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Monday, 10 November 2008
Page: 36


Senator FISHER (4:10 PM) —As a senator for South Australia, where the car-manufacturing sector is a key part of the local economy, I rise to speak in support of this matter of public importance. There is no question that the global financial crisis is having an impact upon Australia’s economy and in particular on the motor vehicle manufacturing sector. Nor is it any secret that the motor car manufacturing sector has struggled with a series of challenges for a series of years. My home state of South Australia has a proud history in car manufacturing from the times of Tom Playford. But in recent years we have seen job losses in the sector. We have seen job losses at car-making firms across Australia, and South Australia in particular. In 2006 South Australia and Victoria contributed 75 per cent of national automotive industry employment. In South Australia over 11,000 people were employed in the sector.

The coalition does more than recognise the vital importance of the car-manufacturing sector to the economy, both nationally and of course in my home state of South Australia, and, indeed, the co-relative contribution made by the components-manufacturing sector, still employing some 200,000 workers across Australia. But our concern is that today’s headline grab by the Rudd government fails to address the short-term threats to the industry. The government has promised something like $6.2 billion over 13 years, but our $7.7 billion or thereabouts a year industry is at serious and immediate risk because the Rudd government has failed in large part in its response to the turbulent global financial situation. We have already had more than 900 workers being retrenched at South Australia’s Clovelly Park plant in the Mitsubishi manufacturing regime earlier this year. The Motor Traders Association of New South Wales is warning now that dealerships are at immediate risk, and I will go to that in more detail in a minute. According to the association, dealers employ about 90,000 workers across Australia and some 40 per cent of those dealerships employ about 30,000 Australian workers. They stand to be critically affected by the forecast pullout of General Electric and GMAC from financing the sector. The Rudd government announcement today does zip to address that potential short-term crisis, the credit squeeze that is facing this sector. Indeed, the Rudd government announcement today erodes the capacity of these dealers to keep cars on their floors. Effectively just seven weeks out from the forecast pullout of GE and GMAC from the sector, the government’s announced initiative fails to address the point.

What did we have instead? We had the Prime Minister on the weekend saying things like ‘we need confidence in the economy’ and ‘next year is going to be ugly’. But what does that do? All that does is erode confidence and give people concerns. It does not provide any information about why next year is going to be ugly. It does not provide any detail as to the government’s plans to address what is otherwise going to be an ugly year. As the Leader of the Opposition has said, in failing to provide useful information, all the government does is tell the Australian community something that no-one really knows about—other than that it sounds bad.

The Prime Minister owes Australians a range of explanations, but in particular he owes them an explanation about the Rudd government’s response to the global financial crisis. The Prime Minister owes Australians an explanation as to why the government entered into an unlimited bank guarantee deposit scheme, which has had so many adverse impacts. Indeed, what other developed country has proffered a supposed solution that has made the situation worse instead of better? That is a distinction the Prime Minister enjoys, and he must explain it to the Australian people. Indeed, in the context of the vehicle manufacturing sector, he owes Australians an explanation as to why he has unveiled a response to the global financial crisis that makes it worse for those companies that would otherwise be financing dealers to keep their cars on the floor. The CEO of the Motor Traders Association of New South Wales, Mr James McCall, speaking about General Electric and GMAC on the AM radio program this morning, said:

They fund an arrangement whereby the dealers stock, the cars they keep in their showroom and looking across New South Wales, there is 500 dealers with an average of 100 cars each in showroom, you are looking at very, very big money.

Now that financial arrangement was funded by GE and GMAC probably to the extent of about 40 per cent of the total market or over 40 per cent of the total market.

Now if the dealers can’t fund their floor room, their showroom stock, then they are in breach of their franchise agreement with the manufacturers and the manufacturers will not renew their franchise agreement so they will have to close their doors.

Why hasn’t the government’s package announced this morning addressed the short-term crisis facing the sector? Where are the details behind the policy announcement? We have no details on the grants process, no details on how a structural adjustment scheme will work, no details as to the cost of the scheme to taxpayers and no details as to how the innovation council will work—and the list goes on.

This is no time for yet another policy to be announced on the run; there is no time for spin over substance without the detail and without the depth. Where is the evidence based policy to address the short-term crisis facing the car manufacturing sector? Instead we have a scenario that looks like the government’s announcement six months ago to provide $500 million for the green car innovation fund from 2011. Today we learn that the government will more than double the funding available for that program, but they are yet to officially commence— (Time expired)