House of Representatives Speech- Automotive Transformation Scheme Amendment Bill 2014

  I rise to condemn the government's Automotive Transformation Scheme Amendment Bill 2014. The Automotive Transformation Scheme is a legislative scheme that encourages investment and innovation in the Australian automotive industry. Since the Automotive Transformation Scheme Act passed through parliament in 2009 the ATS has provided co-investment to companies for the production of motor vehicles and engines, and for investment in eligible research and development and relevant equipment. The ATS was the cornerstone of Labor's New Car Plan for a Greener Future, which was announced in November 2008. This plan provided $5.4 billion of co-investment support from 2010 to 2020, with the ATS accounting for some $3 billion of that investment.

I rise to condemn the government's Automotive Transformation Scheme Amendment Bill 2014. The Automotive Transformation Scheme is a legislative scheme that encourages investment and innovation in the Australian automotive industry. Since the Automotive Transformation Scheme Act passed through parliament in 2009 the ATS has provided co-investment to companies for the production of motor vehicles and engines, and for investment in eligible research and development and relevant equipment. The ATS was the cornerstone of Labor's New Car Plan for a Greener Future, which was announced in November 2008. This plan provided $5.4 billion of co-investment support from 2010 to 2020, with the ATS accounting for some $3 billion of that investment.

Our approach provided long-term certainty for the Australian automotive manufacturing industry. The new car plan was not a hand out; it was a co-investment program that encouraged industry to invest in Australian manufacturing. In a difficult economic environment, Labor's new car plan assured business and industry that the Australian government supported automotive manufacturing in Australia. The ATS has been a success story for industry in Australia. It has supported the automotive manufacturing industry and the associated parts industry in Australia, as well as increasing the capacity for research and development in this important sector of Australian industry.

Before the election, Labor announced A New Car Plan for the 2020s. This plan demonstrated to business and to industry that the Australian government had a plan for automotive manufacturing in this country. Labor's new car plan included an investment of $300 million per annum to support the transformation of the industry, to attract new investment and to support research and development, design and engineering from January 2016. The plan supported Australia's high-tech automotive industry and expanded opportunities for young engineers to utilise their trade in Australia. The plan was widely supported by industry and workers.

If this government gets its way, opportunities for manufacturers, assemblers and engineers in the automotive manufacturing sector will all but disappear. In just over 12 months the Abbott government has comprehensively trashed the faith industry had in the Australian government to support automotive manufacturing in Australia. The government's bill today seeks to further tear apart automotive manufacturing in Australia and to imperil the 200,000 Australians who rely on the industry for employment.

The bill before the House would cut $500 million from the ATS over the next three years, with the effect of terminating the scheme at the end of 2017. This bill would withdraw support for components companies and would inevitably result in the closure of hundreds of manufacturers in the automotive parts industry. By ending the ATS at the end of 2017, this government through this bill is legislating to ensure the premature closure of components manufacturers and the offshoring of thousands of Australian manufacturing jobs. This government's proposal to close the ATS at the end of 2017 is nothing short of an attack on Australia's automotive manufacturing industry, an attack on the employees of Ford, Holden and Toyota, an attack on component-manufacturing companies and an attack on the thousands of workers in my electorate who derive their income by manufacturing component parts.

I say to the Prime Minister that automotive manufacturing is not dead in Australia; it is a tough, resilient industry that supports 200,000 Australian workers. Of those 200,000 workers indirectly employed by the automotive manufacturing industry over 98,000 are employed in Victoria, including thousands in my electorate of Isaacs. In the City of Greater Dandenong, 22,800 people are employed in manufacturing industries and it is estimated that the automotive industry injected $2½ billion into the local economy. Let me say that again: in the City of Greater Dandenong, 22,800 people are employed in manufacturing industries and it is estimated that the automotive industry injected $2.5 billion into the local economy. That is a staggering number of workers who are being cast aside by this government and it is an astonishing economic contribution to the Victorian economy. If this bill is to pass, it will be a catastrophe for the 200,000 Australian workers who rely on automotive manufacturing and associated industries for their continued employment. It would be a disaster for Australia, for Victoria and, in particular, for south-east Melbourne, where so many workers are employed in manufacturing.

There is a concerning and dangerous narrative that this government is perpetuating here. The narrative is that subsidised industries are failed industries, and this is simply untrue. Only 13 countries, which will include Australia for at least a couple more years, can make a car from start to finish. Australia, for a little while longer, will have one of the last remaining complex supply chains to exist in the world. Every one of these 13 countries subsidise their automotive industry. The per capita cost of car industry support around the world includes $90 in Germany, $264 in the United States and $334 in Sweden. The per capita cost for supporting automotive manufacturing in Australia, an industry that supports 200,000 Australians, is $17.40. I will repeat that: $17.40. And yet for this contribution, Australia derives enormous benefit. Two hundred thousand Australians owe their jobs to the automotive manufacturing industry; automotive research and development contributes almost $700 million annually to the Australian economy. The cost of abandoning this industry too is staggering.

