Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

The President has received a letter from Senator Abetz proposing that a definite matter of public importance be submitted to the Senate for discussion, namely:

The serious threats facing Australia’s car dealers and car industry as a result of the Rudd Labor Government’s bungled unlimited deposit guarantee.

I call upon those senators who approve of the proposed discussion to rise in their places.

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today’s debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

Eric Abetz (Tasmania, Liberal Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

There is now no doubt that Labor’s inept handling of the financial guarantee legislation is having greater reverberations every day. Prime Minister Rudd’s spin-over-substance approach is starting to have an impact. It is impacting negatively, and very negatively. The financial guarantee legislation, which we were willing to assist the government with on the assurance that Labor was levelling with us and the Australian people, has now been shown to be not what it was claimed to be at the time. It is now obvious that Labor’s package was ad hoc, on-the-run spin doctoring with a view to the news cycle rather than the financial markets.

The alternative Prime Minister, Mr Turnbull, talked about a guarantee on a Friday. We know that. Two days later, on the Sunday, Mr Rudd had to provide an assurance of a scheme that he said would be uncapped. It was announced two days later. Three days later it was possibly going to be with a cap. And of course, as Senate estimates revealed, the announcement of the cap, on the run in question time, by the Treasurer, Mr Swan, was done without the knowledge of the Secretary to the Treasury. In fact, Mr Swan had already made his announcement during question time when I again asked the Secretary to the Treasury whether or not the government had made its decision in relation to a cap on the financial guarantee legislation, and his answer came back: ‘no’. When I told him that it had been announced in the House of Representatives only a half-hour or so before, he was quite shocked that that had occurred. If ever we needed proof positive that this government is all about spin and not substance then that was a classic example of it.

The scheme—which, might I add, the banks did not ask for—has hugely impacted the financial market. We have now seen the flight of capital, all self-engineered by Labor, from companies like AXA, Challenger and others, which are now suffering the consequences. Consumers are suffering the consequences as well. And, of course, GMAC, GE and other financiers of the car industry are now suffering exactly the same consequences. With the announcement today of Labor’s lightweight car industry plan, with talk of the sector in 2020—that is, two five-year plans plus away—car dealers were also waiting for a package dealing with today’s problem of a lack of finance.

The Minister for Innovation, Industry, Science and Research, Senator Carr, tells us that the government is now working on the issue. I welcome that. But it appears to have occurred only after we as an opposition pursued this issue on behalf of car dealers. GMAC has announced its withdrawal from the Australian market by 31 December, with devastating consequences. GE is having real problems as well. We now know another company is struggling. What Labor does not seem to understand is that the viability of car dealerships is based not so much on the movement or sale of cars as on the sale of finance packages, and that the dealers rely on financiers for their stock holdings. The industry estimate that 40 per cent of dealers will be closed by Christmas is alarming. My own view is that that estimate may well be conservative. I hope it is not. The loss of literally tens of thousands of jobs will be devastating. Competition will be diminished. What is more, the sources of finance for consumers to purchase their cars will not be available either, and that will impact on car manufacturers and the jobs in that sector.

The flow-on consequences of Labor’s ill-considered financial guarantee legislation are now reverberating right around our economy, right through and into car dealerships and from there into car manufacturers. Labor’s inept handling of the guarantee legislation is adding to the hurt and difficulties being faced by the automotive sector. Whilst today’s package seeks to address some of the problems, I note that it says: ‘The engine that will drive all this is innovation.’ Of course it is; innovation is vital. But if that is the case, can Minister Carr and the Labor government explain to the Australian people why, in their very first budget, they slashed $707 million from the Commercial Ready program and $63 million from the CSIRO, which were the drivers of innovation in this country? In their very first budget, $763 million was axed from innovation and now, today—guess what?—innovation is the answer. If only they had known it in their May budget, they would not have axed the $763 million which we, the Howard coalition government, had ensured that these drivers of innovation would receive.

