Earlier this month, the last Australian-built Camry rolled off Toyota’s production line at Altona in Victoria. And shortly, the last Australian-built Commodore will emerge from Holden’s assembly plant at Elizabeth in South Australia.
This is not only the closure of two factories. The shutdown of passenger car production threatens an industry that has always been Australia’s great repository of advanced manufacturing capabilities.
I am confident that there will still be an automotive industry beyond the shutdown, and that it will include manufacturing in some form. But acknowledging that to be so does not lessen the severity of the disruption the manufacturing sector is about to experience. Nor does it lessen the challenge for policymakers in finding the means to preserve capabilities that can attract new investment in the automotive industry.
The scale of the disruption has been modelled by the University of Adelaide: $29 billion will be ripped annually from GDP and up to 200,000 jobs put at risk across the economy.
Remember that this did not have to happen. The carmakers are not going because the industry was not viable, they are going because the Government goaded them to leave.
It must frankly be said that if the Government understands the enormity of its actions, there has been precious little evidence of such understanding.
The Senate inquiry into the future of the automotive industry, however, did the work the Government has not bothered to do.
The inquiry’s recommendations, and those of the earlier 2020 Technology Roadmap by the AutoCRC, offer Australia an opportunity to develop a new automotive industry. But to seize that opportunity we must act now, and preserving the nation’s talents and capabilities in automotive design, development and engineering will be the key.
Those talents are internationally acclaimed, as the carmakers continue to recognise.
It is hoped that the auto companies will retain engineering and design facilities in Australia beyond the shutdown. But there is keen competition in our region. Singapore and Dubai are offering investors substantial tax concessions to establish their own automotive design and engineering industries. And automotive manufacturers are restructuring globally, focusing on returns and rationalising investment decisions.
The 2020 Technology Roadmap identified a range of capabilities that exist in the local industry, in the supply chain as well as the motor vehicle producers.
Those capabilities allow Australian firms to participate in the development of emerging technologies such as electrification, autonomous vehicles, telematics, lightweighting, gaseous fuels and fuel-cell technology.
The Senate inquiry recommended that the Automotive Transformation Scheme, the main government support programme for the industry, needs to be restructured to preserve these capabilities of Australian firms.
The inquiry also recommended that the scheme be extended beyond 2020, and redefined as a broader, engineering and design programme for automotive-related advanced manufacturing.
Thus far, however, the recommendations have fallen on deaf ears in the Turnbull government, which has declined to adopt them.
Globally, every country that has a car industry supports it in some form, because their governments recognise that expertise in automotive manufacturing generates expertise across the economy. Only Australia is poised to walk away from its car industry, when the ATS runs out in 2020.
If we really are the clever country we like to think we are, we won’t let that happen.
Senator Kim Carr is the Shadow Minister for Innovation, Industry, Science and Research.