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Monday, 10 November 2008
Page: 10269

Mr PERRETT (2:25 PM) —My question is to the Minister for Finance and Deregulation. What recent action has the government taken to protect Australia against the global financial crisis?

Mr TANNER (Minister for Finance and Deregulation) —I thank the member for Moreton for his question and congratulate him on the launch of his book, The Twelfth Fish, which I was privileged to play a small part in. And do you know what—it was all his own work! That is unlike the attitude of members opposite, who regard writing as something for staff to do, and even when the staff do it it is not the staffer’s work. In some instances they get the father-in-law to do it. That is what the member for Higgins did. So congratulations to the member for Moreton—a new member of the Labor book club. It is good to see.

The government has taken decisive action with respect to assisting the Australian vehicle manufacturing industry to meet the challenge of fundamental transformation of that industry. We have put forward a 13-year package of over $6 billion to move the Australian industry to a different configuration to enable the production of fuel-efficient, low-emission vehicles. And this package is a significant element in the government’s wider economic strategy—in particular the strategy focusing on the impact of the global financial crisis. Australian industries’ challenges are by no means unique. By no means are the challenges facing vehicle manufacturing in Australia unique. In many respects the challenges that are facing the industry here are similar to those facing the United States industry. There is a significant difference, of course, and that is that our industry is of a much smaller scale and therefore much more vulnerable to shifts in consumer demand and wider economic circumstances.

It is notable that President-elect Obama is expected to pursue similar strategies to assist a transformation to a more environmentally friendly product in the United States vehicle manufacturing industry. The centrepiece of this strategy is a 10-year, $1.3 billion Green Car Innovation Fund, which leverages on a three to one ratio of private investment to environmentally sound technologies. That is a substantially larger fund than was originally promised by the government at the last election. In addition there is a $3.4 billion Automotive Transformation Scheme to underpin the competitiveness of the motor vehicle manufacturing industry. It is important here to note that this money is to flow on the basis of actions and on the basis of contracts. It is not money upfront; it is money in response to actions and decisions and real investments on the part of the vehicle-manufacturing companies. A third aspect is to continue with the phase-down of tariff protection from 10 per cent to five per cent in January 2010. That, of course, ensures that what is the most inefficient and most regressive way of assisting the industry, through tariff protection, is continuing to be reduced, as previously indicated.

Together with the decline in the value of the Australian dollar, cuts in interest rates and, of course, the stimulus from the government’s Economic Security Strategy, these initiatives are good news. They are good news for the vehicle-manufacturing industry, they are good news for the 60,000-odd workers directly employed in the industry and they are good news for the much wider range of people whose economic security and opportunity depends on Australia having a strong vehicle manufacturing industry. But it also requires the manufacturers to deliver. This proposal—this plan—requires the manufacturers to invest, to take risk and to demonstrate their commitment to Australia in the long term. They face very substantial challenges and they are, in some respects, dealing with more or less a perfect storm at the moment, given the wider global circumstances and the change in consumer demand. But they have a strong base on which to move forward and the government is committed to assisting them to transform their companies into much more viable activities and operations over the course of the next 10 or 12 years.

In conclusion, the government is acting decisively to tackle the economic challenges facing this nation, whether with respect to guaranteeing bank deposits or the Economic Security Strategy that is designed to stimulate economic activity, growth and jobs in the Australian economy or the development of a Carbon Pollution Reduction Scheme in order to deal with that enormous challenge of climate change that was so comprehensively neglected by the previous government and to invest in this instance—via today’s announcement—in the structural transformation of one of Australia’s most important industries. The global financial crisis is presenting Australia with an enormous challenge, but the businesses of Australia, the working people of Australia and the government of Australia are up to that challenge and together we are going to meet it and defeat it.