It is this ad hocery approach to policy, the on-again off-again, the yes-no, the stop-start—all dependent on news cycles—that is doing this untold damage to our economy, and unfortunately the car sector is not exempt. Labor hack innovation support and then they pretend to discover it. Labor fiddle with financial guarantee legislation and, because of their speed and lack of consultation, make the problem worse. Then they tell us how they are acting decisively to deal with the problems that they created.

It is a similar situation with the luxury car tax. I notice Senator Cameron opposite. He championed the increase in the luxury car tax, which has now seen a 17 per cent decrease in the sale of these vehicles. Every single one of Australia’s car manufacturers were opposed to this new luxury car tax. They said it would devastate them. So, with Labor having cut innovation and having increased taxation on the Australian car industry, today we get an announcement that they are going to somehow help and support the industry. It would have been a lot better to leave Commercial Ready in place, to leave the CSIRO funding in place, to not put an extra burden on the car industry in this country.

What we need is sound, steady economic management, where decisions are made after full consultation and announced when they are ready, not for the purpose of the news cycle. There was no excuse for delaying this announcement. As I understand it, it had been in the can for quite some time, ready for announcement, but deliberately delayed so it could be used for a particular purpose—such as today, when the parliament resumes and Mr Rudd is being hammered in the other place about the notorious phone call, or the alleged contents of the phone call, between himself and President Bush of the United States. He will not make the denials being sought of him, where the Prime Minister is now basically fingered as the author of those statements. So what do they do? They keep this package for a day on which they think they need something else to fill the news cycle rather than an expose on Mr Rudd. The car industry deserves better. The car industry needs better from this government.

What I can assure those involved in the Australian car industry is this: the coalition is committed to it; we support it. That is why under us, under ACIS between 2001 and 2007, it received some $3.8 billion. Today Senator Carr announces that they are going to spend $6 billion over 13 years and somehow that is better. Do the maths and you will know that the Howard coalition was the best friend the automotive sector had. (Time expired)

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I appreciate the opportunity to participate in this debate on Senator Abetz’s matter of public importance—a typical Abetz approach: a rambling tirade against the government. The framing of Senator Abetz’s motion, which attempts to link the government’s initiative on deposit guarantees to the global threat facing the Australian car industry, is quite bizarre. It is actually an insult to the 200,000 Australians who owe their jobs to the car industry. This motion demonstrates that Senator Abetz lacks even a basic understanding of the drivers for the Australian manufacturing industry. It is not surprising, as Work Choices and short-term adjustment packages were the hallmarks of the Howard government.

Senator Abetz raises the luxury car tax. I happened to sit through all of the submissions on the luxury car tax. The people who were complaining most about the luxury car tax were the importers of luxury cars, who were saying that it gave the Australian manufacturing industry an unfair competitive advantage. Senator Abetz fails to understand that it is not the CSIRO who will drive innovation in the Australian car industry; it has to be the car industry itself. It has to be the managers of the car industry, it has to be the workers in the car industry—they have to bring the technology and the ideas to bear to make the car industry internationally competitive in the future.

The Howard government were all about crisis management and media management as distinct from leadership on the car industry. The Howard government, of which Senator Abetz was a prominent minister, had no vision, no strategy, no planning—it was simply ‘let the market rip’. That was the Howard government’s approach to the car industry. In the face of a clear market failure, where the Australian car industry ignored changing consumer demand and where the car industry ignored the need for more fuel efficient vehicles, the Howard government stood back and did nothing. The opposition need a shadow minister with at least a basic understanding of the current economic crisis and the problems facing the car industry. This motion from Senator Abetz demonstrates that he does not have that skill; he does not understand the industry.

This motion continues the carping negativity that underpins much of the opposition’s response to the current international economic crisis. It is Senator Abetz at his whining and moaning best. This is an opposition who think they are too smart by half—all form and no substance. While Senator Abetz is busy focusing on cheap political stunts, the government continues to take strong and decisive measures to help our working families, to help our pensioners, to help our industry and to help our car industry as it faces massive global challenges. This is an opposition that for 11½ years in government failed to deal with the key issues facing the economy and Australian working families. This is an opposition who were lazy, indolent and unprepared for the bigger economic challenges of globalisation.

