Subject: Australian Automotive Industry


NICK HARMSEN: Is this announcement another barnacle clearing exercise?

SIMON BIRMINGHAM: Not at all, what we have today is good news for South Australia and the Australian automotive industry in two senses. One is that the commitment to withdraw the legislation relating to reductions in funding for the automotive transformation scheme ensures that there’s certainty for automotive manufacturers and components suppliers until 2017, around the support that’s available for them; but the other is the great news that industry is participating actively in the diversification fund, putting in industry dollars in advance of the government dollars there. $6 million from government, $16 million from industry shows that many companies in manufacturing space, in the automotive manufacturing space, believe they have a sound future in Australia well beyond 2017.


NICK HARMSEN: The decision to keep this $500 million in the automotive transformation scheme, which was going to be cut, you had to get that through the parliament and you would have had any hope of getting it through the senate, would you?


SIMON BIRMINGHAM: Look, parliamentary tactics are one thing, what this is about though is good policy, and we have listened since the announcements by Holden and Toyota, to concerns about whether or not the support was there for components manufacturers to stay open right through until the scheduled closure of those plants. These decisions have been taken by their parent companies and we’ve responded to those concerns, and that’s all this does, it gives certainty that components manufacturers have got the support they require to stay open so that the scheduled closes can occur in an orderly way as we’re working with the companies to do so.


NICK HARMSEN: But in the lead up to the last federal election, before Holden had made, or announced its decision to close, it was publically seeking an extension to that automotive transformation scheme. The government said no when it came in to office. Would it not have been better to have made this announcement back then, and perhaps, given the car industry a reason to stay?


SIMON BIRMINGHAM: The decision here would not have made a job of difference to the car industry. They’ve made it very clear, that the decisions taken by General Motors in Detroit, by the Toyota parent companies in Japan were all based on their analysis of their future market position and their analysis of where they need to supply cars and the type of cars they need to supply in the future. So I think what we have to look at here though, is that we have in fact responded to the changed circumstances since that last election, and what has changed is that Holden and Toyota, General Motors and Toyota, have made these decisions. They’ve made them off their own bat, based on their own individual circumstances. We’re responding to that though, to say, “Okay we recognise that this will be a difficult adjustment for the workers involved, for the components companies involved” We want to support them through that difficult adjustment as much as we can, which is why we’re giving them the certainty that this funding will be available if it is required.


NICK HARMSEN: Senator Xenophon says the government should go the whole way and restore the additional $400 million that was due to be in the automotive transformation scheme beyond 2017. Is that something the government will consider?


SIMON BIRMINGHAM: Well the government is investing in a whole different range of ways to support the industry beyond 2017. So we have hundreds of millions of dollars committed through different industry diversification schemes; in my own portfolio, around $470 million for industries to be able to invest in reskilling their workers in areas of growth potential. Today announcing part of a $155 million in funding targeted directly at the automotive industry, in total, these funds go far in excess of the type of funding that Senator Xenophon talking about and its money that is being invested today and in the coming years to set up new jobs for the future as the automotive manufacturers close down.


NICK HARMSEN: But isn’t the reality that companies, like the one we’re sitting at today, Monroe, when 2017 comes around and that government funding through the ATS disappears, it’s going to be phenomenally difficult for them to stay in business, isn’t it?


SIMON BIRMINGHAM: Well Monroe is making an investment in the future, that’s the great thing about the local announcement that’s happening here today. We’re giving Monroe some federal funding, but they providing even more than that in their own investment. They wouldn’t be putting their money on the line if they didn’t see a future beyond 2017. They are a components manufacturer who supplies the aftermarket range of vehicles as well, they are exporting already to numerous locations around the world and this is the type of industry we need to build for Australia in the future. Not one that says we have to put together, necessarily the whole car in Australia, but one that says we can deliver the smart, skilled and technologically innovative components that go in to cars right around the world, be it in their manufacturing process or in the post manufacturing parts process, and Monroe are very confident they will be here for a long time well after 2017, supplying the Australian market and international market.


NICK HARMSEN: Now the money in the automotive transformation scheme is on a per car basis, we’re going to see car production in Australia calm down in the next couple of years until that finish date. Is it the case that you’re going to end up with a lot of unspent money out of this $500 million that you announced today?


SIMON BIRMINGHAM: That really depends on what happens with the car manufactures. It is in their hands as to how many cars they continue to produce and, of course, it’s in the hands of many Australians as to how many of those cars Australians continue to buy. We’ve given them the certainty that the support from government will be there, not just for the car manufacturers, but for the components suppliers to be able to run through the orderly transition to closure of those plants in 2017 whilst also investing elsewhere, particularly with those components manufacturers to diversify so that they can have a life beyond 2017.


NICK HARMSEN: You’re a South Australian senator; you’ve got colleagues here in marginal seats, we’re in one at the moment, is this sort of announcement enough to turn the Prime Minister’s fortune around in a state like South Australia?


SIMON BIRMINGHAM: We’re interested in good policy for the future, policy that creates jobs and opportunities for all Australians, that supports families and we’re very confident that the type of industry investment we’re doing for the long term, investment that encourages industries in growth sectors, investment that provides reskilling opportunities for workers, all of those types of co-investments with industry will provide chances for smaller businesses and bigger businesses to grow and ensure that as the car parts makers close down, like Mitsubishi did a few years ago, we will see other jobs created in the economy and a strong future for those workers and communities.


NICK HARMSEN: Senator Birmingham thanks for your time.