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

The President has received the following letter from Senator Moore:

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

"The Abbott Government's failure to support Australian manufacturing jobs."

Is the proposal supported?

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.

Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Link to this | Hansard source

The loss of Australia's last major motor vehicle producer is a national tragedy. It is an economic and social catastrophe that will be felt for generations. And, of course, all we have seen from the government in response to this suggestion is that there is some bright new day ahead in the future. Like one of those old happy-clappy folk singers from the 1960s, the Prime Minister is out there suggesting that a better day will come sooner or later. There is no plan, no suggestion of a plan and no understanding of the consequences of the government's action.

So we have tens of thousands of high-quality jobs, especially those of blue-collar workers but also those of some of the most creative people working in manufacturing—our scientists, our engineers and our designers—all of whom are now facing the extraordinary anxiety and distress that comes from this kind of situation. We will lose what is now some $700 million that the automotive industry provides by way of its national contribution to our research and development. We will lose an extraordinary array of capabilities in regard to technologies, in skills and in infrastructure. The industry estimates that the death of the automotive industry will slash $7.3 billion from Australia's GDP by 2018; that it will take more than 10 years for the economy to recover and possibly as many as 20 years for manufacturing to recover; and that unemployment levels in the regions most affected will not recover until the end of the 2020s.

So this is a government that has traded-in Australia's automotive industry for a $20 billion welfare bill, and they say they have no regrets. We ought to be shocked at the sheer audacity of this government. In this example of a situation where people are faced with a bleak future, what does this government do? It blames workers; it blames carbon pricing; it blames anyone except the government and its failure to develop an industry policy to meet the needs of Australia.

This is a government that is dominated by those who believe in textbook economics, a textbook view of the way in which the world works. This might be very popular on the north shore of Sydney and in the merchant bankers' suites—bankers, who, of course, enjoy the enormous protections that this government provides to the banking industry—but the government takes the view that we have to turn our back on manufacturing workers.

We of course know the reality. This is a government that, in the last parliament, launched a campaign to slash $500 million from the Automotive Transformation Scheme. It is a decision they had many chances to revisit, but chose not to. This is a government that chose to play chicken with the international automotive industry. They stalled, they delayed, they made snide remarks, they insulted the international investment committees, they bullied General Motors, and they cleared the hurdle which they were seeking: to remove General Motors. I remind senators that on 10 December last year the then Acting Prime Minister, Warren Truss, wrote to General Motors demanding that it make an immediate statement about the future of its Australian plants. That was before the company here had even heard the outcome of the government's much vaunted process around the Productivity Commission. That was before the formal process as to whether or not the government would provide any future support had been concluded. GM's managing director, Mike Devereux, had told the commission on Tuesday of that week that the company had made no decision about its future in Australia and that the company was waiting to hear whether the coalition would offer long-term support. Mr Devereux reminded us then that the cost to Australia of losing the car industry would dwarf the cost to the budget in saving it. We know that Mr Hockey waltzed into the House of Representatives and demanded an answer from General Motors. He got one the next day.

We know the reality of what this government has been about: the ideological obsession of the hard right wing of the Liberal Party, which took the view that there is some legitimate expenditure when it comes to industry assistance—for instance, in oil and gas and in livestock. We actually spend more money on sheep and goats than we do on the automotive industry. But this government took the view that support for the automotive industry was somehow or other immoral. Their unrelenting hostility has produced the result they sought: the destruction of the automotive industry, the destruction of the jobs in the automotive industry and the destruction of the capacity of this country to develop highly advanced, elaborately transformed manufactured goods.

They have tried to present the view that the automotive industry is Old World. They do not recognise that the average car today has some 250 microprocessors on board. Over 30,000 parts have to be delivered on time in exactly the right order, every time. They do not acknowledge the importance of the automotive industry to so many other industries in this country—to steel, to aluminium, to plastics, to electronics, to robotics—all of which have a tremendous impact on other manufacturing industries. They do not acknowledge any of that. All we see from this government is the statement from the Prime Minister on 14 December that there would be no support for Toyota. In fact, we have heard from the Prime Minister the suggestion that there was nothing they could have done. The reality is very different. This government sent a clear, unrelenting message of hostility to Japan, as they did to Detroit. At a time when we know the investment decisions which could have secured billions of dollars worth of new investment, new jobs and new technologies for this country were being made, this government said they were not interested in providing assistance. They have traded on the welfare and the prosperity of tens of thousands of Australian workers. They have shipped offshore the great export industry of this government—they are exporting jobs—because they refuse to acknowledge the economic realities of how decisions are actually made when it comes to investment.

