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Thursday, 21 August 2003
Page: 19278


Mr ENTSCH (Parliamentary Secretary to the Minister for Industry, Tourism and Resources) (11:25 AM) —I would like to thank all the honourable members who have contributed to the debate on this very important legislation, the ACIS Administration Amendment Bill 2003 and the Customs Tariff Amendment (ACIS) Bill 2003. I particularly thank the member for Corangamite and the member for Dunkley, two very fine Victorians who are clearly very strong and passionate supporters of the automotive manufacturing sector. I also welcome the opposition's support of the legislation and their recognition of the strength of our automotive industry. In particular I welcome the opposition's recognition of the export success of the Australian automotive manufacturers. I would, however, like to remind the member for Rankin and the member for Corio that, while the tariff will fall from 15 per cent to 10 per cent in 2005, the ACIS extension to 2015 is going to provide an additional $4.2 billion to assist industry adjust to the reduction of that tariff to five per cent in 2010. It is giving a certainty to the industry, and this is what the industry has been looking for. This is why the industry has welcomed this initiative.

I think the member for Corio was suggesting that an amendment may well come out of the Senate, proposing that we do not phase out that tariff. I think we would have great difficulty in supporting that. In the first instance, we have not put the planned 2008 review into the legislation. I think it is inappropriate for government to bind later governments to actions by legislating a review now. Not reviewing it allows flexibility so that, if circumstances were to change—and we see that the world certainly changes at dramatic speed—there would be the opportunity to do that review sooner or later, and decisions could be made at that point in time. I do not believe that they have any justification for that proposed amendment, and we certainly would have difficulty in supporting it.

It is interesting to note that back in 1995, when the tariff rates were 27.5 per cent, Australia produced about 313,000 vehicles, including 24,000 cars for our export markets, yet in the space of only a few short years, as the member for Corangamite noted, by 2001—when tariffs had fallen to 15 per cent—Australia produced some 350,000 cars, including 112,000 cars for export. The members for Dunkley and Corangamite spoke about the Ford plant in Geelong and how it turned around its manufacturing performance in recent years. Just by way of comparison, earlier this year I had the pleasure of representing the government for the launch of Holden's third shift, at the manufacturing plant in Elizabeth in South Australia. That introduction of the third shift meant an extra 1,000 jobs for Elizabeth, manufacturing motor vehicles more or less 24 hours a day. Holden alone is aiming to reach, by 2008, production levels of 200,000 vehicles, including some 70,000 vehicles for export. This is a huge step forward from where we were back in 1995-96, and the ACIS Administration Bill 2003 will help to drive forward that success and growth well into the future.

This bill makes a number of important amendments to the ACIS Administration Act 1999. It extends the existing Automotive Competitiveness and Investment Scheme to 2015 and allows for the establishment of a research and development fund, specifically to encourage high-end research and development by Australian motor vehicle producers. Significantly, the bill provides a decade of certainty, as I said earlier, to over 200 firms in the Australian automotive industry by providing policy certainty. Firms will be able to have confidence in investment and innovation.

This package will deliver assistance estimated at $4.2 billion to the Australian automotive industry. This assistance is of a transitional nature designed to assist the industry in moving to greater efficiency and competitiveness. The Customs Tariff Amendment (ACIS) Bill 2003 is a companion bill to this bill. Passage of the tariff bill will legislate for the reduction of the automotive tariff from 10 per cent to five per cent in 2010. This will bring the Australian automotive industry in line with the general manufacturing tariff, thus ending what might be considered special protection for the automotive industry. While the lead time given for this tariff reduction is generous, it provides the automotive industry with certainty and time to adjust to new competitive regimes. To date, as we have seen those reductions occur, we have certainly seen those very effective adjustments taking place. This bill was drafted after consultation with industry, and I wish to place on record my thanks to those in the industry who assisted in the development of this legislation.

Question agreed to.

Bill read a second time.

Ordered that the bill be reported to the House without amendment.