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Thursday, 21 August 2003
Page: 19270

Mr GAVAN O'CONNOR (10:47 AM) —I rise to speak in this cognate debate on the ACIS Administration Amendment Bill 2003 and the Customs Tariff Amendment (ACIS) Bill 2003.The ACIS Administration Amendment Bill 2003 gives effect to the government's set of assistance and development measures for the car and component industry over the next decade. The bill contains two discrete aspects: firstly, measures relating to future tariff levels; and, secondly, direct assistance measures aimed at encouraging investment, research and development and innovation. The opposition do not intend to oppose this bill. We accept and understand the broad industry support for the assistance measures contained in it. However, we do take some exception to the government's programmed tariff reductions. As I understand the bill, on 1 January 2005 tariffs on passenger motor vehicles and components are scheduled to fall from 15 per cent to 10 per cent. Of course, in addition to this particular bill, there is another bill that provides for similar tariff reductions in 2010. The tariff levels are scheduled to stay at 10 per cent until 1 January 2010, when they will be reduced to the general manufacturing tariff level of five per cent. We certainly agree with the Productivity Commission review in 2008. We certainly do take exception to the legislated tariff drops that are the focus of government policy.

With regard to the more general assistance measure side, we certainly do support continued assistance to the car and component industry to improve its competitiveness and to encourage it to invest in new plant and equipment. We have seen the fruits of a long policy history—first started with Labor governments—of steering the car industry in a new direction. That particular policy has borne fruit under both governments, I think it is fair to say. I do not see anything exceptional about the assistance measures that are being delivered to the car and component industry in this country. When I look at how easily governments in the past have made assistance available to rural industries, for example, I do not think it is beyond the pale to expect that governments would support a manufacturing industry that is quite central to economic activity in Australia and forms the basis of many regional economies—and I note the presence of the honourable member for Corangamite, the squatter from the Western District, who every now and then ventures into the urban areas of Geelong to make some statements about the importance of the car industry to Geelong.

It is important that I remind the House just how important this industry is. There are about 20 businesses that are directly involved in car and component manufacturing, and the honourable member for Corangamite has mentioned Ford, which forms the central core of Geelong's total manufacturing effort, not just in cars and components. The industry in Geelong employs directly about 3,800 people—an enormous contribution that is made to the regional economy. The multiplier effect of that has been estimated at about 1.5. That simply means another 5,800 people have their businesses and incomes directly linked to the car and component industry in Geelong. The turnover is quite substantial. In Geelong it is about $857 million. That is quite in excess of the $680-odd million that the financiers and bankers are going to get from the sale of Telstra when this government finally does put it on sale, if it gets half a chance. That is a substantial turnover, and the wages and salaries component is some $210 million. A cursory look at the statistics as far as the Geelong economy is concerned will indicate just how important the spending power of car- and component-making employees is and how important the industry is to the Geelong area. So we do not take this bill lightly and we certainly do support the measures in the bill that are directly aimed at encouraging those car and component manufacturers to continually update their processes and to invest in new capital equipment and processes so that at the end of the day we have an industry that can compete.

The honourable member for Corangamite mentioned my involvement with the car industry. I should declare that it goes back even further than my involvement with Senator Button, that visionary Labor industry minister who has won the accolades of all sides of politics and the general community for his foresight as far as this particular industry is concerned. It goes back to the old days when I worked with the Industries Assistance Commission, and one of the particular references that I worked on was passenger motor vehicles, so my involvement with this industry goes way back into the dim distant past, as the honourable member for Corangamite will appreciate. We in government understood that it was going to be very important to focus on this key manufacturing industry and set it in a new direction, and part of that of course was a lowering of the tariff regime. The Geelong community's point of view had a very simple philosophy: better that we have a manufacturing facility and industry in Geelong than none at all. I think the union movement, the labour movement generally and indeed the Geelong community appreciated that the tariff levels were not sustainable at 57 per cent. I do not think you have to be a genius to accept that, but of course it is the way you engage in the reduction of tariffs and the way you interpret the economic circumstance at points in time to give effect to the policies that you wish to implement. This is where the government fails, because it does have an ideological obsession with continually lowering tariffs regardless of the circumstance that the industry might find itself in, and that is why we have these legislative changes.

The industry appreciates that it has to continually invest, innovate and conduct research and development to progress both domestically and internationally. It did that under Labor governments, but we were very sensitive to general market conditions when these measures were put in place. The honourable member for Corangamite has stretched the elastic band in the Main Committee here today. Down in our community, we call him Captain Zero. Back before the turn of the century—back in the 1990s—when the honourable member for Corangamite was a Hewson man, he was an advocate of zero tariffs. Of course, now we see a subtle shift—`I was never Captain Zero; I was Captain Zero-plus-five-per-cent'. I say to the member for Corangamite: you cannot have your cake and eat it—not in this place.

We do appreciate the belated support of the honourable member for Corangamite and his latent interest in the car industry in Geelong. He has finally come to the understanding that this industry is absolutely critical to Geelong's manufacturing future and that the measures that are contained in this bill will assist firms to innovate, invest, engage in research and development, and engage in export market development. That is important and I am not going to be so foolish on the floor of this particular House to criticise a set of assistance measures which are well targeted and are designed to encourage the industry along that path.