Isn't it ironic that it is the Labor Party that has to make the appeal for international investment in Australia and that it is the hard Right of the Liberal Party that says, 'We're not interested. Unless it is Cadburys or a fishing company in Hobart that is in a marginal seat, we're going to draw a line in the sand and we're going to say that we're not interested in the welfare of Australian workers. We're going to make Australian jobs the biggest export industry of all.'

This is a government that will not face up to the reality that for every dollar invested by the Commonwealth in the automotive industry that industry was spending $20, in Toyota's case, and $35, on the advice of General Motors. Last year alone, $1.5 billion was spent by Toyota on its suppliers across Australia. How are you going to replace that? Where are the jobs going to come from to replace that? Where is the investment? Where are we going to see the economic activity? (Time expired)

Simon Birmingham (SA, Liberal Party, Parliamentary Secretary to the Minister for the Environment) Share this | Link to this | Hansard source

I rise to speak on this matter of public importance; it is a matter of significant public importance. It is evident from the contribution by Senator Carr that, yes, those on that side have a very different approach to the way the country should run from the approach of we on this side. I acknowledge that up-front.

Senator Carr spent much of his contribution talking about whether there was a plan for industry, a plan for the economy, a plan for jobs in Australia. Yes, we have a plan. We have a plan to create one of the world's most highly productive and highly competitive economies. Australia has a strong economic base. We have a sound future. We have much that we can build upon and grow jobs upon, as we have done through different waves of economic transformation in this country over decades.

That is what we will do, and we will do it by getting the fundamentals right across every stretch and every part of the economy that we possibly can: by making Australia a lower-taxing country, where it is actually more competitive for people to do business; by making Australia a lighter-regulatory country; and by making Australia a country that is attractive in which to invest, whether you are a small business or a large business and whether you are an Australian-owned business or a multinational business.

We will not be adopting what seems to be Senator Carr's command-and-control approach to economic planning. That is the old socialist approach, which is no surprise coming from Senator Carr. What is the surprise though is that his approach, his command-and-control approach to economic planning and to industry planning, seems basically to be, 'We should give more money to foreign multinationals to prop up jobs here.' That seems to be the genesis of Senator Carr's argument. Boil it all down and that is what his industry planning is. That is certainly what it was throughout his time as industry minister. Throughout his time as industry minister, time and time again it was simply, 'Let's just give more money, because that will fix the problem.'

It was too bad if you were a small business who could not get the ear of government; you did not get any more money in those circumstances. It was too bad if you were somebody who was not from one of the previous government's pet, favoured industries—most likely a highly unionised industry of the previous governments—because you would not get any more money. But if you were able to make a lot more noise, if you were one of the favoured industries and if you were a highly unionised industry, then there was every chance that you could manage to get from the Labor government a bit more money that could go back to your shareholders overseas.

That is their approach. Our approach is different. Our approach is fundamentally to ensure Australia is as productive, competitive and efficient as we can possibly be so that this country can compete on the world stage and grow new jobs in the future. How are we going about doing that? Of course, we have laid out some plans already. We laid them out before the election and we are seeking to implement them.

We will grow new jobs, first and foremost, by reducing the tax base that is affecting manufacturing in particular but also a whole range of industries. If the Labor Party would just get out of our way, we could have repealed the carbon tax already. It is a tax that had a $460 million impact on the automotive industry that Senator Carr was just bemoaning. The carbon tax was a $460 million impact imposed upon that industry by the previous government, which we have been seeking to remove. But, no, they would have us leave the tax there, but give money away instead.

We are seeking to scrap the mining tax. We are seeking to restore the Australian Building and Construction Commission. Why? Because that can help drive greater productivity across the Australian economy. By reducing the rorts, the corruption and the type of activities that some of Senator Carr's union mates undertake, we can make sure that we have a far more competitive environment in that sector.

We are going to continue to cut taxes to make Australia a more competitive place to invest. That is why we have promised a 1½ per cent cut to the company tax rate to 28.5 per cent, making Australia—in our region and in the world—a more attractive place in which to invest for all businesses, not just those who get handouts. We have committed to reducing the amount of red tape, green tape, bureaucracy and regulatory hurdles that businesses face, to the tune of $1 billion a year. Shortly, this parliament will sit on dedicated days to consider the repeal and winding back of the legislation and the red tape that strangles business investment all too much.

So we absolutely have a plan. We have a far clearer plan than those who went before us, whose plan was simply a muddled and befuddled approach of launching new packages every couple of years, changing those packages and stripping money from one to give to another. We all remember the Green Car Innovation Fund: it came and it went, it had money and it did not have money. Little wonder that industries were confused about what they were getting!