Howard, Costello, Turnbull and Senator Abetz presided over a collapse of investment in this country. Senator Abetz stood idly by while productivity and innovation declined. Senator Abetz failed to take the real steps to develop our economy for the future. The opposition presided over the collapse of elaborately transformed manufactures in this country. They presided over a decline in the skill base in this country, and their only answer was 457 visas and to bring workers in to make up for their vandalism in terms of the skill base in this country.

This is an opposition who were climate change sceptics and who, while in government, failed to take steps to ensure the environmental sustainability of our industries and our nation. This is an opposition who rode on the back of the mining boom while masquerading as competent economic managers—11½ years of lost opportunities, of failing to deal with the hard economic challenges that our country, our industry, our communities and our workers face. They were all ignored in the 11½ years of the Howard government.

What did the Howard government do for industry? They negotiated free-trade agreements with the United States and Thailand—free-trade agreements that were a disgrace. They benefited the manufacturing industries of the US and Thailand. They created jobs in the US car industry and the Thai car industry at the expense of Australian workers. Following the implementation of the Howard government’s free-trade agreements, our balance of trade with these countries has declined and cutting-edge and high-skill jobs have been lost to Thailand and the US.

What did the Howard government give us? They gave us Work Choices. They gave us increased managerial prerogative to reduce wages and conditions in the vain hope that this would improve the productive performance of our industries—a lazy approach to industry development, an approach that was doomed to failure. The Howard government adopted a policy of allowing business to cost-cut instead of investing for the future of this nation. Liberal ministers sat around the cabinet table discussing the latest right-wing ideology for attacking working families while real policies which could have driven an internationally competitive economy were ignored.

It has been left to the Labor government to focus on the real issues facing the economy and Australian working families. We have led the world in moving decisively to ensure the stability of our banking sector. As distinct from the opposition’s political stunt on pensions, we have developed an $11.3 billion economic package designed to stimulate economic activity while targeting assistance to the needy. We have moved quickly to focus the car industry on environmental sustainability—something the Howard government failed to do for 11½ years. We have committed $250 million to Enterprise Connect, which is about focusing companies on innovation, management systems, skill development and technological investment—the real drivers of economic wealth and international competitiveness, unlike Work Choices, attacking working families’ wages and conditions, and giving bosses the easy way out to try and reduce costs. We have committed $240 million for Clean Business Australia, practical assistance to help our industries meet the challenges of global warming. We are developing a sophisticated approach to export policies, one designed to assist our companies to compete in cutthroat international markets.

Global manufacturing leaders such as Germany and China have moved quickly to assist their domestic industries, with stimulation packages worth $96 billion in Germany and $871 billion in China. US President-elect Obama has foreshadowed a domestic stimulation package and assistance for the beleaguered US car industry. Nations around the world understand the importance of having a strong, internationally competitive car industry. No nation can provide a high standard of living in a sustainable manner if they simply rely on mineral extraction and agriculture as their economic base. Australia must be more than a quarry, a farm and a tourist destination.

The Prime Minister, Mr Rudd, and the Minister for Innovation, Industry, Science and Research, Senator Carr, have again acted decisively in developing A New Car Plan for a Greener Future. This is a car plan that will maintain jobs in the Australian manufacturing sector—a sector that directly employs 64,000 Australians, three-quarters of them in Victoria and South Australia. An estimated 200,000 people owe their jobs to the car industry. The car industry produces economic activity of $8 billion a year to GDP. Flow-on activities from the car industry go into iron, steel, rubber, mechanical repairs, wholesale trade and business services. On exports, the Australian auto industry’s exports are worth $5.6 billion a year, making it the largest manufacturing export sector and putting its products in the top 10 of all goods and services. On research and development and innovation, the Australian auto industry invests over $600 million a year in research and development and employs over 3,000 researchers, technicians and support staff. The Australian auto industry is absolutely critical to manufacturing because building a car involves other advanced technologies, from microchips to light metals.

