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Monday, 11 October 1999
Page: 9421


Senator MINCHIN (Industry, Science and Resources) (9:39 PM) —After that diatribe of personal abuse, it might be appropriate to return to debating the car industry. It was disappointing to see Senator George Campbell indulge himself in that way, particularly when, as Paul Keating says, he has the bodies of 100,000 manufacturing workers hanging around his neck. The government's commitment in 1996 to seek 200,000 jobs in manufacturing was, of course, a commitment designed to replace the 200,000 jobs that had been lost while Labor was in office. That was the number of jobs lost in manufacturing by the Labor government when it was in office.

In the time remaining, I would like to speak about this legislative package and remind the Senate that this results from the Productivity Commission inquiry into the automotive industry which made certain recommendations to the government in 1997 so far as the post-2000 tariff environment was concerned. We actually differed with the Productivity Commission and decided in our response to that Productivity Commission report that there should be a freeze on automotive tariffs between 2000 and 2005. That was a very deliberate and sensible decision designed to ensure that this industry was in a position to make a transition to a lower tariff environment. It incorporates a scheme that is to the value of $2 billion to assist the industry to adjust to a new tariff in the environment.

This is a scheme which the industry has strongly backed. It has the support of all the major car manufacturers, all the major industry associations and indeed at stages it is alleged to have had the support of the ALP. I remind you that its components are a freeze on tariffs at 15 per cent in January 2000 until 31 December 2004 when the tariff will drop to 10 per cent on 1 January 2005, and a $2 billion assistance scheme to enable the industry to make the adjustment to that lower tariff environment.

The ALP love to have it both ways. They run around saying to the industry, `Look, we know you support this scheme. We know you want this scheme in place as soon as possible. Sure, we are going to support the scheme.' But what do they do when they come into this place? They say, `Sure, we're supporting it, but we're going to move an amendment to remove one of the absolutely fundamental parts of the whole package. That fundamental part of the package is that tariffs will drop to 10 per cent on 1 January 2005.'

Senator George Campbell was rabbiting on about giving this industry certainty. Yes, that is what we must give it. The ALP is proposing to destroy the certainty which the industry needs by suggesting that there be no legislated drop in the tariff to 10 per cent in 2005 but a commitment to yet another review. That is exactly what the industry does not need. It will have no idea what the tariff environment will be in the post-2005 era.

What this industry wants is certainty, just as Senator George Campbell said. We are providing that certainty by legislating that the tariff will stop being reduced at 15 per cent for five years and then move to 10 per cent. The only rationale for the biggest industry assistance scheme this country has ever had, the $2 billion ACIS scheme, can be that it is about enabling this industry to make the adjournment to a 10 per cent tariff. If you do not have a reduction legislated for a 10 per cent tariff applying in the year 2005, there can be no rationale for the whole $2 billion ACIS scheme, or to ask Australian taxpayers to provide that level of support to this industry. This is a unique level of support. Virtually every other manufacturing industry in this country now faces a tariff of around five per cent. The only industries in Australia that essentially do not have that relatively low tariff environment are the TCF industry and the automotive industry, both with tariffs currently above 15 per cent, enjoying at least three times the rate of protection of every other manufacturing industry in this country.

We believe, as do the ALP, that these two industries, which had extremely high levels of protection, do need to be given the opportunity to adjust to a lower level of protection. That is why in both the case of the TCF and the automotive industries we are putting in place adjustment schemes. They are based on the fact that everybody else in this country is facing a five per cent tariff now and that the automotive and TCF industries must, like the rest of manufacturing industry in this country, adjust to a lower tariff environment. It will still be, in 2005, both for the automotive industry and for the TCF industry, a higher rate of tariff than is generally applicable to any other manufacturing industry. We need to say as a parliament to this car industry, `We are going to give you a five-year freeze in the tariff. We are going to give you a $2 billion automotive assistance scheme, but that is provided on the basis that you know and plan for a 10 per cent tariff in the year 2005.' We believe that is absolutely fundamental to this.

What the opposition and now the Democrats are saying is not that they do not support this package at all but that they are prepared to vote for an amendment which undermines the whole integrity of the package. This is not something that will be welcomed by industry.

The consequence of what the ALP and the Democrats have said tonight is that this bill will go back to the House of Representatives, where the Senate amendments will be rejected. We will not have a legislative package, a package which the opposition says it supports. We will not have that package, and the industry will face further uncertainty. The industry supports this package. It wants it legislated. It could be all done tomorrow or the next day, but no, we have the opposition and the Democrats playing games and trying to play up to certain segments of the political marketplace that they believe they can suck up to by not providing the certainty that this industry wants.

The industry wants this scheme as it is presented to the parliament, and the parliament should vote for it. All you are doing is making this a political football which will now bounce around between the two houses and provide no certainty or security to this industry and will further delay the industry's investments. And that can only hurt the workers that you profess to support. So far as the ALP's professed support for workers is concerned, that is laughable given this opposition's refusal to support the GST package, the best legislative tax package there could ever have been for manufacturing in this country and for the car industry.

This is the idiotic opposition which, when in government, reduced the sales tax on motor vehicles to 15 per cent to match the then proposed GST as a sop to try to demonstrate that under Labor car prices would be the same as under the then coalition. But, in the most flagrant abuse of the trust of the electorate and a damnable lie to the Australian people, immediately after the election, it raised the price of motor vehicles by virtue of an increase in the sales tax not back to the original 20 per cent but up to 22 per cent. It was a 50 per cent increase in the sales tax on motor vehicles perpetrated by the then ALP government immediately after it had lied its way back into office in 1993. Was there any concern or compassion shown by the ALP then, either for consumers of motor vehicles or for the workers in motor vehicle factories, by that 50 per cent slug, that 50 per cent increase in the tax?

We do not want to hear all this crying from the ALP about the workers in the motor vehicle industry. We are the ones who are delivering for the workers in the motor vehicle industry. We are the ones who are putting forward a package, in the tax package, that will reduce the price of motor vehicles by some six to eight per cent, make motor vehicles cheaper for Australian consumers, Australian workers, and provide a very good future for Australian workers because their products will no longer wear the tax slug which this opposition wants to maintain on this industry.

An integral part of our comprehensive package for the automotive industry is this $2 billion support package and the tariff certainty that this bill provides of 15 per cent for five years, reducing to 10 per cent. We urge the ALP to rethink its position overnight and not to destroy, by moving these amendments, which the government cannot accept, the certainty which the automotive industry needs and deserves.

I do put on record that we have no in-principle objection to the review of post-2005 arrangements commencing prior to 2005, but there are two federal elections scheduled to take place before 2005. We believe it is a matter for the government of the day, which we believe will be us, given the performance of this opposition. We do believe that is a matter for the government of the day and I certainly have no objection to the review commencing prior to 2005. But we do not want to legislate to that effect and we do not want to provide any signal that there will be any other position than that tariffs will reduce to 10 per cent on 1 January 2005.

Debate interrupted.