What industry will get from our government are the lowest taxes we can create, the lightest regulatory touch we can create and the best opportunities for them to invest that we can create. That is what they will get from us. They will get policy certainty and they will get a government that knows in which direction it wants to take the economy. And we will keep going in that direction to make sure we create the best opportunities for job creation into the future.

You would be forgiven—listening to Senator Carr, Mr Shorten and all of those opposite—for thinking that somehow everything was shipshape in the automotive industry on 7 September 2013 when they lost government. You would be forgiven for thinking there were no issues, there had been no problems and that everything was going along swimmingly well. If you listen to them today you hear them say, 'You should have been able to prevent the closure of Toyota. You should have been able to prevent the closure of Holden.'

What about in May last year, when Ford announced their closure? What about that one? Should that have been preventable when it happened under the previous government? What about in 2008, when Mitsubishi closed its doors? Was that preventable, when it, too, happened under the previous government? The truth of the matter is that the rot in the automotive industry set in under the previous government. The critical mass for the industry was lost under the previous government. By the time we came to power, there were just two automotive manufacturers left in this country.

The critical mass had already been undermined. There was already a huge amount of debate about whether it would be possible to sustain just two manufacturers, about the scope of bailouts that would be required to do that, and about the cost and whether it would be worthwhile. During the time of the previous government, we saw the number of cars made locally in Australia, in the period between 2007 and 2013, reduced by one third. We saw a 25 per cent job reduction in that time.

Yet through that same period of time, we saw ever more money being given to the automotive industry. We saw more money being paid to make fewer cars and to sustain fewer jobs. It sounds like something out of Catch-22, where they paid Major Major not to grow alfalfa sprouts. It sounds like an EU subsidy arrangement, where they pay the farmers not to grow something. The arrangement in Australia under the Labor Party was that we kept paying more for automotive industry companies to employ fewer people and make fewer cars. That is no way to grow your economy, because over time you have fewer people employed and, of course, you have ever-mounting debt and tax burden on the rest of the economy. The problem with Labor's approach compared to ours is that the only way you pay those big multinationals is to tax everybody else more. The small businesses who could never get handouts from Labor had to pay more tax so that Labor could give more money away to the big businesses, who were shrinking anyway. It made no sense then and it would make no sense to continue with it now. It would truly be a case of throwing good money after bad.

That is why we have given a commitment to support the entire Australian economy and to make sure that every Australian business gets a chance to be as competitive as it possibly can. That is why we will be making sure that, as we move forward, we support investment absolutely, in helping those workers, in helping the communities adjust, in making sure the support is there for those in my home state and in Senator Carr's home state, which are particularly affected by the loss of these jobs, so that they can transform. But it has happened before. We have seen significant changes in the Australian economy over the last few decades and, with the policy settings of this government, we will successfully transition to better days again.

John Madigan (Victoria, Democratic Labor Party) Share this | Link to this | Hansard source

The demise of Australia's car industry will impact this country, including my home state of Victoria, enormously. We are watching the death throes of manufacturing. As this happens I worry for our workers, for their families and for the small businesses that are part of the automotive supply chain. The impact of the loss of Toyota, which follows closely similar announcements by Holden and Ford, goes beyond the economic. This is not about pie charts and statistics or about GDP and economic theory—the stuff of so many speeches in this place. This issue—the future of manufacturing in my home state of Victoria—is about people. It is about real people, real skills, real jobs. It is about how people will put food on their tables, pay their mortgages and rents and raise their families. It is about how the fallout of failure will change the face of our communities and how those changes may affect the stability and cohesiveness of those communities.

Our government has failed the people of Victoria and the people of Australia, and what is our future, with an estimated 50,000 jobs in the balance? We only have to look at America to see a snapshot of what we will face if things continue this way. According to a recent report, the number of American workers who are low-wage and low-income earners jumped 94 per cent from 1979 to 2011, reaching 20.9 million workers. That means that one in seven US workers lives in a household whose main source of income is a low-paying job such as working as a retail sales assistant or a fast-food restaurant cashier. For a long time I have been warning of similar likely outcomes in Australia unless our government acts with urgency and with vision. Will thousands more Australian workers and their families be left to barely survive in low-wage, casual jobs—jobs with no certainty, with no sick pay, with no holiday pay and with little or no future? What are the Abbott government's plans for the post-manufacturing Australian economy? Jobs are not simply created or invented out of thin air. It is research and development that will create the jobs of the future. Our manufacturers need encouragement, support and a clear, bipartisan policy approach. They are looking for their government to act in Australia's interests. The great countries of the world manufacture goods; they do not survive simply by digging holes in the ground, by turning their country into a nation of drink waiters or by educating their competitors on how to bury them.