This was never an issue for the Howard government. The Howard government were content to throw money at the industry without any strategy, without any reciprocal obligation and without real results. The plan that we have produced today is a plan that will bring the industry into the 21st century and bring the management of the industry to focus on the innovation and research and development that is so important for our future. Our New Car Plan for a Greener Future is about attracting new investment in long-term sustainable vehicle production—something that the Howard government failed to do in 11½ years. It is about greening the industry. It is about what the community wants. It is not about turning our back on global warming and pretending it is not happening. It is about improving fuel efficiency and reducing carbon emissions. It is about strengthening the local supply chain and boosting skills.

When I was the secretary of the biggest manufacturing union in the country, every time I wrote to a Howard government minister or to the Prime Minister, I was treated with contempt and ignored. Back five and six years ago we were writing to the Howard government saying, ‘You must take steps to protect this industry from their own bad practices and management. You must have an investment in green cars. You must look at what we can do on innovation and technology.’ Yet we were ignored. When we raised the issue of the cost-down approach from the car industry to our components sector, we again were ignored. We said, ‘If our car components sector declines, there is nothing to keep the car industry here.’ Yet we signed a free-trade agreement with Thailand that allows them to build their car components sector into one of the most effective and efficient in the world—off the back of a crook free-trade agreement the Howard government signed, off the back of what is really one of the worst deals that we have ever seen with the United States of America in terms of that free-trade agreement.

We have to strengthen the local supply chain and boost the skills in the industry. We have to link our supply chains to improve market access around the world. If we do not have the skills, if we do not have the innovation and if we do not have the technology, we will not compete. For Senator Abetz to come here and do a cheap political stunt for 10 minutes, saying it is the government’s economic position that is damaging the car industry, beggars belief. It is the most hypocritical thing that I have heard for years in this place. (Time expired)

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

As a senator for South Australia, where the car-manufacturing sector is a key part of the local economy, I rise to speak in support of this matter of public importance. There is no question that the global financial crisis is having an impact upon Australia’s economy and in particular on the motor vehicle manufacturing sector. Nor is it any secret that the motor car manufacturing sector has struggled with a series of challenges for a series of years. My home state of South Australia has a proud history in car manufacturing from the times of Tom Playford. But in recent years we have seen job losses in the sector. We have seen job losses at car-making firms across Australia, and South Australia in particular. In 2006 South Australia and Victoria contributed 75 per cent of national automotive industry employment. In South Australia over 11,000 people were employed in the sector.

The coalition does more than recognise the vital importance of the car-manufacturing sector to the economy, both nationally and of course in my home state of South Australia, and, indeed, the co-relative contribution made by the components-manufacturing sector, still employing some 200,000 workers across Australia. But our concern is that today’s headline grab by the Rudd government fails to address the short-term threats to the industry. The government has promised something like $6.2 billion over 13 years, but our $7.7 billion or thereabouts a year industry is at serious and immediate risk because the Rudd government has failed in large part in its response to the turbulent global financial situation. We have already had more than 900 workers being retrenched at South Australia’s Clovelly Park plant in the Mitsubishi manufacturing regime earlier this year. The Motor Traders Association of New South Wales is warning now that dealerships are at immediate risk, and I will go to that in more detail in a minute. According to the association, dealers employ about 90,000 workers across Australia and some 40 per cent of those dealerships employ about 30,000 Australian workers. They stand to be critically affected by the forecast pullout of General Electric and GMAC from financing the sector. The Rudd government announcement today does zip to address that potential short-term crisis, the credit squeeze that is facing this sector. Indeed, the Rudd government announcement today erodes the capacity of these dealers to keep cars on their floors. Effectively just seven weeks out from the forecast pullout of GE and GMAC from the sector, the government’s announced initiative fails to address the point.

