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Tuesday, 10 November 2015
Page: 8130


Senator RICE (Victoria) (15:42): I present the explanatory memorandum and move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

AUTOMOTIVE TRANSFORMATION SCHEME AMENDMENT (SECURING THE AUTOMOTIVE COMPONENT INDUSTRY) BILL 2015

The Automotive Transformation Scheme Amendment (Securing the Automotive Component Industry) Bill 2015 seeks to amend the Automotive Transformation Scheme in order to provide Australian automotive parts makers with a fighting chance upon the exit of the major car manufacturers from Australia. It will ensure our local automotive manufacturing sectors can maintain jobs by supporting industry shift to clean technologies like electric vehicles.

We know that the up-stream automotive industry in Australia is in crisis. With Ford, Holden and Toyota all exiting Australia, the last locally produced and assembled Australian motor vehicle from these companies is likely to roll off the production line by the end of 2017.

Not only will this see up to ten thousand highly skilled workers simultaneously enter a shrinking job market, but the stress on component and parts manufacturers will lead to further rounds of factory closures and job losses.

The evidence from previous rounds of such closures is in. Two years after the exiting of the Australian market by Mitsubishi Motors in South Australia, only one third of the approximately 1000 workers who were retrenched had found full-time work. Another third had moved on to casual or part-time work while the final third were still struggling to find employment or had moved into early retirement.

This was under conditions of a still robust Australian automotive industry. This round of job losses has the capacity to be much, much worse. The impact of such a large and immediate shift will have catastrophic consequences for our communities.

The Government is fond of talking of market inefficiencies and a lack of competitiveness, of retraining and realignment, but will not keep jobs and smart manufacturing in Australia.

This Bill also addresses a second and very different challenge which confronts our nation, and in it may lie the seed of rebirth for our automotive industry. We know that our industrial addiction to fossil fuels is having an irreversible impact on our climate. The challenges of pollution and climate change need solutions, and in this Bill we put forward a way for Australia to make a significant contribution to the reduction in fossil fuel reliance in the transport sector.

The Bill we put before you today would provide the incentives needed for companies here in Australia to be early movers in the clean energy vehicle market. The Rudd Government's Automotive Transformation Scheme has at its core a good idea, which is to help the automotive industry transition through this incredibly tough period for the sector. However, what it has failed to do is envision how Australia can be a world leader in competitive high-technology manufacturing. The Greens criticised the ATS when it was first introduced as unable to see the writing on the wall. Now is our opportunity to rectify this.

This Bill would provide access to eligibility for registration under the Automotive Transformation Scheme to businesses that have developed electric or non-fossil fuel motor vehicles or engines. It would additionally provide access to eligibility for registration to the ATS for Australian component manufacturers who have developed components specifically for electric or non-fossil fuel vehicles. Current ATS recipients will continue to be supported, but a whole new group of recipients will now be eligible to receive funding under the scheme. The scheme would also be open to new component manufacturers and car makers - not just the established producers.

The Government has indicated its intent to transfer the $800 million of ATS underspend to general revenue due to limitations in the current scheme. What a wasted opportunity that would be. While thousands of Australian workers are expecting to go unhelped into the unemployment line, there are opportunities to make the industry sustainable, both economically and environmentally, into the future. Through this scheme, we can retain the important skills and workers who would otherwise be sent packing on the job market.

The Bill will limit the Minister's ability to block registration in cases where Australian electric and non-fossil fuel motor vehicle and component producers have met key eligibility requirements. This is one of those cases where Ministerial discretion may well be counter-productive to the national interest.

This Bill will change the objects of the Automotive Transformation Scheme Act2009 to include the mandate to support the Australian automotive industry in its transition away from dependence on the major motor vehicle producers as those producers reduce and cease their Australia operations; and to encourage the design and manufacturing of clean energy technologies and the production of motor vehicles that are not powered by fossil fuels. Managing this transition is essential to the functioning of the expanded scheme, the automotive industry itself and the long term future of our manufacturing sector.

Finally, in the provisions laid out in this Bill, the scheme would allow components manufacturers to also be investing in and developing components for the productions of renewable energy technologies. We already see great potential in Australia for this industry to grow. Precision Components is a South Australian manufacturer that is making frames for solar heliostats, for example. There is great potential for our smart, skilled manufacturing sector to be growing Australian activity in the development and production of these technologies.

The experts all agree that the revolution in our automotive industry is coming. It is estimated by industry and market analysts that the market in electric cars may be worth up to $500 billion dollars by 2025. Australia is already a world leader in renewable energy and sustainable agriculture technology, and there is absolutely no reason that we cannot be world leaders in the green transport and motor vehicle industry either.

The transition in Australia has already begun, but without Government effort we know that advanced manufacturing will struggle to grow. We can see examples of green shoots growing. In Port Melbourne, Futuris supplies components for Tesla. Nissan Casting Australia, based in Dandenong South, now produces powertrain castings for the Nissan Leaf. In South Australia, the Ethan Group are bringing together existing component manufacturers with a plan for innovative production of new motor vehicles, including eventually electric vehicles. There are thousands of potential linkages between Australian industry and the world market, but without the right policy settings and economic incentives Australia will miss out on this once in a generation industrial opportunity.

Marion Council in Adelaide has recently voted to investigate the potential of electric vehicle manufacturing at the Tonsley Park site. Tonsley Park was the site of the old Mitsubishi plant which closed in 2008, and which could be said to be the beginning of the exit of the big automotive manufacturing firms from Australian operations. Would it not be fitting if the place that went first in the wind down of the old industry became the incubator of the new. Let us help make this vision a reality.

We commend the Bill to the Senate.

Senator RICE: I seek leave to continue my remarks later.

Leave granted; debate adjourned.