Two years down the track, the Turnbull government has finally responded to a report analysing Australia's automotive industry. Crossbenchers are not pleased.
The report, titled ‘The future of Australia’s Automotive Industry’, was prepared by the Senate Economics References Committee, and was tabled 21 months ago.
Now, one month before the closure of the nation’s two remaining car manufacturers Holden and Toyota, the government has officially responded- by disregarding some of the crucial points and suggested courses of action made in the report.
This response has not pleased Nick Xenophon.
“The government’s pathetic response is almost two years overdue and mostly flies past many of the recommendations that were made to address the serious state the industry faces only a month before Holden and Toyota close their factory doors in Elizabeth and Altona,” said Xenophon in a press release.
According to Xenophon, the government’s response has ignored two key recommendations in the report: an automotive taskforce to address a severe skills shortage in the industry and extending the ‘under-spent’ Automotive Transformation Scheme (ATS).
The end of large automotive manufacturing onshore threatens 60,000 jobs across the nation, up and down the supply chain. Some analysts have warned that this could end Australia's hot streak of economic expansion, and push the country dangerously close to a recession for the first time in 25 years.
The ATS was aimed at preventing economic fallout, by assisting the smooth transition of the automotive manufacturing workforce to other forms of employment.
“But the federal government has done a 'Mr Magoo' here,” senator Xenophon said.
“Just like that elderly vision-impaired cartoon character, they’ve driven blindly through the problem seemingly oblivious to its existence.”
Xenophon is speaking for South Australia, which has lost Mitsubishi’s Tonsley Park facility some years ago and now stands to lose Holden’s Elizabeth plant next month.
“[The government's] solution to address the problem relies almost entirely on the $100 million Advanced Manufacturing Fund which was actually negotiated by NXT,” he added.
“But the government says it won’t divert any of the unspent capped ATS fund to broaden the scope of auto-related programs which would boost skills and create more jobs.
“What is most disturbing is that they can’t see a need for an Automotive Industry Taskforce which the industry itself is crying out for.”
In a press release from Kim Carr, the Shadow Minister for Innovation, Industry, Science and Research, the Labor senator described the response as “a true reflection of the Abbott/Turnbull government’s apathetic attitude towards the automotive industry”.
According to senator Carr, the end of the auto manufacturing industry in Australia will cost the nation two per cent of GDP (gross domestic product), valued at $29 billion.
Beyond the economic strife, senator Carr points out, there’s also the personal cost to employees – now counting 4000 more in Elizabeth (Holden) and Craigieburn, near Ford’s Campbellfield plant, which closed late last year. Werribee and Derrimut, near Toyota’s Altona plant, are also understood to be experiencing higher levels of unemployment, with the situation set to worsen from next month.
Senator Carr argues that the social welfare cost of unemployment benefits will “far exceed” the cost of retaining auto manufacturing industry in Australia.
The take-out from the government’s response is that it sees the future of the automotive industry – the report was tabled after all three remaining manufacturers announced plant closures and a move to full-line importation – resting principally in R&D (research and development).
An ‘Advanced Manufacturing Growth Fund’ will commit to spending $47.5 million over two years ‘high value’ manufacturing in South Australian and Victoria. Additionally, $4 million will be available through the Advanced Manufacturing Growth Centre for the support of “small scale and pilot research projects in advanced manufacturing”.
The government is keeping the ATS in place until 2020, but has ruled out offering the unused portion of the scheme’s budget to aftermarket parts manufacturers and caravan/trailer builders, a suggestion covered by several of the recommendations in the report by the Senate Economics References Committee, which included members of the Greens and the Australian Motor Enthusiasts’ Party.