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Monday, 27 February 2012
Page: 1958

Mr ZAPPIA (Makin) (20:11): In moving the motion that stands in my name, the House will note that there are four parts to it. In the course of my remarks on this matter, I will try to touch on each one of those four parts. The first notes that the General Motors Holden plant in Elizabeth is an iconic South Australian industry that directly employs around 2,500 people. In recent times, there has been considerable public debate about the economy and jobs in Australia—rightly so, because the two are linked. A strong economy means more jobs, and if people are working it is a sign of a strong economy. A strong economy and jobs mean security for Australian families. Long-term jobs and economic security are important not only to Australian families but to whole communities and the country as a whole.

The notion that we are debating goes to the heart of jobs and economic security for tens of thousands of people not only in South Australia but right around the country. If General Motors Holden's operations in Australia were to cease or even be scaled back there would be a cascading effect through other employment sectors and, in turn, through communities across the country. The Gillard government well understands that. The South Australian government well understands that. The only political party that does not seem to understand that is the coalition, both here in federal politics and at state level in South Australia. These coalition parties do not understand the importance of the automotive industry to South Australia and to the nation as a whole. That is why earlier this year the Minister for Manufacturing Senator Kim Carr and South Australian Premier Jay Weatherill travelled to Detroit in the USA to speak to executives of GM and Ford in order to secure a long-term future for GM and Ford operations in Australia.

Senator Carr and Premier Weatherill should be commended for doing so, and that is part of my motion. They should be commended because their trip to the USA sent a very clear message to all about the importance of the car industry to Australia. It is important as an industry sector and it is important to the lives of tens of thousands of people who directly depend on it. Their visit to Detroit and the USA sent a very clear message to the people that work in that industry gave them hope for the future, knowing full well that around the world the automotive sector is finding it very difficult right now. If ever there was a time when political leadership was needed, securing the long-term future of the Australian automotive industry was such a time. I commend Senator Carr and Premier Weatherill for making the time to go and speak directly with the heads of the automotive sector in the USA. Those who argue that we should stop supporting the auto industry take a simplistic, narrow-minded view of its importance to our economy, to the creation of jobs and to the lives of workers within that industry. The GMH plant at Elizabeth effectively started off in 1958, and it has been critical to the economy of Adelaide's northern region for nearly 50 years now. Today, as I said earlier, the plant employs about 2,500 employees. It makes about 90,000 cars a year, and I recall that only a few years ago the figure was almost double that. In the last decade alone, it has generated hundreds of millions of dollars of investment in the new automotive supply industries in Edinburgh Parks, located adjacent to the GMH plant and providing GMH components on a just-in-time production system. I am very familiar with that because it happened during the time that I was mayor of the city of Salisbury and I know how important it was not only to GMH but to the region as a whole and to so many other industries that are reliant on those businesses that have established themselves at Edinburgh Parks. It truly is a multihundred-million dollar investment, which today generates and creates thousands of jobs.

Each of those businesses there not only today support the automotive industry but industries around the country. So the importance of those industries extends much further than just the region within which they are located. The direct and indirect jobs created would, as I have said, run into tens of thousands. But there is a broader effect on the region when jobs are lost, as we have seen in other communities around the country. I am sure that the member for Riverina would understand the impact of what happens to communities when jobs are lost because, apart from the jobs being lost, what we also then start seeing are higher social costs—people defaulting on their mortgages, health costs rising and the like. That would certainly happen in the region that I represent if GMH was not there or started to scale down its operations.

When members opposite criticise the government assistance to the automotive industry, consider what the alternative social costs would be if we do not support that industry and it collapses. Even doing a very basic calculation of income tax lost in one year alone if the plant were to close, you would soon find that the amount of income tax revenue lost to the government would probably be far, far greater than the assistance that is being talked about. That is without looking at unemployment payments, training packages and losses in other industry, and that is simply from that plant alone. Yes, it is true that some employees might find alternative work in the long term, but that will not happen straight away. Even if it does happen, they will need reskilling, because the employees we have at GMH at Elizabeth are very highly skilled employees but they are skilled for the job that they were doing. Their skilling was part and parcel of their training over the years as part of their employment with GMH. It would be an absolute shame to lose those skills altogether.

I have talked about the indirect job losses that would also flow as a result of the GMH plant closing because the automotive industry in this country underpins much of our engineering and advanced manufacturing expertise. The skills and know-how that emanate from the GMH plant flow through to other industries. That would all be lost. But, of course, there are other implications and I just want to quickly talk about a couple of them. One of them is this: if that plant closes, the exports from that plant close. The sales of Australian made cars in Australia also decrease, and that means more imports. So we reduce our exports and we increase our imports. That affects our balance of trade and then there is a flow-on effect in other economic impacts. The automotive industry in this country employs some 46,000 people directly and around 200,000 or more indirectly. Then if you put on top of that all the manufacturing jobs that are somewhat associated with the automotive industry, it is a huge base that is entirely reliant on it. When we talk about support by the government for the automotive industry in this country, it is important that we put it into perspective by comparing it with what is happening in other countries. I am sure my colleague here the member for Wakefield, who has spoken on this issue on many occasions, will talk about that comparison. It is clear to me from the figures that I have seen that when we put on the table what this government is putting on the table in terms of taxpayers' dollars—which equates to around $18 per person in Australia—and we compare that with what is happening overseas—with figures of up to $265 per person in the USA—we start to understand that the money that is being requested is not unreasonable. Furthermore, whatever the government puts on the table is usually matched three or four to one. So, again, what it is really doing is bringing money into this country.

The last point I want to make refers to the condemnation of the coalition for their particular position on it. The automotive industry does not operate on a year-to-year basis. They need a five-year forward plan program in place. They need to know today what is going to happen in five years time in order to make the necessary changes and investment. For the coalition to say that they are going to cut $500 million out of the government's support program for the automotive sector in this country is to create uncertainty for the whole of the community and uncertainty for the industry.

Let me assure members of the coalition that the people I speak to understand that. The communities that I speak to understand that, the journalists who have written about this story understand that and, certainly, the workers at GMH understand that. The coalition should be condemned for creating the uncertainty they have in the minds and the lives of those families living in the region I represent and which the member for Wakefield represents because of their intention to cut $500 million from government assistance to the automotive industry in this country. (Time expired)