What did we have instead? We had the Prime Minister on the weekend saying things like ‘we need confidence in the economy’ and ‘next year is going to be ugly’. But what does that do? All that does is erode confidence and give people concerns. It does not provide any information about why next year is going to be ugly. It does not provide any detail as to the government’s plans to address what is otherwise going to be an ugly year. As the Leader of the Opposition has said, in failing to provide useful information, all the government does is tell the Australian community something that no-one really knows about—other than that it sounds bad.

The Prime Minister owes Australians a range of explanations, but in particular he owes them an explanation about the Rudd government’s response to the global financial crisis. The Prime Minister owes Australians an explanation as to why the government entered into an unlimited bank guarantee deposit scheme, which has had so many adverse impacts. Indeed, what other developed country has proffered a supposed solution that has made the situation worse instead of better? That is a distinction the Prime Minister enjoys, and he must explain it to the Australian people. Indeed, in the context of the vehicle manufacturing sector, he owes Australians an explanation as to why he has unveiled a response to the global financial crisis that makes it worse for those companies that would otherwise be financing dealers to keep their cars on the floor. The CEO of the Motor Traders Association of New South Wales, Mr James McCall, speaking about General Electric and GMAC on the AM radio program this morning, said:

They fund an arrangement whereby the dealers stock, the cars they keep in their showroom and looking across New South Wales, there is 500 dealers with an average of 100 cars each in showroom, you are looking at very, very big money.

Now that financial arrangement was funded by GE and GMAC probably to the extent of about 40 per cent of the total market or over 40 per cent of the total market.

Now if the dealers can’t fund their floor room, their showroom stock, then they are in breach of their franchise agreement with the manufacturers and the manufacturers will not renew their franchise agreement so they will have to close their doors.

Why hasn’t the government’s package announced this morning addressed the short-term crisis facing the sector? Where are the details behind the policy announcement? We have no details on the grants process, no details on how a structural adjustment scheme will work, no details as to the cost of the scheme to taxpayers and no details as to how the innovation council will work—and the list goes on.

This is no time for yet another policy to be announced on the run; there is no time for spin over substance without the detail and without the depth. Where is the evidence based policy to address the short-term crisis facing the car manufacturing sector? Instead we have a scenario that looks like the government’s announcement six months ago to provide $500 million for the green car innovation fund from 2011. Today we learn that the government will more than double the funding available for that program, but they are yet to officially commence— (Time expired)

Don Farrell (SA, Australian Labor Party) Share this | Link to this | Hansard source

I note Senator Fisher’s reference to the proud history of car manufacturing in South Australia. She correctly talked about the role of Tom Playford in establishing the General Motors Holden plant, which first started mass producing cars in 1948. But, in fact, the history of car manufacturing goes back even earlier than that. It goes back to when a fellow called David Shearer—who I assume had some connection with Shearers agricultural manufacturing—produced the first steam-driven horseless carriage in South Australia in 1897. That was really the first car made in Australia, and it was made in South Australia. We continue to make great cars in that state. Tragically, under the previous Howard government, we watched as, bit by bit, Mitsubishi died a very slow death. The previous government did not have a plan for the car industry. Labor does have a car plan—Carr’s car plan—which was announced with the Prime Minister today.

The federal Labor government is committing $6.2 billion to a green car plan to help ensure the future of Australia’s car industry. Senator Abetz suggested that we are ignoring the car industry, but we are in fact devoting the sort of attention to it that the previous government should have done in order to prevent the collapse of the Mitsubishi car factory. This assistance package has important economic and environmental objectives and it is going to help entrench the car industry in Australia, despite the challenges that we currently face from the global financial crisis.

It is interesting that the President-elect of the United States, Mr Barack Obama, has almost immediately homed in on the car industry. He has made clear his view that the car industry is the backbone of the United States economy. In the United States today, Nancy Pelosi and the Senate majority leader, Harry Reid, have asked the Treasury Secretary to assist the big United States car manufacturers with an emergency plan. Of course, two of those companies, Ford and General Motors, have car plants in Australia. Obviously, whatever the American government is planning to do in this area is going to have a dramatic impact in Australia.