We need our manufacturing research and development industries here in Australia to provide for our future. Simply put, if we keep exporting these industries, we are exporting our future and that of future generations. I call for the government to step up on this issue, to tell us what its plan is for manufacturing in my home state of Victoria and the rest of the country, because I hate to think of the alternative if things are allowed to drift further in the current direction.

Alex Gallacher (SA, Australian Labor Party) Share this | Link to this | Hansard source

I rise to make a contribution to this matter of public importance debate. I listened intently to Senator Birmingham's contribution and I did not get any great sense of empathy for the workers and their families. I wonder what Thomas Playford—that icon of the Liberal Party after which the city of Playford is named—would think if he were to hear that contribution. He was critical in instigating and developing the manufacturing plant in the area.

We on this side get a fair bit of vitriol from Senator Brandis and others about our contribution and who we represent and where we are from. I did take a quick look at Senator Birmingham's personal CV, and I note that he has always been in politics. From university, he went straight into an adviser's job, and that is basically where he has lived his whole life. Knowing that made it a bit easier for me to understand the lack of empathy, the lack of passion, the lack of feeling for his own constituents in South Australia.

Thousands of workers at Holden are facing an uncertain future. Their families are worried. Their children are going to school concerned about whether or not their fathers have a job. Families have to explain that life goes on: 'We will progress through this.' There was a completely chilling lack of empathy for the thousands of workers in this situation. We in this place are duty-bound to represent our constituents. I was particularly struck by Senator Birmingham's contribution, which was to the effect of, 'Let's wipe the board clean and promise a better future.' There are thousands of workers looking at redundancy, retraining, redeployment and relocation. On top of that, there are thousands of small business people who have depended on that workforce and their aggregate income. That small business might be a barber shop. I did read of a woman who has a business adjacent to the Holden plant which provides wedding dresses. She has now immediately relocated, because, she says, 'There's no money coming into this area and so I'd better get into another suburb.' There are thousands of small business people—if you listen to the other side these people are their constituents—who will be dramatically affected by the spin-offs of these terrible close-downs. The dry economic arguments really do not stack up.

I keep returning in this debate to the key point of the Allen Consulting Group report: automotive manufacturing in Australia receives around $500 million in government funding each year and for this investment the Australian economy is $21.5 billion larger for having an automotive manufacturing industry. On a per person basis, government assistance to automotive manufacturing is around $18, a very low figure by international standards. Those figures have been read out in the Senate previously. The $21.5 billion return equates to a net positive $934 per person. This government has come in without too many plans. They were an effective and brilliant opposition; they could tear down any policy; they could misrepresent any situation. Now they are in power and they have their hands on the wheel, and the first thing they do is say, 'No.'

Prior to Christmas, we left this place with the close-down of manufacturing of Holden motor cars. I am probably one of the last people—and certainly the last person in my family—who have never bought anything other than a Holden or a Ford. That loyalty is not shared by my children or my neighbours. I daresay even my wife drives a Mazda. There is nothing wrong with competition, but there is something wrong with just walking away from a very resilient, not heavily subsidised sector of manufacturing, which, as Senator Carr says, is not just about cars. It is about technology; it is about microchips; it is about plastics; it is about glass; it is about engines that are brilliant—engines that have emission standards—and braking systems which are top of the range.

The simple wipe-the-slate-clean approach of Senator Birmingham is to say, 'That's all done, we're not going to make cars here anymore. We'll just get them from overseas.' Let's think about that. We know there are very cheap cars made in India, but most recent studies say that, if you drove one and had a collision, you would not survive too well. We know that the Great Wall brand from China performs abysmally in terms of safety ratings. We know from personal experience and from independent agencies that we make a very good car—we make a startlingly good car. I personally drive a Ford, which I think is the equivalent of a BMW, but it is only about a quarter of the price. We know that, but we also know that what has really driven this position in the automotive manufacturing industry is the high dollar. We were exporting our Camaros to America when the dollar was at a much lower level; we were exporting cars to the Middle East when the dollar was at a lower level. Nothing has changed in respect of the technology or in respect of the quality of the cars produced. I daresay not a lot has changed in relation to industrial relations or the efficiencies of the manufacturing plants other than that they have endorsed change, accepted change, employed more robotics and become very much more efficient.

