Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | Link to this | Hansard source

The opposition will be supporting the ACIS Administration Amendment (Unearned Credit Liability) Bill 2007, which is designed to uphold the original intent of the Automotive Competitiveness and Investment Scheme, known as ACIS. The bill is designed to ensure that only activity that is eligible for support under the scheme actually receives support. It is a pretty basic premise of government programs that people have to meet the funding criteria, so of course Labor supports making it crystal clear in legislation. It is also important that programs are able to be administered as simply as possible and with minimum delay to business.

The bill will enable the Department of Industry, Tourism and Resources to continue to make payments at the end of each quarter without having to wade through an audit process for each firm each time. Unearned credit liabilities will be able to be issued once the audit has been done and it is found that a company has been claiming credits for ineligible activities. It is a straightforward proposition which Labor supports; however, it is important in the context of this bill to say a few things about the different attitudes to industry policy adopted by the government and the opposition, especially with regard to the plight of the car industry in this country at this time.

The opposition has put to the government that it is prepared to discuss with the government a bipartisan approach for the reform of ACIS. This has come about as a result of the fact that the car industry is facing a crisis in this country. The ACIS program, established as it was in 2002, has seen significant investment from the public purse in support of what is a strategically vital industry to Australia, not just in economic terms but also in social terms. This industry employs over 60,000 Australians and provides a skills base of great significance to a range of ancillary industries. It is a major exporter for Australia and of course it is very important, particularly to the south-east corner of Australia and especially to my state of South Australia.

It is important to acknowledge that 7,000 jobs in the industry have been lost since the ACIS program was established. I will go through them: General Motors Holden, 1,400 jobs; Mitsubishi, 1,397 jobs; and Ford, 850 jobs—that is, 3,647 jobs lost directly from vehicle manufacturers. I will go through the component manufacturers: Aunde Trim, 80 jobs; Calsonic, in Victoria, 195 jobs; PBR, in Victoria, 184 jobs; GUD, 60 jobs; Johnson Controls, 75 jobs; Tristar, 40 jobs; Air International, 250 jobs—and another 120 jobs, because the losses are from two different branches; Ion, in South Australia, some 600 jobs and, in New South Wales, some 800 jobs; Silcraft, in Victoria, 280 jobs; Trico, 350 jobs; Autoliv, 302 jobs; VOA Webco, 65 jobs; Dana, 79 jobs; Australian Arrow, six jobs; Pilkington, 20 jobs; Spicer Axle, 200 jobs; Kemalex, in Victoria, 85 jobs and a further 80 jobs in South Australia; TI Automotives, 70 jobs; Cooper Standard, 40 jobs; Tenneco, 156 jobs; Exacto, 60 jobs; Bridgestone, 40 jobs, Irons Engineering, 41 jobs; and Hendersons, 25 jobs. That is a further 3,488 jobs lost, bringing the total to 7,135 jobs lost.

We know that the CEOs of the major manufacturers have now met the Minister for Industry, Tourism and Resources on three occasions and have put their views to him about the need for significant reform of the ACIS program. We know that requests have been made in terms of future investment in ACIS and for a position to be taken on the tariff issue. Under this government, ACIS arrangements require tariff reviews to be undertaken and plans have already been made for the further phase-down of tariffs in 2010.

We had the extraordinary situation of Senator Minchin being reported in the Age on 19 February under the headline ‘Brakes may go on car tariff cuts’. The article says:

Finance Minister Nick Minchin has signalled he will fight for the car industry, if a review before a planned tariff cut in 2010 finds the sector cannot cope with a loss of protection in tough trading conditions.

We know that the government’s industry statement is finished and ready to be launched, so it is appropriate for the government to come forward and explain what it is prepared to do with regard to the future of the car industry and to address the legitimate concerns that are being expressed by tens of thousands of Australians about the future of their families with regard to this industry, particularly given its significance to our economy and to our society.