Senator Cameron spoke of some of the initiatives in this plan, but I think they are worth repeating. The aim is to attract new investment in the long term for sustainable vehicle production. We want to green the industry by improving fuel efficiency and reducing carbon emissions. We want to strengthen the local supply chain and boost skills—and, of course, the Manufacturing Workers Union, the union that works in this industry, is going to be very important. That union is very ably led in South Australia by Mr John Camillo. I know he will be working hard with the companies and with the government to ensure that the skills in the sector get boosted. Finally, the plan will link to international supply chains and improve market access for Australian manufacturers. I fully endorse the car plan announced today and believe it is going to provide the necessary impetus to keep car manufacturing in this country going and see it improve and strengthen.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I rise to talk on the car industry and my very real concerns about where it is going and the problems it faces. I believe the first nail in the industry’s coffin is the luxury car tax approved by the Senate. It will put more tax on our cars, especially vehicles such as the Holden Statesman and the top of the range Ford Territory—both, of course, manufactured in Australia. I have some real concerns about the future of our motor vehicle industry. Obviously, it will not be long before import tariffs will be reduced from 10 per cent to five per cent. I believe the government is planning on doing this in 2010. As I said in my maiden speech, we do not play on a level playing field when it comes to trade. The countries we are competing against have very cheap labour. I have been to factories in Thailand to see the manufacturing of parts and vehicles, and some of them pay workers $5 a day. This is what we are expected to compete against. It is virtually impossible.

The big problem I see for the industry is the one now facing dealerships, especially those in country areas. GMAC will withdraw from the financing of motor vehicle dealers by the end of the year. GMAC finances around 25 per cent of all motor dealers in Australia. Those dealers do not necessarily have to be Holden dealers; they have many other makes of vehicles. GMAC has said that about 185 staff from Australia and New Zealand will leave the company by the end of the year, with some staff to be retained to continue on with the leasing, hire purchase and financial agreements already in place.

There is also a problem with GE Money, who are set to leave the industry as well. They also finance around 25 per cent of the car dealerships in Australia. If we do not have dealers, who will sell the motor vehicles? Two financial institutions, GMAC and GE Money, finance around 50 per cent of the dealerships in our nation and both have said they are going. They are going for two reasons: the cost of money following the financial meltdown around the globe—and we are all familiar with that—and the lack of domestic investment in these companies. I would like to expand on that issue.

As I said in question time today, on 13 October I asked the question: what is the government doing about those financial institutions not covered under APRA, those that are in fact covered under ASIC? You do not have to have a college education or be a rocket scientist to realise what will happen if one group of financial institutions, which I will call group A, is underwritten by the government—banks, building societies, credit unions—while another group, group B, which includes debenture issuing companies, cash management trusts and other financial institutions, is not guaranteed by the government. What is the logical thing that will happen when people get nervous about their investments and about whether their money is safe? They will withdraw their money from group B and put it in group A. That is obvious, and the government has done nothing about it. We have seen the withdrawal of funds, and financial institutions are pulling out from financing dealerships. This is a huge problem facing our nation and it is a direct result of the actions of this government. After asking that question on 13 October, I did my best to work with the ministers to stay out of the media and not cause a run on these financial institutions but to instead forgo political gain and try to save many of these financial institutions that are now frozen.

It is frightening to get more calls today, only to find that more financial institutions have gone to the wall and are in receivership. I will comment on one institution that has frozen its funds. A farmer wanted to withdraw money to buy water for his citrus trees. He cannot get the money out of the institution. His trees will die and his livelihood will go. Another person requires his money next month, to pay the Australian Taxation Office, but cannot get the money out of the institution because it is frozen. What is the ATO going to do to this bloke whose money is frozen in this institution and who cannot pay them? These are just some of the problems coming up that we are about to face.

As I said earlier, 50 per cent of our car dealers are financed by GMAC and GE Money—and my colleague Senator Fisher pointed out that there are around 90,000 people employed by motor vehicle dealers. If this 50 per cent cannot refinance, what is going to happen? Are there 45,000 jobs at stake? The banks are very reluctant to finance motor vehicle dealers because the security is not real property; it is on wheels and it can be moved. Any bank will tell you why they will not do it. Other financial institutions are offering money at 20 per cent interest. How can a dealership survive paying 20 per cent interest rates?

