tuesday evening, to the parliament. So I invite them to speak firsthand to not only the workers at the Holden plant but also those working in the car components and related industries nearby, those working right across Australia supporting Holden workers and the auto industries, those running businesses in the north of our state that will also be wiped out if those opposite have their way.

You would be hard-pressed to find a South Australian who will not be affected either directly or indirectly if the economy takes the massive hit that this bill helps to encourage. It is why we will absolutely stand up in this place and say the same thing that we will say to Holden, the same thing that we will say to components manufacturers, the same thing that we will say to the workers who rely on us to stand up and fight for their jobs—and that is that on this side of the House we have your back. On this side of the House we will actually stand up and fight for the local economy. We will fight for manufacturing and we will fight for South Australia despite the ongoing betrayals by those opposite who have broken every commitment they have made and betrayed all of those workers who relied on them keeping their word.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

I had taken the view that the deferred division from earlier this evening should not be proceeded with until the member speaking at 8 pm had completed his or her speech, and so I did not interrupt the member for Adelaide.

Debate adjourned.

Ordered that the resumption of the debate be made an order of the day for a later hour.