Today, there has been a disparaging of the union movement in this place. I would like to place on the record that the secretary of the Amalgamated Metal Workers Union in South Australia, John Camillo, has been driven all of his working life about employment for his members. And that has meant doing all sorts of things with every manufacturer he has come in contact with to save this industry. It is in his DNA; it is in his lifeblood. Building cars is something Australia was always going to do. Talking to John over Christmas was very disheartening.

I refer to Senator Birmingham's chilling economic view of wiping the board clean and creating a brand-new future. I did not hear in his short speech—maybe he will inform us later on—where these people are going to go. When will these people transition into this brand-new world that this government is going to create? Has he been out and spoken to people about their opportunities? I do not think so; I am not aware that he has been out to speak to people about it. There are many people who would be very grateful if he were to paint the same picture he has tried to paint here today—that the government is going to transition the economy into good jobs, more jobs, whatever.

Unfortunately, without manufacturing in this country we will not have R&D. This is a government without a science minister. We know that the R&D, which comes out of things like the automotive manufacturing industry, is a vast asset to the general economy of Australia. No workforce is static. There is, I think, a photographer in this place who did his apprenticeship at Holden in Elizabeth. He worked in the industry and he went on to take his skills into a different sphere. That is quite normal, but training people to a high standard and then having them take their skills into other sectors of the economy will be completely lost. Let me talk about the warehouse on the road. There are thousands of transport workers and operators currently carrying, exactly on time, every component that goes into a car. There is no great warehouse where these components are stocked; the warehouse is actually on the road—off the ship, on the road, out of the warehouse. What happens to all those people? They will probably start taking things off the wharf, but they will not be transporting components. It will be a much smaller task to transfer any number of cars off a ship to any place in Australia. But the components industry does not work that way. You have V8 motors rolling down the highway on a truck to go to an assembly line. All of that is going to disappear. If you throw in the fundamental offshoots to other sectors of the economy—like coffee shops and other small businesses like coffee shops—then it is really a disaster.

Scott Ryan (Victoria, Liberal Party, Parliamentary Secretary to the Minister for Education) Share this | Link to this | Hansard source

I commence my contribution today with a thought for the families who yesterday got the bad news from Toyota about their jobs. As I have mentioned before in this place, I have had personal experience of similar bad news in my family, and I do not think—despite the implications of some of those opposite—that there is a single person in this place who does not feel for people who have to go home and tell their families about the news they got yesterday at Toyota or last year at Holden or before that at Ford—or, might I add, before that at Mitsubishi; or before that at Nissan in Dandenong in the early 1990s; or at International Trucks; or at the Ford plant which used to be in the western suburbs of Sydney; or at the Leyland and Valiant plants which used to be in Melbourne. We always feel for those people.

We are hearing from a Labor Party which I do not recognise as the same one that existed in my youth. As the former Prime Minister John Howard outlined, the process of ending protection and exposing Australia to the global economy—the economic liberalisation which has seen Australia become, if not a perfect economy, an economy which has withstood more shocks than any comparable economy around the world—in many ways started while the Labor Party were in office in the 1980s. The arguments which I have heard put here by Senator Carr and by Senator Gallacher are the very arguments which were completely dismissed, demolished, attacked and repudiated by people such as Bob Hawke and Paul Keating during their terms in government. It shows you how far the modern-day Labor Party have come that they put forward arguments in this place which many of them would remember were repudiated in the course of their own time in parliament or as active members of the Labor Party.

In spite of all the attempts at partisanship and crocodile tears opposite, let us look at Labor's record. In the last two years, as they chopped and changed, Labor broke promises worth nearly $1.5 billion in funding for car industry policies. That is a record unbeaten even by the previous, chaotic government. Senator Kim Carr in his book criticised the government of which he was a member, when he was a minister, for cutting the Green Car Innovation Fund. He wrote:

Unfortunately the Green Car Innovation Fund was abolished, leaving international company executives wondering just what they had to do to get a consistent government policy commitment in Australia.

That statement did not come from someone on this side; it came from the person who was the Labor minister concerned and who opened the debate on this matter of public importance. Two years ago Prime Minister Gillard announced $34 million in funding for Ford and said that it would create 300 new jobs. Yet 330 people lost their jobs eight months later—so it was just a cash handover. In March 2012, Prime Minister Gillard announced $215 million in funding for Holden and, with Premier Wetherill of South Australia, said the funding would 'secure Holden's future in Australia until 2022.' This was either incompetence or an intentional fabrication, because the evidence says otherwise.

Now we get to the bigger issue: the accusation by Senator Carr that somehow the loss of jobs at Toyota is the result of an ideological crusade by the government. I am going to quote the father, in many ways, of the liberalisation agenda which has seen Australia have such a strong economy. Bert Kelly, the former member for Wakefield, was accused of being an ideologue. But, when he was arguing against things such as tariffs, he said:

I do not dread government intervention . . . for ideological reasons. It is just because they are such messers.

