ELEANOR HALL: Let’s go now to the debate inside the federal Coalition about whether it should maintain the hefty Government subsidies to the car industry in Australia.
The Federal Government says that every country that makes cars props up its local industry, and it’s accusing the Opposition of putting auto industry jobs at risk if it doesn’t support the policy, but while the Opposition Leader is yet to make his party’s position clear, the Liberal Senator from South Australia Simon Birmingham told our reporter Stephen Dziedzic that the Federal Government should take the lead in international trade talks and persuade other countries to stop competing through subsidies.
SIMON BIRMINGHAM: Well, according to World Bank figures, we saw in 2009 some $48 billion worth of incentives and investment or co-investment in the car industry from governments of predominantly OECD [Organisation for Economic Co-operation and Development] countries.
Now, that’s a massive scale of spending and it’s a little ironic because these are companies that are profitable in the main. They are big. They are making products for which there is a strong demand in a competitive marketplace, yet governments all over the world are handing out taxpayer dollars, of which they’re incredibly scarce in many cases with governments deep in debt, and I think there’s a time and a place – and now is probably it – to really try to put on the stage for world trade talks discussions about these non-tariff forms of protection and to try to find ways to work cooperatively globally to eliminate them.
STEPHEN DZIEDZIC: Do you think that in the absence of those sort of international agreements that assistance should reduced or phased out? The Gillard Government argues that it’s dealing with the real world as it’s presented to it and they have to deal with the fact that these enormous subsidies are paid out. The only way to keep that investment in Australia is to play that game.
SIMON BIRMINGHAM: Well look, there’s genuine concerns about jobs and, as a South Australian, I fully share and appreciate the fact that Holden is a significant employer in my home state and the jobs that go with that, through the component sector as well as other indirect jobs, are quite significant and we need to make sure that, as a country, we don’t just pull the rug out or act in a pre-emptive way that causes harm to our own economy, so that’s why I think pushing for proper global talks is important. We also need to make sure that, domestically, we run the most competitive domestic platform for the car industry and, frankly, things like the carbon tax don’t help.
STEPHEN DZIEDZIC: So, in the absence of any significant movement internationally, the settings are about right at the moment?
SIMON BIRMINGHAM: Well, we don’t know exactly what the Government is proposing yet. There’s talk about a new deal with Holden. Let’s see what that deal is before people rush to judge the detail of it, but I would hope to see a commitment from this Government to work towards how we can eventually end this type of payout. Otherwise, it becomes something that just goes on forever and ever.
STEPHEN DZIEDZIC: How about the debate inside the Coalition at the moment? Do you expect that the Opposition will end up sticking with its current policy to make a fairly modest reduction in subsidies, or do you think that there’ll be a significant shift?
SIMON BIRMINGHAM: In the end, I think that the Coalition is having a sensible discussion on policy and that’s what is important to have here, and we will have a look at whatever the deal with Holden ends up being, whatever the arrangements are, when it’s revealed and when it’s there for everyone to judge.
ELEANOR HALL: That’s the Liberal Senator from South Australia, Simon Birmingham, speaking to Stephen Dziedzic.