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

I wish to comment on the interim report handed down just yesterday by the Senate Economics References Committee on the future of Australia's automotive industry. This is a very important report and I commend all my colleagues involved in this inquiry. It is good to see Senator Anne Ruston from South Australia is in the chamber. This is a key industry for South Australia and I look forward to working constructively with Senator Ruston, as I have in the past, on this matter. In fact, Senator Ruston is someone for whom I have enormous regard who I have worked with constructively on important issues such as the future of regional post offices and the challenges and the future of the Australian wine industry. I hope that we can get a good result when it comes to the automotive sector.

My concern is that there must be much more done to allow for the transition of the automotive sector in Australia and in my home state of South Australia. What we are facing is a tsunami of job losses, particularly in Victoria and South Australia. It is estimated that something like 150,000 jobs could be lost with the departure of Ford, Holden and Toyota from Australia at the end of 2017. In fact, Ford are due to leave in about a bit over a year.

There are some key issues that this inquiry set out that must be considered. The Automotive Transformation Scheme has something like $700 million in the kitty and it is money that needs to be spent responsibly—

Senator McEwen interjecting—

Can I acknowledge Senator Anne McEwen also from South Australia who has been a consistent and passionate advocate for manufacturing in South Australia.

The federal government, to date, just has not got it about the looming jobs crisis, the looming tsunami of job losses facing Victoria and South Australia, and the several thousand jobs in New South Wales as part of the automotive supply chain—12½ thousand jobs directly in auto manufacturing and 33,000 jobs directly in the components sector in tier 1. But there is tier 2, 3 and 4—the makers of widgets that go into a part that go into another part for a component that goes into a Ford, a Holden or a Toyota made in this country.

The government just has not planned for the enormous upheaval that this sector is facing. We discussed this just last week. I think that the comments by Treasurer Hockey in December 2013 were basically taunting General Motors Holden, goading them to leave Australia—are you gonna stay or are you gonna go; like a bad version of a Clash song. What he said was, quite frankly, reckless and irresponsible. The consequences of those reckless and irresponsible comments, I believe, led to General Motor Holden's decision. Within 48 hours of the statement to the Productivity Commission by the then managing director of GMH in this country, Mike Devereux, that they were willing to stay if there was a plan for the auto sector and within 24 hours of the Treasurer's comments, General Motors Holden made the decision to pull up stumps. And as a consequence, we saw the collapse in the automotive supply chain in this country, with Toyota making the inevitable decision to bail out of Australia by the end of 2017.

What this report of the Economic References Committee does is to set out the magnitude of the problem but also practical solutions in terms of what needs to be done. The Federation of Automotive Products Manufacturers, in their submission to this committee back in April 2015, made a number of very sensible, reasoned submissions. These are companies representing something like 140 businesses in the automotive supply sector that between them represent 33,000 people. These are companies that employ from a few dozen to up to 600 or 700 employees in some of the bigger components makers. They are saying that there must be flexibility in the Automotive Transformation Scheme to enable these companies to diversify to do other things, to make other things or expand markets.

Precision Automotive, headed by Darrin Spinks in South Australia, is making heliostats, which are incredibly useful in the sense that it is plugging into the renewable energy sector. There are other companies that cannot get access to the ATS because of the narrow confines of the criteria for that. One company that I mentioned last week and will mention again is SupaShock. Their team at Magill in South Australia make world-leading shock absorbers. Oscar Fiorinotto and his team do tremendous things. Their shock absorbers are world beating and their technology is second to none—used in F1 racing cars and in the Ford racing team. The Ford racing team says, 'We win races. Our secret weapon is SupaShock shock absorbers.' But they cannot access the funding for the Automotive Transformation Scheme because it is tied to the OEMs—that is, the original equipment manufacturers—Ford, Holden and Toyota. That needs to be loosened up in a way that is responsible to taxpayers, because if we get it right with this fund it will give real hope to many thousands of employees to transition from the shock that we will experience when the last Australian-made car rolls off the line.

Yesterday, in relation to this report and in relation to this whole issue, I was at a forum at the Australian Automotive National Summit with my colleagues Senator John Madigan and Senator Ricky Muir. In his presentation Senator Madigan gave a terrific exposition of what occurred in the UK. The UK industry appeared to be on its last legs but as a result of bipartisan, sensible policies there has been a renaissance in the UK automotive sector. Senator Madigan gave some very impressive statistics on the growth of that sector, the export market—80 per cent of those cars are exported—and the many billions of pounds it contributes to the UK economy. Senator Madigan made the point very powerfully that we should not give up on manufacturing. We need to ensure that this sector gets support, because it will make a real difference to having a strong, vibrant economy with good, well-paying jobs. Senator Ricky Muir made the point about the aftermarket sector. It is a $5 billion a year sector and there are many firms involved in that—something like 200-plus firms are involved in the aftermarket sector. That has tremendous ability to expand, to grow and to take up some of the jobs that will be lost inevitably as a result of the departure of car makers in this country.

This report is only an interim report but it does contain a template of ideas and practical suggestions for the sector to grow in those areas: in the aftermarkets, in the components sector—for diversification to at least absorb to some significant degree, if it is done properly, the enormous job losses that are expected with the demise of the three original equipment manufacturers—Ford, Holden and Toyota. I commend the work of the committee and the secretariat in relation to this report.

There is more work to be done. I urge the federal government to look closely at the funding mechanisms of the ATS, the criteria and other funds so that there can be a real expansion of this sector. One example given yesterday by Richard Dudley, who heads the MTAA, the Motor Trades Association of Australia, was that where there are skills shortages apprenticeships can really be expanded. One of the participants at the forum yesterday made the point that with just a bit of money for a mentoring scheme for apprentices—and this is all about jobs—the apprenticeship retention rate increased from 45 per cent to 85 per cent through a scheme that involved mentoring within the industry but that the funding for that scheme has been taken away. Why would you do that if it is a low-cost, effective way of keeping people in the sector and growing jobs in the automotive sector? There is a lot to be done. I urge the government—and that is why it is important that my colleague Senator Ruston and others from South Australia play a key role in influencing the government on policy on this—to do all we can to stem the job losses and to grow new sectors within the automotive sector so that we can have as many Australians as possible employed in this sector. I seek leave to continue my remarks.

Leave granted; debate adjourned.