We now have a real situation where we are facing the closure of many car dealerships. I will give you some examples. United Holden in Rockdale, Sydney, has pulled the pin and is shutting up soon. Seventy jobs will be gone. I know of one large car dealership that has seven franchises and requires $9 million to refinance. There are approximately 350 people employed in these seven franchises. What is going to happen to them? If they cannot refinance, the doors will close. So much for the working families—the people employed in motor vehicle dealerships—who will lose their jobs as a result of this government not listening when it came to underwriting the institutions. These are the huge problems we face now— (Time expired)

Dana Wortley (SA, Australian Labor Party) Share this | Link to this | Hansard source

As a senator from South Australia, a car manufacturing state, I welcome the opportunity to speak in this chamber on the car industry in Australia and on what this government is doing to assist in securing its future. Unlike those on the other side, we in the government do not adopt a wait-and-see approach. We do not deny the existence of a problem, like those in the Howard government did with the crucial issues of climate change and the water crisis. We do not sit on our hands and wait until the point of no return has passed.

Today the Prime Minister and the Minister for Innovation, Industry, Science and Research announced a $6.2 billion, 13-year plan to make the automotive industry more economically and environmentally sustainable by the year 2020. The New Car Plan for a Greener Future is in fact a new deal for Australian car makers and for Australian car buyers. As the minister told us today, the Green Car plan will boast an expanded $1.3 billion Green Car Innovation Fund, which will provide Australian car companies with the opportunity to receive government funding to design and sell environmentally-friendly cars. The plan reflects the government’s commitment and, in Minister Carr’s words, determination to create high-quality, high-skilled, high-wage jobs.

It reflects too our belief in innovation and our thirst to give Australians greener, safer, more affordable vehicle choices. This fund will see the Australian government match industry investment in green cars on a $1 for $3 basis over a 10-year period from 2009. This is decisive and strong action put in place with the aim of protecting the Australian economy during the global financial crisis. The 13-year New Car Plan for a Greener Future is about manufacturing competitive, low-emission, fuel-efficient vehicles in Australia.

This is a significant day for the car manufacturing industry in our nation. Over its life, this plan is expected to be the catalyst for $16 billion in investment in this industry. It will implement the recommendations of the Bracks review of the automotive industry, including an expanded Green Car Innovation Fund, a reworked automotive transformation scheme and moves to increase our industry’s competitiveness in a tough and tight global market. It is very welcome news, particularly for my home state of South Australia, which has a long and proud history of vehicle manufacturing that stretches back to 1897, when David Shearer revealed his steam-driven horseless carriage.

Having a healthy, prosperous, forward-thinking and outward-looking automotive industry is central to ensuring a healthy future for all Australian manufacturing. It is therefore an essential contributor to our nation’s wellbeing and wealth. That is because today’s vehicles utilise an ever-widening range of advanced technologies. We need to be able to manufacture a vast array of components to be able to build a car from scratch. Australia is one of only about 15 countries worldwide that is able to do just that. Indeed, manufacturing employs one million Australians. It is the backbone of communities and the life force of families.

At least 200,000 Australians are employed either directly or indirectly by the car industry. In uncertain global times we need to ensure that such a crucial industry can have certainty for the future. Automobile manufacturers in Australia have already had to contend with high petrol prices, changing consumer preferences and intense global competition as they try to sell their products. As Senator Cameron pointed out, let us also not forget the impact of the US and Thailand free trade agreements on the industry.

There is no doubt that the global financial crisis has placed unprecedented pressure on local automotive manufacturers, who have already been doing it tough. Australia needs to create an environment that will foster investment, encourage innovation, generate employment, reward research and development and, crucially, restore confidence for the years to come in the long term. For those reasons, the Rudd Labor government— (Time expired)

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Order! The time for discussion on the matter of public importance has expired.