Speech - Automotive Transformation Scheme Amendment Bill 2014

-->

2 October 2014

I rise today to join my Labor colleagues in strong opposition to the Automotive Transformation Scheme Amendment Bill 2014.

The Bill amends the Automotive Transformation Scheme Act 2009 and gives effects to the Abbott Liberal Government’s $500 million cut to the Automotive Transformation Scheme or ATS over 2014‑15 to 2017-18. 

In addition, this bill also has the effect of terminating the ATS on 1 January 2018, cutting a further $400 million from the ATS, leaving absolutely no support for surviving component companies. If this bill is passed here in this House it will spell disaster not only for the 50,000 Australians who are directly employed in the auto industry—and they are people who are spread across the three automotive manufacturers: Ford, Toyota and Holden—but also the 150 component manufacturers there. You are looking at a range of at least 200,000 jobs that are on the line if this bill is passed here today.

The ATS is a legislative scheme that has encouraged investment and innovation in the Australian automotive industry. It provides assistance in the form of co-investment to firms for the production of motor vehicles and engines and, just as importantly, for investment in eligible R&D, plant and equipment. Indeed, when it comes to R&D, we know it is the auto industry that is the largest R&D contributor in the Australian manufacturing sector. It is contributing almost $700 million annually in important research and development that enables our manufacturing sector to be increasingly more sophisticated and high tech in the work they do here in Australia.

We know that the automotive industry is leaving Australia now. The Treasurer himself made it very clear when he stood up in this House and goaded those industries to leave our country. He made it very clear last December that they were not welcome here anymore, but it is critical that governments do not pre-empt the closure of the industry and risk the early closure of firms before 2017 by reducing available funding. Further, the proposed early closure of the ATS ignores the reality that many dozens of component manufacturing companies, employing thousands of workers, will still exist post 2017.

The legislation we are debating here today confirms the Abbott Liberal government's hostility to Australian auto companies and workers. Cutting hundreds of millions of dollars in funding from the ATS now risks causing, as I said, the premature closure of motor vehicle producers and the hundreds of firms in the automotive supply chain, sending thousands of Australian jobs offshore long before the previously proposed date of 2017. This means that the 50,000 direct Australian jobs in the car industry are at risk and, according to a study conducted by the National Institute of Economic and Industry Research, a further 200,000 jobs which rely indirectly on this industry are also at risk. That is more than 30,000 jobs in Queensland, about 24,000 in South Australia, 32,000 in New South Wales, 11,000 in Western Australia, 800 or so in the Northern Territory and ACT combined and nearly 2,000 in Tasmania, but it is a staggering 98,483 jobs in Victoria. Why have we not heard every backbencher opposite from Victoria screaming about the 98,483 jobs that are set to be lost by this government and this legislation? The numbers are truly astounding and are a horrible indictment on this government. These are not workers being liberated as the Prime Minister would have us believe; these are men and women whose livelihoods are being ripped clean away from them.

I stand alongside my Labor colleagues today in our fight to maintain Australian manufacturing capabilities and jobs while members opposite have given up. They are sitting back, seemingly unperturbed by the apparent pre-emptive closure of this vital high-tech industry and the multiple risks associated with the early closure of firms before 2017—early closures that are inevitable as this government continues to cut available funds. Labor will do everything in our power to stop these cuts to the Automotive Transformation Scheme, and we call on the crossbenchers, the minor parties and those courageous backbenchers opposite to stand up for Australian jobs and manufacturing and to block these cuts up in the Senate.

Unlike the Abbott Liberal government, Labor believes there is a future for manufacturing in Australia, and the automotive industry, like the shipbuilding industry in my electorate, is very much a part of that future. In government, Labor's investments ensured that Australia maintained its auto industry in the face of the global financial crisis, global industry restructuring and a record high Australian dollar. The New Car Plan for a Greener Future, announced in November 2008, provided $5.4 billion of co-investment support from 2010 through to 2020. The centrepiece of the plan was the Automotive Transformation Scheme, which provides $3 billion. Labor's approach was based on co-investment and providing long-term certainty. It is not a handout as some members opposite have suggested; the industry only receives support when it invests.

Before the election Labor announced a new car plan for the 2020s to keep making cars in Australia and to keep jobs in the Australian automotive industry. This included a new program of $300 million per annum to support the transformation of the industry to attract new investment and support research and development, design and engineering from January 2016. Labor's commitments would have seen the motor vehicle producers commit to new investments in Australia and a future for the thousands of auto manufacturing jobs that are now on the line—those thousands of jobs that will hang around this government's neck if this legislation is passed.

