Fair shake at exports “crucial”, says industry minister

NEW federal industry minister Ian Macfarlane, a self-confessed motor vehicle “enthusiast”, has vowed to look closely at two issues that have bedevilled the Australian car industry: free-trade agreements and the strong Australian dollar.

The minister also acknowledged the substantial hurdles local car-makers face in creating viable export plans for their vehicles, competing not just against disadvantageous economic conditions but also inter-company production divisions situated in cheaper markets.

Speaking with GoAuto after his press conference at Toyota’s Altona plant this week, Mr Macfarlane said he had discussed the issue of one-sided FTAs with foreign affairs minister Julie Bishop and trade and investment minister Andrew Robb.

Mr Macfarlane also said he understood that the current high value of the Australian dollar was damaging the local industry.

He applauded Toyota Australia’s export record, but recognised how difficult it was at present with the currency at such a high value.

“It’s crucial that, if we are taking cars from someone, we get a fair shake putting cars back into that market,” he said.

“We want Australia to have an internationally competitive car industry. We want to see Australia exporting cars all over the world – (cars) that people want to buy all over the world. I want to see Australia at the forefront of the car industry.

“They (Toyota) export 63,000 vehicles a year, around 60 to 65 per cent of their production, and they are acutely aware that they need to be competitive with the best Toyota plants in the world, and I applaud them for that.

“I know there is not much money in exporting at the moment and, with the dollar where it is, it is very difficult to compete.” Mr Macfarlane’s comments signal a much softer stance than the one taken by the Coalition before September’s federal election, with Tony Abbott and shadow industry minister Sophie Mirabella both insisting on more export volume from Australian car-makers with fewer government handouts.

When challenged about whether his approach to the car industry differed from the policy espoused by the Coalition before the election, the minister sidestepped the issue.

“I’m only looking forward. In terms of what Sophie Mirabella did, that’s the past. We’re concentrating on the future,” he said.

Mr Macfarlane said he would be asking the Productivity Commission to take everything into account in the creation of its report on future funding for the car industry, due within 12 months (with an interim report expected by Christmas), including the strong Australian dollar.

“I’ll be asking them to give me some indication of what their economists think the dollar will be worth in five years’ time,” he said.

However, Mr Macfarlane admitted that not even the best economists in the world could predict the currency with much accuracy.

“Economists were put here to make weather forecasters look good,” he said in jest.

“In the end, as we know from the GFC, the best economists in the world failed to predict the GFC and the best economists in the world said the dollar would never get to parity.” The strength of the Australian dollar since the commodity boom started has helped make imported vehicles much cheaper, forcing local producers to slash prices in order to remain competitive. All three manufacturers are losing money on their local production operations.

Mr Macfarlane also acknowledged the significant inter-company competition Australian car manufacturers were forced to confront, using Toyota as an example.

“This operation and the people who manage it are acutely aware of the international competition that Toyota faces, not only from other brands but, in fact, from other Toyota plants, particularly ones in America,” he said.

“What I do know is that, if we are not exporting cars, then we aren’t under the same sort of pressure that Toyota is under when they see the cars coming out of Kentucky or coming out of Nagoya or the Camrys coming out of Thailand and they’ re trying to export into that same market.

“I know what that means for Toyota. They go over to that shed over there and they work out how they can save $1.50 a car.

“Now $1.50 in a $30,000 vehicle sounds like nothing, (but) they make 100,000 vehicles a year. Last time I looked, $150,000 was a lot of money.” When asked about his return to the industry ministry – he served under John Howard previously – Mr Macfarlane went straight to the point.

“There’s nothing like experience,” he said. “I was the longest serving resources minister Australia has ever had,” he said.

Mr Macfarlane was simultaneously minister for industry and minister for tourism as well as resources from 2001 to 2007 in the Howard government.

However, despite this tenure, Macfarlane, now 58, was not the longest-serving industry minister the late John Button served in the Hawke and Keating governments from 1983 to 1993.

Mr Macfarlane professed to being a competent welder who could produce a “good bead”.

“Look, if you are asking me what I think of the car industry, I am an enthusiast. I love things that get bolted together. I love pulling them apart and putting them back together. I have done that most of my life.

“I have been a farmer longer than I have been a politician. I still have got all my tools from the farm in the shed. Not the welder because it runs on dual phase, but everything else I have still got there.

“If you wanted me to, I could probably pick up a stick welder and run you a good bead.

“Look, in the end, I’m just enthusiastic about the car industry and the people who work for it.

“I am trying not to let them down and I‘ll do everything I can but, in the end, it is a decision of the government,” he said.