Modelling from the University of Adelaide shows that the loss of the industry will lead to a negative annual shock of $29 billion by 2017, or about two per cent of GDP. Welfare payments and lost tax revenue from an industry shutdown are projected to exceed $20 billion, and it will be more than 10 years before the economy recovers from the underlying hit to GDP. Gross regional product in Adelaide and Melbourne is projected to not recover until 2031—17 years away—and yet this government is saying, in effect, that the Australian public cannot afford to support automotive manufacturing.

What is most baffling is that while the Prime Minister can decry industry support to the Australian automotive manufacturing sector, support that ensures the employment of 200,000 Australians, the Prime Minister and the government happily continue to subsidise many other industries. The Australian government has long subsidised industries as broad as mining, banking and tourism. One of the primary roles of the Australian government is to keep Australians in work, and if that requires subsidies and if these subsidies have a net benefit to Australia, as they do with the automotive manufacturing sector, then it is the responsibility of the government to support that sector. But this government has now turned around and said that it will no longer offer support to automotive manufacturing for one of the key industries of Australia, and in particular Victoria. This is a repudiation of well-founded economic and social principles in favour of a dangerous and extreme free market ideology.

If this bill passes and automotive manufacturing does in fact die in Australia, Australia will be worse off. We will be economically worse off and socially worse off. Regions like Melbourne's west and south-east, which already have above average unemployment, will be dramatically worse off, with thousands of workers lining up in dole queues as a result of the abandonment of their industry by this government. On 21 August 2013 the Prime Minister, when he was the then Leader of the Opposition, said in the middle of the election campaign:

I want to see car making survive in this country, not just survive but flourish.

It is clear that this is a Prime Minister who says one thing and does the other. If it was ever in doubt, this bill confirms the utter contempt that the Liberal and National parties hold for the Australia automotive industry.

In the barely 12 months since the Prime Minister's statement, this government has done everything it can to tear down the automotive manufacturing industry. It has removed industry assistance and goaded Holden to leave Australia. It is now trying to gut what is left of automotive manufacturing in Australia by trashing the ATS. There is no economic benefit in passing this bill. It will hurt thousands of Australians and deliver no long-term economic windfall. Apart from ticking a box for the Institute of Public Affairs, one must wonder why the government would pursue this at all.

Manufacturing is a key industry in my electorate. Last month I visited a manufacturing plant of TI Automotive in South Dandenong, in my electorate. TI Automotive, like so many businesses in my electorate and in south-east Melbourne, is facing a difficult future. With Toyota and Holden and Ford to cease manufacturing in Victoria in the coming years, TI Automotive is in the position where it has to compete with similar businesses for a dwindling number of local contracts. Appropriately, TI Automotive is investigating what new products their skilled workforce and modern plant can be turned to. A small amount of government assistance at this time may mean the difference for TI Automotive, and so many components manufacturers like them, between their whole workforce being dismissed and their business continuing to exist. Unlike this government, the operators of TI Automotive and other components manufacturers care about job creation in south-east Melbourne and care about Australia's ability to maintain a strong, economically viable automotive manufacturing industry.

Manufacturing is the lifeblood of south-east Melbourne It has provided employment opportunities for generations of Victorians and I find it deplorable the government would turn its back on such a large and significant section of our community. Make no mistake: this government has abandoned automotive manufacturing in this country and small automotive parts manufacturers, their employees and the communities where those employees live, such as south-east Melbourne, are the victims of this abandonment. It would be a disaster for Australia, and particularly for my electorate of Isaacs, which has the nation's fourth-highest proportion of residents employed in manufacturing, if this bill were to pass. I say to the component parts manufacturers across Australia, and to the 200,000 Australians employed indirectly by Australia's automotive manufacturing industry: Labor stands with you.

In government, Labor's investments in automotive manufacturing ensured that Australia maintained its automotive manufacturing industry in the face of the GFC, global industry restructuring and a record high Australian dollar. We ensured continued employment for many of the 200,000 Australian workers whose jobs are derived from the automotive manufacturing industry. Labor are proud of our record on supporting industry and we will stand with workers and industry against these terrible cuts. The Abbott government's refusal to help an industry that is responsible for the livelihoods of nearly 100,000 Victorians is a prime example of this government placing its extreme free market ideology above social and economic common sense. Unlike the Abbott government, Labor believes in jobs and in the social and economic benefits that meaningful employment brings. Labor will continue to fight for Australian workers in manufacturing and we will oppose this bill.