In his contribution to this debate the member for Paterson in my region—the Parliamentary Secretary to the Minister for Industry, I might add—said that members on this side of the House had no understanding of how to create sustainable industry. I take this opportunity to remind the parliamentary secretary that is overseeing the end of automotive manufacturing industry in Australia.

 

And it is his government that tried to kill off our food processing industry. It is also his government that is wielding the axe over the shipbuilding industry and renewable energy sectors, through its actions and broken promises.

The parliamentary secretary and Minister for Industry have obviously got their portfolio books upside down. Let me help them: your job is to secure and support industry in Australia, not kill it off. These are all industries that would have a future in Australia if Labor was in government. They are industries that may have thought they had a future under this Abbott Liberal government. The Prime Minister said in August last year before being elected, 'I want to see car-making survive in this country—not just survive, but flourish.' The now defence minister also gave assurances last year on local ABC radio 1233 in my city of Newcastle, when he famously said, before the election:

I get really fired up when I find us giving away our manufacturing base in the Defence space to foreign manufacturers. It’s just not on.

He also said in May last year:

We will deliver those submarines from right here at ASC in South Australia. The coalition today is committed to building 12 new submarines here in Adelaide.

The Defence minister's memory is clearly fading. Yesterday, in Senate question time, when pressed on the issue of submarine manufacture in Australia, the minister said:

…there is no contract, no commitment and no obligation on the government to do anything with respect to submarines in Adelaide.

This is a government that is evidently not true to its word. Its words are worth nothing. It is a government that deceived the Australian people to get elected and it is a government that is now taking a wrecking ball to the Australian manufacturing industry.

I want to take this opportunity to say a bit more about these so-called commitments of the Abbott Liberal government to defence manufacturing, and the effects of this betrayal on my community of Newcastle. Family owned shipbuilder Forgacs, one of Newcastle's largest employers, could not have been more clear in their warnings that they will have to close their shipyards at Carrington and Tomago next year, 2015, laying off more than 900 highly skilled tradesmen and women, unless the federal government expedited decisions on future naval shipbuilding projects and started a genuine effort to allocate work to Australian manufacturers.

They were not asking for a hand-out. They were not asking for favours. They could happily compete in an open tendering process—providing, of course, there was a level playing field for that tendering process. Forgacs have already had to let more than 100 employees go as work on the current AWD contract tapered off. The lack of interest from this government on that front has been profound. I have met with the Forgacs management team on a regular basis, as has, at my invitation, the Leader of the Opposition, shadow defence minister, the shadow assistant defence minister, and the members for Shortland and Charlton. At the Tomago shipyard we have all met with the men and women who are building Australia's air warfare destroyers.

Forgacs is an employer that does not want to give up, even when in danger of closing, and they still employ more than 80 apprentices and continue to spend hundreds of thousands of dollars on training and improvements every month. Yet this may all be to no avail. Forgacs and other shipbuilders in Australia have been unjustly maligned in commentary by the Minister for Defence and others when it comes to the AWD build. However, as a recent Australian National Audit Office confirmed, there was a decision made to build the AWDs here in Australia and to pay a premium so that this Australian ship-building industry could be built up, an adequately skilled workforce assembled, the capital invested and the industry brought to world-class levels in terms of quality and production.

Having now paid that premium—Australian taxpayers have already paid to have all of that capacity—and got the industry into a world-class position, we now see the government totally abandoning that investment at precisely the moment when this investment should come good. But instead of realising that capacity and committing to a rolling build of frigates and submarines here in Australia, this government is instead sending those jobs offshore. That is right—they deliberately locked out Australian shipbuilders from bidding for contracts for the two new supply ships earlier this year, citing an inability for Australian builders to undertake the work. That is a claim that was strongly refuted by shipbuilders, unions, the workforce and by others at a recent Senate inquiry into the decision by the government to exclude Australian manufacturers from that tendering process.

And in recent weeks we have seen evidence that the Abbott Liberal government now plans to send submarine contracts to Japan. That will mean more jobs going off shore. Thousands of highly skilled jobs in the ship-building industry are at risk across the country, including 910 workers in Newcastle, because the Abbott government is sending jobs offshore. When the Prime Minister said he would create one million new jobs we thought they would be in Australia, not overseas.

I urge the government to abandon the bill before us. It is bad for Australian industry. It is bad for Australian jobs. Unlike the Abbott Liberal government, Labor believes there is a future for manufacturing in Australia, and the automotive industry is a large part of that future. 

Created with NationBuilder
Authorised by Sharon Claydon MP, 427 Hunter Street Newcastle