Anne Ruston (SA, Liberal Party) Share this | Hansard source

The Automotive Transformation Scheme has been a very important component in assisting the people in South Australia and Victoria predominately who have been impacted on by the decision for the cessation post-2017 of the manufacture of most motor vehicles in Australia. We acknowledge that this transformation scheme is fundamental to an orderly transition. But the reality is that automotive assistance in this country has been a story of evolution as tariffs and imports have been in decline from 60 per cent in the 1980s to now one of the lowest rates in the world. We have to accept that it was a decision to reduce tariffs that has progressively prevented Australia from being able to compete on a global market for the manufacture of motor vehicles. We have delivered over a billion dollars in investment through the ATS, but the industry has been evolving and it has now evolved to a point where the decision is made that it is no longer going to exist in Australia. As I said, the pressure from a high Australia dollar, a highly competitive marketplace and relatively small production volumes are all reasons that have collectively created the perfect storm to result in the decision by the motor vehicle producers to cease manufacture in Australia. All the manufacturers have been quite clear that the level of government support was not the reason for their decision to cease domestic manufacture.

Between now and 2017 the ATS will provide a very important component for transition, and that is why this government has never moved away from its original commitment—and the original form of the ATS—that it would remain in place until 2017. It will come to a conclusion in 2017 because that is when Toyota and Holden have indicated that they will not continue to manufacture cars in Australia. The fact that we have maintained that all the way through this process, never deviating from our original commitment, we believe has provided some certainty to the automotive industry. It has also provided some certainty to component manufacturers. They have known all the way through what this particular scheme is likely to be able to deliver, how much money was going to be accessible and what outcomes the government was trying to seek by the injection of this kind of money into the capacity or the ability of the industry to minimise their number of job losses by retraining and by assisting industries to move into other areas in the economy.

As you would know, coming from South Australia, Mr Acting Deputy President Bernardi, none of this transition was helped terribly much by the fact that BHP decided that they were not going to continue with their mining pursuits at Roxby. That alone has been a major blow to the South Australian economy. The opportunities that would have been provided by the expansion of that mine, had it been able to be progressed in the time frames originally proposed, probably would have seen almost a negligible impact from the wind-down and eventual cessation of the automotive industry, because there would have been so many jobs created by that mining project and all the associated mining activities that would have gone with that massive expansion. However, that was not to be, and it was another blow to the South Australian economy. Who was to blame for that? We will not go into that, but the fact is that we actually have had a series of activities that have all ended up pointing to a very bad space for us. Only a matter of weeks ago, we saw the decision by Alinta, our power stations in the northern part of the state, to shut down their two power plants over the coming years. So we have had, I suppose, a trilogy of really significant negative events that have seen three very major employment and economic development opportunities either cut short or removed from our economy.

As I said, the decision to maintain the automotive industry transition package as is has provided some certainty, but we all need to remember that it is not just that alone that is impacting on the South Australian economy. There are a lot of other things feeding into this particular issue. So the original $300 million legislated cap on funding for each of the three years, 2015, 2016 and 2017, will remain in place. The policies around the automotive sector have, I think, evolved to fit the economic and investment climate of the day. Today the focus for the automotive sector is on transition, and I certainly acknowledge that. In particular, that means the transition of our vehicle component makers to new products, new markets and new opportunities.

When we look at the new markets, the new products and the new opportunities, we do not have to look terribly far to see the opportunities provided by the free trade agreements that have been negotiated since this government has come into power and to realise the opportunities that we are trying to create offshore and some of the extended programs that we are trying to put in place to enable transition opportunities for not just the automotive sector but all Australian businesses. One thing you can be sure of in a country the size of Australia is that we are never going to get rich selling to ourselves. So it is extremely important that we capitalise on the free trade agreements that we negotiated with China, Korea and Japan.

All I can say is, 'Shame on those opposite for the damage that they are trying to cause to the China-Australia free trade arrangements'—because it is these very arrangements that have the capacity to absorb a lot of the excess capacity that Australian manufacturers have. In situations where we lose an industry like the automotive industry and we seek to transition that industry, those workers, those component manufacturers and the associated businesses support that industry, it is really important that we have markets for those products—and what better markets can we think of than those that are very close to our shores, in China, Korea and Japan? So I think that there is some very positive news in this space, and I urge those opposite to get on board and try to work with our Australian businesses—in particular, our Australian manufacturing industry—to make sure that we take advantage of the opportunities that are presented by agreements such as the agreements we have with China, Japan and Korea.

There are a number of other activities that the Australian government has put in place outside of the transition package to ensure that we have a strong and competitive Australian based manufacturing sector. But 'Australian based manufacturing sector' does not mean to say that we have to sell the products that we manufacture in Australia. Sure, a strong domestic market is always good, and not putting all your eggs in one basket is obviously a very fine motto to have. We are committed to a strong manufacturing sector, but we have to also be realistic about the fact that we have probably one great competitive advantage in this country—one which we perhaps are not taking as much advantage of as we should—and that is that we are extraordinarily innovative. So one of the thing that this government has sought to do is to increase its focus on investment in research and development, to make sure that we continue to be the smartest country in the world when it comes to manufacture and, in particular, to make sure that we the smartest growers of our primary produce.

