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Monday, 27 February 2012
Page: 1961

Mr McCORMACK (Riverina) (20:21): Certainly, the General Motors Holden plant in Elizabeth is an iconic South Australian industry. It is an important manufacturing base, the vibrancy and wellbeing of which is the very pulse of this nation's manufacturing heartbeat. The fact that GMH directly employs around 2½ thousand people is proof enough of just how vital it is to the Australian economy.

The indirect benefits that GMH brings to its home state and to the country generally are enormous. It is one of the most trusted automotive brands worldwide. The fact that Australians can drive a product built right here with care and precision, using Australian standards and Australian workers, instils a deep sense of deep achievement and pride in all of us.

The January 2012 visit to Detroit in the United States of America by the Minister for Manufacturing, Senator Kim Carr, and the South Australian Premier, Jay Weatherill, seeking to secure the long-term future of the General Motors Holden Elizabeth plant, was essential. It was the very least these important players in the whole equation could have done. They did what would be expected of them. They need to do anything and everything to support the jobs, direct and indirect, of thousands of South Australians. I agree with the member for Makin, who said that when jobs are lost there are high social costs to a community; people, unfortunately, end up defaulting on mortgages. Unfortunately, when jobs are lost our Prime Minister describes them, passes them off and dismisses them as 'growing pains'—a very unfortunate thing to say.

I believe the member for Makin when he says that the automotive industry underpins much of Australia's engineering and manufacturing expertise. He is right; he is so correct. As he pointed out, quite correctly, fewer homemade cars means more imports. This affects, as he correctly pointed out, our balance-of-trade figures.

But one of the greatest threats looming large over the Australian manufacturing sector is the carbon tax. To take effect from 1 July, the carbon tax will hit manufacturing hard, including the automotive industry. It will send many Australian jobs offshore. As a nation, we neither can afford nor need a carbon tax. The timing of it simply could not be worse. With European economies in meltdown and the United States of America facing such fiscal uncertainty it is simply unfathomable why this Labor government is pushing ahead with its carbon tax, which will hurt Australian families, which will hurt Australian manufacturing and which will hurt car makers such as GMH at Elizabeth.

The national divisional secretary of the Australian Manufacturing Workers Union vehicle division, Ian Jones, put it bluntly yet accurately when he said:

… the Prime Minister does not understand manufacturing's importance to the economy.

This Labor-Greens Alliance does not understand the importance of manufacturing. It has let the Prime Minister forge ahead with the carbon tax in order to stay in power. It is a tax which will affect all industries and do nothing to help the environment.

The Federation of Automotive Products Manufacturers chief executive officer, Richard Reilly, said:

We are going to be impacted by a carbon tax, and our competitors won't.

This government will impose a $460 million carbon tax on the automotive industry at a time when we should be bunkering down against the global downturn and doing everything we can to sustain and even to boost local manufacturing. In the 2010 election the coalition was upfront and honest with the Australian public about a $278 million cut from the Green Car Innovation Fund. Labor, however, slashed $885 million from the fund only months after the 2010 election—yet another example of a broken promise from a broken government.

Labor has broken $1.4 billion in promises to the car industry. It has jacked up luxury car taxes and made changes to the fringe benefits tax. In my electorate of Riverina the Wagga Motors dealership is seeing up to $15,000 dropped from the drive-away price of luxury imported cars as the standard model now includes all elements that were previously added extras. Wagga Motors dealership principal Scott Braid said:

We have to rely on turnover now (to make significant revenue), not up-selling to better packages. The Aussie dollar pressure is pressure on the manufacturer's margin and also our own.

The last thing Wagga Motors and other regional dealers whose margins are already under pressure need is for GMH in South Australia to be hit hard. The last thing regional motor dealerships need is for families to feel the full brunt of an unnecessary and unaffordable carbon tax to make buying that next vehicle an unrealistic option.

