Situation urgent, industry minister orders interim report

INDUSTRY minister Ian Macfarlane has conceded the government faces a challenge keeping the local car industry alive for long enough to hand down findings from a crucial Productivity Commission report around September 2014.

At a press conference held at the Toyota factory in Altona today, Mr Macfarlane said his ultimate goal remained to “make cars not only for the rest of this decade, but for the decades to come”.

However, the minister also said the government had a task ahead of it, balancing the need to give swift clarity to Holden and Toyota – the former of which is weighing up a proposed $1 billion investment here – with the need to produce a methodical and factual report into the viability of the entire industry.

Speaking after a tour of the Toyota assembly plant in Altona with Toyota Australia chairman Max Yasuda, Mr Macfarlane said he would therefore ask the Productivity Commission to produce an interim report before Christmas, so Cabinet could start to consider its options regarding the car industry.

Mr Macfarlane indicated that government may have to reverse the policy it took to the September election to withdraw $500 million of the $1.5 billion allocated for co-investment out to 2015.

“I am asking them to make some interim findings by Christmas so that I can make some assessments, along with (treasurer) Joe Hockey and Cabinet about where we go from there,” he said.

Mr Macfarlane said he expected the final report to be ready in the third quarter of 2014. The report will be sent to the government, which will formulate its policy and then release both the report and the policy.

Asked whether he would stick by the policy to withdraw $500 million of the $1.5 billion previously available to the industry for co-investment out to 2015, Mr Macfarlane hinted at a possible need to dip back into the purse.

“One of the challenges I face is making sure the industry remains operating between now and when we can hand down a final (Productivity Commission) decision, probably towards the middle and maybe the third quarter of next year,” he said.

“We know it is important to get something done quickly, but if it’s going to be based on fact, it’s obviously going to have the cornerstone of the PC (report).

“But if I have to use money that is already within the ATS (Automotive Transformation Scheme) to keep the industry going between now and then – bearing in mind that those cuts start basically now – I will ask Cabinet for permission to do that.”“But the goal is to keep the industry confident that we are working towards a solution in 2014.”

Looking beyond next year, Mr Macfarlane said the importance of the local car industry could not be underestimated, both in its roles as a major employer and a technological innovator.

“If the car industry in Australia shuts down, that’s 40,000 jobs.

“That’s about a third of the population of Toowoomba losing their jobs, not just here in the Toyota plant, not just in the Holden plant, not just in all the component plants around Melbourne and in Victoria and South Australia.

“If these plants close, those repercussions will be felt right across, particularly in eastern Australia, but right across Australia.”

He said the industry was crucial to the health of the whole manufacturing sector.

“Well, the car industry is critically important. People think it’s just metal and wheels.

“Some of the most sophisticated electronic technology in the world goes into motor vehicles and the systems get more and more sophisticated and more and more complicated every year and we benefit from that in safer cars.

“You’ve got the electronics, high technology, new technology even in relation to the steel. You’ve got fashion, you’ve got design, you’ve got innovation or invention as I call it.

“You’ve got technology development, you’ve got all of those things happening in the motor vehicle industry and if it is going to be internationally competitive, I’m going to have to use the whole of my portfolio – right across the portfolio, from the science, from the issues around research and development, technology development, through to apprenticeships, the CSIRO – the full gamut.

“The one thing I have got on my side is that I have a portfolio that can do everything we can in Australia to make sure this industry survives and prospers.”

Mr Macfarlane was asked about what brought on the Coalition’s apparent change in attitude to the car industry since he took over the portfolio from the former shadow industry spokesperson Sophie Mirabella, who failed to get re-elected in September.

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

Meantime, Mr Macfarlane refused to be drawn on whether GM Holden, Toyota Australia or Ford Australia had asked the government for extra cash.

“I don’t disclose anything about private discussions.”

Mr Macfarlane was planning to visit the Ford Australia design and development centre at Broadmeadows in the afternoon.

Before that, he planned to visit Tullamarine airport, to inspect a new Boeing 787 Dreamliner that has parts made at the Boeing operation at Fishermen’s Bend, close to GM Holden’s head office and engine plant.