What is quite apparent is that major pressures are bearing down and moving at a much greater rate than anyone could have anticipated in recent years as a result of changes to the depreciation of the Australian dollar and the pressures that have been brought on by other factors in the industry. It is time for the government to come forward and explain its position with regard to the car industry. It is time for the minister to come forward and explain what exactly the government is prepared to do in the face of widespread representations that are being made about the need for significant reform of industry assistance.

It is also appropriate for this government to be clear as to where it stands more generally on support for aspects of industry policy. Senator Cory Bernardi recently made a speech on the government’s approach to industry policy which demonstrated just how little bipartisan support there is on these questions. I would have thought, given the serious problems facing the automotive industry in South Australia—it contributes some 2½ per cent of GDP and employs some 13,500 people—that this government would be more serious about its commitments to this industry. I would have thought that the government would be prepared to talk to the opposition about what steps could be taken to secure the future of this industry.

It is unfortunate that, from time to time, one’s illusions are shattered—shattered by a government that is quite clearly uncaring and that has no sense of its responsibilities. It was recently brought to my attention that a speech was delivered by Senator Cory Bernardi of South Australia to a Liberal Party meeting in his state. In this rather schizophrenic diatribe, Senator Bernardi claimed that a Rudd Labor government, with me as industry minister, would mean:

... no car (manufacturing) for South Australia.

He further suggested that this demise would come about as the result of policies which he claimed involved advocating for Australia’s interests internationally. He said that addressing market failures which prevent businesses from being able to operate efficiently and maintaining a stable macroeconomic environment would be to blame. It is an extraordinary proposition. Senator Bernardi thinks that the government has no role to play in maintaining a stable macroeconomic environment. Perhaps he should knock on the Prime Minister’s door next time the government claims credit for supposedly low interest rates. Perhaps he should put that view to the minister for industry, in light of the position we have now when interest rates are the second highest in the developed world, and explain this theory that he is advancing.

Senator Bernardi also thinks that the government has no role in establishing policies to address market failure. So he is advocating the abolition of all government support for tertiary education and skills training, which are critical to the automotive industry because they provide skilled workers. After all, if the government has no role in addressing market failure, why should we worry about the positive externalities arising from education and training—the fact that society benefits as well as the individual? We should not worry about the fact that young people will not be able to borrow money in an open market to fund their studies because we have outlawed indentured servitude. This is the proposition that is being advanced in the claims that are being made about the opposition’s statement.

Senator Bernardi particularly objects to comments that I made about thumping the tables in the boardrooms of foreign companies. I confess that I have been known to use colourful language from time to time.

Ruth Webber (WA, Australian Labor Party) Share this | Link to this | Hansard source

Really!

Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | Link to this | Hansard source

It is an extraordinary proposition, but I acknowledge that it is a claim that has been made. However, it is arguably a claim that other industry ministers might have made from time to time. It might be argued that one of our better industry ministers, Senator John Button, made the claim; that is who I was quoting. I was quoting Senator Button, who said that it is one of the jobs of the industry minister to advocate for Australia’s interests in discussions with the head offices of Australia’s vehicle manufacturers, for example. If Senator Bernardi objects to this concept, perhaps the focus of his dismay should be the Howard government’s own industry minister, Ian Macfarlane, who took the very sensible step of accompanying South Australia’s Labor Deputy Premier to Tokyo last December following persistent rumours about Mitsubishi.

What Senator Bernardi fails to explain in his vitriolic outburst is exactly how he thinks his flat-earth economic policies would actually help the South Australian car industry. If he is against the government maintaining a stable macroeconomic environment, addressing market failures and advocating for and in defence of Australia’s interests, why should he be in favour of retaining specific industry programs, no matter how vital the sector is?