Labor's history in the industrial portfolio illustrates the truth of this statement. They handed over cheque after cheque and all the while made not a whit of difference to prevent the downsizing of automotive companies in Australia. What Senator Carr will not reveal to the Senate and the Australian people is the limit for the Labor Party. At what point will they stop writing cheques? How much will the Labor Party contribute? How much will they hand over to other companies to protect a smaller number of jobs than were lost at Toyota? Their record is of abject failure.

It is time to say, despite the phrase 'co-investment' having come into common use through various people seeking government money and through the Greens and the Labor Party over the last few years, that there is no such thing as co-investment. If the taxpayer puts money into a corporation, they do not get a dividend, a say in running the company, the ability to turn up to the AGM, or a vote on the remuneration report of the directors. There is no such thing as co-investment; it is a subsidy. Call it what it is and have the courage to mount the argument for it. We do subsidise some things in this country, but we do it on the honest terms of saying, 'This is an activity worth subsidising,' either for social reasons or, more rarely, for economic reasons. The term 'co-investment' for certain kinds of funding is being used by certain people who want to hide the fact that such funding amounts to subsidies for corporate operations.

We heard this afternoon in question time from the Greens, the party which bleats about corporate welfare and which, in our local governments and in the states, does everything it can to stop people using cars—including in the area where I live—by advocating things such as higher car taxes and congestion charges, all of which make the use of private motor vehicles harder. Yet they come in here and criticise the government for defending the taxpayer. Every cent that was available to the car industry six months ago is available now, but what is not being revealed by those opposite—and this was examined in detail in estimates—is that the accounting measure for the ATS and the $500 million mentioned by Senator Kim Carr was funding for future years, which was not being used because the volumes of car manufacturers had fallen so far. In other words, the ATS is partly a volume-based program. The same amount of money was available to GM and Ford this week as there was in December and as there was in July.

This government is trying to remove barriers to manufacturing—those costs imposed by those opposite, in concert with their Greens allies, that make manufacturing in Australia more expensive. Why on earth, no matter how marginal the cost, would we impose an internal energy tariff—the carbon tax—on every manufacturer in Australia? What it goes to show is that those opposite have absolutely no experience in business. In business, it is about the marginal choices you make. It is how you shave margins that is the difference between success and failure. It is how you shave half a per cent off an energy bill. It is how you shave off a tiny bit of the cost of complying with one of the new regulations brought in by the Labor Party and the Greens—such as the national OH&S laws, which made it harder for every smaller manufacturer around the country.

But the Labor Party do not understand that. They say, 'Oh, it is insignificant.' That betrays their complete lack of experience in running a business and employing people. Everyone who has been involved with or worked in a small business where you get to know your boss, on a farm or in any other form of small enterprise, knows that it is the marginal decisions that make the difference between success and failure. Those opposite do not understand that and that is why they do not care.

I also want to highlight the numbers being used by those opposite. We have heard them time and time again. I turn first to the comparison between the level of subsidy to the motor manufacturing industry in Australia and the level of subsidy in other countries. This idea that Australia has the lowest level of subsidy—because Labor are measuring it on a per capita basis—is a farce. According to the measure used by those opposite, if Australia took the current amount of subsidy and produced only one car with it, we would still have the lowest level of subsidy in the world for car manufacturing—because you are measuring per head of population. I will repeat that. The Labor Party are measuring the level of subsidy based on the number of people in Australia, not the number of cars we produce. Using the Labor Party's measure, the level of subsidy if we only produced one car would be exactly the same as if we produced 100,000 cars. It is a flawed measure and they know it.

When you compare subsidy levels based on subsidy per unit of car production, we have the highest level of subsidy in the world. What the Labor Party will not tell us is how much higher it needs to be. Instead, we get this empty rhetoric, this venal political campaign that does not respect the sacrifices of those who have already lost their jobs in the decades of restructuring that started under Labor. It is all about politics and an attempt to find a diversion from the other issues which face the Labor Party, particularly their union mates. (Time expired)

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

No country is ever successful in the long term … without a really strong and vibrant manufacturing base. It's the foundation of all economic development.

That was said by Alan Mulally, the President and CEO of the Ford Motor Company. We know that just last year, under the Labor government, Ford made the decision to leave Australia. We know that Mitsubishi decided to leave Australia in 2008—also under the former government. That is something the current government is making much of. But, because there are only two remaining manufacturers standing, General Motors Holden and Toyota, there is now a greater duty of care for the government of the day. It is their responsibility to make sure that the industry remains alive—because, if you lose that industry, the consequences will be, according to Richard Reilly, the Chief Executive of the Federation of Automotive Products Manufacturers, 'devastating' and 'diabolical'.