The Automotive Transformation Scheme is the biggest fund from which assistance is given to the auto industry, and it is a retrospective scheme. Certain parameters need to be achieved: production outcomes, investment in research and development and investment in plant and equipment. At Senate estimates this month it was revealed that at least $34 million may have been paid out in breach of Labor's own car industry funding legislation. In the words of the shadow minister for industry, innovation and science, the member for Indi, reacting to the Senate estimates leak, the government were saying: 'It's okay; you don't have to comply with any of these requirements for funding. If there is money left over in the fund, well, it is up to us. If you're nice to us we might give it to you.'

This government is borrowing $10 0 million a day. How can it make these promises? The coalition has provided generous support to the car industry when in government in the past. A plan was put together by the Howard government that was to run from 2002 to 2015, with a Productivity Commission review in 2008, underpinned by set parameters and guidelines with transparency, as with all things that administration undertook, being a hallmark. However, former Prime Minister Kevin Rudd abolished the plan in 2007 and in doing so stripped $1.4 billion from the car industry. On 23 January 2012 Toyota announced it would be axing 350 jobs at its Altona North factory. That is one in 10 jobs by mid April—literally a decimation. On 2 February 2012 another 100 jobs were lost at Holden. These are jobs that Australian families can ill afford to lose—families who pay taxes, families who have kids at school, families who just want job security for the future.

The manufacturing minister's stewardship of his portfolio, both in opposition and in government, has been underwhelming. He has been found to be wanting. He, along with the Prime Minister, said he wanted to be a minister in a country that still made things. That is a view all of us in this place should share. But, given what is happening and what this Labor government has in store, it is going to be a bumpy road ahead. In recent times, 75,000 workers have lost their jobs while being promised job security in the manufacturing sector, and the Prime Minister brushes this aside as 'growing pains'. On 3AW radio station earlier the minister himself said about manufacturing jobs, 'I wouldn't say anyone's job was safe.' Months later, the union movement itself was telling us that the manufacturing sector is in crisis. That was courtesy of the Australian Workers Union.

So we have a sector in which no job is safe, according to the minister, and sector that is in crisis, according to Labor's own union movement. This is not an ideal time to be foisting a carbon tax on the manufacturing industry and the largely unsuspecting people of Australia. I say 'unsuspecting' because just prior to the 2010 election the Prime Minister said, 'There will be no carbon tax under the government I lead.' And we all know that the government, in order to keep faith with the Greens and to keep faith with the regional Independents and to keep in office, has now turned around and imposed a carbon tax on an unsuspecting Australian people. The Prime Minister's words on the future of the car industry and business innovation at her so-called major speech on 1 February this year are hollow, because they lack credibility. The Prime Minister raised the role of sovereign risk in current global instability, but she failed to mention her own broken promises to the car industry, which have sparked that very reality here in Australia.

On 27 June 2011 GM Holden's chairman and managing director, Mike Devereux, said:

We cut a deal with the Prime Minister back in 2008 and then, mid-way through, the rules of the game changed.

… it certainly worries a multi-national parent when sovereign risk begins to be something that is bandied about in terms of doing business in Australia.

How true those words still ring today.

If the Prime Minister had a genuine interest in the car industry, in manufacturing or in innovation she never would have broken her promise not to introduce a carbon tax, which will be a $460 million burden on the industry. She would not have broken $1.4 billion of car industry promises. She would not have dumped manufacturing from cabinet. She would not have crippled government support for business research and development and she would not have completely failed to stem the worst rate of manufacturing job losses in Australia's history. This is also a Prime Minister who has such a poor understanding of the car industry that she ridiculously claimed Cash for Clunkers was a groundbreaking program and that it would have changed the way we live. Both of these programs have since been axed as part of the trashing of an amazing $1.4 billion of Labor broken promises to car makers.

Manufacturing jobs in the automotive industry are important and we should do everything we can to help them. But, unfortunately, the Labor government is not.