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

I am against your 1950s socialist—

Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | Link to this | Hansard source

I am glad the senator has come down to the chamber. We did advise him that I was going to make a few remarks about his incredible incompetence and failure to defend his own constituents. One would have thought he would be up here defending the ACIS program.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

I am protecting them from you and your 1950s socialist—

Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | Link to this | Hansard source

What he proposed in the speech he gave to the Liberal Party in South Australia is that he is opposed to this sort of support. I would have thought he would have explained that position to the Prime Minister and the minister for industry. There is no other logical conclusion to draw from his remarks to his Liberal Party colleagues in South Australia. If he thinks that the policies which are designed to protect jobs are just matters for the defence of socialists, he should try to explain that at the next election. He will have plenty of opportunity. If he thinks that the protection of manufacturing workers’ jobs is just a socialist policy, let him get up and explain that. The auto and manufacturing sectors in this country are extraordinarily important, not just to South Australia but also to Australia as a whole. This is not just a matter for socialists. It is a matter for every single Australian to be concerned about. In terms of South Australia—

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Kevin Rudd denies being a socialist!

Judith Troeth (Victoria, Liberal Party) Share this | Link to this | Hansard source

Order! Senator Bernardi, you will have an opportunity to respond in due course. Please keep your remarks contained until then.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | Link to this | Hansard source

What Senator Bernardi should appreciate is that the auto sector contributes 2.4 per cent to the GDP of South Australia. It contributes one per cent to Australia’s total GDP. It is not an insignificant issue. This parliament should take up these concerns and take up the protection of this industry insofar as it has such strategic importance to our economy and to our society.

However, for Senator Bernardi to denigrate, before his Liberal Party colleagues, the work of auto workers and the work of the auto industry in the manner in which he has defies any rational assessment. Automotive vehicles and components are Australia’s sixth largest export. They represent a larger export than even the exports of our agricultural sector. You would think the Liberal Party would at least know that. You would think that would be at the forefront of Senator Bernardi’s thinking, coming as he does from South Australia, a manufacturing state—but no.

The Labor Party would like to draw to everyone’s attention the fact that innovation and R&D are the keys to competitiveness for manufacturing industry. Manufacturing is one of the most innovative sectors of our economy, with the ABS finding that in 2004-05 over 43.1 per cent of businesses were innovative active compared with 34.9 per cent across all industries, and that within manufacturing the automotive industry contributes 23 per cent of R&D. Indeed, the automotive industry contributes 10 per cent of Australia’s total business R&D. Unfortunately, Australia’s performance in business R&D is nowhere near the standard of performance of our international competitors; it is nowhere near the benchmark being set by others. Business R&D in Australia is 0.89 per cent of GDP compared with the OECD average of 1.5 per cent. Among OECD countries, Australia ranks 15th in the world.

The Commonwealth refused to participate in the National Manufacturing Forum. Every state, every territory and all major industry players participated in this vehicle by which the fundamental issues facing Australian manufacturing could be discussed, but not the Commonwealth. When it comes to manufacturing, the Commonwealth essentially sits on its hands. It takes the view that it is someone else’s problem. It takes the view that, essentially, Australia can be a beach or a quarry. It has no understanding of the significance of manufacturing. Essentially, the government has turned away from its obligations in this regard.

Over the period 1986-87 to 1995-96, we have seen the average annual growth rate of real business investment in the research component of R&D plummet from 11.4 per cent to only 5.1 per cent. In manufacturing the story is particularly grim, with the average annual growth rate slipping from 10.6 per cent to only 1.9 per cent. Looking at gross R&D spending, we can see that China has committed to lifting its expenditure as a proportion of GDP from only 0.6 per cent in 1995 and 1.2 per cent in 2002 to 2.5 per cent by 2050. China is doubling its R&D spend every couple of years. Compare that with our performance and we can see that our performance is grossly inadequate.

We are in the situation where our manufacturing output has fallen by some $860 million. Our manufacturing output has shrunk by 1.1 per cent in 2004-05 and by 0.4 per cent in 2005-06. Since the last federal election, in 1996, we have seen a loss of over 110,000 manufacturing jobs. That equates to 204 manufacturing jobs disappearing each and every week of the Howard government. It is time to act and there is a requirement by this government to face up to its responsibilities. We have laid down the challenge and we now seek a response from the government.

Question agreed to.

Bill read a second time.