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Monday, 27 February 2012
Page: 1967

Mr HUSIC (ChifleyGovernment Whip) (20:47): I rise to speak in favour of the motion moved by my colleague the member for Makin—not, obviously, as a South Australian MP but recognising that we share an interest, as a number of us do on this side, in the future of manufacturing in this country. The electorate of Chifley relies more on the manufacturing sector to provide jobs for local residents than many other electorates around Australia, and just as many as my colleagues here. The latest available census statistics show that over 10,000 people who live in Chifley are employed in manufacturing, accounting for about 16 per cent of total employment. That is considerably higher than the 10.6 per cent average across Australia.

As the Australian economy grows it must do so in a way that includes and supports a vibrant manufacturing sector. Holden—and for that matter Ford and Toyota—are crucial to sustaining manufacturing in this country. The sector itself, as has been reflected on, employs around 46,000 people and another 200,000 people in related manufacturing and service sectors. It consumes—and this is a staggering amount—$1.3 billion in locally manufactured iron and steel, $440 million in polymer products and $157 million in chemicals. And while much has been made of the extent of government assistance to the sector, automotive manufacturing contributes significantly to the overall economy. Holden employs almost 5,000 people, each of whom contributes to the economy through their own taxation and spending. Holden itself estimates that it pays more than $40 million a year in income tax, $2.1 million in fringe benefits tax, $17½ million in payroll tax and $2.1 million a year in property tax. This is a sizeable contribution by this firm.

Australia is only one of 13 countries in the world capable of producing a car from design through R&D to assembly. It is imperative that we hang on to that capability, because it is inherently linked to our ability to innovate. Labor invests in the car industry through programs aimed at improving productivity, global competitiveness and clean technology. During the height of the GFC Labor kept the automotive industry afloat through the $5.4 billion New Car Plan for a Greener Future. It is something that I am proud of; it is something a lot of government members are proud of. Compare that with what the member for Warringah, the Leader of the Opposition, would do. He would cut $1.5 billion in future support from the industry when it needs it most. What does that do to confidence in future policy settings? This policy is not universally accepted in coalition ranks. I understand that there are many members opposite who voice their concerns about what the coalition is proposing to do. The opposition's policy will make it impossible to attract new investment in vehicle models and will put an end to the process of R&D and capital acquisition, the development and adoption of new technologies and the creation of more jobs in the industry. The Prime Minister has given the assurance that, while ever Labor is here, we will be making cars in Australia.

Those opposite make a big deal about the level of industry assistance we are providing, but I would remind them that this is a global industry and we do need to look at what other governments around the world are doing to support their sectors. Australia has a five per cent tariff imposed on passenger motor vehicles and parts, and that is the third lowest in the auto-producing world. Tariffs in the EU and the UK stand at 10 per cent, compared with our level; in China, 25 per cent; and in India, 60 per cent. Research by the Federal Chamber of Automotive Industries has found that Aussie car makers are receiving less than $20 per person in government support. In the UK it is $25 per person; in the US, $250 per person; and in Sweden, as much as $350 per person.

That is a huge difference, as reflected on by my colleague the member for Hindmarsh. When Holden's parent company, General Motors, filed for chapter 11 bankruptcy in 2009, the United States government purchased a 60 per cent stake in the new GM company. During this time, GM Holden continued to stand on its own two feet, without any support from its parent company, and that is a sign of its economic health. The local automotive industry is facing some significant challenges at present, which will exist for some time. On the face of those challenges, such as the high dollar, the rising cost of input materials and the collapse of consumer sales in major export markets hit by the GFC, the last thing we need to do is remove support and say to the 46,000 workers in this sector that they are not valued.

Debate adjourned.