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Monday, 20 June 1994
Page: 1746

Senator SCHACHT (Minister for Small Business, Customs and Construction) (5.56 p.m.) —in reply—I thank honourable senators for their contributions to the debate. I note that the opposition is supporting the Automotive Industry Authority Repeal Bill and that the Greens will support Senator Spindler's proposed amendment on behalf of the Democrats to require a specific report each year from the department regarding the automotive industry. The government will not accept the amendment, but I say to Senator Spindler that we will ensure that in the annual report of the department there is a reasonable and significant report each year about the automotive industry in Australia.

  As a senator from South Australia, I accept the importance of this industry to the economic well-being of Australia. Senator Short quoted from the Report on the state of the automotive industry 1993 that was tabled recently in this parliament. He referred to the price of cars going up in recent times in excess of the CPI. I also point out that in this report there is excellent information about the general improvement in the automotive industry in Australia—improvement in quality, improvement in production and improvement in exports. In particular, in the last decade, exports have gone from $200 million or $300 million to $1.4 billion in 1993. I believe those exports are alone a testament to the success of the government's policies since 1983 in reducing unnecessary protection and tariffs, and encouraging industry to become export oriented and, therefore, to meet the quality requirements that are necessary to be an export oriented industry. The export enhancement program has been central to that.

  There can be no doubt that if one had said to people in South Australia in 1981-82 that we would be exporting fully made cars from South Australia to Europe, Japan and North America, they would have said that one should be taken away and locked up for a substantial amount of time. It was beyond the comprehension of Australians to believe we could beat or match the best in the world with regard to cars and car exports. We are now doing that with great success.

  This year there has been an announcement by Mitsubishi that it will spend $400 million to $500 million on upgrading its South Australian plants in order to build the next generation of the Magna and the Verada. General Motors Holden's has just commissioned a new paint plant at Elizabeth worth well in excess of $100 million to give the Commodores, et cetera, that they produce there a quality of paintwork which matches the best in the world. We are still waiting for an announcement—there has been some indication—that over the next year the Elizabeth plant of General Motors will become the major base for the export of cars to South-East Asia. Again, that is beyond what people would have thought possible only a few years ago.

  The government is very proud of the success of its policy in the car industry. Particular credit must be paid to former Senator Button, the former industry minister who proposed and developed this industry policy in conjunction with the industry—both the employers and the unions. There has been a sea change in attitude on both sides of the industry on issues of quality, industrial relations and training. There is a much more consensus oriented approach to the industry.

  Special tribute should be paid to the car industry unions which have accepted the challenge to become an export oriented industry, to become world best. They have accepted that tariffs should be reduced substantially. I say to you, Mr Acting Deputy President, as a former metal worker, that if one had said to you in the 1970s that Australian trade unions would accept reductions in tariffs and the protective level that then existed, you would probably have thought it was a very long shot.

  The unions have accepted that challenge. They have to be congratulated on the culture change that they have accepted. They now have an industry which they can be proud of. I visited the General Motors Fishermens Bend plant only a month or so ago when it celebrated the export of the two millionth engine from Australia. When I saw the hundreds and hundreds of workers showing great pride in what they had achieved, and the way they enjoyed the celebration of what is a remarkable achievement for the manufacturing industry in Australia, I realised that this industry does have a strong future in this country, a future which this government is dedicated to.

  Senator Spindler basically expressed a view that he did not support the repeal of the authority because there was still work to be done. The industry plan has been going for more than 10 years and there is a well-defined plan for the next few years. We know that there will be a review in 1997 of what tariffs should be post-2000, when we get to the 15 per cent level. But we believe that all of that can be done within the resources of the Department of Industry, Science and Technology. It does not need the continuation of the Automotive Industry Authority.

  After the initial cost of winding down the authority, we will achieve savings of around $600,000 per annum which will be available to the department for other programs. Of course, we will continue to ensure that, within the department, there are resources available to monitor, consult with the industry and advise the government accordingly.

  Like Senator Spindler, I pay tribute to those many officers in the authority who have ensured that the industry plan has been carried out with such great success over the last decade. I also pay tribute to those in the department for their work and their relationship with the industry. The government believes that we can wind down this authority without any diminution of the effectiveness of the government's policy. The authority can take considerable credit for the success of the government's policies over the last decade. Accordingly, the government asks the Senate to support the bill without the proposed amendment.

  Question resolved in the affirmative.

  Bill read a second a time.

  The bill.