The honourable member opposite mentioned the Ford Motor Co. in this debate, as I have. It is a very important company to Geelong's manufacturing future. I am very pleased that, as shown by the recent lift in sales, Ford has improved its position in the marketplace. I congratulate those workers and managers at the Geelong plant and at the plant in Melbourne for the way that they have put their shoulders to the wheel in the face of significant market adversity to turn an unprofitable situation around to one where the company is looking with greater optimism to its future. We have seen the sales of the company increase significantly in July. For example, Ford sales in July totalled 11,578 units, which represents the company's best July results since the year 2000. That total figure is up 2,359 units on last year's number, which represents a 25.6 per cent increase. The Falcon passenger sales in July totalled 6,729. That is up 1,944 units, or a 40.6 per cent increase on the July 2000 figures.

The company is looking forward to a better market position. It is looking forward to increased sales, as other car manufacturers are. We are looking at sales that may well go over the 830,000 units mark, which is a credit to the industry and a credit to the work force in the industry. We are all looking forward to Ford's release of its new Territory. It has invested quite heavily in this new product. From the discussions that I have had with Ford executives both here and in the United States, I must say that we are looking at a very optimistic scenario as far as this particular product is concerned. So I congratulate all those involved with the design and I congratulate the workers and managers for their efforts in bringing this new product to the marketplace.

While I am on the subject of Ford, I wish to thank Ford for their hospitality when I was recently in Detroit. I visited their plant in Detroit earlier this year, and I had discussions with top executives in the Ford Motor Company. The overwhelming impression that came through in those discussions was the fact that they had an enduring respect for the Australian operations and the Geelong plant. That was expressed in the confidence of head office in making those investments in Geelong and in the Victorian operations. We thank them for that, because without that continuing investment the company would not be able to sustain its position in a competitive market—that is the reality. We note that the company does not have a large export performance, so it must rely on the successful introduction of new models into the marketplace to sustain the employment levels over time.

I also want to congratulate the Ford company on its sponsorship of the Geelong Football Club. Recently they tied up another five-year deal. It is the world's longest-running sports sponsorship, and I congratulate both the Ford Motor Company and the Geelong Football Club on the 78 years that they have been together. It is an extraordinary partnership between a club and a major corporate sponsor, and I think the parliament should acknowledge these sorts of initiatives because they are important to the local community.

The honourable member for Corangamite, as we know, has a foot on both sides of the fence. I also note the presence in the parliament today of the honourable member for Franklin, who happens to be a die-hard Melbourne supporter. He would be comforted to know that there is another Melbourne supporter in the House at this point in time: the honourable member for Corangamite. However, the member for Corangamite has had a late conversion to the Geelong Football Club. Obviously, that was done for political reasons, but I guess we will have to forgive him for his sins. We just hope that, when Geelong does play Melbourne, he does not have difficulty with the barracking.

However, there is a more serious issue I want to raise with the honourable member for Corangamite, and it goes to this whole issue of industry policy. In his contribution to the debate, the member was quick to blame the union movement: it is always the unions' fault, isn't it! Going back in time, we know that the Ford plant in Geelong and the industry did have a difficult industrial relations relationship. That was not just the problem of the unions; it was the problem of management as well. Thankfully, today we have a more enlightened management. We have changed the culture of industrial relations.

What we have in the car industry today is this: an enlightened union movement and an enlightened management of the car and components sector, but we still have a government back in the dark, dim industrial relations days. The member for Corangamite demonstrated that today, peddling the same old hoary myths. Let me remind the House that on 23 June 2003 he got up in the House of Representatives and asked a dorothy dixer to the Hon. Joe Hockey—I am not quite sure of the minister's title at the time; perhaps he was the acting industry minister. This is what the minister said in regard to the member for Corangamite:

That is because in his electorate, in Geelong, we have seen the impact of union thuggery at the Ford plant, on the components industries, on delivery drivers, on truckies and on all the small businesses that rely on the automotive industry, from the sandwich suppliers right through to the components businesses. They are all affected by industrial thuggery.

This was an insult not only to the union movement but to the management of Ford. The honourable member for Corangamite ought to come into this House and fess up to the fact that he asked the dorothy dixer that let this dog loose on the industry, because he belled the cat on his real attitude to this industry.

You are not interested in a rational industrial relations relationship between the management of this industry and the union movement. What you are interested in is provoking the union movement, provoking the management and doing all you can to get an industrial relations climate that belongs in the 1950s—that is the reality of your position. How you can come into this House and argue that this is a wonderful package and a wonderful industry then via the back door go out and seek to undermine the efforts of the union movement and the managers to get on with the job because of your confrontationist industrial relations policies and your deception, I really do not know.

The opposition have a very clear policy with regard to manufacturing industry. We seek commitment from industry to securing existing employment levels and improving them. We want adherence to core labour standards, including relevant awards and legislative protection. We want new jobs. We want new investment, increased exports and a continuing commitment to skill development, research and high-quality design performance in Australia. You really do not get all of that particular policy in the coalition government—you only get it when Labor are in power.