It is all well and good for the government to say that Mitsubishi and Ford left under the former government's watch, but there is a greater duty of care now—we have to make sure that the supply chain does not collapse. That would cause great harm to the Australian economy. But that is what is happening here. That is why people like Richard Reilly, a good man who as Chief Executive of the Federation of Automotive Product Manufacturers knows firsthand what the impact will be, are speaking out.

This industry is an ecosystem. It is a big economic ecosystem which employs tens of thousands of Australians. We know that automotive component manufacturers employ something like 40,000 people, most of them in South Australia and Victoria. Those jobs will be lost. In my home state of South Australia, we have really good component manufacturers like ROH, Futuris Automotive Interiors, Multi Slide Industries, Tenneco Australia, TI Automotive, Toyoda Gosei Australia, SMR Automotive, and Precision Components. They have state-of-the-art facilities, but they need to be part of a supply chain. That supply chain will now collapse and that will have a huge impact on our economy.

Paragraph 4 of Toyota's media release refers to 'increased competition due to current and future free trade agreements'. I was wrong earlier when I asked a question in which I said that a Ford Territory costs about $40,000 here and about $100,000 in Thailand. I apologise. It is actually about $57,000 for the top-of-the-line model here and it costs over $100,000 in Thailand. Why? Because of non-tariff barriers. We have been mugs in the way we have negotiated these free trade agreements. We are causing great damage to our economy. We are laughed at internationally. They talk about us as the 'free trade Taliban' because we take such a literalist, purist approach to free trade—to the detriment of jobs in this country.

Let us talk about some of the cost inputs. I think Senator Abetz was right to talk about intervening in the dispute between Toyota and the union, because I think there should have been a bit more flexibility to allow the workers to have a say. But to blame unions and the workers, when you consider that labour costs only make up about 10 to 16 per cent of the cost of a vehicle, is really stretching it. Maybe there is scope for flexibility, but it would not have made much difference. What would have made a difference is the government committing to the co-investment. It might have cost an extra $500 million, but I suggest that this government will be forking out a hell of a lot more than that in welfare benefits to the many thousands of Australians who will lose their jobs and will not be able to get a new one. This is very serious stuff. Let us talk about the carbon tax. Let us get rid of it—but let us also achieve lower electricity costs by making sure that the electricity industry is not inefficient. These are important issues.

I want to conclude with an observation. From the mid-1990s, for almost a decade, John Howard had the so-called 'Howard battlers' behind him—hundreds of thousands of people who, up until then, had been Labor voters but who voted for John Howard because they felt that he was making good decisions. They felt safe with his economic management. I suggest that, as a result of what we have seen today and other decisions this government has made, those Howard battlers will turn into people who will battle against the Abbott government.

Jacinta Collins (Victoria, Australian Labor Party, Shadow Cabinet Secretary) Share this | Link to this | Hansard source

I thank Senator Xenophon for raising the critical issue of the government's duty of care. Senator Birmingham has come back into the chamber, and I listened to Senator Gallacher earlier, and the suggestion is that we can wipe the slate clean now—it is a new order and a new age, or, if you pick up Mr Hockey's comments, the age of entitlement is over. They completely neglect the government's duty of care. Immeasurable irresponsibility has been demonstrated in the way the Australian government has been dealing with industry policy not only in the automotive area but also in food processing. We continue to ask: where is there any consideration of the national interest?

Putting aside some of the cheaper rhetoric in Senator Ryan's speech, his contribution highlighted for me the debate that must be going on in the Liberal-Nationals coalition at the moment. Senator Ryan says we should call it a subsidy. I do not care whether you call it co-investment or subsidy; the point is that the government determines in the national interest to invest in activities that support the economy. I understand that in the Liberal Party there are some who think that there should be no government role at all. That debate is occurring in the coalition at the moment. The victims of that debate are starkly evident. As Senator Xenophon just pointed out, the situation while this government tries to sort out what its industry policy should be is diabolical.

Let us consider a few of the facts. For every one dollar of government support, Toyota currently spends at least $20 in its Australian manufacturing operations. That will go. Fifty thousand direct Australian jobs in the automotive industry will be lost because of this announcement and, as others have highlighted—Senator Gallacher particularly—200,000 jobs which rely indirectly on the automotive industry will also be lost. The impact on our economy of this government's approach to the automotive industry—and this is without thinking about food processing as well—is diabolical.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

The road to recession.