Australia absolutely can be innovative and it can be competitive and it can be a generator of jobs and investment, but it particularly must be a generator of export products. So I call on those opposite to support the government in its initiatives and its drive to make sure that we open up markets in Asia and the rest of the world for Australian manufactured goods. But, as I said, it is not just about our manufactured goods; there is another industry that is in our home state, Mr Acting Deputy President Bernardi—the home state that is also the home to Senator Gallacher, who I believe will make a contribution when I sit down—and that is agricultural and our agricultural pursuits. Once again, the opportunities that are available for our products in these markets in Asia is absolutely massive. These products do not attract subsidies; they do not attract protection. Our agricultural sector does not have transition packages when we find out that people do not want, for example, naval oranges and they want to mandarins these days. We do not have transition packages in the agricultural sector.

We also need to remember that, if the government is going to put in place the infrastructure so that Australian businesses can flourish, we have to make some tough decisions. We cannot fund everything. It would be very nice to think that we could but, unfortunately—as those in this place have probably heard many times from people on this side of the chamber—we were left with a debt and deficit problem that probably prevented us from spending money in areas that we would have liked to to make sure that we created an environment so that our manufacturing businesses, our primary industries, our service sector and all of our economy were given a much better chance to be competitive in the global marketplace. Those opposite can take the blame for the fact that that was not to be the case. Responsible economic management is something that this government takes very, very seriously.

Since coming to government, we have done a number of other things in support of our manufacturing sector. The abolition of the carbon tax alone has been a significant help to business. The fact that we are now sitting here with the Leader of the Opposition saying what is tantamount to his intending to bring a carbon tax back in should they be re-elected at any time in the future is just extraordinary. Only a couple of days ago, when Minister Hunt announced our targets for emissions reduction, we found that those opposite think we should have emissions targets of somewhere between 40 and 60 per cent by 2030. But they failed to mention that the price tag of those emissions reductions would be something along the lines of $633 billion. That is the total projected debt of this country, and they thought that by this particular action they were going to double it between now and 2030. We need to get this whole discussion in that context.

Going back to the transition package and the particular motion moved by Senators Madigan and Xenophon on the importance of the automotive transition scheme to Australia's economic prosperity and development, the government are doing a number of other things to ensure we assist in the transition of this industry and in the minimisation of job losses and the maximisation of the economic output of those states that will be most affected by this change. Examples include cutting the company tax rate by 1.5 percentage points and cutting $2 billion of red tape out of the economy. These kinds of things all assist to make businesses that are operating within the Australian environment more competitive. Examples of other things this particular government, which I am a member of, has done include the implementation of the $50 million manufacturing transition program. Our ongoing activity in the area of trying to strengthen antidumping laws and regimes is something that had been completely forgotten. Other examples are the implementation of the $150 million growth fund and the pushing forward of the Industry Innovation and Competitiveness Agenda, including the Industry Growth Centres.

One of the things we cannot forget is that, under the previous Rudd-Gillard-Rudd Labor government, one manufacturing job was lost every 19 minutes. We need to make sure that we get in context the trends, the change and the pace in which these things are occurring. As I said earlier, there is 8.2 per cent unemployment in South Australia, 8,000 people will lose their jobs in June and the fact that we have the scaling down of most of the mining activity that has been such an important part of the South Australian economy for so long. Alinta has announced its intention to shut down its two power plants in the northern part of the state. The announcements from the 'valley of death' which, hopefully, we have managed to mitigate the impact of, somewhat, by the Prime Minister's announcement last week of the frigate and surface vessel manufacture in Australia for our defence sector. Hopefully that particular activity will go towards preventing that from being any worse than it already has been. But the cold, hard reality is that it is a Labor government presiding over this 8.2 per cent unemployment and other closures in South Australia.

Let us not forget that a legacy has been left to us by those opposite. Let us not forget that we have not in any way changed our commitment to the automotive sector or to the transition scheme that we have put in place. And let us not forget that this needs to be judged in the context of how bad it would have been had we not come into government and put in place a whole heap of initiatives that, hopefully, are stemming the tide of the bleed of the things that were left to us by those opposite. It is really disappointing, and I am sure the contribution of those opposite is going to be much more negative, but I want to finish on a more positive note.

Recently I attended the state address in South Australia where a number of our leading business people such as Business SA and the South Australian government addressed the crowd about the state of South Australia. Whilst we all acknowledge that there were a number of things—and I have outlined them today—that have had a major detrimental impact on the South Australian economy, one thing was very pleasing. I sat next to a gentleman who worked for one of our leading component manufacturers in South Australia and asked him how he thought the government was handling the transition with the ultimate closure of the automotive industry in 2017. He said he could not have praised the people he had been dealing with highly enough and that he thought the transition package was working extremely well. He said that he and his company had taken advantage of this particular package and he believed that the opportunities that were able to be opened up to him, his company and his business by being able to access the resources—not just the financial resources but also the advisory resources—were something that would make all the difference between his company surviving and it not doing so.