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Tuesday, 3 May 1994
Page: 10

Senator FOREMAN —Last night the Minister for Industry, Science and Technology told the Federal Chamber of Automotive Industries that he intended to become personally involved in building a closer working relationship with Australia's car industry. How is the industry currently performing? In what areas will the minister be focusing his attention?

Senator COOK —Senator Foreman has had a longstanding interest in the automobile industry in Australia and is one of the few senators in this chamber who have pursued these interests assiduously. I am pleased to say that the automotive industry is continuing to improve its overall competitiveness as a result of its restructuring under the Button car plan. The industry's strong performance in 1993 is particularly welcome, given the reduction in consumer demand over the last two or three years. It has been achieved as a result of a stronger focus on export for this industry, and that is a very pleasing thing.

  Some of the facts include a 17 per cent improvement in productivity, which brings the improvements in productivity for the automotive industry in Australia for the last two years to 31 per cent, an outstanding performance; an increase in total vehicle sales to about 555,000 units in 1993 compared with 515,000 in 1991; an increase in passenger motor vehicle sales, including sales of locally produced models; and, importantly, an increase in automotive exports to almost $1.5 billion last year compared with $1.3 billion the year before.

  The good export results encompass both cars and components and reflect our increasing access to major automotive industries not only in Asia but also, importantly, in Europe, in the United States of America and in Japan itself. We are in Australia developing a world-class industry as the differential in quality of locally made models compared to imports continues to narrow, a point that the Prime Minister stressed yesterday when he saw on its way to South Korea the two-millionth motor engine produced in Australia.

  Employment levels in the industry have also stabilised, as they have in component manufacturing centres, with a loss of employment in 1993 of 2.4 per cent compared with almost seven per cent in 1992 and 27 per cent in 1991. It is true that the profitability performance of the industry needs to improve. It is also important to realise that the industry is emerging from the impact of the recession and that substantial restructuring has taken place, to place companies in a better position for the future.

  In this vein, it is particularly pleasing that future investment for this industry is projected to increase by almost $2 billion over the next three years, an increase of four per cent over the period 1990-93. Substantial commitments have also been made by car companies that will ensure that an Australian manufacturing capability to supply both domestic and export markets continues into the next decade.

  I am pleased to note that the outlook for the industry in 1994 is positive in terms of projected sales, local production and exports, as well as other performance factors such as productivity, profitability and quality.

  The government intends to work with the automotive industry, as it has in the past, into the future. Our targets are, of course, to improve micro-economic reform changes to complement the efforts that restructuring this industry has made; to work on market access for this industry, particularly in the Asian market area; to help improve work force skills; and to help the industry take up the research and development incentives that we, as a government, provide. I am sure that we can look forward to seeing the automotive industry as a core industry in a restructured and more dynamic Australian industry base, taking advantage of the broadening market in exports that it has developed, and developing that further into the future.