Jacinta Collins (Victoria, Australian Labor Party, Shadow Cabinet Secretary) Share this | Link to this | Hansard source

Indeed, they are on the road to recession. The approach to economic management being exhibited is completely irresponsible. We talk about co-investment or, to pick up Senator Ryan's comments, subsidy, because that is what governments around the world do—they compare the benefits of supporting one industry or another with the impact on the economy overall of losing that activity. Jobs, manufacturing, research and development and a skilled labour force all contribute to a vibrant and healthy economy. It is difficult to believe that Australia will be any better off without an automotive industry. I have been in industry policy debates involving coalition colleagues in years gone by, and we have talked about the benefits of maintaining an automotive industry—the importance for skilling and defence, for instance. I have mentioned food processing. We need to contemplate food security issues as well.

This government, Mr Hockey and Senator Cormann have failed to offer any cogent explanation for why they are deciding to intervene in one case and not another. The suggestion that it is Coca-Cola Amatil as opposed to Cadbury or a small seafood operator in Tasmania simply does not cut the mustard. This government needs a cogent industry policy. It does not have one at the moment. All we hear is glib rhetoric—let's blame the workers, let's blame the workers' conditions, let's suggest that these workers do not have a right to expect a job that pays somewhere around $50,000 or $60,000 a year, let's suggest that there is something wrong with the workers in these cases, as opposed to addressing the need for a cogent industry policy.

We have heard Mr Abbott make incorrect references to enterprise agreements and, as I mentioned before, Mr Hockey has said that the age of entitlement is over. I do not know any Australians who really do think that they are in the age of entitlement but to suggest that workers do not deserve good jobs is rubbish. (Time expired)

Sue Boyce (Queensland, Liberal Party) Share this | Link to this | Hansard source

It certainly is rubbish to suggest that workers do not deserve good jobs but unfortunately you do not get good jobs in bad industries that are not going to survive or can only survive while being propped up by the government. I would have thought an unsustainable job was worse than no job at all. This government is very concerned about doing what it can to assist workers who, over the next three years, will lose their jobs in the automotive industry and in the downstream areas of the automotive industry. However, it is laughable for the opposition to suggest that this is our fault or our problem. As they so often illogically do—and it is cruel to the workers who they allege they represent—they are misrepresenting the truth and misrepresenting the real situation. Under Labor, the last government this country had, one manufacturing job was lost every 19 minutes.

I would like to refer to a couple of examples of the previous government's automotive industry policy. In 2012, Ms Gillard announced that the government would give $34 million to Ford, saying that it would create 300 new jobs. Within eight months, 330 employees had lost their jobs at Ford. Ms Gillard announced a $215 million assistance package for Holden, saying that that would secure its future in Australia until 2022. Last time I checked, we were not up to 2022. Yet, within six months of Ms Gillard's announcement, 670 jobs were gone. Then, of course, part of their brilliant industry policy strategy was to hit the car industry with a $1.8 billion fringe benefits tax slug, just when it looked as though the industry might actually take advantage of some of the money that the then government had thrown at them. There was no logical reason to do that. There is no logical reason to do anything other than what this government is doing to maintain and build manufacturing in Australia. We are going to improve the manufacturing industry across the board in Australia, not just for the big firms that happen to have senior union reps who can go a-whining to the opposition. We are going to do it by getting taxes down, getting rid of rid of regulation and getting productivity up.

Twenty years ago, I could have stood here and said, 'I, as a national manufacturer …' I cannot say that anymore because our family business, which is almost 90 years old, is now a manufacturer, importer and distributor. The reasons that we had to go down that path are exactly the same reasons that industry is hurting right across the board in Australia: you have to adapt, change and learn to function within the environment you have, not listen to the untruths and exaggerated nonsense from the opposition suggesting that somehow the car industry could have been maintained as it was. It could not be maintained as it was. That is very, very basic. You just have to look at some of the figures that come from the Productivity Commission, for example. In June 2012, the effective assistance rate was about four per cent for manufacturing and about three per cent for agriculture; but, for motor vehicles, it was nine per cent—an effective assistance rate of nine per cent, an unsustainable rate that was going up, not down, under the stewardship of the people who allegedly care about jobs. Those jobs could not continue to exist. Sustainability does not exist in an industry where the government help rate is nine per cent.

We will make a sustainable industry possible. We will assist the firms to have a broad-based economic approach through good regulatory reform and by getting rid of some of the impediments to workplace flexibility. (Time expired)

Ursula Stephens (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Order! The time for the discussion has now expired.