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Wednesday, 13 November 2013
Page: 241

Senator XENOPHON (South Australia) (16:31): I cannot do justice, in the limited time I have, to this debate, but it is important that as a nation we do justice to the automotive manufacturing industry and the tens of thousands of jobs that rely on it: in my home state, 16,000 jobs; in Victoria at least 33,000 jobs—plus the multiplier effect and the flow-on effect for the small businesses that rely on this industry. I have spoken to the component manufacturers and in South Australia they would be devastated by the loss of General Motors. If General Motors goes that will be the end of our automotive industry in this nation, because I cannot see how the supply chain will not collapse. It could mean that Toyota, a very fine manufacturer of motor vehicles in Victoria, will also go with it.

I want to say at the outset I have been working very constructively with federal industry minister Ian Macfarlane, South Australian industry minister Tom Kenyon and South Australian Premier Jay Weatherill. We all want the same thing, I believe, and it is important that we look at the consequences of what happens if we do not have an automotive industry in this nation. It will be devastating and we will not get these jobs back. The dry economic rationalist thinks that somehow, magically, these jobs will be created somewhere else. It does not work like that in the real world.

Free trade is not fair trade, when you look at some of the consequences of what we are up against here in Australia. I will give you one example: it is contained in the Allen Consulting Group report prepared for the Federal Chamber of Automotive Industries and released just a few days ago. That report makes a very telling point. We have a free trade agreement with Thailand. That means we are supposed to be sending our goods to Thailand with no duties or tariffs, and vice versa from Thailand. Well, Thai-made cars come here; but if you want to buy a Ford Territory—a very fine Australian car—in Thailand, what does it cost? Not $38,000 or $40,000, the recommended retail price here in Australia. It will cost $100,000 because of non-tariff barriers. I do not know how on earth we got ourselves into that position but we are being treated like mugs when it comes to these so-called free trade agreements. It is not a level playing field and that must be acknowledged.

I also want to acknowledge at this stage the great assistance and advice I have been getting from Robert Debelle who is an expert on these issues in Adelaide and has worked very closely with the automotive industry. I am very grateful for Mr Debelle's assistance and for his innovative approach.

We also need to acknowledge what happens if we lose automotive manufacturing in this country. Information given by Goran Roos, the manufacturing expert and adviser to the South Australian government who is well regarded internationally, is this: the automotive industry can serve as an example. It is an industry that has been and is under the highest pressure to continuously increase its productivity. Hence it has not only achieved, and is achieving, astonishing results but is also an industry that has driven productivity growth in other areas of the manufacturing sector. If we lose this industry, we lose that cutting edge; we lose that innovation. If you look at what other components manufacturers are doing—SMR in Adelaide to give you one example, with some of their technology in terms of mirrors for vehicles—it is simply outstanding. In conjunction with R&D and universities, this is the future of our industry. If we lose it there will be nothing to replace it. It will be, as Allen Consulting Group has said, a $21½ billion hit to Australia's economy.

To think that we are competing on some sort of level playing field with the rest of the world is incredibly naive. My plea to this government—and I say this in a constructive way—is: does this government want to be the government that presides over the demise of our automotive industry? Without this industry, in the next three or four years every week people will be laid off, factories will close, families will be devastated and large parts of the northern and southern suburbs of Adelaide will be turned into industrial wastelands. We need to fight for this industry. We need to be smart about it and we need to acknowledge the enormous flow-on benefits of this industry. I will continue to work constructively with Minister Macfarlane, who I believe is passionate about this industry, and with the South Australian government. I hope that the Victorian state government picks up on this issue, which I am sure Senator Madigan will talk about shortly.

The simple message is: once this industry is gone, it will not come back. We will be left with absolute devastation in the suburbs of Australia if we lose this critical industry.

The ACTING DEPUTY PRESIDENT ( Senator Bernardi ): Thank you, Senator Xenophon. Senator Farrell.