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Tuesday, 1 December 2015
Page: 9431


Senator KIM CARR (Victoria) (16:07): At the request of the Chair of the Senate Economics References Committee, I present the report Future of Australia's automotive industry together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

Senator KIM CARR: I move:

That the Senate take note of the report.

I would like to say a few words about this report. Australia's automotive industry is undergoing fundamental transformation, and I use the word 'transformation' deliberately. I am not one of the doomsayers who believe that the industry will die when the last locally produced car rolls off the production line at the end of 2017. Labor remains confident that with the right policy settings Australia can attract new automotive manufacturing investment and, beyond manufacturing, the automotive industry involves much more than the production of passenger cars. These other activities will include the aftermarket manufacturing; engineering and design; the manufacture and adaption of large trucks and other heavy vehicles; retailing, servicing and smash repairs; sales support; automotive dealerships; and training.

There is no doubt that beyond 2017 the automotive industry will continue and will include manufacturing in some form. The real question is what will be the scope and the extent of manufacturing activity, and the answer to that question will depend upon government policy. That is why 12 months ago the Senate referred this matter to the Economics References Committee. The committee's interim report, tabled in August, made recommendations intended to support the component manufacturers, the section of the industry most vulnerable to the departure of car markers. It is vital that the industry capabilities they possess are maintained.

The automotive industry has always been the great repository of skills and knowledge in advanced manufacturing in Australia, and preserving those skills will be the key to attracting new investment. It will be the people that attract the investment. We have got to have the right trained people to maintain the capacities to attract that investment.

The main recommendations of the interim report concern the provision of co-investment through the Automotive Transformation Scheme. The inquiry called on the government to maintain funding under the scheme through to 2021 as the ATS Act provides. The inquiry also recommended that eligibility for ATS be broadened and that it be reconfigured as an advanced manufacturing, engineering and design scheme. It would still be automotive related but it would be able to assist supply chain firms in diversification and entering new markets.

The final report expressed the committee's conviction that the government should set in place policies that encourage diversification, growth and innovation in automotive manufacturing in Australia. It calls for a whole-of-government approach, with the allocation of resources from a range of departments to ensure that the processes of transformation continue. To facilitate this and to develop a coordinated national framework for automotive policy, the committee calls on the government to establish an automotive industry task force. The task force, with representatives from industry, from unions and from governments, would build on the work of the AutoCRC and the Automotive Australia 2020 road map project. This was an integral part of the New Car Plan, which, of course, provided for the opportunities to be identified for future investment and future growth in the automotive industry in this country.

The final report also makes recommendations intended to avoid a social and economic catastrophe in the regions most directly affected by the shutdown in car-making, particularly in Victoria and in South Australia. I might add that there is not a state in the Commonwealth that will not be directly affected with massive job losses as a consequence of the government's actions in driving General Motors and Toyota out of Australia. No-one pretends that the impact will be anything other than severe.

This should be seen not just as a time of challenge but as a time of new opportunities. If we develop policy wisely and we preserve our skills and knowledge base, the automotive industry will survive—and not just survive; it will flourish. There are international precedents for this kind of revival. At the end of the 1980s, the United Kingdom automotive industry was predicted to die in much the same way as some of the smarties in this town have suggested about the Australian automotive industry. Of course, that was a direct result of the devastation of Margaret Thatcher.

But in the United Kingdom the automotive industry did not die.

Senator Bernardi interjecting

Senator KIM CARR: No, the automotive manufacturer Holden was driven out of this country by the actions of Mr Hockey and the acting Prime Minister at the time, who goaded General Motors to leave, and now we have a consequence where it will cost considerably more—I mean many, many times more—in social security payments and other disaster relief as a consequence of the actions of this government than will ever be spent in terms of co-investment for this industry.

I put to you that in the United Kingdom a similar experience was seen to happen but both sides in politics came to realise how important the automotive industry was to the United Kingdom. In the United Kingdom now the Conservative government is investing heavily in co-investment so that the British automotive industry is amongst the most prosperous in the world. The United Kingdom probably has the largest export sector in Europe and it has come a long way from the devastation of Margaret Thatcher. The United Kingdom automotive industry is now a world leader and that is because it has become a bipartisan issue, yet again, as support for the automotive industry once was in this country.

There is no reason in my mind why this could not happen here. The two reports of this inquiry show the necessary policy work has already begun. But what is really needed here is political will. I urge senators on all sides of the chamber to study the committee's report carefully, to adopt its recommendations and to help build the future of the Australian automotive industry.